E-Commerce

Thuyduong Nguyen

IT 3700-02 Spring 2003

April 28, 2003

Introduction• E-Commerce is sharing business information, maintaining

business relationships and conducting business transaction by means of telecommunications network

• It is conducting the exchange of information using a combination of structures and unstructured messages across the entire range of networking technologies

• The Internet’s WWW has been the prime driver of contemporary E-commerce

• E-commerce enables organizations of all sizes and in all market sectors to improve their competitiveness

Traditional vs. Electronic

• Traditional commerce:

• Firms engages in many other activities in addition to buying and selling their product

• Traditional commerce include: buyers and sellers using old fashion method to do business

• Electronic Commerce:

• Firms has used various electronic communications tools to conduct different kinds of business transactions.

• Electronic Commerce use technology to moves people around the world

Advantages of E-Commerce • Increase sales and decrease sales costs

• A small firm's promotional message out to potential customers in every country in the world with good ad

• Reach narrow market segments that are geographically scattered

• Increases sales opportunities for seller, it also increases purchasing opportunities for the buyers

• Businesses can identify new suppliers and business partners

• Provides buyers with a wide range of choices than traditional commerce

• Electronic payments of tax refund, public retirement, and welfare support cost less to issue and arrive securely and quickly when transmitted over the Internet

• Electronic payments can be easier to audit and monitor than payments made by check, providing protection against fraud and theft losses

• Electronic commerce enables people to work form home

Benefits for general welfare of society:

• Many products and services require that a critical mass of potential buyers be equipped and willing to buy through the Internet.

• Costs and benefits have been hard to quantify• Many firms have had trouble recruiting and retaining

employees with the technological, design, and business process skills needed to create an effective electronic commerce

• Firms also have difficulty of integrating existing database and transaction-processing software designed for traditional commerce into the software that enables electronic commerce

• Firms also face cultural and legal obstacles to conducting electronic commerce

 

Disad. of Electronic Commerce:

Main Areas of E-Commerce

• Business to Business (B2B)

• Business to Consumer (B2C)

• Business to Government/Government to Business (B2G/G2B)

Benefits of E-Commerce• The market for a Web based is not bound by any geographical

constraints

• The transaction cost go down tremendously in a well set up site

• Better, more inviting, convenient and comprehensive presentation of goods is conducive to greater sales

• Small and large firms alike have the opportunity to set-up and conduct business on the internet.

• An inexpensive advertising medium for organizations, it allows organizations an opportunity for publicizing their products and services at minimal cost.

Barriers to E-Commerce

1. Access and Connectivity

2. Authentication and Standardization

3. Cyber Laws

4. Technology

Promise & Threat

• Impact and Issues of Electronic Commerce

1. The business, societal, and research problematic of E-commerce spans an immense range, which reflects the depth of change being caused by this rapidly expanding mode of doing business.

• Limitations and Asymmetries of Infrastructure

1. The infrastructure of the Internet, which acts as the current global information infrastructure, has acknowledged problems.

2. The issues turn on the provision of sufficient band width for the surging use that is also moving to multimedia transmissions, and on the problems fostered by the decentralized nature of the Internet.

Risks in E-Commerce• Business practices

• Information protection

• Transaction Integrity

• Privacy and Trust

• Global Efforts Towards Retaining Privacy & Building Trust

• Web Trust

• TRUSTe

• P3P (Privacy Preferences Project)

E-commerce StatisticsBusiness to Commerce (B2C) Commerce Statistic

1999 2000 2001 2002 2003 2004 2005$28,550 $44,120 $61,820 $91,878 $125,265 $168,815 $227,690

U.S. Business-to-Consumer (B2C) E-Commerce Forecast(All in USD Millions)

Source:GartnerG2 (December 2001)

B2C Commerce

$28,550

$44,120

$61,820

$91,878

$125,265$168,815

$227,690 1999

2000

2001

2002

2003

2004

2005

B2C

E-commerce StatisticsCosts of Traditional vs. Online Purchasing Processes-USD

Source: American Express/Ernst & Young, June 2002Process Step Traditional Process Purchase Card + eCommerce

Buying 59.00 3.40Paying 12.00 0.34Reconciling integration 19.00 0.70Avg transaction cost 90.00 4.44

Tradnl vs. Online Graphs

59.00

3.4012.00

0.34

19.00

0.70

90.00

4.44

0.0010.00

20.00

30.00

40.00

50.00

60.00

70.00

80.00

90.00

Tra

nsa

cti

on

Co

st

in $

Buying Reconcilingintegration

Process Step

Cost of Traditional vs. Online Purchasing Processes

Traditional Process

Purchase Card + eCommerce

E-commerce Statistics

Total Worldwide E-Commerce Revenues, 2004 (B2B & B2C)Source: Forrester Research

Region Norht America Asia Pacific Western Europe Latin America Rest of WorldTotal $3.50 $1.60 $1.50 $81.80 $68.60

Trillion Trillion Trillion Billion Billion

Worldwide E-commerce RevenuesTotal Worldwide E-Commerce Revenues

$81.80

$68.60

$1.50$3.50$1.60

Norht America Asia Pacif ic Western Europe Latin America Rest of World

E-commerce Statistics

Transaction Size At Commerce-Enabled Web SitesSource: ActivMedia ResearchSize $1-50 $51-100 $101-500 $501-1,000 $1000-10,000 Up-$10,000 Average MedianSample 20% 13% 27% 9% 23% 8% $4,622 $300B2C 22% 15% 26% 10% 20% 8% $4,450 $244B2B 5% 5% 36% 5% 41% 8% $5,580 $800

Commerce Enabled Web Sites

0%

100000%

200000%

300000%

400000%

500000%

600000%

Pe

rce

nta

ge

$1-50 $101-500

$1000-10,000

Average

Size

Transaction Size @ Commerce Enabled WebSites

Sample

B2C

B2B

Preferences• Business and Technology: Electronic Commerce:

(http://www.e-centre.org.uk/products_buinesstech_ecommerce.htm)

• Western Australia E-Commerce Centre: (http://www.ecommercecentre.online.wa.gov.au/government/egov-what.htm)

• E-commerce Security: (http://www.ftc.gov/bcp/menu-internet.htm)

• Business to Business Marketplace: (http://www.traderinasia.com/b2bverticalmarketplace.html)