INTRODUCTION Electronic commerce is defined as embracing the concept of trade, exchange of merchandise on a large scale between different countries.

By association, e-commerce can be seen to include the electronic medium for this exchange. Thus electronic commerce can be broadly defined as the exchange of merchandise (whether tangible or intangible) on a large scale between different countries using an electronic medium namely the Internet. The implications of this are that ecommerce incorporates a whole socio-economic, telecommunications technology and commercial infrastructure at the macro-environmental level. All these elements interact together to provide the fundamentals of e-commerce. Business, on the other hand, is defined as a commercial enterprise as a going concern. WHAT IS E-COMMERCE?  Electronic commerce or e-commerce refers to a wide range of online business activities for products and services. It also pertains to any form of business transaction in which the parties interact electronically rather than by physical exchanges or direct physical contact.  Electronic Commerce (EC) is where business transactions take place via telecommunications networks, especially the Internet.  Electronic commerce describes the buying and selling of products, services, and information via computer networks including the Internet.  E-commerce, ecommerce, or electronic commerce is defined as the conduct of a financial transaction by electronic means  E-commerce is the use of electronic communications and digital information processing technology in business transactions to create, transform, and redefine relationships for value creation between or among organizations, and between organizations and individuals Even today, some considerable time after the so called dot com/Internet revolution, electronic commerce (e-commerce) remains a relatively new, emerging and constantly changing area of business management and information technology. Next stage is development of Electronic data interchange (EDI). EDI is the electronic transfer of a standardised business transaction between a sender and receiver computer, over some kind of private network or value added network (VAN). With the advent of the Internet, the term e-commerce began to include:  Electronic trading of physical goods and of intangibles such as information.  All the steps involved in trade, such as on-line marketing, ordering payment and support for delivery.  The electronic provision of services such as after sales support or on-line legal advice. OBJECTIVES OF ECOMMERCE       To understand the complexity of e-commerce and its many facets. To explore how e-business and e-commerce fit together. To identify the impact of e-commerce. To recognise the benefits and limitations of e-commerce. To use classification frameworks for analysing e-commerce. To identify the main barriers to the growth and development of e-commerce in organisations.
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Most of developing countries are already participating in e-commerce, either as sellers or buyers. On another plane, developing countries are given increased access to the global marketplace, where they compete with and complement the more developed economies. However, to facilitate ecommerce growth in these countries, the relatively underdeveloped information infrastructure must be improved. Among the areas for policy interventions are:  High Internet access costs, including connection service fees, communication fees, and hosting charges for websites with sufficient bandwidth;  Limited availability of credit cards and a nationwide credit card system;  Underdeveloped transportation infrastructure resulting in slow and uncertain delivery of goods and services;  Network security problems and insufficient security safeguards;  Lack of skilled human resources and key technologies (i.e., inadequate professional IT workforce)  Cross-border issues, such as the recognition of transactions under laws of other ASEAN member-countries, certification services, improvement of delivery methods and customs facilitation; and  The relatively low cost of labor, which implies that a shift to a comparatively capital intensive solution is not apparent.  Provision of services such as after sales support or on-line legal advice. IS E-COMMERCE THE SAME AS E-BUSINESS While some use e-commerce and e-business interchangeably, they are distinct concepts. In e-commerce, information and communications technology (ICT) is used in inter-business or interorganizational transactions (transactions between and among the organizations).

TYPES OF E-COMMERCE E-commerce identifies the partners directly involved in the transaction. An informal version of this framework is being loosely applied in the use of the terms business-to-business (B-to-B), businessto-consumer (B-to-C) and consumer-to-consumer (C-to-C) and mobile commerce (m-commerce). 1. Business-to-Business (B-to-B) B2B e-commerce is simply defined as e-commerce between companies. This is the type of ecommerce that deals with relationships between and among businesses. About 80% of e-commerce is of this type, and most experts predict that B2B ecommerce will continue to grow faster than the B2C segment. The B2B market has three components: a) Direct selling and support to business (as in the case of Cisco where customers can buy and also get technical support, downloads, patches online). b) E-procurement (also known as industry portals) where a purchasing agent can shop for supplies from vendors, request proposals, and, in some cases, bid to make a purchase at a desired price. For example the autoparts wholesaler (reliableautomotive.com); and the chemical B-to-B exchange. c) Information sites provide information about a particular industry for its companies and their employees. These include specialised search sites and trade and industry standards
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organisation sites. E.g. new market makers.com is a leading portal for B-to-B news. Many Bto-B sites may also fall into none or more than one of these groups. 2. Business-to-consumer (B to C) The exchange of products, information and services between business and the consumer.. In this case, the c represents either consumer or customer. Business-to-consumer e-commerce, or commerce between companies and consumers, involves customers gathering information; purchasing physical goods (i.e., tangibles such as books or consumer products) or information goods (or goods of electronic material or digitized content, such as software, or e-books); and, for information goods, receiving products over an electronic network. The more common applications of this type of e-commerce are in the areas of purchasing products and information, and personal finance management, which pertains to the management of personal investments and finances. B2C e-commerce reduces transactions costs (particularly search costs) by increasing consumer access to information and allowing consumers to find the most competitive price for a product or service. B2C e-commerce also reduces market entry barriers since the cost of putting up and maintaining a Web site is much cheaper than installing a brick-and-mortar structure for a firm. In the case of information goods, B2C e-commerce is even more attractive because it saves firms from factoring in the additional cost of a physical distribution network. Moreover, for countries with a growing and robust Internet population, delivering information goods becomes increasingly feasible. 3. Business-to-Government (B-to-G): Business-to-government e-commerce or B2G is generally defined as commerce between companies and the public sector. It refers to the use of the Internet for public procurement, licensing procedures, and other government-related operations. This kind of e-commerce has two features: first, the public sector assumes a pilot/leading role in establishing e-commerce; and second, it is assumed that the public sector has the greatest need for making its procurement system more effective. Web-based purchasing policy increases the transparency of the procurement process and reduces the risk of irregularities. To date, however, the size of the B2G ecommerce market as a component of total e-commerce is insignificant, as government e-procurement systems remain undeveloped. 4. Consumer-to-Consumer (C-to-C): Consumer-to-consumer e-commerce or C2C is simply commerce between private individuals or consumers. This type of e-commerce is characterized by the growth of electronic marketplaces and online auctions, particularly in vertical industries where firms/businesses can bid for what they want from among multiple suppliers. It perhaps has the greatest potential for developing new markets. Consumer-to-business (C2B) transactions involve reverse auctions, which empower the consumer to drive transactions. A concrete example of this when competing airlines gives a traveler best travel and ticket offers in response to the travelers post that she wants to fly from New York to San Francisco firms/organizations) and in business-to-consumer transactions (transactions between firms/organizations and individuals).

MODEL OF E-COMMERCE

Definitions:Database: It is a storage container that holds information about the items being sold. ro (prices, manufacturers, etc.) Corporate Web Site: This is a password protected web site that enables to modify the information in the database (update prices, add new items, delete old items, etc.) Public Web Site: This is the web site that displays and describes the products to the customers. From this web site the merchandise can be securely purchased by anyone in the world. Steps involved are: Step 1: In the diagram above, Step 1 shows the arrow flowing out of the database into the Corporate web site. In other words, all of the information about the products, prices, manufacturers, etc is being displayed in easy to read lists inside the web browser. We can access these lists from anywhere in the world, not just from inside the office. Step 2: This step shows the arrow flowing from the Corporate web site into the database. As mentioned in Step 1. The information is being displayed in the form of lists inside the web browser. Each individual item, on each list is editable. This means that we can change prices, add new items and delete old items, etc from anywhere in the world. All of the "updates" to these lists are instantly stored in the database. This functionality empowers to administer own web site allowing us to avoid web site maintenance fees and service time. Step 3: The final step shows the information that is stored in the database flowing into the Public web site. With all of the editing complete, we have the confidence in knowing that the customers are seeing accurate and up to the minute products and price information.

WHY SHOP ONLINE? Online access has enabled people from all walks of life to bring entire libraries, entertainment venues, post offices and financial centers to a workplace, to a desktop or to a shirt pocket. The Internets largest and most meaningful impact may very well be on the way consumers shop for everything from gifts, gadgets and groceries to clothing, cars, and cruises. The ease and selection that the Internet provides to shoppers has changed the face of retailing. More and more, consumers visit a stores Web site to make their choices before traveling to the store itself; and in a rapidly swelling tide, many shoppers are bypassing the store altogether and ordering online directly from the Web sites of their favorite brands and outlets.. Online stores are open 24 hours a day, seven days a week, and their inventories are often more complete than those of their brick-and-mortar counterparts, the Internet makes it easy for
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shoppers to compare products withi or between stores, to read product reviews from other customers, to access vendor return policies and to find warrant information. A recent study of the marketplace by Nielsen//Net Ratings found more than 200 million Americans (or 75%) are using the Internet.

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ublic NASDAQ: EBAY NASDAQ-100 Component S& 500 Component September 3, 1995 ierre Omidyar q i i San Jose, California, .S. S$ 01.801 billion (2010) eBay.com i i i Online auction Required to buy and sell

B (NASDAQ: EBAY) is an American internet consumer-to-consumer corporation that manages eBay.com, an online auction and shopping website in which people and businesses buy and sell a broad variety of goods and services worldwide. Founded in 1995, eBay is one of the notable success stories of the dot-com bubble. It is now a multi-billion dollar business with operations locali ed in over thirty countries. Ebay carries on ticket trading; online money transfers and other services. i l

Millions of collectibles, decor, appliances, computers, furnishings, equipment, domain names vehicles, and other miscellaneous items are listed, bought, or sold daily on eBay. Generally,anything can be auctioned on the site as long as it is not illegal. arge international companies, such as IBM, sell their newest products and offer services on eBay using competitive auctions and fi ed-priced storefronts. Online access has enabled people from all walks of life to bring entire libraries, entertainment venues, post offices and financial centers to a workplace, to a desktop or to a shirt pocket. The Internet s largest and most meaningful impact may very well be on the way consumers shop for everything from gifts, gadgets and groceries to clothing, cars, and cruises. Online stores are open 24 hours a day, seven days a week, and their inventories are often more complete than those of their brick-and-mortar counterparts, the Internet makes it easy for

shoppers to compare products within or between stores, to read product reviews from other customers, to access vendor return policies and to find warranty information. A recent study of the marketplace by Nielsen//Net Ratings found more than 200 million Americans (or 75%) are using the Internet.

SHOPPING SAFELY ONLINE Online fraud can take many forms from non-delivery of goods to non-return of damaged goods. In many cases, online fraud can be deterred by following a few simple practices:1. Learn as much as possible about the product and seller: Shoppers will feel more secure and confident if they are familiar with the merchants from whom theyre buying. The Internet offers the platform for retailers to provide information about their companies and histories while the buyers are empowered to do their research about the products and companies. 2. Understand the retailers refund policies: Look for and ask about what the refund policies are. Questions to ask include: the required timeframe a buyer must contact the retailers and return the items, if a full refund will be offered or a merchandise credit, and if an item that has been opened can be returned. 3. Choose a secure password to protect account information: Many people use passwords for online stores that could be guessed, like their birthday, Social Security Number or a family members name. Instead, a password should contain a combination of upper and lower case letters and numbers and symbols that no one else will know. 4. Use a secure checkout and payment process: Many Web sites use a technology called Secure Sockets Layer (SSL) to encrypt the personal and financial information sent over the Internet. To know if the retailer is offering a safe checkout process, look for the logos from companies like VeriSign or Trust E. 5. If an offer sounds highly suspicious or too good to be true, it probably is: As with any purchase, shoppers should read the fine print (or, in some instances, click the links describing the purchase agreement). While Internet shops frequently offer lower prices than brick-and-mortar stores, shoppers should be wary of unreasonably low bargain prices or unusually attractive promises.

HOW GOVERNMENT USES E-COMMERCE:1) E-procurement. Government agencies should be able to trade electronically with all suppliers using open standards-through agency enablement programs, supplier enablement programs, and e-procurement information systems. 2) Customs clearance. With the computerization of customs processes and operations (i.e., electronic submission, processing and electronic payment; and automated systems for data entry to integrate customs tables, codes and pre assessment), one can expect more predictable and more precise information on clearing time and delivery shipments, and increased legitimate revenues. 3) Tax administration. This includes a system for electronic processing and transmission of tax return information, online issuances of tax clearances, permits, and licenses, and an electronic process registration of businesses and new taxpayers, among others.

WHAT ARE THE KEY DRIVERS? It is important to identify the key drivers of e-commerce to allow a comparison between different countries. It is often claimed that e-commerce is more advanced in the USA than in Europe. These key drivers can be measured by a number of criteria that highlight the stages of advancement of e-commerce in each of the respective countries. The criteria that determine the level of advancement of e-commerce are:1. Technological factors The degree of advancement of the telecommunications infrastructure which provides access to the new technology for business and consumers. 2. Political factors includes the role of government in creating government legislation, initiatives and funding to support the use and development of e-commerce and information technology. 3. Social factors incorporates the level and advancement in IT education and training which will enable both potential buyers and the workforce to understand and use the new technology. 4. Economic factors includes the general wealth and commercial health of the nation and the elements that contributes it. Since a distinction has been made in this book between e-commerce and e-business for consistency, the key drivers of e-business are also identified. These are mainly at the level of firm and are influenced by macro-environment and e-commerce, which include: i. ii. iii. iv. v. Organisational culture attitudes to research and development (R D); its willingness to innovate and use technology to achieve objectives. Commercial benefits in terms of cost savings and improved efficiency that impact on the financial performance of the firm. Skilled and committed workforce that understands, is willing and able to implement new technologies and processes. Requirements of customers and suppliers in terms of product and service demand and supply. Competition ensuring the organisation stays ahead of or at least keeps up with competitors and industry leaders.

Ecommerce provides the infrastructure and environment that enables and facilitates e-business. Within this, the implementation of e-business is solely dependent on whether there is a demand by the organisation and whether it can be supplied within the organisation.

WHAT IS THE IMPACT OF ELECTRONIC COMMERCE? E-commerce and e-business are not solely the Internet, websites or dot com companies. It is about a new business concept that incorporates all previous business management and economic concepts. As such, e-business and e-commerce impact on many areas of business and disciplines of business management studies. For example: Marketing issues of on-line advertising, marketing strategies and consumer behaviour and cultures. One of the areas in which it impacts particularly is direct marketing. In the past this was mainly door-todoor, home parties (like the Tupperware parties) and mail order using catalogues or leaflets. This moved to telemarketing and TV selling with the advances in telephone and television technology and finally developed into e-marketing spawning eCRM (customer relationship management) data mining and the like by creating new channels for direct sales and promotion.

Finance and accounting on-line banking; issues of transaction costs; accounting and auditing implications where intangible assets and human capital must be tangibly valued in an increasingly knowledge based economy. Production and operations management the impact of on-line processing has led to reduced cycle times. It takes seconds to deliver digitized products and services electronically; similarly the time for processing orders can be reduced by more than 90 per cent from days to minutes. Production systems are integrated with finance marketing and other functional systems as well as with business partners and customers. Human resource management issues of on-line recruiting, home working and entrepreneurs are working on a project by project basis replacing permanent employees. Business law and ethics the different legal and ethical issues that have arisen as a result of a global virtual market e.g. Issues such as copyright, privacy of customer information, legality of electronic contracts, etc.

WHAT ARE THE BENEFITS OF E-COMMERCE? 1. Benefits of e-commerce to organizations International marketplace- What used to be a single physical marketplace located in a geographical area has now become a borderless marketplace including national and international markets. By becoming e-commerce enabled, businesses now have access to people all around the world. In effect all e-commerce businesses have become virtual multinational corporations. Operational cost savings- The cost of creating, processing, distributing, storing and retrieving paperbased information has decreased (see Intel mini-case). Mass customization- E-commerce has revolutionized the way consumers buy goods and services. The pull-type processing allows for products and services to be customised to the customers requirements. In the past when Ford first started making motor cars, customers could have any color so long as it was black. Now customers can configure a car according to their specifications within minutes on-line via the www.ford.com website. Lower telecommunications cost. The Internet is much cheaper than value added networks (VANs) which were based on leasing telephone lines for the sole use of the organisation and its authorised partners. It is also cheaper to send a fax or e-mail via the Internet than direct dialing. 2. Benefits of e-commerce to customers 24/7 access- Enables customers to shop or conduct other transactions 24 hours a day, all year round from almost any location e.g. checking balances, making payments, obtaining travel and other information. In one case a pop star set up web cameras in every room in his house, so that he could check the status of his home by logging onto the Internet when he was away from home on tour. More choices- Customers not only have a whole range of products that they can choose from and customise, but also an international selection of suppliers. Price comparisons- Customers can shop around the world and conduct comparisons either directly by visiting different sites, or by visiting a single site where prices are aggregated from a number of providers and compared (for example www.moneyextra.co.uk for financial products and services). Improved delivery processes. This can range from the immediate delivery of digitised or electronic goods such as software or audio-visual files by downloading via the Internet, to the on-line tracking of the progress of packages being delivered by mail or courier.

3. Benefits of e-commerce to society Enables more flexible working practices, which enhances the quality of life for a whole host of people in society, enabling them to work from home. Not only is this more convenient and provides happier and less stressful working environments, it also potentially reduces environmental pollution as fewer people have to travel to work regularly. Connects people- Enables people in developing countries and rural areas to enjoy and access products, services, information and other people which otherwise would not be so easily available to them. Facilitates delivery of public services- For example, health services available over the Internet (online consultation with doctors or nurses), and filing taxes over the Internet through the Inland Revenue website.

LIMITATIONS OF E-COMMERCE 1. Limitations of e-commerce to organizations Lack of sufficient system security, reliability, standards and communication protocols- There are numerous reports of websites and databases being hacked into, and security holes in software. For example, Microsoft has over the years issued many security notices and patches for their software. Several banking and other business websites, including Barclays Bank, and even the Consumers Association in the UK, have experienced breaches in security where a technical oversight o a r fault in its systems led to confidential client information becoming available to all. Rapidly evolving and changing technology, so there is always a feeling of trying to catch up and not be left behind. Under pressure to innovate and develop business models- To exploit the new opportunities which sometimes leads to detrimental of strategies to the organization. The ease with which business models can be copied and emulated increases that pressure and curtails longer -term competitive advantage. Facing increased competition from both national and international competitors often leads to price wars and subsequent unsustainable losses for the organisation. Problems with compatibility of older and newer technology- There are problems where older business systems cannot communicate with web based and Internet infrastructures, leading to running of almost two independent systems where data cannot be shared. This often leads to invest in new systems or an infrastructure, which bridges the different systems In both cases this is both . financially costly as well as disruptive to the efficient running of organisations. 2. Limitations of e-commerce to consumers Computing equipment is needed for individuals to participate in the new digital economy, which means an initial capital cost to customers. A basic technical knowledge is required of both computing equipment and navigation of the Internet and the World Wide Web. Cost of access to the Internet, whether dial-up or broadband tariffs.. Lack of security and privacy of personal data- There is no real control of data that is collected over the Web or Internet. Data protection laws are not universal. Physical contact and relationships are replaced by electronic processes. Customers are unable to touch and feel goods being sold on-line or gauge voices and reactions of human beings. Breakdown in human interaction- As people become more used to interacting electronically there could be an erosion of personal and social skills which might eventually be detrimental to the world.
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Social division- There is a potential danger that there will be an increase in the social divide between technical haves and have-nots so people who do not have technical skills become unable to secure better-paid jobs with potentially dangerous implications for social stability. Reliance on telecommunications infrastructure, power and IT skills, which in developing countries nullifies the benefits when power, advanced telecommunications infrastructures and IT skills are unavailable or scarce or underdeveloped. Facilitates Just-In-Time manufacturing- This could potentially cripple an economy in times of crisis as stocks are kept to a minimum and delivery patterns are based on pre -set levels of stock which last for days rather than weeks CASE Difficulty in policing the Internet, which means that numerous crimes can be perpetrated and often go undetected. There is also an unpleasant rise in the availability and access of obscene material and ease with which pedophiles and others can entrap children by masquerading in chat rooms. CONCLUSION Todays online shoppers have become very smart consumers very quickly. The Internet empowers people to easily compare products, prices and delivery options which have made shopping more enjoyable, less expensive and less time consuming. Now Internet users are becoming increasingly savvy about protecting their identities and their purchases when shopping by taking advantage of sites and systems to which they can turn to online. Pursuing wise choices when corresponding and making purchases online will help ensure that consumers and their resources remain secure and that confidence in all the benefits the Internet can bring to daily living will continue to expand.

REFERENCES 1. eBay Security Center www.ebay.com/securitycenter 2. Anti-Phishing Working Group www.anti-phishing.org 3. PayPal Security Center www.paypal.com/security 4. Google.com

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