UNIT : 1 Overview of E-Commerce
1. Definition E-commerce.
Ans. E-commerce stands for electronic commerce.
E-commerce is the activity of purchasing or selling products via the internet.
E-commerce offers almost everything to buy, making it extremely competitive.
Some notable examples of successful e-commerce businesses are Amazon, Flipkart, eBay, and Myntra.
E-commerce utilizes technology like mobile commerce, electronic funds transfers, supply chain management, inventory management systems, internet marketing, online transaction processing, EDI(Electronic data interchange), and automated data collection mechanisms.
2. What are the functions and significance E-Commerce?
Ans. E-Commerce Functions: These are the typical functions of an e-commerce system available both on back office and front office:
Registration
Basket
Payment
Product management
Orders Management
VAT and shipping costs
Registration:
In order to make a purchase, users must register with the site, providing all the information needed for shipping and billing.
The data will be stored on a database and will be available from the back office.
Basket:
The basket is a tool that, like a shopping basket, allows users to select the products they want and then go to the checkout for payment.
Managing the basket means:
Summarizing user requests within the possibilities offered by the catalogue
Checking the basket and possibly cancel/modify the items placed in it.
Starting the payment process for the selected products
Payment:
The payment system is a mechanism that facilitates dialogue between the parties involved in financial transactions: the bank, the store and you with your credit card.
After filling the order, the customer enters his/her credit card number that travels along a channel solely accessible to the bank.
The bank checks the customer’s account and decides whether or not to authorise the payment.
Product management:
This is the main part of the e-commerce system and provides all the features required for product placement, order fulfilment, etc…,key to the management of online sales.
In detail the features in the system are:
Product code
Category
Subcategory
Product name
Description
Image, zoom
Sizes available
Price
‘Pieces’ in stock
The products can be searched by category and subcategory.
Order management:
The order is the card that summarizes all the delivery and order information to enable correct delivery. It includes:
List of products purchased
User information
Details of place of delivery
Delivery time information
Payment information
VAT and shipping costs:
In addition to the cost of products purchased, the system manages the VAT(Value added tax) and the shipping charges.
The e-commerce module is able to manage VAT rates in countries within and outside the EU.
Shipping costs both fixed and variable based on the weight and volume of the shipment.
Discounts:
Discounts and promotions are managed for a single product or product category.
This second phase of the site requires a detailed analysis of your current storage and order management systems with which it will be necessary to integrate.
Significance and Scope of E-commerce:
The scope of e-commerce encompasses a wide range of online transactions and activities, including
Cross-border e-commerce:
Cross-border e-commerce refers to the buying and selling of goods and services across national borders. With the rise of e-commerce, it is becoming easier for businesses and consumers to engage in cross-border transactions, even if they are located in different countries.
Digital goods and services:
Digital goods and services refer to products that are delivered and consumed in a digital form.
Examples include software, music, e-books, and online courses.
The ease of delivery and the low costs associated with distributing digital goods make them an attractive option for both businesses and consumers.
E-marketing and advertising:
E-marketing and advertising refers to the use of digital channels to promote and sell products.
This includes activities such as email marketing, search engine optimization, social media marketing, and online advertising.
3. Explain the scope of E-Commerce and growth in India.
Ans.
Scope of E-Commerce:
1.Business Growth: Every business owner wants to see growth in the business. It seems so easy when saying it, but it takes dedicated time and effort to see the expansion. Product vendors and service providers can increase their revenue by making a website of their own or else list the items on other e-commerce websites to reach the vast audience.
2. Different Ecommerce Marketplaces: The Ecommerce marketplaces like Amazon, Paytm, Snapdeal, Shop clues, Flipkart, etc. have their own policies to operate in the market. By agreeing with their terms and conditions, Sellers can list the items in almost every category they are interested in. Creating more listings in the inventory also makes it possible to get good sales on the ecommerce platform. This is one of the best opportunities sellers will get to showcase their products to large audiences.
3. Offers and Discounts: Offers and discounts are also one of the reasons for soar in scope of ecommerce industry. People look for huge discounts and special promo codes when they want to shop online. As a result, they visit numerous ecommerce sites to get the best deal for them. Online sellers can promote their products on Instagram and facebook with coupon codes and target the audience to generate the additional sales.
4. Fast Shipping: There are many shipping service companies which deliver the items in a very short amount of time. However, sellers have to pay high fees for it. Customers generally want their products to arrive in a very short period of time. Nowadays, the delays in shipping only happen because of bad environmental conditions. The shipping service companies have good manpower to process all their operations in a timely manner.
5. Reach to More Audience: The best advantage of having your own website or on the ecommerce website is that your business is not limited to just a single place. The customers can visit your website through any part of the world and purchase your items or services. There are people all around the globe who regularly shops online. Social media have played a huge role in expanding e-business.
6. Advertising: In the initial stage of selling your products online, Advertising is the best and first priority option to go with. However, the advertising budget will totally depend on the sellers. Sellers can generate more sales with advertising. On the other hand promotion also helps in reaching a larger audience. It is very easy to advertise on Google, Facebook, Instagram.
7. B2C and B2B Offering: The scope of ecommerce has been extended to the next level when dealing online. Sellers can offer both pricing b2b and b2b both when listing items on the e-commerce website like Amazon. Business customers are able to see bulk pricing if they are on the platform for bulk purchasing. In this way sellers can get both type of customers at the same time.
Growth of E-commerce in India
After China and the US, India had the third-largest online shopper base of 150 million in FY21 and is expected to be 350 million by FY26.
4. What is E-Business? Give the difference E-Business and E-Commerce.
Ans. E-Business (electronic business) is any process that a business organization conducts over a computer-mediated network. Business organizations include any for-profit, governmental, or nonprofit entity. Their processes include production-, customer-, and internal- or management-focused business processes.
E-Business Vs. E-commerce
S. No. | E-Commerce | E-Business |
|---|---|---|
1. | E-Commerce refers to the performing online commercial activities, transactions over internet. | E-Business refers to performing all type of business activities through internet. |
2. | E-Commerce is a narrow concept and it is considered as a subset of E-Business. | E-Business is a broad concept and it is considered as a superset of E-Commerce. |
3. | Commercial transactions are carried out in e-commerce. | Business transactions are carried out in e-business. |
4. | In e-commerce transaction are limited. | In e-business transactions are not limited. |
5. | It includes activities like buying and selling product, making monetary transactions etc over internet. | It includes activities like procurement of raw materials/goods, customer education, supply activities buying and selling product, making monetary transactions etc. over internet. |
6. | It usually requires the use of only a website. | It requires the use of multiple websites, CRMs, ERPs that connect different business processes. |
7. | It involves mandatory use of internet. | It involves the use of internet, intranet or extranet. |
8. | E-Commerce is more appropriate in Business to Customer (B2C) context. | E-Business is more appropriate in Business to Business (B2B) context. |
9. | E-Commerce covers outward/external business process. | E-Business covers internal as well as external business process/activities. |
5. Explain the features of E-Commerce Technology.
Ans.
1. Ubiquity: There is a physical space in the traditional business market. Where for example, the customer has to go to buy Clothes, Shoes etc. Whereas in E-commerce this is not the case. E-commerce is everywhere. Due to E-commerce, both the time and effort of the people are reduced.
2. Global Reach: Business transactions in E-commerce can also be done outside the country. Which makes it even more convenient and effective. You can scale up the E-commerce business as per your wish.
This is the most accessible way to take your business globally. In E-commerce, the whole world is your market. There is potential of market scale within the E-commerce business.
3.Universal Standards : Universal Standards are standards shared by all the nations around world. These are technical standards of Internet for conducting e-commerce.
4. Richness: E-commerce is also as rich as Television Technology. Advertising and branding is an important part of commerce. E-commerce can Deliver Video, Audio, Animation, Billboards and Signs etc. 5. Interactivity: The technology of E-commerce business is interactive. In this business and consumer can communicate with each other.
6. What are the advantages and disadvantages of E-Commerce.
Ans.
Advantages :
Available 24/7
Provides a global reach
No need for intermediaries
Provides user with options to compare and select best option
Reduces paper work
Lowers the transaction cost
Disadvantages:
Lack of personal touch
Requires an initial setup cost for hardware, software etc.
Sometimes there are problems with order fulfillment or returns
Security is a key concern
-Identify Theft
-Malware
-Denial of Services
7. What are the types of E-Business? Explain each type in details.
Ans.
B2C:
In B2C model, a business website is a place where all the transactions take place directly between a business organization and a consumer.
In the B2C model, a consumer goes to the website, selects a catalog, orders the catalog, and an email is sent to the business organization.
After receiving the order, goods are dispatched to the customer.
Following are the key features of the B2C model −
Heavy advertising required to attract customers.
High investments in terms of hardware/software.
Support or good customer care service.
B2B:
A website following the B2B business model sells its products to an intermediate buyer who then sells the products to the final customer.
As an example, a wholesaler places an order from a company's website and after receiving the consignment, it sells the end product to the final customer who comes to buy the product at the wholesaler's retail outlet.
B2B identifies both the seller as well as the buyer as business entities.
B2B covers a large number of applications, which enables business to form relationships with their distributors, re-sellers, suppliers, etc.
C2C:
A website following the C2C business model helps consumers to sell their assets like residential property, cars, motorcycles, etc., or rent a room by publishing their information on the website.
Website may or may not charge the consumer for its services.
Another consumer may opt to buy the product of the first customer by viewing the post/advertisement on the website.
Social Ecommerce:
Social commerce is the use of social media platforms like Facebook and Instagram to market and sell products and services.
Shoppers can use social commerce to:
Discover brands
Research products
Interact with customer support
Purchase items
Social commerce is a more convenient and interactive shopping experience which may explain why it’s becoming increasingly popular. Estimates show that the global value of social commerce will reach about $2.9 trillion by 2026:
M-Commerce:
Buying and selling products and services through mobile devices are the new trend.
A housewife can purchase her kitchen appliances from the comfort of her living room, a busy person can order lunch from office, one can use mobile platforms to sell goods and services − all with a few clicks.
Local E-commerce:
A customer orders a product from a seller, and the merchant delivers the goods to the customer from the nearest location.
This significantly cuts the time and expense of logistics while also establishing a degree of confidence between the two parties.
This is primarily due to the fact that the consumer is purchasing from a nearby, or local, merchant or shop.
Local commerce is classified as Offline-to-Online commerce (O2O).
The word “O2O” refers to the possibility (should be the reality) for retailers with physical stores to market and sell to local online customers the same way online pure-plays do.
8. Explain the concept of social E-Commerce and M-Commerce.
Ans.
Social E-Commerce:
Social commerce is the use of social media platforms like Facebook and Instagram to market and sell products and services.
Shoppers can use social commerce to:
Discover brands
Research products
Interact with customer support
Purchase items
Social commerce is a more convenient and interactive shopping experience which may explain why it’s becoming increasingly popular. Estimates show that the global value of social commerce will reach about $2.9 trillion by 2026:
Social commerce is booming because social media usage is.
Research shows the typical social media user now spends about 15% of their waking life on social platforms, with 10% of US adults having an addiction to at least one app.
Social commerce is a simple way to promote and sell products.
For example, while scrolling on Instagram you may see a set of skin care products, tap Shop Now, add it to your shopping cart, and check out within the app.
M-Commerce:
Buying and selling products and services through mobile devices are the new trend.
A housewife can purchase her kitchen appliances from the comfort of her living room, a busy person can order lunch from office, one can use mobile platforms to sell goods and services − all with a few clicks.
What is M-Commerce?
Mobile commerce or simply M-Commerce means engaging users in a buy or sell process via a mobile device.
For instance, when someone buys an Android app or an iPhone app, that person is engaged in m-commerce.
There are a number of content assets that can be bought and sold via a mobile device such as games, applications, ringtones, subscriptions etc.
Benefits of M-Commerce:
The probability of your potential customers owning a Smartphone is very high, so you can safely assume that you will get much more positive response from mobile devices than your website.
M-commerce is recommended for every business irrespective of its type, scale, and size.
9. Explain Local E-Commerce.
Ans.
Local E-commerce:
A customer orders a product from a seller, and the merchant delivers the goods to the customer from the nearest location.
This significantly cuts the time and expense of logistics while also establishing a degree of confidence between the two parties.
This is primarily due to the fact that the consumer is purchasing from a nearby, or local, merchant or shop.
Local commerce is classified as Offline-to-Online commerce (O2O).
The word “O2O” refers to the possibility (should be the reality) for retailers with physical stores to market and sell to local online customers the same way online pure-plays do.
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