Chapter 1 Ecommerce

PE 301 E-Commerce / Commerce Department

Prepared By:

RABI’AH BINTI SEMAN Lecturer of Commerce Department

Politeknik Merlimau [email protected]/[email protected]

PE 301 E-COMMERCE


CLO 1: Describe precisely e-commerce concept, classification and current risk relating to online business transactions

TOPIC 1

Overview Of E-Commerce


Definition Of E-Commerce

- Process of BUYING & SELLING of goods and services over the Internet. - Refers only to ONLINE Transaction.

Definition Of E-Business

- Derived from the term e-commerce. - conducting of business on the internet, not only buying & selling - serving customers &collaborating with business partners.

Topic 1: Overview Of E-Commerce


Evolution Of E-Commerce

The evolution of e-commerce can be attributed to a combination regulatory reform and technological innovation. Through Internet (which played an important role in the evolution) appeared in the late 1960s, e-commerce now took off with the arrival of the World Wide Web and browsers in the 1990s.

• funds can be routed electronically from one organization to another.

Electronic Funds Transfer (EFT)

•used to electronically transfer routine documents, that expanded electronic transfers from financial transactions to other types of transaction processing.

Electronic Data Interchange (EDI)

•a system which allows the flow of information to be automated between organizations in order to reach a desired supply-chain management system, which enables the development of competitive organisations.

Interorganizational System (IOS)

E-Commerce were first developed in the early 1970s with innovations like;



Evolution Of E-Commerce

Year Event

1984 EDI, or electronic data interchange, was standardized through ASC X12. This guaranteed that companies would be able to complete transactions with one another reliably

1992 Compuserve offers online retail products to its customers. This gives people the first chance to buy things off their computer.

1994 Netscape arrived. Providing users a simple browser to surf the Internet and a safe online transaction technology called Secure Sockets Layer.

1995 Two of the biggest names in e-commerce are launched: Amazon.com and eBay.com.

1998 DSL, or Digital Subscriber Line, provides fast, always-on Internet service to subscribers across California. This prompts people to spend more time, and money, online.

1999 Retail spending over the Internet reaches $20 billion, according to Business.com.

2000 The U.S government extended the moratorium on Internet taxes until at least 2005.


http://www.amazon.com/

http://www.amazon.com/

http://www.ebay.com/

http://www.business.com/


E-Commerce Attributes

1. Ubiquity 2. Global Reach 3. Universal Standards 4. Richness 5. Interactivity 6. Information Density 7. Personalization/ Customization


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Infrastructure Of E-Commerce

Marketing

Facilities

Customer Service

Information Technology

Fulfillment

Finance & Administration

Human Resource



Infrastructure Of E-Commerce (MARKETING)

- Most important element - Website must be found - visitors are on your site, you need to keep them there and compel them to buy from you - website design, social media, - search marketing, merchandising, - email, or other forms of advertising - Most small ecommerce businesses outsource some element of marketing.



Infrastructure Of E-Commerce (FACILITIES)

- find an office park that has a wide variety of spaces in different sizes - may be able to start in a smaller space and move up to a larger one without penalty, as your needs change.



Infrastructure Of E-Commerce (CUSTOMER SERVICE)

- manage in house & outsource - Basic customer service for sales and post-sales activities can be handled using email, and by providing an 800 number f or more extensive phone support - for smaller companies - not a requirement -LIVE CHAT can be handled in house



Infrastructure Of E-Commerce (INFOR. TECHNOLOGY)

- Choose the right ecommerce platform - build and host your own system – more cash upfront and skilled administrators and developers - outsource the development and hosting - reduce staffing costs, but will incur higher costs for any future website enhancements or changes.



Infrastructure Of E-Commerce (FULFILLMENT)

- own inventory - provide a high level of control, but will tie up cash in inventory, warehouse space, and fulfillment staff. - drop shipping arrangements with suppliers -Be sure to understand the costs involved and analyze the other options before moving forward



Infrastructure Of E-Commerce (FINANCE & ADMINISTRATION)

- Finance - use outside services for vendor payments, payroll, and other basic accounting activities. - administration - need leadership team - provide direction to them. - Good communication. - authoritative or democratic - But choose a style and stay consistent. - Be sure that everyone understands their roles, - as well as the overall business strategies.



Infrastructure Of E-Commerce (HUMAN RESOURCE)

- Recruiting, - setting up compensation, - maintaining compliance - and other HR activities are - specialized and time consuming



Cycles Of E-Commerce

Payment

Transaction

Customization

Attraction

Information

Support

Delivery

Personalization



Information

Attraction

Customization

- well structured information. - help potential browser make their "remote" buying decision – AMAZON.com

- Marketing strategies. -Advertising -Unique / Creative / Innovative

-One of Internet's great promises is the ability to enable a potential customer to describe and demand what exactly he/she needs, -how she wants it packed, where and when delivered, how will be paid for and the list goes on

Cycle Of E-Commerce



Transaction

Payment

Support

-New Software & application - Faster & more effective

- understanding, evaluating, and offering the appropriate Payment methods with their associated security systems is key in ultimately achieving what any trader seeks: Close the Sale

-Online Customer Support technologies, Methodologies and services that if understood and applied they can become an eTailers best asset.

Cycle Of E-Commerce



Delivery

Personalization

- Delivering physically what has been ordered - so easily- electronically proved to be a major headick -organizational, operational and financial- for most eCommerce sites

- Help eCommerce companies to log, understand and manage their customer relationships and in the process offer them a personalized response to their needs.

Cycle Of E-Commerce



E-Commerce Business Model

Social Commerce

Brokerage Model

Store Model




Store Model

MANUFACTURER

MULTI-BRANDED RETAILERS

FLASH / PRIVATE SALES PRODUCT

CURATED PRODUCT

SUBSCRIPTION MODEL


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Brokerage Model

ONLINE MARKET PLACE

COMPARISON SHOPPING

ONLINE AUCTION

GROUP BUYING






media supports social interaction and user contributions

Social Commerce

Seller Social media Buyer




Advantage of E-Commerce

Overcome Geographical limitations

Gain New Customers With Search Engine Visibility Lower Costs Locate the Product Quicker

Eliminate Travel Time & Cost

Provide Comparison Shopping

Enable Deals, Bargains, Coupons and Group Buying

Provide Abundant Information

Create Targeted Communication

Remain Open All The Time Create Market For Niche Products



Limitation of E-Commerce
