The contents include introduction of commerce, traditional commerce and e-commerce, features and success factors of e-commerce, benefits and limitations of e-commerce, types of e-commerce and terminologies used in e-commerce.

1. Introduction to
Electronic Commerce
Mr. Roshan Bhattarai
Kathmandu, Nepal

2. Introduction
• People developed skills in one of the area and traded
some of their production for other’s needs
• Started with barter system, eventually gave way to use of
currency, making transactions easier to settle
• One created a product/service, another else found
valuable and was willing to pay for it in exchange

3. Commerce
• A negotiated exchange of valuable products/services
between two or more parties
– includes activities each of the parties undertakes to
complete the transaction
• Activities involved in conducting commerce are called
business processes
– Eg: placing orders, sending invoices, payment, goods
delivery etc.

4. Traditional Commerce
• Manufacturer sells products/services to its customers
with face to face interaction
• Buyers and sellers meet together and make payment
• From sellers perspective,
– they establish the business where there is a higher
availability of customers /higher demand of products
• From buyers perspective,
– they prefer the location which is easily accessible
• The financial institutions play the role of transferring
funds from the buyers to sellers.

5. Fig: Overview of Traditional Commerce
Manufacturer Customer
Financial
Institution
Common
Market Place

6. • The major disadvantage of traditional commerce is
– the need of face to face interaction and
– common marketplace
• To overcome this problem,
– the concept of e-commerce is introduced
– basically focuses on boundary-less commercial transaction
irrespective of time and locations

7. E-commerce
• E-commerce is all about performing commercial
transactions electronically
• buying and selling of products, services and information
via computer networks including the Internet
• With the advent of the Internet, the term e-commerce
began to include:
– Electronic trading of physical goods and intangibles such as
information
– All the steps involved in trade, such as online advertising,
ordering, payment and support for delivery
– The electronic provision of services such as after sale support,
online legal advice
– Electronic support for collaboration between companies etc.

8. Traditional Commerce vs E-Commerce
Basis E-commerce Traditional Commerce
Sales channel Enterprise-Internet-
Consumer
Manufacturer- Wholesaler-
Retailer-Consumer
Sales hr/region 24*7, entire world Restricted area, Restricted sales hr
Sales Place/
Method
Marketplace (Network)
Sale based on Information
Marketplace (Store)
Sale based on Display
Customer
Support
Real time Delayed
Processing of
business
transactions
Automated Manual
Individual
Involvement
Need not involve in all
stages
Need to involve in all stages

9. Features of E-commerce
• Ubiquity
– activity is done/available at anytime from anywhere in the
world
• Global Reach
– reach consumers anywhere in the world/highest number
of potential consumers
• Universal Standards
– operates on standard platforms with agreed upon
methods and systems
• Richness
– merchant can present their message in effective way using
audios, videos, graphics and texts/integrating powerful
marketing messages and customer’s experiences

10. • Interactivity
– allows two way communications between merchant and
consumer
– allows an online merchant to engage a consumer in way
similar to face-to-face experiences/on a more massive,
global scale
• Information Density
– reduces the cost to store, process and communicate
information
– accuracy and timeliness increase/making information
inexpensive and plentiful
• Personalization/Customization
– business can target their marketing message to specific
individuals/merchants can change the product or service
based on user preferences

11. E-Commerce Success Factors
• Selection and Value
– Attractive product selections,
– competitive prices,
– satisfaction guarantees,
– customer support after the sale
• Performance and Service
– fast/easy navigation, shopping, and purchasing,
– prompt shipping and delivery
• Look and Feel
– Attractive web storefront,
– multimedia product catalog pages and shopping features

12. • Advertising and Incentives
– Targeted web page advertising and e-mail promotions,
– discounts and special offers,
– advertising at affiliate sites
• Personal Attention
– Personal web pages,
– personalized product recommendations,
– Web advertising and e-mail notices, and
– interactive support for customers
• Community Relationships
– Virtual communities of customers, suppliers, company
representatives, and others
– via newsgroups, chat rooms, and links to related sites

13. • Security and Reliability
– Security of customer information and website
transactions,
– trustworthy product information, and
– reliable order fulfillment

14. Benefits and Limitations of E-
commerce
Benefits of e-commerce to organizations
• International marketplace
• Operational cost savings
• Mass customization
• Enables reduced inventories
• Lower telecommunications cost
• Digitization of products and processes
• No more time constraints

15. Benefits of e-commerce to consumers
• 24/7 access
• More choices
• Price comparisons (Eg: www.policybazzar.com)
• Improved process for delivery of digital products
• Environment of competition
– Customers aggregate their orders together into a single
order presented to wholesalers or manufacturers and
obtain a more competitive price (aggregate buying)
– Eg: for example www.letsbuyit.com.

16. Benefits of e-commerce to society
• Enables more flexible working practices
– working from home is more convenient
– provides happier and less stressful working environments
– potentially reduces environmental pollution as fewer people
have to travel to work regularly
• Connects people
– Enables people in developing countries and rural areas to
enjoy and access products, services, information
• Facilitates delivery of public services
– Eg: online health services, paying taxes over the Internet etc

17. Limitations of e-commerce to organizations
• Lack of sufficient system security, reliability, standards
and communication protocols.
• Rapidly evolving and changing technology
• Under pressure to innovate and develop new business
models
• Facing increased competition
• Problems with compatibility of older and ‘newer’
technology

18. Limitations of e-commerce to consumers
• Initial cost of computing equipment
• Cost of access to the Internet
• A basic technical knowledge
• Cost of computing equipment
• Lack of security and privacy of personal data
• Physical contact and relationships are replaced by
electronic processes
• A lack of trust because they are interacting with faceless
computers

19. Limitations of e-commerce to society
• Breakdown in human interaction
• Social division
– between technical haves and have-nots
• Reliance on telecommunications infrastructure and IT skills
• Wasted resources
– technology dates quickly, how to dispose of all the old
computers, keyboards, monitors, speakers and other
hardware?
• Difficulty in policing the Internet
– numerous crimes can be carried out and often go
undetected

20. Types of E-commerce
(based on the relationship of transaction parties)
Business-to-Business
• Business-to-Business (B2B) describes commercial
transactions between businesses, such as
– between a manufacturer and a wholesaler, or
– between a wholesaler and a retailer
• companies sell their online goods to other companies
without being engaged in sales to consumers
• In most B2B E-commerce environments entering the
web shop requires a log in.
• Eg: alibaba.com, 3DXTech.com, acme-world.com,
metalsite.com etc

21. • Volume of B2B (Business-to-Business) transactions is
much higher than the volume of B2C transactions.
• The primary reason for this is
– in a typical supply chain there will be many B2B
transactions involving sub components or raw materials,
and
– only one B2C transaction, specifically sale of the finished
product to the end customer
• For example, an automobile manufacturer makes
several B2B transactions such as buying tires, glass,
rubber etc from suppliers for its vehicles
• The final transaction, a finished vehicle sold to the
consumer, is a single (B2C) transaction

22. Business-to-Consumer
• Business-to-consumer describes activities of businesses
serving end consumers with products and/or services
• companies sell their online goods to consumers who are
the end users of their products or services
• Usually, B2C E-commerce web shops have an open access
for any visitor, meaning that there is no need for a person
to login in order to make any product related enquiry
• applies to any business or organization that sells its
products or services to consumers over the Internet for its
own use

23. • When most people think of B2C e-commerce, we think of
Amazon, the online bookseller that launched its site in
1995
• In addition to online retailers, B2C has grown to include
services such as online banking, travel services, health
information, real estate sites etc
• Eg: Amazon.com, sastodeal.com, flipkart.com,
wallmart.com, trivago.com etc.

24. Consumer-to-Business
• E-commerce business model in which consumers offer
products or services or demands for products or services
to companies
• consumers usually post their products or services or
demands for products or services online on which
companies can post their bids
• A consumer reviews the bids and selects the company
that meets his/her price expectations
• This business model is a complete reversal of traditional
business model where companies offer goods and
services to consumers (B2C)

25. • Eg: priceline.com, upwork.com
• Priceline first became known for its Name Your Own Price
system, where travelers would name their price for airline
tickets, hotel rooms, car rentals, and vacation packages
• buyers make a suggestion for a product’s price and the
transaction occurs only if a seller accepts the quoted price
• Upwork, formerly Elance, is a global freelancing platform
where businesses or individuals connect to conduct
business.. largest freelancer marketplace in the world

26. Consumer-to-Consumer
• Consumer-to-consumer (C2C) electronic commerce
involves the electronically facilitated transactions
between consumers
• consumers sell their online goods to other consumers
• examples are the online auction sites like eBay,
quickr.com, olx.in etc
• consumer posts an item for sale and other consumers bid
to purchase it
• The sites are only intermediaries, just there to match
consumers
• They do not have to check quality of the products being
offered.

27. Terminologies in ecommerce
Search Engine Optimization (SEO)
• SEO is the process of enhancing websites to increase the
visibility of the site and gain rankings.
• SEO is a form of digital marketing that uses Google and
other search engines to bring users to a website by
organic listings.
Search Engine Results Page (SERP)
• The page that lists all the results from a search query
within a search engine.
• Search engines list relevant terms by analyzing the query
and the site to provide the best match.

28. Shopping Cart
• An e-Commerce shopping cart is the contents of what a
user has added to his online order.
Brick and Mortar
• A business that has a physical store that customers can
go to rather than just having an online presence

29. Email Marketing
• Engaging your audience with products and services
promoted through email.
• These email lists usually consist of users that have signed
up or expressed an interest in the site or organization
Up selling
• Offering deals on similar products or showing related
products in hopes to get users to buy additional items
along with their purchase

30. Pop-up-ad:
• An ad that automatically opens a new browser window
E-tailing:
• Virtual storefronts which act as a catalogue of products
and includes a shopping cart system to enable customers
to purchase online

31. Responsive Web Design:
• A website design approach that is aimed at creating sites
to provide an optimal viewing experience (easy reading,
navigation, scrolling etc) across a range of devices (e.g.
mobile phones, tablets, laptops, desktop computers)
Order Tracking:
• The process in which a customer views the progress of
their order leading up to delivery.
• Usually, a tracking code is provided to the client when a
purchase is completed

32. Affiliate Marketing:
• Partnerships between ecommerce platforms and online
publishers, where the publisher
endorses/reviews/features a product and is compensated
based on ecommerce performance
Disintermediation:
• The process of eliminating channels and selling product
directly to the end customer

33. Navigation:
• Generally referred to process of moving from one page
or section of a website to other
Permission Marketing:
• Marketing based on getting a users consent to receive
information from your company or website

34. Certification Authority
• A third party company that issues digital certificates that
confirms a company or individuals' identification
Encryption
• Process of transforming data into a type that prevents
casual observers from deciphering

35. Firewall
• Software/hardware used to prevent unauthorized access
from a computer system or network of computer systems
Privacy policy
• A Web site's official statement on the type of information
collected on a site, how the information will be used,
how the person can access this data and the steps for
having the data removed

36. Google Analytics
• analytics service on the internet that tracks and reports
website traffic into graphs and charts for easy access to
traffic trends over designated periods of time
Google Keywords
• trending words or phrases based on what users are
searching for within Google
• Keywords are often tracked and used throughout ads and
other marketing tactics.

37. Content Management System (CMS):
• A system that allows website owners to make text and
picture changes to their ecommerce store with little or
no technical knowledge. (e.g. WordPress)
Secure Socket Layer (SSL):
• Technology for encrypting data sent over the internet.
SSL certificates are used to verify the authenticity of an
ecommerce site’s encryption standards.