By Internet commerce, we mean the use of the global Internet for purchase and sale of goods, services, including service and support after sale. Internet commerce brings some new technology and new capabilities to business, but the fundamental business problems are those that merchants have faced for hundred – even thousands – of years: you must have something to sell, make it known to potential buyers, accept payment deliver the goods or services, and provide appropriate service after the sale. The Internet:
An efficient mechanism for advertising and distributing product information. – enabling complete business transactions.
Internet commerce – one type of the more general “electronic commerce”.
There are many different definitions and understanding about E-Commerce. According to Frederick J. Riggins and Hyeun-Suk Rhee, a recent pilot survey shows that some practitioners and managers view E-Commerce, i.e. buying and selling goods and products over internet. However, researchers believe the E-Commerce practice should include a wide variety of presale and post-sale activities. We can identify three classes of e-commerce applications:
- Business-to business
Different Definitions of E-Commerce:
Zwass defines e-commerce as
“… the sharing of business information, maintaining business relationships, and the conducting business transactions by means of telecommunications networks”
He pointed out that e-commerce includes not only buying and selling goods over Internet, but also various business processes within individual organizations that support the goal.
Four different types of information technology are converging to create the discipline of e-commerce:
- electronic messages, email and fax
- sharing a corporate digital library
- electronic document interchange utilizing EDI and electronic funds transfer
- electronic publishing to promote marketing, advertising, sales, and customer support
Treese and Stewart gave their view of Internet-commerce as follows:
“… the use of the global Internet for purchase and sale of goods and services, including service and support after the sale. The Internet may be an efficient mechanism for advertising and distributing product information, but our focus is on enabling complete business transactions.”
“… . Speaking broadly, electronic commerce includes the use of computing and communication technologies in financial business, online airline reservation, order processing, inventory management… Historically speaking, the best known idea in electronic commerce has been Electronic Data Interchange (EDI)… ”
Although their view of e-commerce has been expanded to services and support after sale.
Daniel Minoli and Emma Minoli gave their view of Internet-based commerce as follows:
“… This revolution is known as electronic commerce, which is any purchasing or selling through an electronic communications medium. … . Internet-based commerce, in general, and Web-based commerce, in particular, are important sub-disciplines of electronic commerce.”
“Electronic commerce is the symbiotic integration of communications, data management, and security capabilities to allow business applications within different organizations to automatically exchange information related to the sale of goods and services.”
The Scope of Electronic Commerce
- Electronic Commerce encompasses one or more of the following:
- EDI on the Internet
- E-mail on the Internet
- Shopping on the World Wide Web
- Product sales and services on the Web
- Electronic banking or funds transfer
- Outsourced customer and employee care operations
- Electronic Commerce: –
- Automates the conduct of business among enterprises, their customers, suppliers and employees – anytime, anywhere.
- Creates interdependencies between your company’s value chain and those of your suppliers and customers.
Your company can create competitive advantage by optimizing and re-engineering those valuechain links to the outside.
Differences between Electronic Commerce and traditional commerce
The major difference is the way information is exchanged and processed:
- Traditional commerce:
- face-to-face, telephone lines , or mail systems
- manual processing of traditional business transactions
- individual involved in all stages of business transactions
- using Internet or other network communication technology
- automated processing of business transactions
- individual involved in all stages of transactions
- pulls together all activities of business transactions, marketing and advertising as well as service and customer support
Characteristics of Electronic Commerce
The tools are electronic but the application is commerce. –
- Commerce is not accounting or decision support or any other internally focuses function.
- Commerce is externally focused on those with whom you do business.
- Commerce is doing business, not reporting on it or sending messages about it.
Special characteristics of electronic commerce and Web commerce:
- Information exchanged and processed by a communications network and computers, as well as e-commerce software.
- Most transactions are processed automatically.
- pulls together a gamut of business support services, such as
- inter-organizational e-mail, on-line directories
- trading support systems for commodities – products, and customized products
- built goods and services
- ordering and logistic support system supports
- management and statistical reporting systems
Benefits of Internet Commerce
- Business benefits:
- Reduced costs to buyers from increased competition on-line
- Reduced costs to suppliers by on-line auction
- Reduced errors, time, and overhead costs information processing
- Reduced inventories, and warehouse
- Increased access to real-time inventory information, speed-up ordering & purchasing processing time
- Easier enter into new markets in an efficient way
- Easily create new markets and get new customers
- Automated business processing
- Cost-effective document transfer
- Reduced time to complete business transactions, speed-up the delivery time
- Reduced business overhead and enhance business management
- Marketing benefits:
- Improved market analysis, product analysis and customer analysis.
- Low-cost advertising
- Easy to create and maintain customer o client database
- Customer benefits:
- Wide-scale information dissemination
- Wide selection of good products and goods at the low price
- Rapid inter-personal communications and information accesses
- Wider access to assistance and to advice from experts and peers.
- Save shopping time and money
- Fast services and delivery
Services provided under the various modes of e-Commerce
- Business-to-Consumer (B2C): The B2C market in India generates the bulk of revenues across the consumer-facing modes of e-Commerce. Furthermore, though online travel has typically held a major share of the B2C market, online retail is also growing rapidly and is expected to significantly increase its share.
- Consumer-to-Consumer (C2C): India’s C2C market, though currently small, is set to grow with the entry of several players. These entrants are attracting VC investment. Their online portals are also garnering significant traffic. We expect the C2C segment to show rapid growth in coming years.
- Business-to-Business (B2B): The most common users of B2B online classifieds are micro, small and medium enterprises (MSMEs). These small businesses lack the requisite financial resources and, therefore, find it difficult to market their products and services to potential clients through traditional media such as newspapers, banners and television. Trade through online B2B portals increases the visibility of MSMEs in the marketplace and helps them overcome barriers of time, communication and geography.