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ITE-101_Week-15-Lesson

The document discusses electronic commerce (EC) as a modern trend in selling that allows customers to engage in purchasing processes online. It outlines the benefits and challenges of EC for both merchants and consumers, including accessibility, cost reduction, and security concerns. Additionally, it categorizes different types of e-commerce, such as B2C, B2B, C2C, P2P, and mobile commerce, highlighting their unique advantages.

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2 views

ITE-101_Week-15-Lesson

The document discusses electronic commerce (EC) as a modern trend in selling that allows customers to engage in purchasing processes online. It outlines the benefits and challenges of EC for both merchants and consumers, including accessibility, cost reduction, and security concerns. Additionally, it categorizes different types of e-commerce, such as B2C, B2B, C2C, P2P, and mobile commerce, highlighting their unique advantages.

Uploaded by

Beatrize Campos
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as PDF, TXT or read online on Scribd
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ITE101 | Living in the IT Era - Week 15

E-Commerce Trends and Issues


Electronic commerce (EC) is a new trend in modern selling and merchandising technologies that allows customers
to engage in all stages of a purchase decision while completing those steps electronically rather than over the phone
with a printed catalog or in a physical shop. A client may view product information, choose products to buy, make
safe purchases, and have the transaction handled financially through electronic commerce.

Kalakota and Whinston (1997) define EC from these perspectives:


• From the standpoint of communications, EC refers to the transmission of data, goods or services, or financial
transactions over telephone lines, computer networks, or other electronic channels.
• From a business standpoint, EC is the use of technology to automate workflow and commercial transactions.
• From the standpoint of services, EC is a tool that responds to the demand of businesses, customers, and
management to reduce service costs while enhancing the quality of goods and speeding up service delivery.
• From an online standpoint, EC offers the possibility to purchase and sell goods and data through the Internet as
well as other online services.

Electronic commerce applications started in the early 1970’s, with such innovation as electronic fund
transfers (EFT). However, only significant firms, financial institutions, and a few brave small businesses were
included in the applications. Then came EDI, which broadened the scope of transaction processing from financial to
other types and increased the number of participating businesses from financial institutions to manufacturers,
merchants, and services, among others. Then came a ton of more uses, like stock trading and reservation systems
for vacation. The phrase "electronic commerce" was established with the early 1990s commercialization of the
Internet and its quick expansion to millions of prospective consumers. C applications also grew quickly at this time.
The creation of networks, protocols, software, and standards was one factor in the technology's quick development.
The rise in competition and other commercial pressures is the additional factor.

• Ubiquity - Internet/Web technology is accessible anywhere, anytime, via mobile devices, including at work, at
home, and elsewhere. The boundaries of the market are no longer applicable, and it is no longer restricted by time
or place. There is now a "marketspace" where people may shop. Both customer convenience and shopping prices
are improved.
• Global Reach - The technology is applicable everywhere on Earth, spanning national borders. Cross-cultural and
cross-national commerce is possible without hindrance or change. Potentially billions of clients and millions of
companies are included in the term "marketspace" globally
• Universal Standards – There is just one set of technological norms, and those are the Internet norms. Around
the world, there is just one set of technical media standards.
• Richness – It is possible to send text, audio, and video communications. Each of them is incorporated into a single
marketing message and consumer experience.
• Interactivity – Through user contact, the technology functions. Customers participate in a conversation that
dynamically adapts the experience to each person and involves them in the process of getting products to market.
• Information Density - The technology improves information quality while lowering information expenses. Costs
associated with information processing, storage, and communication significantly decrease, but the currency,
accuracy, and timeliness significantly increase. Information becomes accessible, affordable, and reliable.
• Personalization/customization - The technology enables the delivery of tailored communications to both groups
and individuals. Based on individual traits, products and services are customized and marketing messages are
personalized.

The benefits of ecommerce to merchants or organizations are as follows:


• National and international marketplaces are added to the marketplace via electronic commerce. A firm may simply
and rapidly find the greatest suppliers, the most suited business partners internationally, and more clients with
little investment in money.
• Paper-based information creation, processing, distribution, and retrieval costs are reduced by e-commerce.
Companies can reduce the administrative expenses associated with purchasing, for instance, by using an
electronic procurement system.
• The period between capital expenditure and the receiving of goods and services is shortened by e-commerce.
• Additional advantages include a better image, better customer service, streamlined procedures, enhanced output,
and increased flexibility.
The benefits of ecommerce to consumers are as follows:
• Customers may conduct business through e-commerce from virtually anywhere, 24 hours a day, 365 days a year.
• Customers have more options thanks to e-commerce since they may choose from a wide variety of sellers and
items.
• Why Customers commonly find cheaper goods and services through e-commerce because it enables them to
search around and make rapid comparisons.
• Rather than waiting days or weeks for information, customers may now get it right away.

The disadvantages of ecommerce are as follows:


• Cost and justification - Building EC in-house may be quite expensive, and any errors brought on by inexperience
could cause delays. Although there are numerous prospects for outsourcing, it can be difficult to know where and
how to start.
• Security and privacy - These concerns are particularly significant in the business-to-consumer sector, particularly
security concerns that, when suitable encryption is employed, are believed to be less serious than they actually
are. Privacy protections are continually being enhanced. The EC sector has a very lengthy and tough problem
convincing clients that online transactions and privacy are actually highly safe. However, the customers viewed
these concerns to be very vital.
• Lack of trust and user resistance - Customers are reluctant to utilize electronic money, paperless transactions, or
unidentified, faceless sellers. So it could be challenging to convert from physical to internet retailers.
• Other limiting factors – Online experiences are not tactile. Some buyers want to touch products, such as clothing,
in order to fully understand what they are purchasing.

Major types of ECommerce


Business-to-Consumers (B2C) is a kind of online trade that caters to direct customers. Purchasing is the key activity
here. There are retail sales to certain customers. For instance, a consumer or customer is the type of shopper that
often uses Amazon.com.

Benefits of B2C to Business


• Lower distribution costs
• New business opportunities
• More accurate and up-to-date consumer data (potentially anyway)
• Opportunity for added value services
• Better customer support
• Lower operating costs

Benefits of B2C to Consumers


• Convenience
• Information
• Ability to compare and choose among many offers
• Lower prices, at times but not always
• Personal Service

Business-to-Business (B2B) is a kind of e-commerce that benefits companies. Purchases are a crucial B2B activity.
Purchasing differs from purchasing in that departments rather than lone people are engaged, official procedures are
followed, significant sums of money may be exchanged, and intricate discussions and contracts may be involved.

Advantages of B2B:
• Lower:
o purchasing costs
o sales costs
o marketing costs
• Reduced inventory
• Efficient logistics
• Lower cycle time
• Better customer support

B2B Electronic Commerce: Areas of Growth


• Goods
o computing and electronics
o motor vehicles
o petrochemicals
o utilities
• Services
o financial
o professional
o administration
o travel
o telecom

Consumer-to-Consumer (C2C) is a sort of e-commerce where users sell to other customers directly. Examples
include people advertising in classified advertisements on websites like www.buyandsell.com.ph and selling homes,
vehicles, cell phones, and other items. Another example of C2C is selling knowledge and skills and marketing
personal services online. To promote goods for sale or services, some auction sites operate intranets and other
corporate internal networks.

Benefits of C2C:
• increased liquidity (products, services, advice)
• reduced search costs

Peer-to-Peer (P2P) is a kind of online commerce that connects people and enables them to share data and resources
without the usage of a central server. The difficulty with P2P companies is creating workable, ethical business
structures. P2P networks like Kazaa and Groove are examples.

Mobile Commerce is a subset of e-commerce that utilizes mobile phones and Palm devices for transactions. This has
mostly gained popularity in Japan and Europe, where it uses new wireless technology to supplement established
online business models. Phone-based 3G, Wi-Fi, and Bluetooth are the main technologies utilized in mobile
commerce. Even if this technology is a letdown in the US, it is always improving.

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