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Chapter 10
Electronic Commerce
Electronic Commerce
E-commerce is
the buying and
selling of
products and
services
electronically
over the
Internet.
Business-to-Consumer
Electronic Commerce
In business-to-consumer
electronic commerce
(B2C) transactions,
companies use the
Internet to sell products
and services to
consumers and to receive
payments.
Business-to-Business Electronic
Commerce (B2B)
Business-to-business
electronic commerce (B2B)
companies use the Internet to
conduct routine business
activities with other
companies, including ordering
manufacturing parts and
purchasing inventories from
wholesalers.
Venues of E-Commerce
The Web provides numerous businessto-consumer electronic commerce
venues, which are types of Web sites
where e-commerce transactions occur.
Users can move from venue to venue
on the Internet to search for, find,
purchase, and pay for products and
services.
Online Shopping
Also called electronic
shopping or e-shopping,
online shopping is using a
computer, modem, browser,
and the Internet to locate,
examine, purchase, sell,
and pay for products.
Advantages of
Online Shopping
Online shopping offers several distinct advantages
over traditional shopping methods.
Convenience
Greater Selection
Increased Product Information
Ease of Comparison Shopping.
Online Shopping Venues
Consumers can visit a number of
online shopping venues, including
online stores, online superstores,
and online shopping malls.
Online Store
An online
store, also
called a virtual
store, is a
seller’s Web
site where
customers can
view,
purchase, and
pay for
products and
services.
Online Superstore
An online superstore offers a
greater variety of products and
contains departments that house
similar kinds of products in one
area.
Online Shopping Mall
An online
shopping mall
connects its
stores by
hyperlinks on the
mall’s home
page.
Guidelines for Shopping Online
In evaluating online shopping sites, a shopper
should look for features such as:
Clearly stated selling and security terms
Excellent customer service
Ease of making purchases
Satisfactory product information
Assistance for E-Commerce
Some helps for online shoppers include online
catalogs and shopping agents, or bots.
Online Services
The Web now offers numerous types of online services.
Some are free, but most require the user to subscribe
and pay a fee.
Fashion
Car-buying Services
Health-related Information Services
Home-buying Services
Entertainment
Financial Services (banking and investing)
Travel Services
Peer-To-Peer
Online Transactions
Web
Site
Buyer
Seller
Peer-to-peer business-to-consumer transactions are
those that take place between individuals, usually at a
common forum-type Web site sponsored by a business.
Online Auctions
A popular peer-to-peer
transaction activity is online
auctions, sites such as eBay
or uBid where individuals
can sell, bid on, or purchase
items from other individuals
around the world.
Digital Music Distribution
User Uploads Music
User Downloads Music
An early and popular type of peer-to-peer transaction
was digital music distribution. Due to copyright
infringement issues, this activity has evolved to a feebased service through such companies as Apple
Computer.
Transaction Payment Methods
Electronic funds transfer (EFT) is a general term that refers to any
transfer of money over the Internet.
Current Transaction Methods
Some current transaction methods include check or
credit card by phone, credit accounts, credit cards,
smart cards, digital cash, electronic wallets, micro
payments, and electronic (digital) signatures.
Transaction Security and Encryption
Many shopping sites protect online transactions by
encrypting information transmitted over the Internet.
Encryption
Encryption is the process of converting readable
information, called plaintext, into unreadable
information, called ciphertext, to prevent unauthorized
access and usage.
Establishing an E-tailer Web Site
Some important considerations include:
Methods for processing payments
Hardware and software needs
Advertising and promoting the site.
Managing the site
Attractive and effective site design
Business-to-Business
Electronic Commerce
In B2B electronic commerce, businesses use computers, networks, the
Internet, and e-commerce technologies to conduct a variety of routine
business activities with other companies.
Business-to-Business Electronic
Commerce Transaction
In a business-to-business electronic
commerce transaction, both the seller and
buyer are business organizations.
B2B E-Commerce
With B2B e-commerce companies can:
Order Supplies
Enhance collaboration among employees
Improve customer response time
Coordinate operations
Share information
B2B E-Commerce
Order
supplies
B2B E-Commerce
Enhance collaboration among employees
B2B E-Commerce
Improve customer
response time
B2B E-Commerce
Process financial transactions.
B2B E-Commerce
Speed up product
development
Coordinate operations
Conduct numerous
other business
activities
On the Horizon
Enhanced Web Phone Technology
New technologies will allow users to perform all types of Internet activities
on their cell phones or other handheld devices. In the future, a single chip
embedded in a cell phone’s SIM (subscriber information module) will be all
users will need to identify themselves, replacing credit cards, identity cards,
PIN numbers, and even passports.
Improved Capacity and Security in Web Servers
Advances in Internet and Web server capabilities will allow these
technologies to handle many more online users concurrently. Additionally,
servers will provide greater security, including improved firewall, virus, and
hacker protection.
On the Horizon
Online Research and Development
Companies will speed up research and development by tapping into the
power of the Internet to solicit consumer feedback online, an important
aspect in measuring consumer interest in new products.
Machine-To-Machine (M2M) Applications
Businesses in the future will use machine-to-machine e-commerce,
or M2M, to automate many routine business transactions.
Expanded Use of Radio-Frequency Identification (RFID) Technology
Wal-Mart and other companies plan to implement RFID to track shipments
through the supply chain. RFID uses an antenna and chip containing an
electronic product code, which is embedded in a shipping pallet or cargo
container. Electronic readers activate the chip, which then sends or
receives information. Container break-ins can be recorded.