DU SOL B.Com 3rd Year E-Commerce Notes Chapter 1 Introduction to E-Commerce

DU SOL B.Com 3rd Year E-Commerce Notes Chapter 1 Introduction to E-Commerce

Question 1.
What do you understand by E-commerce. Explain its Meaning, Nature and Concept.
Meaning And Nature Of E-Commerce :
E-Commerce is the technology for doing business over the net. It has its roots in computer and commerce. It allows you to do business as you do otherwise too but here the person concerned is not facing you. The whole business is done in writing and without talking and seeing each other, mostly. You type the question and he will answer and vice versa, so the business is done without a chance of saying, “l did not say so”, because everything is written here.

Let us first understand by what commerce is.

Commerce. According to dictionary commerce is, it is the exchange or transformation or buying and selling of entities (goods or commodities) on a very large scale involving transportation from one place to another”. Commerce deals with buyers (the people who want to purchase items and services with money), sellers (the people who provides items and services to the buyers by taking money from the buyers) and the producer (the people who originate „ the products and services for the buyers and the sellers).

Let us now understand what E-Commerce or Electronic – Commerce is.

E-Commerce. It is nothing but adding electronic to the commerce, i.e., doing business on the net. It can be buying and selling of stocks and bonds, selling a product, buying goods and services for your company’s operations ‘ or purchasing a fancy dress, or any other such commercial transaction. E-commerce covers the vast of amount of business-to-consumer and business- to-business transactions taking place on the Web (with the help of internet). It is not Just Web Shopping, it is more than the definition. Despite popular belief, there is a lot more to e-commerce than buying goods online.

Every day, millions of transactions are conducted via the Web, all of which fall under the E-commerce. E-Commerce is to conduct business by using the IT (Information Technology, i.e., Computer technologies and the electronic communications). In other words it is the buying and selling of items of goods and services on the Web. E-Commerce is the process of doing business electronic. It involves automation of a variety of B2B (Business to Business) and B2C (Business to Consumer) transaction through reliable and secure connections.

The use of electronic transmission medium (telecommunication, internet) to engage in the exchange of business document including buying and selling products and services with physically or digitally from location to another using computer as a component and internet as a media. E-Commerce is a composite of technologies process and business strategies that foster the instant exchange of information within between organization. E-Commerce strengthens relationship with buyers make it easier to attract new customer improves customer responsiveness and open new markets on a global scale.

E-Commerce is the application of various communication technologies to provide the automated exchange of business information with internal and external customer, suppliers and financial institutions. E-Commerce is about-x. setting your business on the Internet, allowing visitors to access your website x and go through virtual catalog or your product/services online.

When the visitor wants to buy something he/she likes, they merely, add it to their virtual shopping basket, items in the virtual shopping basket can be added or deleted and when you are all set to checkout. You head to the virtual checkout counter, which has your complete total and will ask you for your name, address, etc. and method/way of payment (usually credit card). Once all the information is entered the buying and selling procedure is complete and you have to just wait for delivery.

The Origin Of Term E-Commerce :
IBM was the first company who use the term internationally. The 1972, IBM used this term as ‘E-business’ and the first successful transaction is held between USA and European union in 1973 with the invention of personal computers. The term E-commerce is derived from e-mail means conducting business online with the help of electronic devices like personal computers, phone lines, fax machine, pager, etc. E-Commerce helps conduct traditional commerce through new ways of transferring and processing information, since it is information which is at the heart of any commercial activity.

Information is electronically transferred from computer to computer, in an automated way. E-commerce refers to the paperless exchange of business information using EDI, E-mail, Electronic bulletin Boards, EPT and other network based technologies.

It is not only automates manual processes and paper transactions, but also helps organization move to a fully e-environmeu and change the way they operate. The most popular areas of business-to-consumer E-commerce include goods sold in the following categories: computer products, consumer products, books and magazines and music and entertainment products. Actually it is thinking small on the WWW (world wide web).

Internet is now-a-days a way of life. You cannot work without it. What started as a simple means of transferring data for government and educational groups lias quickly taken on a life of its own. For small business, it is not only a great marketing tool, but also an efficient means of communication and data transfer, as well as an entire sales channel.

World Wide Web provides the perfect backdrop for a small business that is looking to expand its customer base, grow its profits and even increase its product offerings. On the Web, issue like company size and physical location are completely transparent. For this reason, the small business getting involved with e-commerce has a fair chance of succeeding without having to invest in a fancy storefront or additional employees.

Even a one-man-show can make it on the Web. That is why more and more companies are becoming shorter and shorter strength wise. Even people have starting working from what is called Virtual Office, which can even be your car, having a laptop and a phone. And when the going gets tough, there’s always outsourcing to help you over the rough spots. Through it all, your customers never need to know that your firm is made up of you and your kitchen table-office.

Present a positive image and deliver the goods and time you’ll never have to explain your company’s location or employees to anyone. It’s Cost Effective. The obvious benefits aside, it’s the cost savings that really add up when a company implements an e-commerce strategy. With an investment of as little as Rs.50,000, companies are able to contract professionals to create their e-commerce-enabled sites, which are subsequently hosted by an Internet Service Provider (ISP) for an average of Rs.700 per month. Still others – those who are lucky enough to have tech-savvy workers onboard – are getting the job done for even less.

Working of E-commerce. There are several sites which are known as Search Engines. You type the product you want to search and it will give you the name of the sites who are dealing with such product. You then searches those web sites. From there, you decide what you want to purchase and sell. The transaction is done using the online transaction server, where all of the information the gives is encrypted. Once you have placed your order, the information moves through a private gateway to a Processing Network, where the issuing and acquiring banks complete or deny the transaction. This generally takes place in no more than 5-7 seconds.

E-Commerce In India :

Gone are the days when India used to be 25 years behind all the developments. These days India is at par with all the new technologies. Almost all major organizations have some presence on the net. The real challenge is to convert this presence into online business. Some companies, notably rediffOnTheNet, SatyamOnline, MantraOnline, have already ventured into this field, and they are working towards giving you foolproof business terms. For example, sitting at home you can enter the website of your supplier of cellphone connection and giving them your credit card number can buy the
extra talk time from them. All this without leaving the desk. This is e-commerce at its best.

Question 2.
What are the advantages of E-commerce?
The driving need for E-Commerce is felt to enable a corporation to cut down expenses while improving quality of products and services and increase the speed of delivery of products. There are endless business applications of E-commerce range form as small as $100 to as large as $1 billion or more.

The selection of Business Application of E-Commerce depends upon the organization that is offering business solution to its country. For example, the business application may your own website that simply display the products or it may be a portal which is giving services as well. The various business applications are as follows—

  • Direct Marketing and selling (B2C)
  • Supply Chain Management (B2B)
  • Corporate Procurement (B2B)

Direct marketing and selling: Selling over the web allows businesses of all sizes to reach consumer all over the world. This requires that business provide consumer with an engaging shopping experience, run price promotions, cross sell items and accept typical consumer payment method such as credit cards.

Further, when an order is placed through an organization’s website, consumers must be able to existing business processes and integrate with databases.

Benefits of E-commerce. Some benefits of electronic commerce are listed below –

  • Reduced costs to customers from increased competition in procurement, as more suppliers are able to compete in an electronic market place.
  • Reduced errors, time and overhead costs in information processing by eliminating requirements of re-entering data.
  • Reduced time to complete business transactions especially reduced time from delivery to payment.
  • Easier entry into new markets, particularly geographically remote markets.
  • Better quality of goods after specification is standardized.
  • Increased ability for customized products.
  • Faster time-to-market as time delays between the individual steps of business processes are eliminated.
  • Optimization of resource allocation.
  • Reduced overhead costs through uniformity, automation and large- scale integration.

Reduced ecological damage due to the electronic co-ordination of activities and the movement of Conventional electronic commerce areas could include-

  • Searching for product information
  • Ordering products
  • Paying for goods and services
  • Customer services

Given below is a list of some examples of electronic commerce application areas –

  1. Internal electronic mail and messaging.
  2. Online publishing of corporate documents.
  3. Online searches for documents, projects and peer knowledge.
  4. Distributing critical and timely information to employees.
  5. Managing corporate finance and personnel systems.
  6. Manufacturing logistics management.
  7. Supply chain management for inventory, warehousing and distribution, sending order processing information and reports to suppliers and customers.
  8. Tracking orders and shipments.
  9. and countless other business activities.
  10. From all this one can see that e-commerce involves a variety of institutions, over many types of networks linking those institutions and across a number of business processes that must occur between/ within these institutions as shown below:
  11. E-Commerce on the Internet is still at an early stage of development.
  12. Banks and other financial institutions, government regulations and Internet Service Providers will influence the evolution of E-Commerce.
  13. The consumer-business [C2B] market will continue to grow.
    In the business-business [B2B] market, short term partnering and more supplier associations will drive the need for faster ways of conducting supply and financial transactions.
  14. EDI on the Internet will have its place, only because of its prior integration with business practices.
  15. In the business-business [B2B] market, short term partnering and more supplier associations will drive the need for faster ways of conducting supply and financial transactions.
  16. EDI on the Internet will have its place, only because of its prior integration with business practices.

Question 3.
What are the different categories of E-commerce?
There are different categories which provide means for doing business over the net. The selection of E-Commerce categories largely depends upon in the following factors:

Workload What markets segment is being served (What)
The services What services being given (What)
The means the services are produced (How)

For example, in the case of Amazon.com, Who refer to buyer segment, What (in case of B2C) refer to consumer goods, How refers to platform (Internet).

Who Customer
What Product
How Means

On the Internet the organizations are using various methods to deliver goods and services to their customer. These are E-mails, MMS, chatting etc. There are number of channels or tools used for handling the E-Commerce. Some of these are described as below-

  1. EDI (standards/Protocols)
  2. Van (Network/VSAT e.g. Internet)
  3. Commercenet (Consortium/Committee)
  4. ERP (Software Package)
  5. SCM (E-Com. Tools)
  6. CRM (E-Com. Tools)

Categories of E-Commerce. Following are some categories of E- Commerce on the basis on government and the consumer as –

  • Business – 2 – business (B2B)
  • Public side (Govt).
  • Business-consumer Private Side (corporate)
  • B2B2C
  • B2C (Business to Consumer)

In B2C e-com, consumer directly uses the Internet platform, particularly the web 1 to conduct activities such as browsing, ordering and making a payment. In B2C two parties involved are a business and air end consumer and end consumer is known as direct consumer.

Activities in B2C E-Commerce. The interaction between a business and a consumer consists of following activities –

  • Promotion
  • Ordering
  • Product delivery
  • After sales support

In each of these areas, the E-commerce platform is beginning to play an important role. Advertisements appear on postal sites such as Yahoo. Just as they do on TV, Radio and Newspaper. Books, apparel, furniture and CDs can be ordered over the Internet.

DU SOL B.Com 3rd Year E-Commerce Notes 

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