LESOTHO

BIC3513 E-Commerce Systems

CHAPTER 1
Introduction to
eCommerce Systems
Faculty of Information & Communication Technology

Learning objectives
Define eCommerce and describe how it differs from eBusiness.
Identify and describe the unique features of eCommerce
technology and discuss their business significance.
Recognize and describe Web 2.0 applications.
Describe the major types of eCommerce .
Discuss the origins and growth of eCommerce .
Explain the evolution of eCommerce from its early years to
today.
Identify the factors that will define the next five years of
eCommerce .
Describe the major themes underlying the study of eCommerce .
Identify the major academic disciplines contributing to
eCommerce .
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Facebook: The New Face of

E-commerce?
Do you use Facebook, and if so, how often?
What has the experience been like?
Have you purchased anything based on an advertisement on
Facebook or by using a link provided by a friend?
Are you concerned about the privacy of the information you
have posted on Facebook?

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First Things First

Welcome to the new world of electronic commerce (eCommerce or
EC)
The industry of the twenty-first century
Do business electronically from virtually anywhere in the world
that has a computer.
In 2011 alone, US eCommerce generated well over $310
billion in retail business and over $3.36 trillion business-to-business
traffic.
The Internet - an international network of independent computer
systems
precipitated the revolution.
Security
Privacy
Other problems
Has permeated virtually every phrase of society
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E-commerce Trends 20112014

Social networking continues to grow
Expansion of social e-commerce platform
Mobile platform begins to rival PC platform
Localization of e-commerce (Groupon)
Explosive growth in online video viewing
Continued privacy and security concerns

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Myths about eCommerce

Setting up a Web site is easy.
eCommerce means no more mass marketing.
eCommerce means a new economy.
eCommerce is revolutionary.
eCommerce is a commercial fad that crashed in 2000.
All products can be sold online using identical business models.
Build it and they will come.
The middleman is out.

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The Drivers for eCommerce

Digital Convergence - digital devices communicating with one
another
Anytime, anywhere, anyone - eCommerce is available to
anyone (24/7)
Changes in Organizations - todays businesses empower frontline
workers to do the kind of work once performed by junior
management
Increasing pressure on operating costs and profit margins global
competition and the proliferation of products and services
worldwide have added pressure on operating costs and profit
margins
Demand for customized products and services - mass
customization puts pressure on firms to handle customized
requests on a mass-market scale
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Changes in Organizational
Makeup

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eCommerce Versus eBusiness

eCommerce
Selling goods and services on the retail level with anyone,
anywhere, via the Internet
Greater efficiency and effective exchange of goods and
services
Exchange based upon transaction
A block of information exchange between the merchant
and its
customers via the corporate Web site
www.amazon.com
eBusiness
Connecting critical business systems and constituencies
directly
via the Internet
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eCommerce Versus eBusiness

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eBusiness:
Digital enablement of transactions and processes within
a firm, involving information systems under firms control
Does not include commercial transactions involving an
exchange
of value across organizational boundaries

eCommerce Versus eBusiness

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eCommerce Is Not eBusiness

eBusiness - the conduct of business on the Internet, in supplychain planning, tracking, fulfillment, invoicement, and payment.
Includes buying and selling as well as servicing customer and
collaborating with business partners
Electronic information is used to boost performance and create
value by forming new relationships between and among
businesses and customers.
One example of eBusiness is SAP ( www.sap.com)

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Why Study eCommerce ?

eCommerce technology is different, more powerful
than previous technologies
eCommerce bringing fundamental changes to
commerce
Traditional commerce:
Passive consumer
Sales-force driven
Fixed prices
Information asymmetry
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Unique Features of
eCommerce Technology
1. Ubiquity (available everywhere, all the time)
2. Global reach (across cultural/national boundaries)
3. Universal standards (lowers market entry for merchants and
search costs for consumers)
4. Information richness (more powerful selling environment)
5. Interactivity (can simulate face-to-face experience, but on a
global scale)
6. Information density (amount and quality of information
available to all market participants)
7. Personalization/customization
8. Social technology
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Web 2.0
Applications, technologies that allow users to:
Create and share content, preferences, bookmarks, and
online personas
Participate in virtual lives
Build online communities
Examples
YouTube, Photobucket, Flickr, Google, iPhone
MySpace, Facebook, LinkedIn
Second Life
Wikipedia
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Web 2.0
User-centered applications and social media technologies
User-generated content and communication
Highly interactive, social communities
Large audiences; yet mostly unproven business models
e.g., Twitter, YouTube, Facebook, Second Life,
Wikipedia, Digg.

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Types of eCommerce
Classified by market relationship
Business-to-Consumer (B2C)
Business-to-Business (B2B)
Consumer-to-Consumer (C2C)
Classified by technology used
Peer-to-Peer (P2P)
Enables Internet users to share files and computer
resources
Mobile commerce (M-commerce)

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Types of eCommerce Examples

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eCommerce Applications
Business-to-Consumer (Internet)
Business-to-Business (Internet and Extranet)
Supply-Chain Management
Business-within-Business (Intranet)
Business-to-Government (B2G)

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Business-to-Consumer
(Internet)
The consumers use of a merchants Web storefront or Web site
Modeled on the traditional shopping experience
Shopping cart is used to hold goods until the customer is ready
to check out
Online order form supported by the appropriate software
Checkout is order and payment processing

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Business-to-Business (Internet
and Extranet)
Business-to-Business eCommerce is industrial marketing
among the processes it handles are fulfillment and procurement
Companies can conveniently and quickly check their suppliers
inventories or make instant purchases
Competing online should also force prices for materials and
supplies to drop dramatically
B2B often use an extranet: a shared intranet vendors,
contractors, suppliers, and key customers

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Consumer-to-Consumer
eCommerce
Provide a way for consumers to sell to each other
Consumer:
prepares the product for market
places the product for auction or sale
relies on market maker to provide catalog,
search
engine, and transaction clearing
capabilities

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Business-within-Business
(Intranet)
Strictly a within company type of information exchange
Restricted to internal employees and customers
Firewalls to keep out non employees
E-mail replaces paper for the communication of messages order
acknowledgement and approvals, and other forms or
correspondence
The intranet becomes a facilitator for the exchange of
information and services among the departments or divisions of a
company
Different departments with different PCs or local area networks
can interact on an intranet
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Benefits of an Intranet
Low development and maintenance costs
Environmentally friendly because it is companyspecific
Availability and sharing of information
Timely, current information
Quick and easy dissemination of information
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Business-to-Government (B2G)
The government market is strikingly similar to B2B.
Huge potential for savings in $1.8 trillion federal and $1 trillion
state and local expenditures
Changing the status quo in government is not so easy
Changes to employee tasks and job restructuring often
create resistance
Tax savings potential is not easily recognized
Committing to technology means constant need for
upgrades and
additional costs

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Key Elements of Internet, Extranet,

and
Intranet eCommerce

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The Internet
Worldwide network of computer networks built on
common standards
Created in late 1960s
Services include the Web, e-mail, file transfers, etc.
Can measure growth by looking at number of Internet
hosts with domain names

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The Web
Most popular Internet service
Developed in early 1990s
Provides access to Web pages
HTML documents that may include text, graphics,
animations, music, videos
Web content has grown exponentially
Google reports 1 trillion unique URLs; 120 billion
pages indexed

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INTERNET USAGE STATISTICS

The Internet Big Picture
World Internet Users and Population
Stats

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Origins & Growth of

eCommerce
Precursors:
Baxter Healthcare (1970, pharmaceutical firm, B2B, telephonebased modem, hospital reorder supplies)
Electronic Data Interchange (EDI) standards (exchange
commercial documents and transactions)
French Minitel (1980s videotext system, B2C, 13,000 services:
ticket agencies, travel services, retail products, online banking)
None had functionality of Internet
1995: Beginning of eCommerce
First sales of banner advertisements by AT&T, Volvo, Sprint

Since then, eCommerce fastest growing form of

commerce in the United States

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Share of retail online sales by

type of company

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Top 10 Most Popular Search

Engines | August 2014
1 | Google 1 - eBizMBA Rank | 1,100,000,000 - Estimated Unique Monthly Visitors | 1 - Compete Rank | 1 Quantcast Rank | 1 - Alexa Rank | August 27, 2014. The Most Popular Search Engines | eBizMBA

2 | Bing 15 - eBizMBA Rank | 350,000,000 - Estimated Unique Monthly Visitors | 5 - Compete Rank | 19 Quantcast Rank | 22 - Alexa Rank | August 27, 2014. The Most Popular Search Engines | eBizMBA

3 | Yahoo! Search 18 - eBizMBA Rank | 300,000,000 - Estimated Unique Monthly Visitors

| *8* - Compete Rank |*28* - Quantcast Rank | NA - Alexa Rank | August 27, 2014.
The Most Popular Search Engines | eBizMBA
4 | Ask 25 - eBizMBA Rank | 245,000,000 - Estimated Unique Monthly Visitors | 14 Compete Rank | 31 - Quantcast Rank | 31 - Alexa Rank | August 27, 2014.
The Most Popular Search Engines | eBizMBA

5 | Aol Search 245 - eBizMBA Rank | 125,000,000 - Estimated Unique Monthly Visitors |
*250* - Compete Rank |*240* - Quantcast Rank | NA - Alexa Rank | August 27, 2014.
The Most Popular Search Engines | eBizMBA
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Top 10 Most Popular Search

Engines | August 2014
6 | Wow 271 - eBizMBA Rank | 100,000,000 - Estimated Unique Monthly Visitors | 20 Compete Rank |*26* - Quantcast Rank | 767 - Alexa Rank | August 27, 2014.
The Most Popular Search Engines | eBizMBA
7 | WebCrawler 511 - eBizMBA Rank | 65,000,000 - Estimated Unique Monthly Visitors
| 100 - Compete Rank |759 - Quantcast Rank | 674 - Alexa Rank | August 27, 2014.
The Most Popular Search Engines | eBizMBA
8 | MyWebSearch 545 - eBizMBA Rank | 60,000,000 - Estimated Unique Monthly Visitors | *105*
- Compete Rank |1,124 - Quantcast Rank | 405 - Alexa Rank | August 27, 2014.
The Most Popular Search Engines | eBizMBA
9 | Infospace 892 - eBizMBA Rank | 24,000,000 - Estimated Unique Monthly Visitors | *66* Compete Rank |*500* - Quantcast Rank | 2,110 - Alexa Rank | August 27, 2014.
The Most Popular Search Engines | eBizMBA
10 | Info 1,064 - eBizMBA Rank | 13,500,000 - Estimated Unique Monthly Visitors | 378 Compete Rank |877 - Quantcast Rank | 1,938 - Alexa Rank | August 27, 2014.
The Most Popular Search Engines | eBizMBA
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