Slides for the first three lessons of our course, E-Commerce Essentials. It explains essential introductory concepts in E-Commerce.

1. E-COMMERCE ESSENTIALS
MODULE 1: INTRODUCTION TO E-COMMERCE

2. E-COMMERCE AND E-
BUSINESS: AN
INTRODUCTION
LESSON -1

3. EVOLUTION OF E-COMMERCE
• MORE IMPORTANT FOR ANSWERING INTERVIEW QUESTIONS THAN PRACTICAL
PURPOSES
• GIVES YOU A NECESSARY UNDERSTANDING OF THE ORIGIN OF E-COMMERCE TO
BUILD UPON IT IN FUTURE LESSONS

4. EVOLUTION OF E-COMMERCE
E-COMMERCE
• E-COMMERCE COVERS OUTWARD-
FACING PROCESSES THAT TOUCH
CUSTOMERS, SUPPLIERS AND EXTERNAL
PARTNERS, INCLUDING SALES,
MARKETING, ORDER TAKING, DELIVERY,
CUSTOMER SERVICE, PURCHASING OF
RAW MATERIALS AND SUPPLIES FOR
PRODUCTION AND PROCUREMENT OF
INDIRECT OPERATING-EXPENSE ITEMS,
SUCH AS OFFICE SUPPLIES.
E-BUSINESS
E-BUSINESS INCLUDES E-COMMERCE
BUT ALSO COVERS INTERNAL
PROCESSES SUCH AS PRODUCTION,
INVENTORY MANAGEMENT, PRODUCT
DEVELOPMENT, RISK MANAGEMENT,
FINANCE, KNOWLEDGE MANAGEMENT
AND HUMAN RESOURCES

5. • IT INVOLVES NEW BUSINESS MODELS
AND THE POTENTIAL TO GAIN NEW
REVENUE
• E-BUSINESS STRATEGY IS MORE
COMPLEX, MORE FOCUSED ON
INTERNAL PROCESSES, AND AIMED AT
COST SAVINGS AND IMPROVEMENTS
IN EFFICIENCY, PRODUCTIVITY AND
COST SAVINGS.

6. • RELATIVELY EASY TO IMPLEMENT
BECAUSE IT INVOLVES ONLY THREE TYPES
OF INTEGRATION: VERTICAL
INTEGRATION OF FRONT-END WEB SITE
APPLICATIONS TO EXISTING
TRANSACTION SYSTEMS; CROSS-BUSINESS
INTEGRATION OF A COMPANY WITH WEB
SITES OF CUSTOMERS, SUPPLIERS OR
INTERMEDIARIES SUCH AS WEB-BASED
MARKETPLACES; AND INTEGRATION OF
TECHNOLOGY WITH MODESTLY
REDESIGNED PROCESSES FOR ORDER
HANDLING, PURCHASING OR CUSTOMER
SERVICE.
• FOUR DIRECTIONS OF INTEGRATION:
VERTICALLY, BETWEEN WEB FRONT- AND
BACK-END SYSTEMS; LATERALLY, BETWEEN A
COMPANY AND ITS CUSTOMERS, BUSINESS
PARTNERS, SUPPLIERS OR INTERMEDIARIES;
HORIZONTALLY, AMONG E-COMMERCE,
ENTERPRISE RESOURCE PLANNING (ERP),
CUSTOMER RELATIONSHIP MANAGEMENT
(CRM), KNOWLEDGE MANAGEMENT AND
SUPPLY-CHAIN MANAGEMENT SYSTEMS; AND
DOWNWARD THROUGH THE ENTERPRISE, FOR
INTEGRATION OF NEW TECHNOLOGIES WITH
RADICALLY REDESIGNED BUSINESS PROCESSES.

7. INTERESTING FACTS TO IMPRESS THE
INTERVIEWER
• 1979- MICHAEL ALDRIDGE IS CREDITED WITH INVENTING ONLINE SHOPPING BY
CONNECTING A MODIFIED DOMESTIC TV TO A REAL-TIME TRANSACTION
PROCESSING COMPUTER VIA A DOMESTIC TELEPHONE LINE
• 1998- PAYPAL COMES INTO EXISTENCE. ONE OF THE FIRST MAJOR E-COMMERCE
COMPANIES THAT EXISTS TODAY.

8. FACTORS FUELLING E-COMMERCE
• WHAT ARE SOME OF THE FACTORS ACCORDING TO YOU THAT IS FUELLING E-
COMMERCE IN INDIA?

9. • TECHNOLOGICAL BOOM
• BUILDING UP TRUST AND RELIANCE: FEEDBACK AND INTERACTION WITH E-
COMMERCE
• ECONOMIC GROWTH
• CONVENIENCE
• MOST IMPORTANT FACTOR: PEOPLE BECOMING FAMILIAR WITH THIS NEW WAY
OF TRANSACTING. (NO MORE FEAR OF THE UNKNOWN)

10. TRADITIONAL COMMERCE VS. E-COMMERCE
• HOME DELIVERY, SOMETIMES WITHOUT ANY ADDITIONAL CHARGES AND SAME-
DAY DELIVERY OPTIONS
• REACH MORE AUDIENCE; NATION-WIDE OR EVEN GLOBAL.
• DIRECT AND IMMEDIATE FEEDBACK FROM YOUR CUSTOMERS. A TIGHTLY
INTEGRATED SUPPLY CHAIN WITH FEW OR NO MIDDLEMEN. GOOD FOR
BUSINESS.
• CASE OF ONLINE FRAUDS

11. MEDIA CONVERGENCE
• MEDIA CONVERGENCE IS A TERM THAT CAN REFER TO EITHER: 1) THE MERGING
OF PREVIOUSLY DISTINCT MEDIA TECHNOLOGIES AND MEDIA FORMS RESULTING
FROM DIGITIZATION AND COMPUTER NETWORKING; OR 2) AN ECONOMIC
STRATEGY IN WHICH THE MEDIA PROPERTIES OWNED BY COMMUNICATIONS
COMPANIES EMPLOY DIGITIZATION AND COMPUTER NETWORKING TO WORK
TOGETHER (SEE MEDIA OWNERSHIP).

12. E-COMMERCE
APPLICATIONS
LESSON -2

13. BUSINESS APPLICATIONS OF E-COMMERCE
• PILLAR STONE FOR MANY OF THE START-UP COMPANIES
• BUSINESS TO BUSINESS (B2B), BUSINESS TO CONSUMER (B2C), CONSUMER TO
BUSINESS (C2B) AND CONSUMER TO CONSUMER (C2C)
• DISCUSS MEANING AND EXAMPLES FOR EACH

14. ANATOMY OF E-COMMERCE APPLICATIONS
• MULTIMEDIA CONTENT
• MULTIMEDIA STORAGE SERVERS
• ELECTRONIC PAYMENT SYSTEM (EPS)
WHAT ARE SOME OF THE ESSENTIAL COMPONENTS OF AN E-COMMERCE WEBSITE?

15. ESSENTIAL ELEMENTS OF AN E-COMMERCE
WEBSITE
• ONLINE PRODUCT CATALOGUE
• QUIRKY AND DESCRIPTIVE DETAILS
• SHOPPING CART
• BUYING OPTIONS
• AVAILABILITY IN THE ADDRESS AREA
• PAYMENT METHODS

16. E-COMMERCE CONSUMER APPLICATIONS
• HOME SHOPPING
• BANKING
• EDUCATION AND ENTERTAINMENT

17. E-COMMERCE ORGANIZATION APPLICATIONS
• ONLINE MARKETING. COMPANIES ARE USING E-COMMERCE TO MARKET THEIR
BRAND ON THE INTERNET.
• INVENTORY MANAGEMENT: NO HASSLES OF CARRYING THE PRODUCTS AND
DOING IT MANUALLY.
• SUPPLY CHAIN: JUST-IN-TIME SYSTEMS
• LOWER COSTS
• GLOBAL MARKET REACH

18. BACKBONE OF E-COMMERCE

19. PAYMENT METHODS
• DIGITAL WALLETS
• SECURE SOCKET LAYER (SSL) PAYMENT GATEWAYS
• SMART CARDS LIKE CREDIT OR DEBIT CARDS
DISCUSS EXAMPLES OF EACH.

20. BUSINESS MODELS OF E-
COMMERCE
LESSON -3

21. BUSINESS MODELS
• B2B
• B2C
• INTRA B-COMMERCE
• C2C
• B2G

22. INTRA B-COMMERCE
• TRANSACTIONS WHICH TAKE PLACE WITHIN THE FIRM ARE KNOWN AS INTRA- B
COMMERCE.
• SELLING AND BUYING OF PRODUCTS WITHIN THE ORGANIZATION
• EXAMPLES: TRANSACTION BETWEEN SUBSIDIARIES, DEPARTMENTS, ETC.
• FOR INSTANCE, A PERSON FROM SALES TEAM CAN REACH OUT TO THE PRODUCTION
TEAM FOR A TRANSACTION WHICH IS FOR THE BENEFIT OF THE COMPANY.
• OBJECTIVES OF INTRA- B COMMERCE:
• TO ENSURE THE PROPER PROCUREMENT OF PRODUCT.
• MANAGE THE COMPANY’S RESOURCES EFFICIENTLY.

23. B2B
• BUSINESS-TO-BUSINESS E-COMMERCE
• REFERS TO THE COMMERCIAL TRANSACTION BETWEEN TWO COMPANIES
• A COMPANY CANNOT PRODUCE ALL OF ITS MATERIALS OF ITS OWN. IT NEEDS
TO BE ASSOCIATED WITH SOMEONE HAVING SPECIALIZATION IN THE RAW
MATERIALS, SOMEONE WITH THE PACKAGING OR SOMEONE WITH THE DELIVERY
OF PRODUCTS.
• ALIBABA: WORLD’S LARGEST B2B PLATFORM
• INDIAMART: INDIA’S LARGEST B2B PLATFORM

24. B2B EXCHANGES
• THE B2B MARKET IS COMPOSED OF WEBSITES WERE BUYERS AND SELLERS COME
TOGETHER VERTICALLY AND HORIZONTALLY TO COMMUNICATE, BID,
ADVERTISE, TRANSACT, AND PROCURE.
• MOSTLY INDUSTRY SPECIFIC
• EXAMPLES: BRAVOBUILD (CONSTRUCTION), STEELTRADING (STEEL), 1CITYBIZ
(AUCTION)

25. BENEFITS & BARRIERS TO B2B E-COMMERCE
• WIDE REACH
• EXPLORING UNTAPPED MARKET
• BUSINESS ALL DAY LONG
• QUICKER RESPONSE
• TRANSPARENT STRUCTURE
• MAINTENANCE COSTS
• PROCESS COMPLEXITY
• SECURITY ISSUES
• TECHNICAL GLITCH
• LACK OF VENTURE CAPITAL

26. B2C E-COMMERCE
• TRANSACTION WHICH TAKES PLACE BETWEEN THE CONSUMERS AND COMPANIES
IS KNOWN AS BUSINESS TO CONSUMER (B2C) E COMMERCE
• E TAILING AND ONLINE SHOPPING IS THE END RESULT OF B2B E COMMERCE

27. B2C MODELS
• PORTAL MODEL: PORTALS ARE THE CULMINATION OF BOTH INTERNET AND WEB
TO CREATE A PATH FOR GETTING INFORMATION ABOUT THE PRODUCT.
PORTALS ARE BASICALLY THE GETAWAYS PROVIDING POWERFUL SEARCH ENGINE
TOOLS TO DEFINE THE PLATFORM. INTERNET NAVIGATION SITES LIKE YAHOO,
GOOGLE AND MSN ARE SOME OF THE PORTAL SITES WHICH HELP THE
CONSUMER GET INFORMATION LIKE, STOCK MARKETS, FORECASTS, SHOPPING
RATES, ETC.

28. • E-TAILER/ STOREFRONT MODEL: STOREFRONT IS THE ACTUAL PLACE WHERE
THE TRANSACTIONS TAKE PLACE. THE WEBSITE FOR THE COMPANY PROVIDES
THE PRODUCT CATALOGUE AND PAYMENT IS DONE IN A SAFE ENVIRONMENT. IT
PROVIDES ACCESS TO THE CUSTOMERS AT ANY TIME OF THE DAY. NO TIME
RESTRICTION AND SAFE ACCESS TO THE SITE IS THE WORK OF THE STOREFRONT
MODEL.

29. • CONTENT PROVIDER: ANY NEWS, INFORMATION, VIDEOS NEEDED BY THE
CUSTOMER IS PROVIDED BY THE CONTENT PROVIDERS. THEY ETCH OUT THE
PARTICULAR SITE FOR THE CONTENT AND GENERATE REVENUE THROUGH THE
CLICKS, SUBSCRIPTIONS AND MARKETING. THEY DO NOT OWN THE CONTENT
BUT BRING OUT THE CONTENT ACTUALLY REQUIRED BY THE USE

30. • SERVICE PROVIDERS: THESE PROVIDERS DO NOT ACTUALLY SELL A PRODUCT;
RATHER THEY PROVIDE ONLINE ASSISTANCE IN THE FURTHER PROCESSING. LIKE
THE SERVICE IN THE INQUIRY OF PARTICULAR ASPECT OR ANY ASSISTANCE IN
UPDATING THE CURRENT VERSION OF PRODUCT. THEY HELP IN CONSULTING,
LAW ESTATE OR STORAGE. THEY USUALLY REFER TO THIRD PARTIES SUCH AS
STORAGE SERVICE PROVIDERS (SSP) OR INTERNET SERVICE PROVIDER (ISP).

31. • TRANSACTION BROKERS: AS THE NAME SUGGESTS, IT ACTS LIKE THE BROKER
BETWEEN THE BUYER AND THE SELLER. IT ACTS AS THE NEUTRAL PARTY
HELPING SERVE THE PURPOSE OF TRANSACTION. THEY RECEIVE COMMISSION
FOR EACH TRANSACTION THAT TOOK PLACE. SOME OF THE EXAMPLES WOULD
BE ONLINE JOB PORTALS WHICH HELP THE CANDIDATES AND THE COMPANIES
MEET AND FORM AN ALLIANCE.

32. B2C MODELS: ADVANTAGES &
DISADVANTAGES
ADVANTAGES
• TIME FLEXIBILITY
• NO LOCATION CONSTRAINT
• LESS INVESTMENT AND BETTER
RETURNS
• EASE AND COMFORT OF SHOPPING
• NO HASSLES OF MIDDLEMEN
• GLOBAL REACH
DISADVANTAGES
• SECURITY THREATS
• MORE COMPETITION
• LOW CONVERSION RATES
• TECHNICAL GLITCHES AND FAILURES

33. C2C MODELS
• OLX OR EBAY
• TWO TYPES OF C2C BUSINESS
• CLASSIFIEDS- CLASSIFIEDS REFERS TO THE ADVERTISEMENT STAPLED ONTO THE
PILLARS OR WEBSITES. MANY A TIMES, ONE PERSON HAS NO USE FOR A CERTAIN
PRODUCT AND THE VALUE IS DEGRADING QUICKLY. TO SELL THAT, HE WILL
POST CLASSIFIED ADS IN THE SITE AND THE PERFECT BUYER IS FOUND.

34. • AUCTIONS: AUCTIONS SIGNIFIES BIDDING UP FOR THE PRODUCT UNTIL IT HAS
OUTREACHED THE MAXIMUM AMOUNT. EBAY IS ONE OF THE SITE WHICH
PROVIDES ONLINE BIDDING ON PRODUCTS.

35. IMPORTANCE OF C2C MODELS
• REDUCTION IN COST OF SELLING
• ALIGNMENT OF NEED AND SALE
• NO TIME CONSTRAINT
• WIDE REACH
• ONE-TO-ONE SALE

36. INTERNET ENVIRONMENT
FOR E-COMMERCE
LESSON -4

37. INTERNET ECONOMY: CONCEPTUAL
FRAMEWORK
• BEFORE INTERNET BECAME POPULAR, ELECTRONIC DATA INTERCHANGE (EDI)
WAS EMPLOYED TO EXCHANGE RECEIPTS, INVOICES, INFORMATION BY
BUSINESSES
• IT WAS NOT FLEXIBLE AND IN DUE COURSE OF TIME, IT WAS HARD TO MAINTAIN
TRANSACTIONS. SO AFTER THE ARRIVAL OF INTERNET, IT WAS DISCARDED.

38. INTERNET ECONOMY CONCEPTUAL
FRAMEWORK
• LAYER 1: THE INTERNET INFRASTRUCTURE LAYER
• LAYER 2: THE INTERNET APPLICATIONS LAYER
• LAYER 3: THE INTERNET INTERMEDIARY LAYER
• LAYER 4: THE INTERNET COMMERCE LAYER

39. LAYER -1: THE INTERNET INFRASTRUCTURE
LAYER
• WHAT IS IT?
• COMPANIES THAT PROVIDE THE INFRASTRUCTURE FOR NETWORK AND ITS
SERVICES
• TYPES OF COMPANIES
• NETWORK HARDWARE PROVIDER, ISP, SOFTWARE COMPANIES, SERVER
MANUFACTURERS
• EXAMPLES: MCI, CISCO, TCS

40. LAYER 2: THE INTERNET APPLICATIONS LAYER
• WHAT IS IT ABOUT?
• COMPANIES THAT PROVIDE SOFTWARE FOR ENABLING TRANSACTIONS AND
SERVICES
• TYPES OF COMPANIES: CONSULTANCY SOFTWARE DEVELOPERS, MULTIMEDIA
DEVELOPMENT PROVIDERS
• EXAMPLES: NETSCAPE, ADOBE, MICROSOFT

41. LAYER 3: THE INTERNET INTERMEDIARY
LAYER
• WHAT IS IT?
• COMPANIES THAT ACT LIKE THE PLATFORM FOR TRANSACTIONS
• TYPES OF COMPANIES
• ONLINE PORTALS, CONTENT PROVIDERS, INTERNET AND BROKERS
• EXAMPLES: YAHOO, E-BAY

42. LAYER 4: THE INTERNET COMMERCE LAYER
• WHAT IS IT ABOUT?
• COMPANIES THAT DIRECTLY INTERACT WITH THE CUSTOMERS TO SELL THEIR
PRODUCTS
• TYPE OF COMPANIES: SUBSCRIPTION BASED COMPANIES, E-TAILERS, ONLINE
TICKET SELLERS.
• EXAMPLES: FLIPKART, AMAZON

43. PROVIDERS AND VENDORS OF E-BUSINESS
SOFTWARE
• ARIBA: PROVIDES BUSINESS TO BUSINESS ELECTRONIC COMMERCE SOLUTIONS
FOR ENTERPRISES.
• IBM COMMERCE SOFTWARE: SOFTWARE FOR SMALL AND MEDIUM COMPANIES.
• SHOPIFY: THE MOST POPULAR ONE. IT HELPS YOU MAKE A GREAT LOOKING E-
COMMERCE WEBSITE BY SELECTING ANY OF THE TEMPLATE DESIGNS. IT ALSO
HELPS PROVIDE MARKETING TOOLS FOR SEO AND STRATEGIES TO THRIVE
TOWARDS SUCCESS.