WHAT IS E-

COMMERCE?
Any idea?
Are you familiar with
these?
 E commerce
• Electronic commerce, commonly
written as e-commerce is the trading
or facilitation of trading in products or
services using computer networks,
such as the Internet.
• Electronic commerce draws on
technologies such as mobile
commerce, electronic funds transfer,
supply chain management, Internet
marketing, online transaction
processing, electronic data interchange
(EDI), inventory management systems,
and automated data collection
systems.
HOW IT WORKS?
 Applications of E-commerce
• Supply chain management
• Online purchasing
• Online marketing and advertising
• Online auction
• E banking
• Online publishing
• Online entertainment
• Online booking (ticket seat etc.)
Supply chain
management
Supply chain
management (SCM) is
the management of the
flow of goods and
services.
Internet has changed
the scenario of supply
chain management.
E commerce has
resulted into e-supply
chain networks which is
way more efficient than
the conventional
system.
Online
purchasing

• Shop 24/7
• Comfort of own
home
• A lot of stores within
a click away
• Comparison
Shopping easier
• Discount coupons
available online
• No Lines
• Privacy
• Don’t have to drag
kids out
• Save on fuel
Online
marketing and
advertising
• Broad and global
Reach
• Highly adaptable to
multitasking
• Cost-effectiveness
• Time-effectiveness
• Convenient, easy
and quick service
delivery
• Follow-up and after-
sales relationship
• Advertising to target
markets
•
Online auction
• Many sites allow you
to sell both new and
used items on there
websites for profit.
Examples:
Amazon
Ebay
Craigslist

• No physical location
• Convenience
• Rich information
• Time saving
• Plenty of choices
• Compare prices
Online
banking
Online
entertainment
Gone are the days when
we purchase cassette,
CD, DVD for music and
videos.
Now a days everything
is downloaded.
E publishing
• Global reach
• Availability of most
updated information
• Documents are more
secure.
• Electronic
documents are
never misfiled or lost
Online
booking
• Saves valuable time
and cuts costs
• No third party
involvement
• Easy update tourist
services prices
directly on your
website
• Reliability and
efficiency
History of E-Commerce
• E-commerce actually began in the 1970s when
larger corporations started creating private
networks to share information with business
partners and suppliers.
• This process, called electronic data interchange
(EDI), transmitted standardized data that
streamlined the procurement process between
businesses, so that paperwork and human
intervention were nearly eliminated.
• EDI is still in place, and is so effective at reducing
costs and improving efficiency that an estimated
95% of fortune 1,000 companies use it.
 History of E-Commerce
• Prodigy was running text
ads and selling flowers in
the early '80s
• The first documented
Online sale in 1994 was
what?

A CD
History of E-Commerce
• Early EC was pioneered by internet companies that didn't
(and still don't) perform traditional retail. Called pure
plays.
• Such as Amazon.Com and CD-now.
• More recently click and mortar stores have moved online
• Like barnes and noble, best buy, the gap, and Walmart
 History of E-Commerce: Amazon.com

• Early in 1994, working for D.E. Shaw in New York City, Jeff
Bezos, a restless, 30-year-old hedge fund manager began
researching the commercial possibilities of the Net.
• A year later, Bezos drove west, raising venture funds for a
new small online book shop (originally called
Cadabra.com), to be launched from his garage in Bellevue,
Wash.
• Running on a Website and a warehouse, by its third year
Bezos's precocious Amazon.com toppled $150 million in
annual sales — a milestone that Wal-Mart founder Sam
Walton needed 12 years (and 78 stores) to reach.
History of E-Commerce: Stocks
• Electronic stock trading debuted 30 years ago with
Instinet, Reuters' computer network that allowed
after-hours trading.
• Charles Schwab first offered a dial-up trading service called
The Equalizer in 1985.
• E-Trade founded in 1982 as an institutional trading service
began offering consumer trading in 1992 through America
Online and CompuServe.
• True Web-based trading arrived in 1994 with
Chicago-based NET Investor, which offered 15-
minute delayed quotes and charged $35 per trade.
• Ameritrade, Datek Online, and others followed,
eventually driving commissions to as low as $8 per
trade, and forcing the implementation of free, real-
time stock quotes in 1998.
 History of E-Commerce: Ads
• In 1994, the first national consumer brand site -
www.zima.com - was launched for the Coor's owned
beverage Zima.
• In October of 1994, Wired magazine's Hotwired,
dished up the first banner ads from 12 advertisers,
including AT&T, Club Med, and Volvo. Sales for the
entire online ad industry were $1 million that year,
and Hotwired owned 40 percent of it.
• In 1998, online ad revenues reached $2 billion,
topping the $1.6 billion spent on "outside" ads, such
as billboards. General Motors alone pumped in $12.7
million. Online ad revenue is expected to reach $11.5
billion by 2003 that’s 5 percent of the total U.S. ad
market.
History of E-Commerce: Travel
• Booking a trip over the Web back in 1995 meant going to
a travel site and requesting a fare.
• In early 1997, Travelocity offered a paging service to its
Web customers that alerted them if their flight was
delayed.
• In the fall of 1997, Priceline.com launched its innovative,
bid-based market for discount airfares.
• Today you can bid on empty seats, name your price,
choose a seat from a diagram, and know of fare bargains
often before agents have that information.
EC Advantages/Disadvantages
• EC Advantages
• Ability to reach new markets
• Reduces costs (for some businesses)
• Increased purchasing opportunities
• More efficient (electronic payments,
telecommuting, etc.)
EC Advantages/Disadvantages
• EC Disadvantages
• Incompatibility for certain industries
• Limitations of the medium
• Costs!!!
• Skills required
• Cultural and legal issues
EC Classification
• Classification by nature of the transactions or interactions
Business-to-business (B2B)
E-commerce model in which all of the participants are businesses
or other organizations

Business-to-consumer (b2c)
E-commerce model in which businesses sell to individual shoppers
EC Classification
E-tailing
Online retailing, usually B2C

Business-to-business-to-consumer
(b2b2c)
E-commerce model in which a business provides some product or
service to a client business that maintains its own customers
EC Classification
Consumer-to-business (C2B)
E-commerce model in which individuals use the internet to sell
products or services to organizations or individuals seek sellers to
bid on products or services they need

Consumer-to-consumer (c2c)
E-commerce model in which consumers sell directly to other
consumers
EC Classification
Peer-to-peer
Technology that enables networked peer computers to share data
and processing with each other directly; can be used in C2C, B2B,
and B2C e-commerce

Mobile commerce (m-commerce)

E-commerce transactions and activities conducted in a wireless
environment
EC Classification
Location-based commerce (l-commerce)
M-commerce transactions targeted to individuals in specific
locations, at specific times

Intrabusiness e-commerce
E-commerce category that includes all internal organizational
activities that involve the exchange of goods, services, or
information among various units and individuals in an organization
EC Classification
Business-to-employees (B2E)
E-commerce model in which an organization delivers services,
information, or products to its individual employees

Collaborative commerce (c-commerce)

E-commerce model in which individuals or groups communicate or
collaborate online

E-learning
The online delivery of information for purposes of training or
education
EC Classification
Exchange (electronic)
A public electronic market with many buyers and sellers

Exchange-to-exchange (e2e)
E-commerce model in which electronic exchanges formally connect to
one another for the purpose of exchanging information

E-government
E-commerce model in which a government entity buys or provides
goods, services, or information to businesses or individual citizens
Models in e-commerce
• Model A (e-bay model): in this model, the role of e-
commerce player is to bring buyers and suppliers on
single trading platform i.e. To create a mall or common
market place. Prominent player following this model is
e-bay so we call it as e-bay model.
• Pros of e-bay model:
• Very large market place
• Ease of management
• Competitive rates
• Competitive rates
 Cons of e-Bay model:
• Low margins
• Success of this model is dependent on external partners
• High risk in terms of charge backs & disputes by buyers
• Many seller might sell products without bill/invoice
Model B (Flipkart Model):
• In this model, e-commerce player control end to end value
chain i.e. Right from procurement to delivery is controlled
by service provider. Flipkart works on this model therefore
we refer this model as flipkart model.
• Pros of flipkart model:
• Scale of operation
• High margin business
• Probability of repeat business is high
 Cons of flipkart model:
• Logistics: logistics can either be pro or con but in current
scenario logistics is a major headache for all ecommerce
player though flipkart manage approx. 65% logistics
operations but still it has to rely on logistics of suppliers &
3rd party provider for 35% of deliveries.
• Limited product portfolio: managing own warehouse or
product inventory adds to cost of operation because no
company can create unlimited storage space.
• High investments: huge investments required in such
models in order to manage and control end to end value
chain
 Model C (Snapdeal Model)
• This model is totally different from rest 2 models, in this
model the e-commerce player does not sell any
goods/service on its own but offers discount coupons
which can be used by buyers to avail discount at the time
of buying good or availing service from merchant. We will
refer this model as snapdeal model but original concept is
copied from groupon.
Pros of snapdeal model
• E-commerce player is only technology provider therefore
very less hassles in business operation. Normally a team
of 23 sales executives are hired in each city to tie up with
brands for discounts.
• Cost of operations is very low compared to other models.
• Very easy to set up business operations.
• Lot of upcoming brands / merchants are available for tie
up.
Cons of snapdeal model
• Ultra low margin business.
• Unknown brands.
• Discount is available otherwise also.
• Managing coupon logistics is difficult.
• Profitable business only if huge volumes can be
committed to merchants.
• Marketing cost to generate traffic on website is high.
• E-commerce player should understand the local flavour
well so that deals are appealing and relevant