E-Commerce: Definition, Types and Trends. Your Introduction Your Name Your Name Place of Internship Place of Internship Your short term and long term.

E-Commerce: Definition, E-Commerce: Definition, Types and TrendsTypes and Trends

Your IntroductionYour Introduction

Your NameYour Name Place of InternshipPlace of Internship Your short term and long term goalsYour short term and long term goals Your interests and hobbiesYour interests and hobbies

My introductionMy introduction

• B.E, MBA(systems),CCNA,PMP with 15 years IT B.E, MBA(systems),CCNA,PMP with 15 years IT industry experienceindustry experience

• Vice President of PMI MumbaiVice President of PMI Mumbai

• Skills: Portfolio and Program management, Skills: Portfolio and Program management, project management, IT infrastructure project management, IT infrastructure management, Service deliverymanagement, Service delivery

• Visiting faculty for many institute across the Visiting faculty for many institute across the countrycountry

E-commerce: DefinitionE-commerce: Definition

Traditional business process:Traditional business process: Conduct market research to identify customer Conduct market research to identify customer

needs.needs. Create product or service that will meet Create product or service that will meet

customer's needs.customer's needs. Advertise and promote product or serviceAdvertise and promote product or service Negotiate a sale transaction, including: Negotiate a sale transaction, including:

* Delivery logistics* Delivery logistics* Inspection, testing and acceptance* Inspection, testing and acceptance

Ship goods and Invoice customerShip goods and Invoice customer Receive and process customer paymentsReceive and process customer payments Provide after-sales support, maintenance and Provide after-sales support, maintenance and

warranty service.warranty service.

E-commerce: DefinitionE-commerce: Definition

Started in 1983 at Boston Computer Started in 1983 at Boston Computer Exchange by Alax RandallExchange by Alax Randall

http://www.youtube.com/watch?v=wan896ZO4aY

Actually started with EDI(1960s)Actually started with EDI(1960s) Too many docs( invoice, Pos,bill of landing…all Too many docs( invoice, Pos,bill of landing…all

have same set of info) and lots of time and moneyhave same set of info) and lots of time and money Process: Entering data into computers, printing Process: Entering data into computers, printing

paper forms and reentering at other side, each paper forms and reentering at other side, each with their unique formatwith their unique format

Set of standards created for exchanging data Set of standards created for exchanging data electronicallyelectronically

E-BusinessE-Business• One of the first to use the term was IBM, when, One of the first to use the term was IBM, when,

in October, 1997, it launched a thematic in October, 1997, it launched a thematic campaign built around the termcampaign built around the term

• e-business can be said to include e-business can be said to include e-servicee-service, the , the provision of services and tasks over the Internet provision of services and tasks over the Internet by application service providersby application service providers

• One of the first to report sales in the millions of One of the first to report sales in the millions of dollars directly from the Web was Dell Computerdollars directly from the Web was Dell Computer

• Exploiting the convenience, availability, and Exploiting the convenience, availability, and world-wide reach of the Internet, many world-wide reach of the Internet, many companies, such as Amazon.com, the book companies, such as Amazon.com, the book sellers, have already discovered how to use the sellers, have already discovered how to use the Internet successfullyInternet successfully

..

E-commerce: DefinitionE-commerce: Definition

No widely accepted definition. In loose No widely accepted definition. In loose sense it means doing business over the sense it means doing business over the internet, selling products [goods and internet, selling products [goods and services] which are delivered offline as services] which are delivered offline as well as products which can be “digitalized” well as products which can be “digitalized” and delivered on line.and delivered on line.““e-commerce is the online transaction of e-commerce is the online transaction of business, featuring linked computer business, featuring linked computer systems of the vendor, host and buyer. systems of the vendor, host and buyer. Electronic transactions involve the transfer Electronic transactions involve the transfer of ownership or rights to use a good or of ownership or rights to use a good or service” [US Department of Commerceservice” [US Department of Commerce]]

E-commerce: ScopeE-commerce: Scope

E-commerce is a sub-set of E-commerce is a sub-set of e-businesse-businessE-business: E-business: application of ICT to all aspects of application of ICT to all aspects of companies operations: i.e. customer relations management companies operations: i.e. customer relations management (CRM); enterprise resource planning (ERP); sales force (CRM); enterprise resource planning (ERP); sales force management (SFM); electronic procurement (EP)management (SFM); electronic procurement (EP)

E-commerceE-commerce: Functions: Functions Communication Communication [on-line catalogue][on-line catalogue] Transaction Transaction [shopping carts: browse and select [shopping carts: browse and select

items and make buying decision]items and make buying decision] Payment Payment [electronic payment methods][electronic payment methods]

E-commerce CharacteristicsE-commerce Characteristics Operates on a bona fide basis [no prior Operates on a bona fide basis [no prior

arrangement between customer and seller]arrangement between customer and seller]

Operates over the Operates over the InternetInternet; using all or any ; using all or any combination of technologies designed to combination of technologies designed to exchange dataexchange data [email, mobile phone,[email, mobile phone, EDI];EDI]; toto access dataaccess data [share databases or electronic [share databases or electronic bulleting boards]; and tobulleting boards]; and to capture datacapture data [bar [bar coding and magnetic or optical character readerscoding and magnetic or optical character readers

Requires Requires buyer adhering to a contractbuyer adhering to a contract [I [I

AGREE, I DON’T AGREEAGREE, I DON’T AGREE

E-commerce Market StructureE-commerce Market Structure Portal (POR)Portal (POR):: Engages in building a Engages in building a

community of consumers of information about community of consumers of information about products. Focal points for influencing the channel products. Focal points for influencing the channel traffic into web sites managed by providers.(e.g traffic into web sites managed by providers.(e.g ebay.in as a portal)ebay.in as a portal)

Market Maker (MMK)Market Maker (MMK):: F Facilitates business acilitates business transactions that take place between supplier and transactions that take place between supplier and buyer, and provides value through a system of buyer, and provides value through a system of implicit or explicit guarantee of security and trust.implicit or explicit guarantee of security and trust.(e.g ebay as a company)(e.g ebay as a company)

Product/service Provider (PSP):Product/service Provider (PSP): Conduct directly business over the internet, Conduct directly business over the internet, customized informationcustomized information systems and business systems and business processes.(e.g Apple, Sony etc)processes.(e.g Apple, Sony etc)

E-commerce: ElementsE-commerce: Elements

A good or service to be offeredA good or service to be offered Customer needs to know how to find Customer needs to know how to find

the product [marketing, portals]the product [marketing, portals] Exchange of money [electronic or Exchange of money [electronic or

conventional financial transactions]conventional financial transactions] Delivery mechanism [on-line, off-line]Delivery mechanism [on-line, off-line] Customer service and Customer service and

communicationcommunication

EC frameworkEC framework

PeoplePeople Public PolicyPublic Policy Marketing and advertisementMarketing and advertisement Support ServicesSupport Services Business partnershipsBusiness partnerships

E-commerce: ElementsE-commerce: Elements

Ecommerce in actionEcommerce in action

G2GG2Ge.g. e.g.

coordinationcoordination

G2BG2Be.g. informatione.g. information

G2CG2Ce.g. informatione.g. information

B2GB2Ge.g. e.g.

procurement(procurement(tenders)tenders)

B2BB2Be.g. e-e.g. e-

commerce(indcommerce(indiamart.com)iamart.com)

B2CB2Ce.g. e-e.g. e-

commerce(ebcommerce(ebay,amazon)ay,amazon)

C2GC2Ge.g. taxese.g. taxes

C2BC2Be.g. price e.g. price

comparisons(pricomparisons(pricline.com)cline.com)

C2CC2Ce.g. auction e.g. auction

markets(ebay markets(ebay and amazon)and amazon)

Government

Business

Consumer

Government Business Consumer

E-commerce and Broader Internet Applications

Source OECD (2000)

EC ClassificationEC Classification

B2B2C(Wholesale-retail-consumer)B2B2C(Wholesale-retail-consumer) Peer-to-peer applicationsPeer-to-peer applications Mobile CommerceMobile Commerce Intrabusiness ECIntrabusiness EC B2E(part of Intrabusiness EC)B2E(part of Intrabusiness EC) Collaborative Commerce(M&S)Collaborative Commerce(M&S) Exchange to Exchange Exchange to Exchange EgovernmentEgovernment Non business ECNon business EC E-LearningE-Learning

EC DriversEC Drivers Digital RevolutionDigital Revolution

• Internet, intranets, extranets, computers, softwareInternet, intranets, extranets, computers, software• A vast array of digitized productsA vast array of digitized products• Financial transactions digitallyFinancial transactions digitally• Microprocessors and networking capabilities in physical Microprocessors and networking capabilities in physical

goodsgoods

Business EnvironmentBusiness Environment• Economical, technical, social and legal factorsEconomical, technical, social and legal factors• Change at very fast pace, you need to be ready to adoptChange at very fast pace, you need to be ready to adopt• Problems and opportunities due to this changeProblems and opportunities due to this change• More competitive products faster with less resourcesMore competitive products faster with less resources

Business ModelsBusiness Models

A method of doing business by which a company A method of doing business by which a company can generate revenue to sustain itselfcan generate revenue to sustain itself

Value chain concept (e.g Wal Mart, TV broadcast)Value chain concept (e.g Wal Mart, TV broadcast)

One company can have multiple buz modelsOne company can have multiple buz models

A subset of business plan or business caseA subset of business plan or business case

Weill and Vitale(2001) developed for evaluating Weill and Vitale(2001) developed for evaluating viability of e-business initiativesviability of e-business initiatives

Business ModelsBusiness Models As per Mckay and Marshall(2004), it contains…As per Mckay and Marshall(2004), it contains…

A description of a customer and company's A description of a customer and company's relationship with the customerrelationship with the customer

Description of all products and services that company Description of all products and services that company will offerwill offer

A description of business processA description of business process

List of resources required List of resources required

A description of organization supply chainA description of organization supply chain Revenue, cost, sources of financing and estimated Revenue, cost, sources of financing and estimated

profitabilityprofitability

Business ModelsBusiness Models Online direct marketing(Amazon, Walmart)Online direct marketing(Amazon, Walmart) Electronic tendering systems(GE-reverse auction)Electronic tendering systems(GE-reverse auction) Name your own priceName your own price Find the best priceFind the best price Affiliate marketingAffiliate marketing Viral MarketingViral Marketing Group purchasing Group purchasing Online auctionsOnline auctions Product and service customizationProduct and service customization Electronic market places and exchangesElectronic market places and exchanges Value chain integratorsValue chain integrators Value chain service providersValue chain service providers Information brokersInformation brokers

Revenue ModelsRevenue Models

SSales (Wal-Mart)ales (Wal-Mart) Transaction fees(Stock market)Transaction fees(Stock market) Subscription fees(Airtel broadband)Subscription fees(Airtel broadband) Advertising fees (Google)Advertising fees (Google) Affiliate rates (Ebay and Amazon)Affiliate rates (Ebay and Amazon) Other revenue sources(play games or watch Other revenue sources(play games or watch

sports online for a fee)sports online for a fee)

EC SuccessesEC Successes Virtual EC companies such as Ebay, google, Virtual EC companies such as Ebay, google,

yahoo, Verisign, AOL, checkpointyahoo, Verisign, AOL, checkpoint

Click and Mortar companies- Cisco, GE,IBM, Intel Click and Mortar companies- Cisco, GE,IBM, Intel and Schwaband Schwab

Startups like loy.com, drugstore.com, ftd.com, Startups like loy.com, drugstore.com, ftd.com, campusfood.comcampusfood.com

EC FailuresEC Failures Useem 2000, Perkins and perkins 2001, Carton Useem 2000, Perkins and perkins 2001, Carton

2002, Kaplan 20022002, Kaplan 2002

B2C failures: eToys, expeditor, Marchfirst, B2C failures: eToys, expeditor, Marchfirst, Drkoop.com,webvan.com and boo.comDrkoop.com,webvan.com and boo.com

B2B failures: Chemdex.com, ventro.com, B2B failures: Chemdex.com, ventro.com, verticalnet.comverticalnet.com

E-Commerce: AdvantagesE-Commerce: Advantages Being able to conduct business 24 x 7 x Being able to conduct business 24 x 7 x

365365 Access the global marketplaceAccess the global marketplace SpeedSpeed Opportunity to reduce costsOpportunity to reduce costs Computer platform-independentComputer platform-independent Efficient applications development Efficient applications development

environment environment Allowing customer self service and Allowing customer self service and

'customer outsourcing‘'customer outsourcing‘ Stepping beyond borders to a global viewStepping beyond borders to a global view

E-Commerce: disadvantagesE-Commerce: disadvantages Time for delivery of physical products Time for delivery of physical products Physical product, supplier & delivery Physical product, supplier & delivery

uncertaintyuncertainty Perishable goodsPerishable goods Limited and selected sensory informationLimited and selected sensory information Returning goodsReturning goods Privacy, security, payment, identity, Privacy, security, payment, identity,

contract.contract. Defined services & the unexpected Defined services & the unexpected Personal service Personal service Size and number of transactionsSize and number of transactions

E-Commerce: Key Success E-Commerce: Key Success factorsfactors

Selection and valueSelection and value Performance and servicePerformance and service Look and feelLook and feel Advertising and IncentiveAdvertising and Incentive Personal attentionPersonal attention Community RelationshipsCommunity Relationships Security and ReliabilitySecurity and Reliability

E-Commerce: ImpactE-Commerce: Impact

Widening global digital divideWidening global digital divide Changes in the business regulationsChanges in the business regulations 90% of the internet users are in 90% of the internet users are in

industrialized countries as US and industrialized countries as US and Canada(57%)Canada(57%)

Internet users in Middle east and Africa Internet users in Middle east and Africa only 1%only 1%

Technical, legal and governance issuesTechnical, legal and governance issues

E-Commerce: StrategyE-Commerce: Strategy

Online vs offline strategyOnline vs offline strategy Speed of transactionsSpeed of transactions Appropriate amount of resources for Appropriate amount of resources for

advertisingadvertising Integration of ecommerce components Integration of ecommerce components

with the overall site designwith the overall site design Multiple ways to communicate for Multiple ways to communicate for

customerscustomers Search capability that really worksSearch capability that really works Home or an index page on websiteHome or an index page on website

E-Commerce: ExamplesE-Commerce: Examples

E-Commerce: ExamplesE-Commerce: Examples

E-Commerce: ExamplesE-Commerce: Examples

E-Commerce: VideosE-Commerce: Videos

http://www.youtube.com/watch?v=wan896ZO4aY

http://www.youtube.com/watch?v=IZp_X5IQgIU

http://www.youtube.com/watch?v=LW4X3b_j0eE

http://www.youtube.com/watch?v=OY2tcQ574Ew

http://www.youtube.com/watch?http://www.youtube.com/watch?v=5G7b86a_r1Uv=5G7b86a_r1U