In this lesson, learn about electronic commerce and its importance in our modern world.

You will also

learn about types of electronic commerce, as well as some pros and cons of the process.

What Is Electronic Commerce?

Have you ever purchased a pair of shoes over the Internet? Or, maybe you've used your computer to
sell an old phone? If so, you've taken part in electronic commerce. Also known as ecommerce, electronic commerce is the process by which businesses and consumers buy and sell
goods and services through an electronic medium.
Electronic commerce emerged in the early 1990s, and its use has increased at a rapid rate. Today,
the majority of companies have an online presence. In fact, having the ability to conduct business
through the Internet has become a necessity. Everything from food and clothes to entertainment and
furniture can be purchased online.
Two familiar examples of electronic commerce companies are eBay and Amazon. Both of these
companies allow consumers to purchase a variety of goods and services online from businesses and
other consumers, while eBay also hosts online auctions. Consumers on these sites typically have
numerous payment options, as well as choices for how their products are delivered.

E-commerce (electronic commerce or EC) is the buying and selling of goods

and services, or the transmitting of funds or data, over an electronic network,
primarily the internet. These business transactions occur either as businessto-business, business-to-consumer, consumer-to-consumer or consumer-tobusiness. The terms e-commerce and e-business are often used
interchangeably. The term e-tail is also sometimes used in reference
to transactional processes for online shopping.

History of e-commerce
The beginnings of e-commerce can be traced to the 1960s, when businesses
started usingElectronic Data Interchange (EDI) to share business documents
with other companies. In 1979, the American National Standards Institute
developed ASC X12 as a universal standard for businesses to share
documents through electronic networks. After the number of individual users
sharing electronic documents with each other grew in the 1980s, in the 1990s
the rise of eBay and Amazon revolutionized the e-commerce industry.

Consumers can now purchase endless amounts of items online, both from
typical brick and mortar stores with e-commerce capabilities and one another.

E-commerce applications
E-commerce is conducted using a variety of applications, such as email,
online catalogs and shopping carts, EDI, File Transfer Protocol, and
web services. This includes business-to-business activities and outreach such
as using email for unsolicited ads (usually viewed as spam) to consumers and
other business prospects, as well as to send out e-newsletters to subscribers.
More companies now try to entice consumers directly online, using tools such
as digital coupons, social media marketing and targeted advertisements.

The benefits of e-commerce include its around-the-clock availability, the speed

of access, the wide availability of goods and services for the consumer, easy
accessibility, and international reach. Its perceived downsides include
sometimes-limited customer service, consumers not being able to see or
touch a product prior to purchase, and the necessitated wait time for product
shipping.
The e-commerce market continues to grow: Online sales accounted for more
than a third of total U.S. retail sales growth in 2015, according to data from the
U.S. Commerce Department. Web sales totaled $341.7 billion in 2015, a
14.6% increase over 2014. E-commerce conducted using mobile devices and
social media is on the rise as well: Internet Retailer reported that mobile
accounted for 30% of all U.S. e-commerce activities in 2015. And according to
Invesp, 5% of all online spending was via social commerce in 2015, with
Facebook, Pinterest and Twitter providing the most referrals.

The rise of e-commerce forces IT personnel to move beyond infrastructure

design and maintenance and consider numerous customer-facing aspects
such as consumer data privacy and security. When developing IT systems and
applications to accommodate e-commerce activities, data governance
related regulatory compliance mandates,personally identifiable
information privacy rules and information protection protocols must be
considered.
E-Commerce or Electronics Commerce is a methodology of modern business which
addresses the need of business organizations.
This reference will take you through simple and practical approach while learning ecommerce principles.

Audience
This reference has been prepared for the beginners to help them understand the basic
to advanced concepts related to e-commerce.

Prerequisites
Before you start doing practice with various types of examples given in this reference,
I'm making an assumption that you are already aware about what is a market, buyers,
sellers, a traditional commerce.
E-Commerce or Electronics Commerce is a methodology of modern business which
addresses the need of business organizations, vendors and customers to reduce cost
and improve the quality of goods and services while increasing the speed of delivery.
E-commerce refers to paperless exchange of business information using following
ways.

Electronic Data Exchange (EDI)

Electronic Mail (e-mail)

Electronic Bulletin Boards

Electronic Fund Transfer (EFT)

Other Network-based technologies

Features
E-Commerce provides following features

Non-Cash Payment E-Commerce enables use of credit cards, debit cards,

smart cards, electronic fund transfer via bank's website and other modes of
electronics payment.

24x7 Service availability E-commerce automates business of enterprises

and services provided by them to customers are available anytime, anywhere.
Here 24x7 refers to 24 hours of each seven days of a week.

Advertising / Marketing E-commerce increases the reach of advertising of

products and services of businesses. It helps in better marketing management
of products / services.

Improved Sales Using E-Commerce, orders for the products can be

generated any time, any where without any human intervention. By this way,
dependencies to buy a product reduce at large and sales increases.

Support E-Commerce provides various ways to provide pre sales and post
sales assistance to provide better services to customers.

Inventory Management Using E-Commerce, inventory management of

products becomes automated. Reports get generated instantly when required.
Product inventory management becomes very efficient and easy to maintain.

Communication improvement E-Commerce provides ways for faster,

efficient, reliable communication with customers and partners.

Traditional Commerce v/s E-Commerce

Sr.
No.

Traditional Commerce

E-Commerce

Heavy dependency on information

exchange from person to person.

Information sharing is made easy via

electronic communication channels making
little dependency on person to person
information exchange.

Communication/ transaction are

done in synchronous way. Manual
intervention is required for each
communication or transaction.

Communication or transaction can be done

in asynchronous way. Electronics system
automatically handles when to pass
communication to required person or do
the transactions.

It is difficult to establish and

maintain standard practices in
traditional commerce.

A uniform strategy can be easily

established and maintain in e-commerce.

Communications of business
depends upon individual skills.

In e-Commerce or Electronic Market, there

is no human intervention.

Unavailability of a uniform
platform as traditional commerce
depends heavily on personal
communication.

E-Commerce website provides user a

platform where al l information is available
at one place.

No uniform platform for

information sharing as it depends
heavily on personal
communication.

E-Commerce provides a universal platform

to support commercial / business activities
across the globe.

Advantages to Organizations

Using E-Commerce, organization can expand their market to national and

international markets with minimum capital investment. An organization can
easily locate more customers, best suppliers and suitable business partners
across the globe.

E-Commerce helps organization to reduce the cost to create process, distribute,

retrieve and manage the paper based information by digitizing the information.

E-commerce improves the brand image of the company.

E-commerce helps organization to provide better customer services.

E-Commerce helps to simplify the business processes and make them faster and
efficient.

E-Commerce reduces paper work a lot.

E-Commerce increased the productivity of the organization. It supports "pull"

type supply management. In "pull" type supply management, a business
process starts when a request comes from a customer and it uses just-in-time
manufacturing way.

Advantages to Customers

24x7 support. Customer can do transactions for the product or enquiry about
any product/services provided by a company any time, any where from any
location. Here 24x7 refers to 24 hours of each seven days of a week.

E-Commerce application provides user more options and quicker delivery of

products.

E-Commerce application provides user more options to compare and select the
cheaper and better option.

A customer can put review comments about a product and can see what others
are buying or see the review comments of other customers before making a final
buy.

E-Commerce provides option of virtual auctions.

Readily available information. A customer can see the relevant detailed

information within seconds rather than waiting for days or weeks.

E-Commerce increases competition among the organizations and as result

organizations provides substantial discounts to customers.

Advantages to Society

Customers need not to travel to shop a product thus less traffic on road and low
air pollution.

E-Commerce helps reducing cost of products so less affluent people can also
afford the products.

E-Commerce has enabled access to services and products to rural areas as well
which are otherwise not available to them.

E-Commerce helps government to deliver public services like health care,

education, social services at reduced cost and in improved way.

INTRODUCTION TO E-COMMERCE INTRODUCTION Internet has become an important

medium for doing global business based on the state of the art technology. Global business
was conducted in a new way: electronically, using networks and the Internet. The availability
of Internet has led to the development of E-Commerce (Electronic commerce), in which
business transactions take place via telecommunication networks. DEFINITION OF ECOMMERCE: Electronic commerce is an emerging model of new selling and merchandising
tools in which buyers are able to participate in all phases of a purchase decision, while
stepping through those processes electronically rather than in a physical store or by phone
(with a physical catalogue).

E-commerce is more than just buying and selling products online.

</li></ul><ul><li>Instead, it encompasses the entire online processes of
developing, marketing, selling, delivering, and paying for products and
services purchased by internet worked, global market places of
customers, with support of worldwide network of business partners.
</li></ul>

3 Electronic Commerce under different perspectives: Communications Perspective

Communications Perspective EC is the delivery of information, products /services, or
payments over the telephone lines, computer networks or any other electronic means.
Business Process Perspective Business Process Perspective EC is the application of
technology toward the automation of business transactions and work flow. Service
Perspective Service Perspective EC is a tool that addresses the desire of firms, consumers,
and management to cut service costs while improving the quality of goods and increasing the

speed of service delivery. Online Perspective Online Perspective EC provides the capability
of buying and selling products and information on the internet and other online services.

4 CLASSIFICATIONS OF E-COMMERCE APPLICATIONS Electronic Markets: The principle

function of an electronic market is to facilitate the search for the required product or service. Airline
booking systems are an example of an electronic market. Electronic Data Interchange (EDI):
Electronic Data Interchange (EDI) is the electronic exchange of business documents in a standard,
computer processable, universally accepted format between-trading partners. EDI is quite different
from sending electronic mail, messages or sharing files through a network. Internet Commerce
The Internet (and similar network facilities) can be used for advertising goods and services and
transacting one-off deals. Internet commerce has application for both business-to-business and
business to consumer transactions.

6 SCOPE OF E-COMMERCE Selling can be focussed to the global customer Pre-sales,

subcontracts, supply Financing and insurance Commercial transactions: ordering, delivery, payment
Product service and maintenance Co-operative product development Distributed co-operative
working Use of public and private services Business-to-administrations (e.g. customs, etc) Transport
and logistics Public procurement Automatic trading of digital goods Accounting Dispute resolution

What is the scope for eCommerce?

Scope of E-Commerce is immense. But currently there are many competitors in the market which are
not only for the shopping of electronic things or clothes or such but now many platforms have come
up with the Services like online selling of Furniture, Groceries etc. So To survive in market one has
to have many research to know the market deeply.

eCommerce is all about ur mark in the industry. There is never a failure if u are unique in the
product and if the quality of ur product is the best success is urs a day earlier r later bcoz success is
waiting behind U to reach U as soon as possible.
And to be successful ur website interface should be the best for that U can reach

-commerce is on peak in present day. So bright scope in E-commerce today.

The scope of ecommerce is very bright the reason behind is that now a days ecah any every person is
having their own smart phones in each and every hand they are also having many electronic gadgets
with them through which the consumers are always looking for online shopping in which they are
able to see more that 1000 brands and also able to see many varieties under it. Consumers are also
having the option of cash on delivery and online payment option also. Therefore they can save their
time to travel.