ENHANCING LESSON 26: INTRODUCTION TO E-COMMERCE

Objective
The objective of this lesson is to give you an insight into : E-commerce Impact of E-Commerce E-commerce Applications Infrastructure Requirements E-commerce Website Designing Financial Transactions in E-commerce Legal Implications of E-commerce Security aspects in E-commerce

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need not be in physical proximity to the seller to buy goods. As there is a world wide network of computers connected across, ne can get online and carry on the business transactions using internet as the media. You all will definitely agree that for the success of this concept, it should provide with better capabilities than traditional way of doing business, then only a buyer or a seller will be interested on carrying on the trade through E-commerce. How do you think that E-commerce will help a commercial / Business organization ? The answer lies in the fact that: E-commerce has the capability to transform every institution in this world, by : Changing the way we do business The way the we communicate, interact as individuals... The Way all of us get involved with businesses. What are the features of E-commerce which are attracting the world across to carry on the online trades and e-commerce?

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Introduction
Why should you all know about E-Commerce? You all might be aware of the David Vs. Goliath story , where the giant Goliath is feared across as he is mighty and anyone dare challenging him, gets killed in the process and the Goliath started misusing his strengths. People started fearing Goliath, there was a small kid David, who was quite small, less strong at physique, but strong mentally, wanted to fight with Goliath, inspite of warnings from his friends and well wishers, he had a fight with Goliath, and at the end he was successful in killing the Goliath. This task he could achieve using his mind and not his physique, as he knew that if he uses his physique, he can never fight Goliath, so to defeat Goliath , he need to use another strategy or strength which will help him achieve his Goal, which was the secret of his success. But, why are we discussing this story in this subject ? , Is it for fun, yeah!! you are all correct, it is fun and learn together, which will help a firm to be able to compete with the most powerful competitor, even if the firm is quite small, more efficiently and effectively, without wasting much time, lesser use of resources, and the spare time and resources can be used for activities which add value to the organization. Every now and then, a technology or idea conies along that is so profound, so powerful, so universal that its impact changes everything... and the e-commerce is one such technol-ogy , which has the potential to confirm the concept of DAVID Vs. GOLIATH So, lets get into the e-mindset and begin our journey through the world of e-commerce. The term e-commerce is not difficult to understand & we can simply define the e-commerce as : Using the Internet for Commerce/ Business transactions This definition stresses on the fact that, there is a new communication channel for the business other than traditional media, where there is a physical interaction between the Buyer and Seller. Here the concept of the business is quite different, one

The following can be taken as the most important features of E-commerce : Low Cost of Start up Very Low Cost of Operation Finding new Markets and Customers Easy and Faster Market Research Competitive Advantage And Many More

The above factors make e-commerce the order of the day, as with more and more sophistication in technology, more and more easier the things are becoming and the user is finding the operational environment quite friendly. The e- commerce setup (applications): You all might be wondering about the various applications of e-commerce, your inquisitiveness is quite valid as the topic itself is so interesting. Now, let us look into the various applications of the E-commerce: 1. Business to Consumers ( B2C ) 2. Business to Business ( B2B ) 3. Business to Government / Administration ( B2G / B2A) 4. Consumer to Government / Administration (C2G / C2A) 5. Consumer to Consumer (C2C)
Business to Consumers (B2C)

Is there any one who has a first hand experience of using Internet for your purchases? Surely, some one of you must have had this wonderful experience, sitting at your home, buying something, or making some payments etc.

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You can think about booking a movie ticket online, ordering a pizza online, etc. These are all nothing but B2C applications of E-commerce, where a consumer is interacting with the seller through Internet and fulfilling a need.
Business to Business ( B2B ) :

You all can understand that there has to be a media through

You all might be wondering, how do business and business interact and for what purpose. Each and every business organization is also a consumer, as they have to purchase the basic raw materials and components for further processing, it has to interact with the suppliers, major business partners. The basic transactions like Just-in-time inventory management, supply chain management, etc. are some of the typical examples of B2B applications.
Business to Government / Administration (B2G /B2A)

which the buyer and seller will meet, a common platform which brings in together, the Buyer and the Seller. In order to utilize the potential of the e-commerce, one has to have the Internet connectivity, todays most powerful and potential media, on the seller as well as the buyer side. As the trade is possible only when the buyer connects to the sellers e-shop and places his order for the requirements and the seller acknowledges the order placed and works on it. All these activities take place through Internet as a media, away from the traditional media.
The Website / Portal

How do you carry on your purchases in daily routine? We all, in general visit various shops and establishments in the market, so as to fulfill our buying needs. It is a time consuming process, the same can be done quite easily by visiting the shops on the Internet. These shops or Kiosks on Internet are the Websites and Portals. Visiting a shop on the Internet means that we are connecting to the website/ portal of the desired e-shop, and go through what they have to offer us, and then place an order for our requirement.

Whats the role of the government in Business, any guesses?? You should all be aware that for any business to run, it must conform to governmental procedures . It is usually seen that the interaction with the governmental bodies is quite a cumbersome and time-consuming process, in spite of many efforts by the government to have Single Window Counter, things are not improving to the level, which has to be there. So, realizing the potential of Internet and e-commerce, the governmental bodies are making themselves available on the net, so as the help businesses to carry on all the interactions through Internet, all these applications are nothing but B2G / B2A applications.
Consumer to Government / Administration (C2G /

Website Designing
What comes to your mind when you think about staring a business, the basic infrastructure, isnt it. Yeah, we are now going to understand the designing part of the e-shop, which is done through the amalgamation of varied software, which are a proper blend as they are the best suited for the job they are chosen for. All the websites are usually designed using HTML (Hyper Text Mark Up Language) as a base and all other scripting languages and tools like, JavaScript, Jscript, Perl, CGI, Applets, Servlets, etc as supplementary. The detailed discussion of these tools is beyond the scope of this lesson.
The E-Payment Systems

C2A) : The consumer also need to interact with the governmental agencies and bodies like registration office, water and electricity department etc. for various purposes, all the ecommerce applications that provide for this, are C2G / C2A applications of the e-commerce.
Consumer to Consumer (C2C) :

The auctions, newspaper ads about purchase and sale of automobiles etc., are the platforms where a consumer interacts with another consumer and gets the transaction complete, these applications if they use Internet as media, are the C2C applications of E-commerce. What are the infrastructure requirements for implementing E-Commerce ? You all till now have understood the importance of ecommerce, now let us look into the fact that what do we all need for implementing the e-commerce. The following are the infrastructure require-ments which we require for implementing the e-commerce : The Internet Connectivity The Website / Portal The E-Payment Systems The Security Systems The Internet Connectivity :

The closing part of a sale/purchase is the payment of the bill. Now, the question arises that how am I going to pay the bill, as I am not in physical proximity, to the seller. There is usually no trust involved as both the parties are strangers to each other and they do not have any physical interaction, which makes it further more difficult to carry on the payment, which is the crux of the transaction. We cannot tackle the payments through our traditional instruments of cash, cheques, Demand Drafts, etc., as they all need physical presence of the giver, so there has to be new instruments which will be working on the same lines of the traditional instruments, giving the same feel and flexibility to the user. Let us look into some of these instruments, which are very vital for the success of E-commerce: 1. Plastic Money: - They are the plastic cards, issued by a bank, which gives the facility to the user to make payments, the settlement terms being different, on whose basis one can classify them into two basic types, the prepaid and the post paid.

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The prepaid cards are in general known as DEBIT CARDS. These cards are issued to the one who has an account with some balance in his account, the limit for the spending is the amount of money you have in the bank subjected to the minimum limits of the concerned bank.

mechanism to protect the rights of the consumer as well as the seller. All the countries across the globe have enacted the new cyber laws to curtail these problems.
Advantages and utilities of the E-commerce

How Can You Use a Debit Card?

The debit card carries the name of the holder, number, and balance details, one has to give in the number and the amount of transaction, if there is sufficient balance in the account, then the balance is reduced by the amount and the transaction is completed. The Post Paid cards are in general known as CREDIT CARDS. The bank or an institution, on the basis of the credibility of the person, issues these cards. A credit limit is fixed and the transactions up to the limit are allowed. The only difference between the Debit card and the Credit card is that, here, one can pay at a later date, everything else is the same. 2. E-Cheques and E- Demand Draft They are quite similar to our traditional cheques and demand drafts, the difference being that they are in e-form. Here, the bank gives the e-cheque facility to the account holder, where one can issue e-cheques, which are authenticated by the bank for all the transactions. 3. E-Cash This is the most flexible form of the e-payment systems, this works on the same lines of our tradi-tional cash. Only difference here is that one can generate his own currency note through software and ratify it from the bank he has an account with and then use it for transactions on the Internet. These payment systems make the e-commerce a successful one.

Applications : You all might be now aware of E-commerce, let us now look into some of the advantages and utilities a firm enjoys if it implements E-Commerce applications. The firm benefits by the following factors : Enhancement of operational effectiveness Automation of Administrative Processes Re-engineering of Primary Infrastructure Creating new industries Gaining Competitive Advantage Strategic positioning Supply-Chain Reconfiguration and Integration Intensified Competitive Procurement Enhanced Selling Processes Enhanced Customer Usage Experience Enhanced Customer Buying Experience Helps to Compete Globally Saves Cost and Time To be in tune with the world To Create SUCCESS

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Issues & Challenges of E-commerce

The biggest challenge is cultural. It is in the fundamental transformation of tthings get done in the world. But you all know that until we take a step ahead, we will never progress, so we need to prepare ourselves for this new revolution and make the best use of it. Change before you have to, has to be followed, as until you change you cannot survive.

At the end of this lesson, you should all now be aware of all the facets of E-commerce and should be able to adopt and implement the e-commerce applications , so as to make a firm effective. One has to prepare for the future changes as the Ecommerce is going to be order of the day and if one does not use the potential of E-commerce , they will be left behind

E-commerce - concern Areas

Now that we have already seen about varied aspects of eCommerce, what do you think could be the areas of major concern, which is going to decide the fate of e-Commerce. Could you make the following areas:
Security Cyber laws

Whenever the person is doing the trade e-way, there is a major concern about the security of the transactions, as the credit number and other details have to be sent across the Internet. The security is the major concern area, but now lot of measures are being taken to see to it that the transactions are secure in ecommerce, so that many can take benefit of the e-commerce potential.
Cyber laws

As you are all aware that, whenever there is trade, it is bound to have problems and litigations, there has to be an effective
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