E-commerce

Overview of E-commerce

• Definition:

Electronic Commerce (EC) describes the process of buying, selling, transferring, or exchanging products, services, and information using computer network and the Internet. It also include servicing customers, collaborating with business partners, conducting e-learning, intra business activities, and conducting electronic transactions within an organization.

E-commerce forms

• EC can take several forms depending on the degree of digitization of :

1-product 2-process 3-Deleivary agent.All of them can be physically or digitally.• examples: buying SW is pure digitally,

buying a shirt is partially digital and partially physically.

• Any transaction that is partially digital is an E-commerce transaction.

• EC organization are pure physically organizations, but companies engaged only in EC are virtual organizations.

• EC can done over the:1-Internet 2-Value-Added networks ( VAN) that

add communication services to existing common carriers such as LAN.

* For example: buying food from vending machine, buying with smart cards or cell phone are all EC activities.

Types of EC transactions

1-Business to business (B2B): seller and buyer are organizations.

2- collaborative commerce (c-commerce): sharing business activities electronically.

3-Business to consumer (B2C): seller is an organization, buyers are individuals.

4-consumer to business (C2B): consumer names a service, the organization try to fulfill it. (it looks for a supplier to the service).

5-consumer-to-consumer (C2C): individual sells product to other individual.

6-intra business (intraorganization) commerce: internally improve org. functions.

7-government to citizens (G2C) or others: government provides services to citizens using EC technologies. It can do business to other governments.

8- mobile commerce (MC): EC is done in a wireless environment, using cell phones to access the Internet.

EC models

• Some of the major EC models are:1-Online direct marketing sell directly to

customers.2-Name-your-price (use priceline.com)3-Find the best price: specify your need,

compare prices, choose the best price.4-virtual marketing: spread your brand on

the NET.5-membership model: for members only.

EC benefits

• To organization:1- Expands a company’s market place to national

and international markets.2- decreases cost of creating, processing,

distributing, storing, and retrieving information by digitized process.

3-enables companies to get material and services from other companies faster and cheaper.

4-enables small business to compete with large ones.

EC benefits

• To customers1-provide less expensive products and services

provided by online services.2- gives customers more choices to select from.3-makes it possible for people to work and study

at home.4-allows consumers to communicate and

exchange ideas.5-enables customers to shop 24 hours daily.6-delivers detailed information in seconds.

EC benefits

• To society

1- enable individual to work at home, and do less traveling.

2- allows some good to be sold at low prices which increase the living standards.

3-enables people in developing countries to enjoy products and services that are not available in these countries.

Limitations and failures of EC

• There are technical and not technical limitations which slowed the growth of EC, some of which are:

A- Technical limitations:1-lack of universally accepted standards.2-insufficient telecommunications bandwidth3-still-evolving SW development tools.4-difficulties of integrating the Internet and EC applications

and SW with some existing applications and DBs (especially legacy).

5-need for special WEB servers.6-expensive and inconvenient Internet accessibility.

• B- Non Technical limitations:1-unresolved legal issues (for quality, security, and

reliability).2-lack of national and international government regulations

and industry standards.3-lack of mature methods for measuring EC benefits.4-many sellers and buyers wait for EC to stabilize before

they take part.5-customers resistance to change from real to virtual store.6-thinking that EC is expensive and unsecured.

EC mechanisms

• The most common are:

A-Electronic auctions B-Portals- Electronic Auctions:

A mechanisms where sellers place offers and buyers make sequential bids. It uses competitive nature for reaching a final price.

• The Internet provide an efficient infrastructure, • a less expensive and with many participants of

sellers and buyers.

Auction types

1- Forward: used as a selling channel for one seller to many buyers.

- products are placed in a site like eBay.com. Sellers and buyers can individuals. They bid continuously and the heights bidder wins the items.

2- Reverse auctions: there is one buyer, (an organization) that wants to buy a product or services. Then suppliers are invited to submit bids. Online bidding is fast and attracts many bidders. The lowest bid wins.

Auction Benefits

• Benefits to sellers:

- Increase revenues in a short period of time.

- More buyers means more optimized selling prices.

- Saves auction fees, administrative expenses.

- Enables more liquidation

• Benefits to buyers

- increased chances to find unique products.

- Chance to bargain instead of buying a fixed price.

- Entertainment buyers enjoy e-buying.

- Anonymity buyers remain anonymous.

Portals

• E-commerce portals( التجارة الى المداخل:(االلكترونية

As the Internet and Intranets are widely used, more and more information are gathered which (overload) . Information is scattered across documents, e-mail messages, and database in different locations and systems. This makes finding accurate and relevant information takes time and requires access to multiple systems.

• To solve this problem PORTALS are used.

• Portal is an information gateway. It attempts to address information overload through an intranet-based environment to search and access relevant information from disparate IT system and Internet using advanced indexing and search techniques.

• Information portal:

A single point of access through a Web browser to critical business information located inside and outside an organization and it can be personalized.

Types of Portals

Portals vary according to audiences and contents. We consider five types:

1- commercial (public): offer routine contents for different audiences, most popular on the Internet, intended for broad audiences.

Examples : yahoo.com, lycos.com2-publishing portals: intended for specific groups of

specific interests. They provide extensive on line search.

examples: techweb.com and zdnet.com

3-personal portals: contain specific filtered information for individuals. Offer narrow contents for one audience. Example any personal web page.

4-mobile portals: accessible from mobile devices.

5-voice portals: web sites with audio interface, they can be accessed by a standard phone or cell phone.

Functionality of Portals

• Functionality vary from simple information portals that stores data and enables users to navigate and query them to more sophisticated one that allows collaboration.

• Collaborative commerce refers to non-buying and selling EC transactions. It refers to joint product design, joint forecasted demand and other decision making activities among organizations. Example, collaboration between a company and a vender who is designing a product or part of it.

Legal and Ethical issues in E-Commerce

• When buyers and sellers do not know each other and can not even see each other (they may be in different countries), there is a chance that dishonest people will commit fraud and other crimes over the Internet.

• Internet fraud has grown very fast even faster than the Internet itself.

E-commerce

• Process of buying, selling, transferring, exchanging products, services, or information over computer networks

• Pure versus partial– Based on degree of digitization

• Product• Process• Intermediary

– Pure requires all three components to be fully digitized

• Internet versus non-Internet– Most are Internet based– May be value-added networks or local area networks

E-commerce Transactions

• Business-to-business (B2B)• Business-to-consumer (B2C)• Consumer-to-consumer (C2C)• Consumer-to-business (C2B)• Government-to-citizens (G2C)• Collaborative commerce between partners• Business to employees• Intrabusiness/Intraorganizational commerce• Mobile commerce (M-commerce)

Scope of E-commerce

• Applications supported by infrastructure– Hardware– Software

• Messaging, multimedia, interfaces, business services

– Networks• communications

• Support areas– People– Legal and public policy and regulations– Marketing and advertisements– Support services ranging from payments to order delivery– Business partnerships like joint ventures, e-marketplaces,

affiliations

Advantages• Advantages:

– Expands marketplace globally– Expands availability of resources– Shortens marketing-distribution

channels– Decreases expenses– Reduces inventory– Aids small businesses in

competing– Enables specialized niches– Quicker delivery of information– Enables individuals to work from

home– Facilitates delivery of public

services

– Allows for purchase of goods at lowered prices

– Enables customization, personalization

– Decreases costs to customers, while increasing their choices

– Allows for 24 hour shopping

– Makes electronic auctions possible

– Enables people to interact in electronic communities

Limitations• Limitations:

– Lack of universal standards– Insufficient bandwidth– Software-development tools are still evolving– Integration difficulties– Need for special Web servers in addition to network servers– Accessibility expensive– Unresolved legal issues– Lack of national and international governmental regulations– Lack of mature methodologies to measure benefits and justify– Customer resistance– Security questions– Insufficient number of buyers and sellers for profitable e-commerce

operations

E-commerce Mechanisms

• Electronic auctions– Competitive market mechanisms

• Forward auctions– Sellers place offers and buyers make sequential bidsعروض

• Reverse auctions– Sellers are invited to submit bids on product or service buyer wants

• Barteringمقايضه– Exchange of goods or services without money transactions

• Portals االنترنت بوابات– Information gateways

• Single point of access through Web browser

Portals

• Commercial– Offer content to broad audiences

• Routine • Little personalization

• Publishing– Based on specific interests

• Extensive search capabilities

• Personal – Target specific filtered information

• Narrow content• Personalized

• Mobile– Accessible through mobile devices

Portals

• Voice– Audio interfaces– Accessible through phones

• Corporate – Access to business information located both within

and outside of organization • Rich content• Limited communities• Organized focal point

– Suppliers– Customers– Employees– Supervisors

Legal and Ethical Issues• Fraud

– Seller’s and buyer’s• Buyer protection• Seller protection

– Unwarranted repudiation– Intellectual property rights– Domain names

• Privacy issues– Cookies– Web tracking– Sales of lists– Monitoring e-mails and site visits

• Taxation• Disintermediation• Intellectual Property issues