What We can learn from E-Commerce in China

ECOM6013 (Prof H S Nair of Stanford Business School)

E-Commerce Technologies (2024-25)

Topic 3
E-Commerce Presence, Website
Design, Testing & Maintenance

Paul Cheung
paul.cheung@hku.hk

Source: https://www.gsb.stanford.edu/insights/what-we-can-learn-e-commerce-china 2

Learning Objectives
Imagine Your E-commerce Presence (1 of 3)
1 Understand the questions you must ask and answer, and the • What’s the idea?
steps you should take, in developing an e-commerce – Your mission
presence.
– Target audience
2 Explain the process that should be followed in building an e-
commerce presence. – Intended market space
3 Identify and understand the major considerations involved in – Strategic analysis
choosing web server and e-commerce merchant server – Marketing matrix
software. – Development timeline
4 Understand the issues involved in choosing the most – Preliminary budget
appropriate hardware for an e-commerce site.
5 Identify additional tools that can improve website
performance.
6 Understand the important considerations involved in
developing a mobile website and building mobile applications.

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Imagine Your E-commerce Presence (2 of 3)

Imagine Your E-commerce Presence (3 of 3)
• Where’s the money? • Where’s the content coming from?
– Business model(s) • Know yourself - SWOT analysis (Strength, Weakness,
– Revenue model(s) Opportunity, Threat)
• Develop an e-commerce presence map
• Who and where is the target audience? • Develop a timeline: Milestones
– Demographics, lifestyle, consumption patterns, etc. • How much will this cost? (US estimate, different in other
countries and at different time, and much cheaper in Hong
• What is the ballpark? Characterize the marketplace Kong and in Mainland)
– Size, growth, demographics, structure – Simple website: up to US$5,000
– Small startup: US$25,000 to US$50,000
– Large corporate website: US$100,000+ to millions

Figure 4.1 SWOT Analysis E-commerce Presence Map

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Figure 4.2
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Building an E-commerce Site:

A Systematic Approach
• Most important management challenges:
1. Developing a clear understanding of business
objectives
2. Knowing how to choose the right technology to achieve
those objectives
• Main factors to consider (see next slide)
– Management
– Hardware architecture
– Software
– Design
– Telecommunications
– Human resources

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Factors to Consider in Developing E-Commerce Planning: The Systems Development Life Cycle
Presence
• Methodology for understanding business
objectives of a system and designing an
appropriate solution

• Five major steps: (see next slide)

– Systems analysis/planning
– Systems design
– Building the system
– Testing
– Implementation
Figure 4.4

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 Web Site Systems Development Life Cycle How has Alibaba.COM evolved?

February 8, 2000 Oct 1, 2024

Figure 4.5 13 14

System Analysis/Planning Table 4.2 System Analysis for a Typical E-Commerce

Site (1 of 2)
• Business objectives:
Business Objective System Functionality Information Requirements
– List of capabilities you want your site to have
Display goods Digital Catalog Dynamic text and graphics catalog

• System functionalities: Provide product Product database Product description, stocking numbers, inventory levels
information
– List of information system capabilities needed to
achieve business objectives Personalize/customize
product
Customer on-site tracking Site log for every customer visit; data mining capability
to identify common customer paths and appropriate
responses
• Information requirements:
– Information elements that system must produce in Engage customers in
conversations
On-site blog; user forums Software with blogging and community forum
functionality
order to achieve business objectives
Execute a transaction Shopping cart/payment Secure credit card clearing; multiple payment options
system

Accumulate customer Customer database Name, address, phone, and e-mail for all customers;
information online customer registration

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Table 4.2
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 Table 4.2 System Analysis for a Typical E-Commerce Consideration for quality
Site (2 of 2)
Quality means attention to:
Business Objective System Functionality Information Requirements • Navigation
Provide after-sale Sales database Customer ID, product, date, payment, shipment date • Accessibility
customer support
• Scalability
Coordinate
marketing/advertising
Ad server, e-mail server, e-
mail, campaign manager, ad
Site behavior log of prospects and customers linked to
e-mail and banner ad campaigns
• Reliability
banner
manager
• Maintainability
• Usability
Understand marketing Site tracking and reporting Number of unique visitors, pages visited, products • Compatibility and interoperability
effectiveness system purchased, identified by marketing campaign
• Security
• Readability
Provide production and Inventory management Product and inventory levels, supplier ID and contact,
supplier links system order quantity data by product

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Table 4.2

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A Logical Design for a Simple Website

Systems Design:
Hardware and Software Platforms
• System design specification:
– Description of main components of a system
and their relationship to one another
• Two components of system design:
– Logical design
Data flow diagrams, processing functions,
databases
– Physical design Fig 4.6 (a)
Specifies actual physical, software
components, models, and so on
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Physical Design for a Simple Website Building the System: In-House Versus
Outsourcing
• Outsourcing: Hiring vendors to provide services
involved in building site
• Build own vs outsourcing:
– Build your own requires team with diverse skill set; choice of
software tools; both risks and possible benefits
• Host own vs. outsourcing
– Hosting: Hosting company responsible for ensuring site is
accessible 24/7, for monthly fee
– Co-location: Firm purchases or leases web server (with
control over its operation), but server is located at vendor’s
facility

Fig 4.6

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Choices in Building and Hosting Testing the System

• Testing
– Unit testing
– System testing
– Acceptance testing
– A/B testing (split testing)
– Multivariate testing

Figure 4.7
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Implementation, Maintenance, and

Optimization Factors in Web Site Optimization

• Systems break down unpredictably

• Maintenance is ongoing
• Maintenance costs: Similar to development costs
– A $10K e-commerce site may require $10K
annually to upkeep
• Benchmarking

Figure 4.9
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Simple vs. Multi-tiered Web Site Two-Tier E-commerce Site Architecture

Architecture

§ System architecture
• Arrangement of software, machinery, and tasks in an
information system needed to achieve a specific
functionality
§ Two-tier
• Web server and database server
§ Multi-tier
• Web application servers
• Backend, legacy databases
Fig. 4.10a

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Multi-Tier E-commerce Architecture Typical Functionality of Open-Source Software

Figure 4.10(b) Break Time 29 30

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Dynamic Page Generation Tools

Site Management Tools
• Basic tools included in all web servers §Dynamic page generation:
– Verify that links on pages are still valid —Contents stored in database and fetched when needed
– Identify orphan files §Common tools:
—CGI, ASP, JSP, ODBC, JDBC
• Third-party software for advanced management
§Advantages
– Monitor customer purchases
—Lowers menu costs
– Marketing campaign effectiveness
—Permits easy online market segmentation
– Keep track of hit counts and other statistics —Enables cost-free price discrimination
– Example: Webtrends Analytics 10, Google analytics (and other —Enables content management system (CMS)
equivalent used in Mainland China)

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Application Servers E-commerce Merchant Server Software (1 of 3)

• Web application servers: • Provides basic functionality for sales
– Online catalog
– Provide specific business functionality required for a
website List of products available on website
– Shopping cart
– Type of middleware Allows shoppers to set aside, review, edit selections, and
Isolate business applications from Web servers and then make purchase
databases – Credit card processing
– Single-function applications being replaced by integrated Typically works in conjunction with shopping cart
software tools that combine all functionality needed for e- Verifies card and puts through credit to company’s account
at checkout
commerce site

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Merchant Server Software Packages (2 of 3) Merchant Server Software Packages (3 of 3)

§ Different options for different-sized businesses • Key factors in selecting a package
– Functionality
—Small and medium-sized businesses: Shopify;
– Support for different business models, including m-commerce
WordPress (WooCommerce), Wix, Square, Weebly,
– Business process modeling tools
Squarespace, Bigcommerce, open-source solutions – Visual site management and reporting
—Mid-range: HCL Commerce; Sitecore Experience – Performance and scalability
Commerce – Connectivity to existing business systems
—High-end: SAP Commerce, Oracle A T G Web – Compliance with standards
Commerce, Adobe Commerce – Global and multicultural capability
– Local sales tax and shipping rules
• Many now also available as cloud-based SaaS solutions.

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 Right-Sizing Your Hardware Platform:
Choosing Hardware The Demand Side
• Hardware platform: • Customer demand:
– Underlying computing equipment needed for e-commerce – Most important factor affecting speed of site
functionality
• Factors in overall demand:
• Objective:
– Number of simultaneous users in peak periods
– Enough platform capacity to meet peak demand without wasting
money – Nature of customer requests (user profile)
• Important to understand the factors that affect speed, – Type of content (dynamic v s static Web pages)
ersu

capacity, and scalability of a site – Required security

– Number of items in inventory
– Number of page requests
– Speed of legacy applications

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Right-Sizing Your Hardware Platform: Vertical and Horizontal Scaling Techniques (will skip)
The Supply Side Technique Application
Use a faster computer Deploy edge servers, presentation servers, data
• Scalability: servers, etc.
– Ability of site to increase in size as demand warrants Create a cluster of computers Use computers in parallel to balance loads.
• Ways to scale hardware: Use appliance servers Use special-purpose computers optimized for their
– Vertically task.
Increase processing power of individual components Segment workload Segment incoming work to specialized computers.
– Horizontally Batch requests Combine related requests for data into groups, process
Employ multiple computers to share workload as group.
– Improve processing architecture Manage connections Reduce connections between processes and
– Outsource hosting, use content delivery network computers to a minimum.
Aggregate user data Aggregate user data from legacy applications in single
data pools.
Cache Store frequently used data in cache rather than on the
disk.
Table 4.6
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Improving the Processing Architecture of Your Site (will skip) The Eight Most Important Factors in Successful E-
Architecture Improvement Description
Commerce Site Design
Separate static content from Use specialized servers for each type of Factor Description
dynamic content workload. Functionality Pages that work, load quickly, and point the customer
Cache static content Increase R A M to the gigabyte range and store toward your product offerings
static content in R A M. Informational Links that customers can easily find to discover more about
Cache database lookup tables Use cache tables used to look up database you and your products
records. Ease of use Simple foolproof navigation
Consolidate business logic on Put shopping cart, credit card processing, and Redundant navigation Alternative navigation to the same content
dedicated servers other C P U-intensive activity on dedicated Ease of purchase One or two clicks to purchase
servers. Multi-browser Site works with the most popular browsers
Optimize A S P code Examine your code to ensure it is operating functionality
efficiently Simple graphics Avoids distracting, obnoxious graphics and sounds that the
Optimize the database Examine your database search times and take user cannot control
schema steps to reduce access times. Legible text Avoids backgrounds that distort text or make it illegible

Table 4.7 Table 4.9

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The Webby Awards (2023)

(2024)
Assignment # 2
E-Commerce Presence Look Around

This assignment is intended to make you go and find ONE interesting

example of e-Commerce Presence (website or mobile presence) which
impresses you, and critique that particular implementation – both
positive and negative. You can share this with others if you like. Why
are you impressed? What are the best and the worst of this presence?

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https://www.webbyawards.com/ (since 1996)
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Personalization Tools The Information Policies

• Personalization • Privacy policy
– Ability to treat people based on personal preferences – Set of public statements declaring how site will treat
and prior history with site customers’ personal information that is gathered by site
• Accessibility rules
• Customization
– Set of design objectives that ensure users with disability
– Ability to change the product to better fit the needs of the can access the site
customer
• Privacy Commission of Personal Data (PCPD)
• Cookies – The PCPD is an independent body set up to oversee
– Primary method to achieve personalization and the implementation of and compliance with the
customization provisions of the Personal Data (Privacy) Ordinance
(Chapter 486 of the Laws of Hong Kong) (the
Ordinance).

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Developing a Mobile Website and Building

EU General Data Protection Regulation (GDPR)
Ref: https://www.pcpd.org.hk/english/data_privacy_law/eu/eu.html Mobile Applications
• Types of m-commerce software
– Mobile website
Responsive Web design
– Native app
– Mobile Web app
– Hybrid app
Runs inside native container (e.g. WeChat
Mini-program)
App distribution
Based on HTML5, CSS, JavaScript

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Planning and Building a Mobile Presence Mobile Presence Design Considerations

• Identify business objectives, system functionality, and • Platform constraints
information requirements – Graphics, file sizes
• Choice: • Mobile first design
– Mobile website or mobile Web app – Desktop website design after mobile design
Less expensive • Responsive web design (RWD)
– Native app – CSS site adjusts layout of site according to device screen
resolutions
Can use device hardware, available offline
• Adaptive web design (AWD)
– Server delivers different templates or versions of site
optimized for device

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Mobile Presence: Performance and Cost

Considerations Systems analysis for building a mobile
More reading:
https://www.hswsolutions.com/services/
presence
• Mobile first design mobile-web-development/mobile-
• Most efficient website-vs-apps/
• Mobile website
– Resizing existing website for mobile access is least
expensive
• Mobile web app
– Can utilize browser A PI
• Native app
– Most expensive; requires more programming

Table 4.12 52

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 Example: Amazon.co.uk
appears in 3 presences -
website, mobile website and
mobile App

Mobile Website App

Table 4.13 Website

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What is Responsive Design? (1:53) How to Learn More?

USEFUL RSOURCES
1. W3School - https://www.w3schools.com/whatis/
Good for learning terminology, basic concepts and simple tutorials
and examples
2. Mozilla Development Network (MDN) -
https://developer.mozilla.org/en-US/
Good for deeper learning and tutorials
3. Google Web Dev - https://developers.google.com/web
As Chrome is the most popular browser, this is the Google’s take on
Web Development, but is company specific to a certain extend

Take ICOM6034 Website Engineering

- You would need to have sufficient programming knowledge and
experience

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Source: https://www.youtube.com/watch?v=oNSX21dh6kw
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Build Your Own Website?
AVAILABLE for Beginners without programming experience

1. Wix Free Website Builder – https://wix.com

Easy to use tools for building a simple e-commerce website for selling
products or services.
2. Shopify Site Builder – https://shopify.com
Free and easy tools for building a shopping site for online business.
3. WordPress – https://wordpress.com
One of the most popular tools for creating websites not only just for e-
commerce but for other purposes (originally designed for blogging). It
has a large collections of templates and plug-in. There is provision for
free hosting and some free templates and plug-ins, but more advanced
ones are paid options.

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