E-COMMERCE

E-Commerce or Electronic Commerce means buying and selling

of goods, products, or services over the internet. E-commerce is
also known as electronic commerce or internet commerce. These
services provided online over the internet network. Transaction
of money, funds, and data are also considered as E-commerce.
These business transactions can be done in four ways: Business
to Business (B2B), Business to Customer (B2C), Customer to
Customer (C2C), Customer to Business (C2B). The standard
definition of E-commerce is a commercial transaction which is
happened over the internet. Online stores like Amazon, Flipkart,
Shopify, Myntra, Ebay, Quikr, Olx are examples of E-commerce
websites. By 2020, global retail e-commerce can reach up to $27
Trinon.

EXAMPLES OF E-Commerce are:

• Amazon.com, an online bookstore started in 1995 grew
its revenue to more than 600$ million in 1998.
• Microsoft Expedia, an integrated online travel
transaction site helps to choose a flight, buy an airline
ticket, book a hotel, rent a car etc. in only a few minutes.
History of e-commerce
The beginnings of e-commerce can be traced to
the 1960s, when businesses started
using Electronic 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, the rise of eBay and Amazon in the 1990s
revolutionized the e-commerce industry.
Consumers can now purchase endless amounts of
items online, from e-tailers, typical brick and
mortar stores with e-commerce capabilities and
one another.
 Scope of E-Commerce
• E-Commerce is a general concept covering any form of
business transaction or information exchange executed
using information and communication technologies
((ICT’s).
• It includes electronic trading of goods, services and
electronic material.
It takes place between companies, between companies and
their customers or between companies and public
administrations.
There is high scope of e-commerce in each aspect of
business, at present it is in the embryonic stage but in
future e-commerce would be the part of day to day activity
of business firms.
Following are the marketing areas where we seek
scope of e-commerce:
(i) Marketing, sales and sales promotion.
(ii) Pre-sales, subcontracts, supply.
(iii) Financing and insurance.
(iv) Commercial transactions – ordering, delivery,
payment.
(v) Product service and maintenance.
(vi) Co-operative product development.
(vii) Distributed co-operative working.
(viii) Use of public and private services.
(ix) Business-to-administrations
(x) Transport and logistics.
(xi) Public procurement.
(xii) Automatic trading of digital goods like games, learning
material, songs and music etc.
(xiii) Accounting and financial management.
(xiv) Legal advice
Types of e-commerce
system
There are 6 types of e-commerce systems. They are B2B,
B2C, C2C, C2B, B2A, C2A. All these 6 types of e-
commerce that are used today are classified based on the
nature of the transaction.
B2B (Business-to-Business)
B2B e-commerce can be simply defined as the commerce
between companies. In Business-to-Business type of
electronic commerce system, companies do business
with each other. For say, a manufacturer selling a product
to a wholesaler, a wholesaler selling a product to the
retailer. Here manufacturer, wholesaler and retailer all are
doing their separate businesses.
Above diagram illustrates the B2B model. There are 3
businesses- wholesaler, manufacturer and the retailer. Here
manufacturer has a website using which wholesalers can
purchase products from the manufacturer. When a
wholesaler places an order on the website, the
information regarding the order will be received by the
manufacturer through the website. Then after processing
the order, the manufacturer will send the product to the
wholesaler. After receiving the products wholesaler can
sell it to the retailers. This type of business is called B2B
model.
B2C (Business-to-Consumer)
B2C model works as its name suggest. In this model, the
company sells their products, goods or services directly to
the consumer online. Here the customer can view products
on the website that they want to buy and can order it. After
receiving the order details, the company will process the
order and then send the products directly to the customer.
For example, Amazon, Flipkart etc are this type of e-
commerce business model which we are using in our daily
life.
We can view products on the websites like Amazon,
Flipkart and can order it. After receiving the order, the
selling company of the products processes it and send it to
us. Here a business company is selling their products to the
customer with the help of an e-commerce website.

C2C (Consumer-to-Consumer)
Here a consumer sells products, goods or services to
other consumers using the internet or the web
technologies. The C2C business model helps us to sell our
assets or properties like a car, house, bike, electronics etc
via online to other consumers. OLX, Quickr etc are this
type of business model.
Here, if consumer-1 wants to sell a product then he/she can
publish the details of the product on the website like OLX
or Quickr. The consumer-2 can view the details of the
product on that website that consumer-1 wants to sell. If
consumer-2 is willing to buy the product that consumer-1
is selling, then the buyer can directly contact the seller and
the product will be sold. Here products are selling directly
from a consumer to another consumer via the website.
C2B (Consumer-to-Business)
A consumer to the business model is a type of commerce
where a consumer or end user provides a product or
service to an organization. It is the reverse model of the
B2C or business to consumer model, where businesses
produce products and services for consumer
consumption.

In this business model, individual customers offer to sell

products or services to the companies who are prepared to
purchase them. For example, if you are a software
developer, then you can show a demo of your software or
skills that you have on the sites like freelancer, fiverr etc.
If a company likes your software or skills then the company
will directly buy the software from you or can hire you for
their services.

B2A (Business-to-Administration)
B2A or business to administration also referred as
the business to government (B2G) commerce, it is a
derivative of B2B e-commerce model. in this model,
the businesses and government agencies
(administration) use central websites to exchange
information and do business with each other more
efficiently than they usually can off the web.

B2G business is also referred to public sector

marketing that means marketing products and
services to various government levels. The B2G
business network provides a platform to businesses to
bid on government opportunities such as auctions,
tenders and application submission etc.

C2A (Consumer-to-Administration)
Consumer to administration or consumer to government e-
commerce model helps consumers to request
information or post various feedbacks regarding public
sectors directly to the government authorities or
administration.For say, making electricity bill payments
through the website government, making payment of taxes,
payment of health insurance etc are C2A type of business
model.

Consumer to administration or consumer to government e-

commerce model provides an easy and instant solution or
way to establish communication between the consumers
and government.
 Framework
Conceptual Framework
Internet economy is a broader term which includes both e-
commerce and e-business. There are various elements
governing the process of online trading of goods and
services. These elements are classified as different layers
as per the framework given by Center for Research and
Electronic Commerce (CREC) at the University of Texas
in the following manner:
1. Layer1- Internet and Network
Infrastructure
This layer is facilitated by the companies that provide
enabling hardware, software and networking devices for
the internet, internet service providers (ISPs), fiber optic
cable makers, PC manufacturers, etc. Examples for such
providers include CISCO, AT&T, AOL, etc. This layer
also deals with the network framework which establishes
an effective connection between the buyer and the supplier.
The network lattice on which the internet works today is
based on packet switching technique. In this technique, the
message is broken down into small packets. Every packet
bears the address of its source and destination. This way
the message enjoys a flexible and faster medium of
communication. These packets are then assembled in order
 at the destination computer for ultimate delivery. The
internet infrastructure works under the governance of
certain protocols. These set of rules and regulations are
collectively termed as TCP/IP protocol. Here TCP stands
for Transmission Control protocol and IP signify Internet
protocol.
2. Layer2- Internet Applications
Infrastructure
This layer is facilitated by companies that design software
products for buyer’s web- interface with the seller.
Integrity at this layer enables a secure online transaction.
Such companies comprise IBM, Adobe, Oracle, TCS, etc.
These companies provide web development design and
consultancy services to various online businesses. It is at
this layer where the type of e-commerce is determined.
3. Layer3- Internet Intermediaries
This layer facilitates the real scenario of e-commerce. It
includes companies that establish links between the buyers
and the sellers by creating the virtual market where the
online trading takes place. It interfaces the application
layer to the users. Interactive catalogs and directory
support services are examples of this layer. While the
interactive catalog deals with people, the directory catalog
deal interacts directly with software applications. Online
travel agents like Travelocity; Content Aggregators like
 Yahoo! and Google, etc are examples of such
intermediaries.
4. Layer4- Internet Commerce
This layer is facilitated by companies that sell products or
services directly to consumers and businesses. These
companies include the online retailers or the E-tailers like
Amazon, Dell, eBay, etc.

A Figure Depicting 4th Level of Conceptual E Commerce

Framework Facilitated By Companies Selling Products Directly
to Businesses and Customer
Elements of e-commerce
Ecommerce also known as electronic commerce or
internet commerce, refers to the buying and selling of
goods or services using the internet, and the transfer of
money and data to execute these transactions.
Ecommerce is often used to refer to the sale of physical
products online, but it can also describe any kind of
commercial transaction that is facilitated through the
internet.
Whereas e-business refers to all aspects of operating an
online business, ecommerce refers specifically to the
transaction of goods and services.
In order to capture your audience and make the sales, you
have an ecommerce website .
Your e-commerce website needs to be current and
implement several very important elements.

7 points to consider when developing your

e-commerce site:
1. User Friendly
If your store is easy to navigate, you will have a greater
chance of making a sale from the start.
2. Shopping Cart and Checkout Process
Adding items to the shopping cart should be simple.
Color choices or style preferences should be easy to view
and select. Customers like to view what they have in
their cart while continuing to shop, so make sure you
have a design and functionality that makes it easy.

3. Mobile Compatibility
80% of all online adults own a smartphone. Mobile visits,
in many cases now, outrank desktop use.

4. Calls to Action (CTA)

Make sure to lead your customers through your site with
calls to action that are specific to what you want them to
do. For example, if you have a sale, your CTA button
could be "Click Here to Save 20%!"

5. Images and Descriptions

When people are searching for a product to buy, they
want to know all the details about it before making their
purchase.
Cover all aspects, including size, texture, uses, benefits,
colors available, etc. You want your potential customer
to feel confident that they know enough about your
product to purchase it, instead of going elsewhere.

6. Customer Support
Customer support needs to be available in case of any
problems or questions. There are several different types
of customer support, toll free, email support, and online
chat. Decide which is the best choice for your budget and
type of business.

7. Security and Privacy

Make sure you have an SSL certificate installed to
encrypt data coming and going to the browser. Today
every website, e-commerce or not, should have one.
E- COMMERCE IN INDIA
India has an internet users base of about 475 million as
of July 2018, about 40% of the population. Despite being
the second-largest userbase in world, only behind China
(650 million, 48% of population), the penetration of e-
commerce is low compared to markets like the United
States (266 million, 84%), or France (54 M, 81%), but is
growing at an unprecedented rate, adding around 6
million new entrants every month. The industry
consensus is that growth is at an inflection point.
In India, cash on delivery is the most preferred payment
method, accumulating 75% of the e-retail
activities. Demand for international consumer products
(including long-tail items) is growing much faster than in-
country supply from authorised distributors and e-
commerce offerings.
In 2017, the largest e-commerce companies in India
were Flipkart, Amazon, Myntra, Paytm, and Snapdeal.

WHAT IS AN E-COMMERCE WEBSITE

E-Commerce websites are online portals that facility
online transactions of goods and services through
means of the transfer of information and funds over the
Internet. In the early days, e-Commerce was done
partially through emails and phone calls. Now, with a
single website, anything and everything that a
transaction needs, can be executed online.
There are different e-Commerce websites for every
field. The most common type is retail selling, but there
are many others too, like auction websites, business-to-
business services, music portals, consultancy websites,
finance management websites, and the like. You can
build such websites by hiring dedicated developers.

DEFINITION

Trade, be it barter exchange or buying and selling of

goods and services has been prevalent for centuries. No
one can be self-sufficient. And this brings out the need
for demand and supply of goods and services.
Transactions have been going on all over the world for
centuries, locally, and across locations. Keeping the same
concept in mind, now think electronic.

10 POPULAR E-COMMERCE WEBSITES

Ecommerce has become a way of life in India. Once used
only by the tech savvy to buy things not available in the
neighbourhood mall, it has now become ubiquitous,
thanks to a surge in internet use, and some heavy duty
advertizing by ecommerce bigwigs.
Indians have their quirks and specific needs when it
comes to online shopping. Globally leading shopping
sites aren’t necessarily the ones most popular within the
country. Also, while Amazon India is top of the list in the
shopping category, overall, it ranks sixth, behind Google
(both global and India), Facebook, YouTube, and Yahoo.
Some, like Alibaba and Amazon only ship to the country,
while others, like Amazon’s India unit, Flipkart, and
Snapdeal have taken a global model and gone as native
as possible.
 Amazon
India

Top of the lot is Amazon India, beating all other

ecommerce websites, as per SimilarWeb. Amazon
launched its India website in 2013, six years after
Flipkart. A mean fight ensued, complete with mega ad
spending, localization, and billion dollar checks on both
ends. Amazon, however, seems to be winning the
desktop war.
Flipkart

The king of Indian ecommerce holds second place in

website popularity. Flipkart insists that is because it is
pushing more towards app transactions, where the
company beats Amazon. Many industry analysts,
however, think while mobile commerce is the way to the
future, it is too early to discount website business.
Flipkart, valued at around US$15 billion, leads the
ecommerce pack in the country, but is under pressure to
maintain that lead as Amazon nips in.
SNAPDEAL

The self professed online Walmart of India, Softbank-

backed Snapdeal takes the third spot. Founder and CEO
Kunal Bahl has repeatedly said he is building the
company modelled after Alibaba, calling Snapdeal a
“technology platform that brings sellers and buyers
together,” rather than an ecommerce site. Now, Indian
laws make it mandatory for most ecommerce sites to
operate as marketplaces, so that doesn’t make much of a
difference. Bahl, however, has an uphill task at hand,
matching Amazon India and Flipkart’s mega budgets and
massive leads.
Ababa

Alibaba does not have an Indian website, and one does

not see ads asking Indians to buy on Alibaba, but
customers here have long discovered the benefits of
getting electronics and bulk purchases done on this online
megastore. Shipping via Aliexpress is gaining popularity as
well.
Ebay
India

Once talked of in the same breath as Amazon, Ebay has

quietly slipped in rung across the world, including in
India. Travails at home have hit Ebay’s performance in
India, but the company now manages to cling to the fifth
spot. That’s ahead of Jabong, though.
Jabong

The other troubled ecommerce player in the country,

online clothes store Jabong, ranks below Ebay in the
popularity charts. Once caught up in management
changes and other problems, Jabong now seems to have
found its balance. It is, however, still lagging behind rival
Myntra in the sector. Myntra does not have a
transactional website, so it’s not featured on this list.
Shopclues

India’s latest entrant to the unicorn club, Shopclues

patiently worked its way up to the top by focussing on
daily household needs while Flipkart and Amazon were
busy selling mobile phones and other electronics.
Steadfastly profit-oriented, Shopclues is expected to
become profitable with IPO in 2017.
That is even before Flipkart, India’s largest ecommerce
player, is eyeing going public.
 OLX

Listing website OLX is a rival to Quikr, and India’s answer

to the popular Craigslist. OLX India came online in 2007
and has quickly become popular for buying and selling
pre-owned cars, books, and even real estate.
Amazon
The parent website, not to be confused with the Indian
subsidiary. Indians love to shop for international brands
of electronics, cosmetics and even fashion accessories,
which leads many to look up global sites like Amazon,
and of course, Alibaba. Add to that the fact that paying
US$ rates often comes cheaper for many electronic
items, than buying their Indian versions, and it’s no
surprise Jeff Bezos’ “everything store” has made it to this
list.

Quikr

Another Craigslist-inspired site, and OLX’s rival. Quikr has

been growing fast, and recently bought CommonFloor to
boost its real estate listings. It has so far raised US$346
million from 10 investors, including Tiger Global, Matrix
Partners, Warburg Pincus, and Norwest Venture Partners
(NVP). The company, founded in Mumbai by Pranay
Chulet and Jiby Thomas, started as a classifieds portal in
Mumbai and then shifted its base to Bangalore in
December 2014.

Limitations of E-Commerce
E-Commerce suffers from the following drawbacks.
Security: Security continues to be a problem for online
businesses. Customers might be reluctant to give their
credit card number at the website due to a number of
credit card fraud cases.
System and Data Integrity: Data protection and
integrity of the system that handles the data are serious
concerns. Computer viruses may cause data corruption,
file backups, storage problems etc. there is also a
danger of hackers accessing the files and corrupting
accounts.
Costs: Even though the company may initially save
money by cutting intermediaries, other costs may be
incurred as start-up costs in terms of hardware and
software as well as training of employees and costs to
maintain the website.
Products People won’t buy Online: There are certain
products like home furnishings which people might not
like to buy online. They might want to, for instance, sit
 on a sofa to see how comfortable it is, feel the texture
of the fabric etc.
Corporate vulnerability Web farming: The availability
of product details, catalogs, and other information
about a business through its website makes it
vulnerable to access by the competitors. The
competitors might then indulge in web farming i.e.
extracting business intelligence from your competitor’s
web pages.
Problem of customer loyalty: No business can survive
for long without loyal customers. The new breed of net
savvy customers buys from a website where they are
getting the best deal. They are not loyal to a particular
seller.
Shortage of Talent: There is a great shortage of skilled
people who can handle e-commerce successfully.
Traditional organisational structures and poor work
cultures also inhibit the growth of e-commerce.
Fulfillment Problems: There could be problems related
to shipping delays and merchandise mix-ups.
Returning goods: Returning goods online can be
difficult. There are uncertainties regarding whether the
goods will get back to their source, who will pay for the
return postage, will the refund be paid etc.

E-Commerce Applications
• E-Marketing
• E-Advertising
• E-Banking
• E-Learning
• Mobile Commerce
• Online Shopping
• Entertainment

• E-Marketing:-
 E-Marketing also known as Internet Marketing,
Online Marketing, Web Marketing.
It is the marketing of products or services over the
internet. It is consider to be broad in scope because
not refers to marketing on the internet but also done
in Email and wireless media.
 E-Marketing ties together the creative and technical
aspects of the internet, including design
development, advertising and sales.
Internet marketing is associated with several
business models i.e., B2C, B2B, C2C.
 Internet marketing is inexpensive when examine the
ratio of cost to the reach of the target.

• E-Advertising:-

It is also known as online advertising it is a form of

promotion that uses internet and World Wide Web to
deliver marketing messages to attracts customers.
Example: Banner ads, Social network
advertising,online classified advertising etc.
The growth of these particular media attracts the
attention of advertisers as a more productive source
to bring in consumers.
• E-Banking:-

Means any user with a personal computer and

browser can get connected to his banks, website to
perform any of the banking functions. In internet
banking system the bank has a centralized data base
i.e., web-enabled.
 Best example for E-Banking is ATM.
An ATM is an electronic fund transfer terminal
capable of handling cash deposits, transfer, Balance
enquiries, cash withdrawals, and pay bills.

• SERVICES THROUGH E-BANKING:

 Bill Payment Service
 Fund Transfer
 Investing through Internet Banking
 Shopping

• E-Learning:-
E-Learning comprises all forms of electronically
supported learning and teaching.
E-Learning applications and processes include web-
based learning, computer-based learning.
Content is delivered via. The internet,
intranet/extranet, audio, or video tape, satellite TV.
  E-Learning is naturally suited to distance and flexible
learning, but can also be used conjunction with face-
to-face teaching.
 E-Learning can also refer to the educational website
such as those offering learning scenarios worst and
interactive exercises for children.
A learning management system (LMS) is software
used for delivering, tracking, and managing training
/education.

• Mobile Commerce:-
Mobile Commerce also known as M-Commerce, is the
ability to conduct, commerce as a mobile device, such
as mobile phone.
Banks and other financial institutions use mobile
commerce to allow their customers to access account
information and make transactions, such as
purchasing, withdrawals etc.,
 Using a mobile browser customers can shop online
without having to be at their personal computer.
• SERVICES ARE:
1. Mobile ticketing
2. Mobile contract purchase and delivery mainly
consumes of the sale of ring tones, wallpapers and
games of mobile phones.
3. Local base services
• Local discount offers
• Local weather
4. Information services
 News
• Sports, Scores

• Online Shopping:-
Online shopping is the process whereby consumers
Directly buy goods or services from a sell in real
time without intermediary services over the
internet.
An online shop, e-shop, e-store, internet shop web
shop, web store, online store, or virtual shop
evokes the physical analogy of buying products or
services in a shopping center.
In order to shop online, one must be able to have
access to a computer, a bank account and debit
card.
 Online shoppers commonly use credit card to
make payments , however some systems enable
users to create accounts and pay by alternative
means ,such as
 Cheque.
 Debit cards.
Gift cards
 Online stores are usually available 24 hours a day
 • Entertainment:-
The conventional media that have been used for
entertainment are
1. Books/magazines.
2. Radio.
3. Television/films.
4. Video games.
Online books /newspapers, online radio, online
television, online firms, and online games are
common place in internet where we can
entertain.
Online social networking websites are one of
the biggest sources of E-entertainment for
today’s tech-savvy generation.