E-Commerce and E-Business

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December 29, 2013

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Contents

1 Preface 31.1 Preface to the First Edition . . . . . . . . . . . . . . . . . . . . . . . . . . . 3

2 Introduction 52.1 Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5

3 Concepts and Definitions 73.1 What is e-commerce? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 73.2 Is the Internet economy synonymous with e-commerce and e-business? . . . 83.3 What are the different types of e-commerce? . . . . . . . . . . . . . . . . . . 103.4 The major different types of e-commerce are: business-to-business (B2B);

business-to-consumer (B2C); business-to-government (B2G); consumer-to-consumer (C2C); and mobile commerce (m-commerce). . . . . . . . . . . . . 10

3.5 What forces are fueling e-commerce? . . . . . . . . . . . . . . . . . . . . . . 163.6 What are the components of a typical successful e-commerce transaction loop? 173.7 How is the Internet relevant to e-commerce? . . . . . . . . . . . . . . . . . . 183.8 How important is an intranet for a business engaging in e-commerce? . . . . 193.9 Aside from reducing the cost of doing business, what are the advantages of

e-commerce for businesses? . . . . . . . . . . . . . . . . . . . . . . . . . . . 193.10 How is e-commerce helpful to the consumer? . . . . . . . . . . . . . . . . . . 203.11 How are business relationships transformed through e-commerce? . . . . . . 203.12 How does e-commerce link customers, workers, suppliers, distributors and

competitors? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 213.13 What is Google AdSense and how does it work for e-commerce . . . . . . . 22

4 E-Commerce Applications: Issues and Prospects 234.1 E-Commerce Applications: Issues and Prospects . . . . . . . . . . . . . . . 234.2 What are the existing practices in developing countries with respect to buying

and paying online? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 234.3 What is an electronic payment system? Why is it important? . . . . . . . . 244.4 What is e-tailing? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 274.5 What is online publishing? What are its most common applications? . . . . 29

5 E-Commerce in Developing Countries 315.1 How important is e-commerce to SMEs in developing countries? How big is

the SME e-business market? . . . . . . . . . . . . . . . . . . . . . . . . . . . 315.2 Is e-commerce helpful to the women sector? How has it helped in empowering

women? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 365.3 What is the role of government in the development of e-commerce in devel-

oping countries? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37

III

Contents

6 About the Author 436.1 About the Author . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43

7 For Further Reading 457.1 For Further Reading . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45

8 Notes 498.1 Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49

9 Acknowledgment 539.1 Acknowledgment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53

10 Contributors 55

List of Figures 57

11 Licenses 6111.1 GNU GENERAL PUBLIC LICENSE . . . . . . . . . . . . . . . . . . . . . 6111.2 GNU Free Documentation License . . . . . . . . . . . . . . . . . . . . . . . 6211.3 GNU Lesser General Public License . . . . . . . . . . . . . . . . . . . . . . 63

1

1 Preface

1.1 Preface to the First Edition

One the many challenges facing the countries in the Asia-Pacific today is preparing theirsocieties and governments for globalization and the information and communication revo-lution. Policy-makers, business executives, NGO activists, academics, and ordinary citizensare increasingly concerned with the need to make their societies competitive in the emergentinformation economy.

The e-ASEAN Task Force and the UNDP Asia Pacific Development Information Programme(UNDP-APDIP) share the belief that with enabling information and communication tech-nologies (ICTs), countries can face the challenge of the information age. With ICTs theycan leap forth to higher levels of social, economic and political development. We hope thatin making this leap, policy and decision-makers, planners, researchers, development prac-titioners, opinion-makers, and others will find this series of e-primers on the informationeconomy, society, and polity useful.

The e-primers aim to provide readers with a clear understanding of the various termi-nologies, definitions, trends, and issues associated with the information age. The primersare written in simple, easy-to-understand language. They provide examples, case studies,lessons learned, and best practices that will help planners and decision makers in address-ing pertinent issues and crafting policies and strategies appropriate for the informationeconomy.

The present series of e-primers includes the following titles:

1. The Information Age2. Nets, Webs and the Information Infrastructure3. e-Commerce and e-Business4. Legal and Regulatory Issues for the Information Economy5. e-Government6. ICT and Education7. Genes, Technology and Policy: An Introduction to Biotechnology

These e-primers are also available online at http://www.apdip.net/publications/iespprimers

The primers are brought to you by UNDP-APDIP, which seeks to create an ICT enablingenvironment through advocacy and policy reform in the Asia-Pacific region, and the e-ASEAN Task Force, an ICT for development initiative of the 10-member Association ofSoutheast Asian Nations. We welcome your views on new topics and issues on which thee-primers may be useful.

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http://www.apdip.net/publications/iespprimershttp://www.apdip.net/publications/iespprimers

Preface

Finally, we thank all who have been involved with this series of e-primers-writers, re-searchers, peer reviewers and the production team.

Roberto R. RomuloChairman (2000-2002)e-ASEAN Task ForceManila, Philippines

Shahid AkhtarProgram CoordinatorUNDP-APDIPKuala Lumpur, Malaysiahttp://www.apdip.net

Category:E-Commerce and E-Business1

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2 Introduction

2.1 Introduction

In the emerging global economy, e-commerce and e-business have increasingly become anecessary component of business strategy and a strong catalyst for economic development.The integration of information and communications technology (ICT) in business has rev-olutionized relationships within organizations and those between and among organizationsand individuals. Specifically, the use of ICT in business has enhanced productivity, en-couraged greater customer participation, and enabled mass customization, besides reducingcosts.

With developments in the Internet and Web-based technologies, distinctions between tra-ditional markets and the global electronic marketplace-such as business capital size, amongothers-are gradually being narrowed down. The name of the game is strategic positioning,the ability of a company to determine emerging opportunities and utilize the necessaryhuman capital skills (such as intellectual resources) to make the most of these opportu-nities through an e-business strategy that is simple, workable and practicable within thecontext of a global information milieu and new economic environment. With its effect ofleveling the playing field, e-commerce coupled with the appropriate strategy and policy ap-proach enables small and medium scale enterprises to compete with large and capital-richbusinesses.

On another plane, developing countries are given increased access to the global marketplace,where they compete with and complement