1.

DEFINITION OF ECOMMERCE:
Electronic commerce, commonly known as
(electronic marketing) e-commerce, consists
of the buying and selling of products or
services over electronic systems such as the
Internet and other computer networks.

Modern electronic commerce typically uses

the World Wide Web at least at some point
in the transaction's lifecycle, although it can
use a wider range of technologies such as e-
mail as well. In general, if we use any type of electronic devices in getting orders and
sending catalogues, like telephone, fax or any other such instruments, we are supposed
to be applying electronic business techniques.

Electronic commerce is generally considered to be the sales aspect of e-business. It

also consists of the exchange of data to facilitate the financing and payment aspects of
the business transactions.

2. HISTORY OF ECOMMERCE:
The meaning of electronic commerce has changed over the last 30 years. Originally,
electronic commerce meant the facilitation of commercial transactions electronically,
using technology such as Electronic Data Interchange (EDI) and Electronic Funds
Transfer (EFT). These were both introduced in the late 1970s.

Online shopping, an important component of electronic commerce was invented by

Michael Aldrich in the UK in 1979.

The growth and acceptance of credit cards, automated teller machines (ATM) and
telephone banking in the 1980s were also forms of electronic commerce. An early
example of electronic commerce in physical goods was the Boston Computer
Exchange, a marketplace for used computers launched in 1982. An early online
information marketplace, including online consulting, was the American Information
Exchange.

The world's first recorded B2B was Thomson Holidays in 1981. The first recorded B2C
was Gateshead SIS/Tesco in 1984. All these organizations used the switched public
telephone network in dial-up and leased line modes.

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There was no broadband capability. From the 1990s onwards, electronic commerce
would additionally include enterprise resource planning systems (ERP), data mining and
data warehousing.

In 1990 Tim Berners-Lee invented the World Wide Web and transformed an academic
telecommunication network into a worldwide everyman everyday communication
system called internet/www.

Although the Internet became popular worldwide around 1994 when the first internet
online shopping started, it took about five years to introduce security protocols and DSL
allowing continual connection to the Internet. By the end of 2000, many European and
American business companies offered their services through the World Wide Web.

Nowadays, Ecommerce is gaining momentum and most of the things if not everything is
getting digitally enabled.

3. TYPES OF ECOMMERCE:
➢ Business to Business (B2B)

It is the largest form of e-commerce involving business of trillions of dollars. In this form,
the buyers and sellers are both business entities and do not involve an individual
consumer. It is like the manufacturer supplying goods to the retailer or wholesaler. E.g.
Dell sells computers and other related accessories online but it is does not manufacture
all those products. So, in order to sell those products, it first purchases them from
different businesses i.e. the manufacturers of those products.

B2B

➢ Business to Consumer (B2C)

As the name suggests, it is the model involving businesses and consumers. This is the
most common e-commerce segment. In this model, online businesses sell to individual
consumers. When B2C started, it had a small share in the market but after 1995 its
growth was exponential. The basic concept behind this type is that the online retailers
and marketers can sell their products to the online consumer by using crystal clear data

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which is made available via various online marketing tools. E.g. an online pharmacy
giving free medical consultation and selling medicines to patients is B2C model or Dell
selling its computer to the users. All the information of Dell computer are available on its
website, you can place an order on the web and buy online.

B2C

➢ Consumer to Consumer (C2C)

It facilitates the online transaction of goods or services between two people. Though
there is no visible intermediary involved but the parties cannot carry out the transactions
without the platform which is provided by the online market maker. E.G when one
person is transferring money to other through some online means.

➢ Middleman

It is the type of ecommerce in which the online transaction of goods and services take
place with the help of third party. The third has its own commission in the sale. E.G
Brokers in the stock exchange will buy and sell shares for you and they will have its own
commission.

➢ Others
There are other types of e-commerce business models too like Business to Employee
(B2E), Government to Business (G2B) and Government to Citizen (G2C) but in essence
they are similar to the above mentioned types. Moreover, it is not necessary that these

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models are dedicatedly followed in all the online business types. It may be the case that
a business is using all the models or only one of them or some of them as per its needs.

4. STEPS OF ECOMMERCE:
Most studies, suggest that e-commerce runs through steps.

➢ Searching

The very first step is, to build a channel I-E website to let the world know about your
existence. The website contains information about the company, product/services and
other related information. This can help visitors to learn more about the hosts.

➢ Buying

The next step involves asking customers to lose their pockets and buy on line. The
customer will give order for sale or services and information about place, where product
should be delivering.

➢ Paying

When the customer buy, then you will receive payment either through credit card or
electronic transfer from your account to company`s account.

➢ Shipping

The last step is to deliver the goods or services on the basis of information provided by
the costumer.

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5. TECHNOLOGY USED IN ECOMMERCE:
While going throgh steps of Ecommerce different technologies can be used such as:

➢ Websites
➢ Email
➢ Instant Messaging
➢ Teleconferencing
➢ Telephone
➢ Fax
➢ Mobiles

6. ADVANTAGES OF ECOMMERCE:

➢ Online shopping

Online shopping is the process consumers go through to purchase products or services

over the Internet or other networks.

➢ Online banking (or Internet banking)

It allows the customers to conduct financial transactions on a secure website.

➢ Expand Geographical Reach

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The most apparent benefit of E-Commerce is the ability to acquire customers across the
country and around the world.

➢ Expand Customer Base

By providing your customers another purchase channel, your business can attract and
retain customers that may have never purchased from you.

➢ Increase Visibility

Consumers are increasingly searching for information on the Internet prior to making a
purchase. Make your business available to them.

➢ Provide Customers Valuable Information

Easy to find contact information, store hours, product information, and answers to
common questions all add to creating a positive customer experience.

➢ Never Close

Your customers can purchase products from you at 3:00 AM when you are asleep.
Ecommerce services are available 24 hours 7 days a week.

➢ Reduce Marketing and Advertising Costs

Internet marketing can be highly targeted to your specific customer; it is more effective
and provides a higher return on investment than traditional media advertising.

➢ Collect More Customer Data

Ecommerce, by the very nature of the transactions, automatically collects valuable

customer data and relates purchases to that customer. You can use this information to
increase future sales from your customers.

➢ Increase Sales Through Promotions

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Online, promotions are easier than ever. It can easily be created, edited, and deleted.
This Increases flexibility allows you to see what type of marketing strategy works and
stick with it!

7. DISADAVANTAGES OF ECOMMERCE:
➢ Security Problems
An e-commerce business exposes itself to security risks because of disclosure of
confidential data, data transfer and transaction risks (as in online payments) or virus
attacks.
➢ Cyber Crime:
While on behalf of the customer, there are possibilities of credit card number theft.
When you enter your credit card number while shopping online, your number might be
stolen and the amount in your account can be transferred to someone else.

➢ Training and Maintenance:

A company needs well-skilled and trained workers to maintain and create the
ecommerce facilities of the company. This can prove a bit costly and also may bring
changes in the organizational structure.
➢ Unable to Examine Products Personally:
If we buy products through the internet, we are not able to examine the products
physically and the quality of the product. Images of the products may be available for
viewing. But we can’t buy the product by seeing the image on the internet. There is a
risk involved in the quality of the product that the consumer is purchasing.
➢ Website Stickiness and Customer Loyalty:
A company can have a website and exist within the Internet but there may not be
enough people visiting the site and purchasing services or products from the company.
The Internet provides less expensive advertising but also because of its sheer vastness
and the existence of websites of established businesses, it is critical to create a website
that is “sticky‿ enough to attract market share and create loyalty among the acquired
market share.
8. ECOMMERCE IN PAKISTAN:
As we start warming up to global e-commerce in Pakistan, we must understand that
almost 78 per cent of the e-commerce activity takes place in the USA, obviously driven
by the use of internet in that country.

Pakistan is still far behind in chasing the west in this regard. Entrepreneurs in Pakistan
are of the opinion that e- commerce means being able to make and receive payments
through internet and any other activity through internet is not considered as e-
commerce. This low level of understanding has led many Pakistani firms to give low

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priority to e-commerce due to unavailability of proper framework for the internet in the
country. In Pakistan, e-commerce is still in its infancy and faces many barriers to grow.

• The notable barriers are:

• Unavailability of proper infrastructure: [Telephone line of stem lines of steam age,

frequent failures of power]

• Limited user of internet: Hardly one per cent of the entire population have access
to the internet],

• The issue of security of transactions on the internet,

• High bandwidth rates,

• And last but not least the rigid and monopoly role of the PTCL.

However, the SBP has recently put a crack on the barriers when it approved the
merchant ID accounts to facilitate online transactions. But there is still a long way to go
and requires government to continue to grease the wheels of e-commerce to speed up
the process.

Nevertheless, Pakistan can make good use of this opportunity with proper planning and
execution.

9. CONCLUSION:
The Internet has created a new economic ecosystem, the e-commerce marketplace,
and it has become the virtual main street of the world. Providing a quick and convenient
way of exchanging goods and services both regionally and globally, e-commerce has
boomed. Today, e-commerce has grown into a huge industry. The ever growing
demand of the modern life can only be fulfilled through ecommerce.

Ecommerce has so many advantages that in today`s modern world we cannot ignore it.

The disadvantages of Ecommerce can be handled through proper management and by

brining social awareness.

Therefore our business sector needs to give proper attention to Ecommerce, only than
they can survive in the modern economy. Ecommerce vision can serve as a Catalyst for
Growth in Pakistan’s Economy.

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