E-COMMERCE

Contents: Introduction, History, Types of E-commerce–inter-organizational, intra-organizational, customer to business, differences between E-Commerce systems and traditional systems, E-Commerce frameworks, Applications of E-commerce.

E-commerce is a process of buying and selling or exchanging products, services, and information using electronic media. In other words, e-commerce is one of the most important aspects of the Internet, which allows people to exchange goods and services immediately and with no barriers of time or distance.

TYPES OF E-COMMERCE

1. Business-to-business E-Commerce (B2B) –This type refers to a company selling or buying from other companies electronically.
2. Business-to-customer E-commerce (B2C) –In this type, the company establishes a website on the internet and puts information about products and services, allows the customer to order these from a website, and also provides customer support services. For example, amazon.com is general merchandise that sells consumer products to retail consumers.
3. Consumer to consume E-commerce (C2C) – it provides a way for consumers to sell to each other, with the help of an online market maker such as the auction site eBay. eBay.com creates a market space where consumers can auction or sell goods directly to other consumers.
4. Business to Government (B2G): The B2G model is a variant of the B2B model. Such websites are used by the government to trade and exchange information with various business organizations. Such websites are accredited by the government and provide a medium for businesses to submit application forms to the government.

ADVANTAGES OF E-COMMERCE

1. Using E-Commerce, any organization can expand their market to national and international markets with minimum capital investment. An organization can easily locate more customers, the best suppliers, and suitable business partners across the globe.
2. E-commerce helps organizations to reduce the cost to create process, distribute, retrieve, and manage paper-based information by digitalizing the information.
3. E-commerce improves the board image of the company
4. E-commerce helps organizations to provide better customer service.
5. E-commerce helps to simplify business processes and make them faster and more efficient.
6. E-Commerce reduces paperwork a lot.
7. E-commerce increased the productivity of the organization.
8. 24X7 support. Customers can do transactions for the product or inquire about any product /services provided by a company at any time anywhere from any location.
9. The E-commerce application provides users with more options and quicker delivery of products.
10. The E-Commerce application provides users with more options to compare and select the cheaper and better option.

DISADVANTAGES OF E-COMMERCE

1. There can be a lack of system security, reliability, or standards owing to poor implementation of e-commerce.
2. The software development industry is still evolving and keeps changing rapidly.
3. In many countries, network bandwidth might cause an issue as there is insufficient telecommunication bandwidth available.
4. Special types of web servers or other software might be required by the vendor to set the e-commerce environment apart from network servers.
5. Sometimes it becomes difficult to integrate E-Commerce software or website with the existing application or database.
6. There could be software/ hardware compatibility issues as the same E–commerce software may be incompatible with some operating system or any other component.

INTER-ORGANIZATIONAL AND INTRA-ORGANIZATIONAL

INTER-ORGANIZATIONAL

Inter-organizational e-commerce, also known as B2B (Business-to-Business) e-commerce, involves electronic transactions between two or more organizations. It typically includes business activities such as procurement, supply chain management, and collaboration between different companies. Here’s a more detailed explanation:

1. Nature of Transactions: Inter-organizational e-commerce deals with transactions and interactions between businesses. These transactions can involve the exchange of goods, services, information, or financial transactions.
2. Participants: The participants in inter-organizational e-commerce are typically businesses, government entities, or non-profit organizations. For example, a manufacturing company may order raw materials from a supplier through online channels.
3. Examples: Some common examples of inter-organizational e-commerce include:
   • Businesses purchasing raw materials from suppliers.
   • Companies collaborating with partners or vendors to streamline their supply chain.
   • Government agencies procuring goods or services from private suppliers.
4. Key Technologies: Inter-organizational e-commerce relies on technologies such as Electronic Data Interchange (EDI), supply chain management systems, and online marketplaces to facilitate transactions and communication between organizations.
5. Benefits: Inter-organizational e-commerce can lead to increased efficiency, cost savings, and improved supply chain management. It allows organizations to connect with a broader range of suppliers and partners, reducing geographical barriers.

INTRA-ORGANIZATIONAL

Intra-organizational e-commerce, also known as B2E (Business-to-Employee) or organizational e-commerce, involves electronic transactions and interactions within a single organization. It focuses on improving internal processes, communication, and services for employees. Here’s a more detailed explanation:

1. Nature of Transactions: Intra-organizational e-commerce deals with transactions and interactions within an organization. These transactions often revolve around employee-related activities such as HR processes, training, and communication.
2. Participants: The participants in intra-organizational e-commerce are typically employees, managers, and other stakeholders within the organization. For example, employees might use an internal e-commerce platform to request office supplies or book training sessions.
3. Examples: Some common examples of intra-organizational e-commerce include:
   • Internal HR systems for managing employee benefits and payroll.
   • Internal e-commerce portals for employees to request office supplies or equipment.
   • In-house training and development programs are accessible online.
4. Key Technologies: Intra-organizational e-commerce relies on technologies such as Intranets, internal e-commerce platforms, and enterprise resource planning (ERP) systems to facilitate transactions and communication within the organization.
5. Benefits: Intra-organizational e-commerce can lead to improved employee productivity, streamlined internal processes, and better communication within the organization. It helps organizations manage their resources more efficiently and provide better services to employees.

Sl. No	Parameters of comparison	E-commerce systems	Traditional systems
1	Medium of Transactions	Transactions in e-commerce systems primarily occur over digital platforms, such as websites and mobile apps, using the Internet. These systems enable online buying and selling.	Traditional systems involve physical, face-to-face transactions, phone orders, and in-person interactions at brick-and-mortar stores.
2	Global Reach	E-commerce systems have a global reach, allowing businesses to sell products or services to customers worldwide, breaking down geographical barriers.	Traditional Systems: Traditional systems often serve a local or regional customer base, limiting the potential customer reach.
3	Operating Hours	E-commerce systems operate 24/7, allowing customers to shop at any time, providing convenience and flexibility.	Traditional Systems: Traditional systems have fixed operating hours and may not be available during evenings, weekends, or holidays.
4	Overhead Costs	E-commerce businesses often have lower overhead costs as they don’t require physical storefronts or extensive staff for in-person sales.	Traditional Systems: Traditional businesses may have higher overhead costs, including rent, utilities, and on-site staff.
5	Inventory Management	E-commerce systems often employ real-time inventory management, ensuring products are accurately listed as available or out of stock.	Traditional businesses may rely on periodic manual inventory checks, leading to occasional discrepancies.
6	Customer Interaction	E-commerce systems use digital tools like chatbots, email, and online reviews for customer interaction and support.	Traditional systems rely on face-to-face interactions, phone calls, and in-store assistance for customer support.
7	Payment Methods	E-commerce systems offer various digital payment options, including credit cards, digital wallets, and online payment gateways.	Traditional systems typically accept cash, checks, and credit/debit cards but may not support newer digital payment methods.
8	Customer Data Handling	E-commerce systems collect extensive customer data for personalization, marketing, and analytics, which can raise privacy concerns.	Traditional systems collect limited customer data, primarily for in-person transactions and loyalty programs.
9	Competitive Landscape	E-commerce faces intense online competition and the need for effective digital marketing strategies.	Traditional businesses compete in local markets, with competition from nearby physical stores.
10	Shopping Experience	E-commerce provides a convenient, online shopping experience with product reviews, recommendations, and easy comparisons.	Traditional systems offer a tactile, in-store shopping experience where customers can physically inspect products.
11	Returns and Refunds	E-commerce systems often have return policies, including return shipping, which can be more convenient for customers.	Traditional systems may have varying return policies, and customers may need to return items in person.

E-COMMERCE FRAMEWORKS

APPLICATIONS OF E-COMMERCE

1. Online Retail (B2C): E-commerce has revolutionized retail, allowing consumers to shop for a vast array of products online. Popular online marketplaces like Amazon, eBay, and Alibaba serve as platforms for retailers to sell products directly to consumers.
2. Business-to-Business (B2B) E-commerce: Businesses use e-commerce to source raw materials, components, and products from other businesses. B2B e-commerce platforms streamline procurement, supply chain management, and collaboration among companies.
3. Digital Content and Subscription Services: E-commerce enables the distribution and sale of digital content such as music, movies, e-books, and software. Subscription-based models for streaming services like Netflix and Spotify have gained popularity.
4. Online Travel and Booking: Travel agencies, airlines, hotels, and car rental companies use e-commerce platforms to facilitate online bookings and reservations. Customers can plan, book, and manage their travel itineraries online.
5. Online Food Delivery: E-commerce has transformed the food industry, allowing consumers to order food from restaurants and have it delivered to their doorstep through platforms like Uber Eats, Grubhub, and DoorDash.
6. Online Banking and Financial Services: Customers can conduct banking transactions, invest, and manage their finances online through e-commerce platforms offered by banks, investment firms, and financial institutions.
7. Online Marketplaces for Services: E-commerce extends beyond physical products to services. Platforms like Upwork and Fiverr connect freelancers and service providers with clients seeking various services.
8. E-learning and Online Education: E-commerce has revolutionized education, making online courses and educational materials accessible to a global audience. Institutions and educators use platforms like Coursera, edX, and Udemy to offer courses.
9. Healthcare and Telemedicine: E-commerce platforms facilitate online doctor appointments, telemedicine consultations, and the purchase of healthcare products and prescription medications.
10. Auctions: Online auction platforms like eBay provide a digital marketplace for buyers and sellers to bid on and purchase a wide range of items, from collectibles to antiques.
11. Government Services: Governments use e-commerce to offer services such as tax filing, vehicle registration, and the issuance of permits and licenses online, improving efficiency and convenience.
12. Non-profit and Charitable Donations: Non-profit organizations use e-commerce to accept online donations, raise funds, and promote causes. Crowdfunding platforms like Kickstarter and GoFundMe facilitate fundraising for various initiatives.
13. Real Estate: E-commerce platforms enable property listings, virtual tours, and online property purchases and rentals. Real estate agents and companies use these platforms to reach a broader audience.
14. Fashion and Apparel: Clothing brands and fashion retailers operate e-commerce websites to sell clothing, accessories, and footwear to a global customer base.
15. Subscription Box Services: Subscription e-commerce models deliver curated products and services to subscribers on a regular basis. Examples include meal kits, beauty boxes, and book subscriptions.
16. Cross-border E-commerce: E-commerce facilitates international trade, allowing businesses to sell products to customers in different countries. Cross-border e-commerce platforms simplify global expansion.