UNIT 12 E-COMMERCE AND

M-COMMERCE

Structure
12.0 Objectives
12.1 Introduction
12.2 Electronic commerce
12.2.1 Defining e-commerce and its activities
12.2.2 Characteristics of e-commerce
12.2.3 Advantages of e-commerce
12.2.4 Limitations of e-commerce
12.2.5 Types of E-Commerce
12.3 Business to Business (B2B) E-Commerce
12.4 Achieving Customer Intimacy in B2C E-Commerce
12.4.1 Interactive marketing
12.4.2 Personalization
12.4.3 Self Service
12.5 M-Commerce
12.5.1 Advantages and Disadvantages of M-Commerce
12.5.2 Applications of M-Commerce
12.5.3 Mobile Commerce Service
12.6 Let Us Sum Up
12.7 Keywords
12.8 Suggested Further Readings / References
12.9 Answers to Check Your Progress

12.0 OBJECTIVES
After studying this unit, you should be able to:
●● define the nature and concept of e-commerce;
●● explain the various types of e-commerce;
●● differentiate between e-commerce and e-business; and
●● describe the concept of M-commerce, its advantages, disadvantages,
application, and services.

12.1 INTRODUCTION
E-commerce is a revolution that has changed how businesses buy and
sell products and services. It is associated with buying and selling
information, products, and services on online networks. While at the same
time, e-commerce also enables people to use the internet as a source of
information to compare and contrast prices and products available on any
marketplace. Hence, more often e-commerce is used to define a broader
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Enterprise Information System process where the internet is redefining the methods used by companies in
running their businesses. This includes day-to-day activities such as logistics
and marketing, or interactions with their customers and suppliers, these
have become the need of the hour to be able to do business electronically. It
not only automates manual processes and paper transactions but also helps
organizations in moving to a fully electronic environment and change the
way they operate.
M-commerce refers to the practice of conducting financial and promotional
activities with the use of a wireless handheld device. The term m-commerce
is short for Mobile commerce and recognizes that the transactions may be
conducted using cell phones, personal digital assistants (PDAs), smartphones,
and other hand-held devices that we operate with Internet access. With the
advancement of technologies, computers these days are being replaced by
Smartphones they can do many things that our everyday laptops, gadgets,
and desktops offer us and thus m-commerce is gaining popularity. This Unit
highlights e-commerce, its importance, types, m-commerce applications,
services, etc.

12.2 ELECTRONIC COMMERCE

Electronic commerce is an amalgamation of new selling tools, where
consumers can participate in all steps of a purchase decision. The obvious
difference is that all the steps here are taken electronically and not physically
or via telephone. The culmination of the steps and processes that enable
e-Commerce and allow the customer or consumer to access detailed product
information, select & choose the items to purchase, as well as to conduct a
secure financial transaction to complete the purchase. Hence, E-commerce
is a concept that explains and elaborates upon the idea of buying and selling
products, goods, services, and information via computers including the
internet.
Due to the global scaling up of the ICTs sector, e-commerce has rapidly
progressed and scaled up its presence in emerging markets of developed and
even in developing countries and its effects on their economies. As can be
expected, e-commerce itself has evolved as the technology for facilitating
commercial transactions via the internet.
The increase in the use of the Internet in the past two decades, along with
devices such as smartphones and tablets indicates that consumer confidence
in e-commerce will keep growing even as it keeps evolving and expanding.
The growth of social media over the past few years has ensured that the
relationship between the business and the consumer has become more
engaging. This has resulted in the users becoming comfortable and making
it easier for transactions to take place online. All of this has resulted in
e-commerce gaining momentum, as more and more people have started to
purchase goods via the internet.
12.2.1 Defining E-commerce and Its Activities
Electronic Commerce (EC) can be defined in several ways:
1. E-commerce means the ability to conduct business electronically, or
over the Internet.
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2. E-commerce means managing business transactions using networking E-commerce and
and electronic means. M-commerce

3. E-commerce is a platform for selling products and services via the

Internet.
4. E-commerce refers generally to all forms of commercial transactions
involving both organizations and individuals that are based upon the
electronic processing and transmission of data, including text, sound,
and visual images. It also refers to the effects that the electronic
exchange of commercial information may have on the institutions
and processes that support and govern commercial activities. These
include organizational management, commercial negotiations, and
contracts, legal and regulatory frameworks, financial statement
agreements, and taxation, among many others.

E-commerce deals with

Online buying/
Selling of

ADVERTISING
PRODUCT SERVICES
SPACE

 Shopping & Investing  Authentication

 Entertainment  Search
 E-books  Logistics
 Gaming Payment

Fig. 12.1: Defining E-Commerce

(Source: Sushila Madan, E-commerce Chapter1)
E-commerce is part of an evolving approach to business that could eventually
involve the application of information and communication technologies to
the product and distribution of goods and services on a global scale. Some
elements of E-commerce are ‘non-transactional’–geared to the provision of
information about products and services, the delivery of information-based
(intangible) products to customers, and the support of supply chains. The
complete process, however, is transactional–geared directly to processes of
trade in goods and services.
Electronic commerce encompasses a broad range of activities. It includes
electronic trading of physical goods and services and electronic material.
The ambit of e-commerce includes advertising and promotion of goods and
services, facilitation of contacts between traders, pre-and post-sales support,
or payment of taxes. The whole commercial cycle starting from ordering,
invoicing, transporting, delivery and payment can be done electronically.
E-commerce is transforming how companies do business.
12.2.2 Characteristics of e-Commerce
E-commerce is characterized by a wide range of business operations and
transactions, including :
●● Establishment of business-to-business relationship;
●● Electronic payment (using electronic fund transfer, credit cards,
electronic cheques, electronic cash);
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Enterprise Information System ●● Electronic distribution of products and services;
●● Exchange of information;
●● Pre–and post-sales support;
●● Customer Relationship Management (CRM); and
●● Virtual enterprises–groups of independent companies that pool their
competencies so that they can offer products or services that would be
beyond the capabilities of any of the individual companies.
12.2.3 Advantages of e-Commerce
Internet is a large system of interconnected computer networks that span the
globe. The benefits of conducting business on the Internet are summarized
below:
●● The accelerated buying process for saving time
One of the problems conventional stores face is the delay in buying
by a consumer during the problem of accessing a physical store that
may or may not be available. E-commerce overcomes this hurdle
by aiding the consumer avail the specific product at pace and with
ease. It helps the consumer choose from a wide range of products by
making available goods from other chained stores as well, widening
the net of available goods as well fast forward the process-to-process
payments. With the availability of a wide range of options from a
spectrum of vendors, E-commerce not only aids in the diversification
of the marketplace but also helps access the online global market. All
these processes also aid in reducing the travel and delivery time of the
products.
●● Personalized store as per Consumer preference
A major asset of conducting an online business is the enhanced
shopping experience. As each user is introduced to a different first
page based on their location and advanced search for conducting a
purchase. The consumer’s history of purchases is also reflected in the
personalized experience of online commerce. This allows consumers
to avail themselves of special services like benefits and discounts due
to their loyalty, order history, and so on, hence fulfilling customer
expectations.
●● Reduce recurring costs while hiring virtual support resources
One of the key factors that aid in reducing cost when it comes to
E-commerce is the outsourcing of tasks to even different countries or
employees for use to many other E-commerce Businesses. This makes
the presence of a company possible in multiple locations possible at
a fraction of the cost of physical presence due to the reduced need for
employees.
●● Customer’s retargeting is easier.
Retargeting a customer is a key part of retaining a customer base.
Below are some of the techniques which can be used to retarget
customers:
●● It is a good strategy to share a coupon when customers leave the
checkout page.
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 ●● By sending emails that are pitching upsell and cross-sell. E-commerce and
M-commerce
●● By redirecting the consumer to the desired web page or targeted
advertisement based on Consumer data.
●● Easier to encourage an impulse buy
Impulse buying is an important tool in the arsenal of the sellers where
it works as a path for consumers to act as per their choices towards
particular products. It plays on the psychological behavior of humans
where some of us have personality traits that encourage impulse
buying. It is often because of the urge to feel good, and at the same
time the attempt at deriving emotional value from certain products
makes them feel good, or things that have an emotional value.
●● Reviews Available
The review system allows the consumer to make decisions as well as
pass judgment on a wide range of variables. The presence of positive
comments or a higher rating of one’s business not only adds value
but also builds the trust of the consumer on the product as well as the
business. This not only projects the business as transparent; it helps
the consumer to voice their opinion about their choices in products.
This has a larger effect in generating traction for the business as well
as building trust among consumers.
●● Detailed information is available for the consumer
The availability of detailed information is one of the key strengths of
E-commerce. All consumers are always seeking detailed insights into
the product they are interested in as it aids them in making an informed
decision. The availability of information allows the consumer to
gauge the relevance and value of the product or service according to
their needs. It is the detailed description of the product that helps the
consumer to make a confident choice according to their requirements.
●● Quality service at a reasonably low operation cost
Operational costs are a major expenditure when it comes to asserting
the physical presence of any business. Usually for a business to
maintain a physical presence, they have to pay a lot of money in the
form of rent, salaries for employees, maintenance, and other expenses.
E-commerce plays an important role in reducing the cost of operations
significantly by eliminating a significant part of that expense as the
business does not have to rely on a physical presence to impart quality
service.
●● Quick and affordable marketing
E-commerce provides a cost-effective way for to businesses for
marketing anything effectively. This is in contrast to the expensive
and time-consuming processes used in Physical marketing practices.
Some pointers for understanding marketing techniques are listed
below:
●● Availability of quality content for attracting customers is an
important factor for being more visible or noticeable in the
market.
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Enterprise Information System ●● Creative marketing videos explaining the product and services
for better understanding.
●● Social networking is important for asserting one’s presence
everywhere and helps in the development of popularity for a
product.
●● Employing different tricks to reach the customers, is easy
through digital marketing techniques.
●● E-Commerce has flexibility with 24/7 service capability
Flexibility in terms of both accessibility and affordability are
major areas where Ecommerce is more powerful than conventional
stores and retail spaces as it allows the service to consumers 24/7.
It is not only the capability of providing a shopping option round
the clock, E-commerce also helps consumers with chat support,
provide recommendations and identify products being seemed by the
consumer at any time and place.
12.2.4 Limitations of e-Commerce
The drawbacks of conducting business on the Internet are summarized
below :
●● Lack of personal touch
One of the things that play a huge role in consumer satisfaction is the
ability to personally view and touch any product. It is an important
factor when it comes to customer satisfaction as even the best detailed,
expressed, and explained products can fail to convince and attract the
consumer. E-commerce faces an irreparable limitation when it comes
to the physical presence of the product in front of the consumer.
●● Unsure about the quality
When it comes to purchasing products online, it is difficult for the
consumer to determine their quality. It is also common knowledge
that there has been malpractice when it comes to fake reviews to
artificially boost sales and of low quality or faulty products. Even
though a review of the product might be available, it is difficult to
convince a consumer based on the same.
●● Late Delivery
One of the assurances of businesses practicing E-commerce is the
delivery time of the product. There is a whole range of issues that
can arise when it comes to the delivery of the purchased product;
hence businesses avoid giving exact delivery dates and try providing
windows for the same. Many times, this results in the consumer
waiting for the product for more than the assured period.
●● Security issues
As with anything that uses the World Wide Web, E-commerce is
prone to security challenges unique to the cyber world. It is especially
vulnerable and targeted frequently as it stores user data including
their financial details. Hence there is a constant challenge of securing

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 this data from a wide range of security challenges including malware, E-commerce and
hacking, ransomware, etc. M-commerce

●● Difficulty in purchasing some products

When some sensitive products like Gold are in question, it is difficult
to purchase them via online transactions. It is also true for products
that are dependent on variables that are dependent on size, shape, etc.
that are difficult to quantify with exact measurement. Trust is also an
important factor when it comes to these products, and the lack of the
ability to verify them physically is a hindrance to purchasing such
products online.
●● Site Crash issues
There is still some uncertainty when it comes to the functioning of
servers and the availability of round-the-clock and quality internet
service. This can create a lot of hindrance from a sales perspective
and can result in the loss of consumers as they might have to wait for
an unspecified period to proceed with transactions.
12.2.5 Types of e-Commerce
Generally, there are various types of E-Commerce systems namely; B2B
(Business-to-Business), B2C (Business-to-Consumer), C2C (Consumer-to-
Consumer), C2B (Consumer-to-Business), B2G (Business-to-Government/
Administration), C2A (Consumer-to-Administration), and P2P (Peer-to-
Peer), Direct to consumer (D2C).

B2B
B2C B2G

Types
of
E-commerce
P2P C2A

C2C D2C

Fig 12.2: Types of e-Commerce

Many different types of e-commerce and transactions exist in the world of
e-commerce today. These various types of different E-Commerce that are
used today are classified based on the nature of their transactions and are
elaborated upon below.
B2B (Business-to-Business)
This form of E-commerce is understood to be of the kind that takes place
between companies. In the Business-to-Business type of E-Commerce
system, the companies involved come together to conduct business with
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Enterprise Information System each other. An example for the same can be when a manufacturer sells a
product to a wholesaler, while the wholesaler tries to sell the same product
to a retailer, they are all said to be doing business.

Fig 12.3: B2B model

Fig 12.3 above illustrates the ‘B2B’ model for the mentioned example. As
shown, there are three main businesses i.e., wholesaler, manufacturer, and
retailer. The Manufacturer has a website that can be used by the wholesaler
to place orders for the product; this order is then processed and sent to the
wholesaler. After receiving the product, the wholesaler can use a digital
medium to advertise the product or take orders from a retailer for the same.
This kind of business is called the B2B type of E-commerce.
B2C (Business-to-Consumer)
This model of E-commerce is understood to be the process where a company
or business sells its goods, services, and products directly to the consumer
via the internet. The consumer has the liberty of browsing through the
internet to filter, check and view products and then ordering them. After
receiving an order, the company proceeds to process and send the order
directly to the consumer. Daily life examples of such types of E-commerce
companies are Amazon, Flipkart, and so on. It is important to note that many
of these giant E-commerce companies do not manufacture or produce these
services or products, but rather list them on their website for commission-
based payments.

Fig 12.4: ‘B2C’ Model

The above Fig. 12.4 shows the process followed in this model, the consumer
can surf the websites or mobile applications of the mentioned companies and
the like to order available products. After receiving the order, the company
processes the same before sending it to the consumer. Hence, in this ‘B2C’
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model of E-commerce, the company tries to sell a product directly to the E-commerce and
consumer. M-commerce

C2C (Consumer-to-Consumer)
This form of E-commerce is understood to be a model where consumers sell
goods, services, and products to another consumer via web technologies and
the internet. This model comprises the selling of a wide range of products
including movable assets and properties. Companies such as Quicker,
OLX, and so on are some examples of this model of E-commerce which is
illustrated below.

Fig 12.5: C2C Business Model

C2B (Consumer-to-Business)
This model of E-commerce for all purposes is the opposite of the ‘B2C’ model
where businesses produce goods, services, and products for consumers. It
is a type of commerce where a consumer provides goods, services, and
products to an organization or business in Fig 12.6.

Fig 12.6: B2C Business Model

B2G (Business-to-Government)
Business-to-government, also known as business-to-administration, refers
to trade between the business sector as a supplier and a government body
as a customer. This kind of E-commerce refers to the situation where
businesses conduct commerce with the government; it is essentially a part
of the ‘B2B’ model. It is essentially a model where government-related
agencies and different businesses use web-based applications for the
exchange of information as well as for conducting business more effectively
and efficiently compared to off-web transactions.

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Enterprise Information System

Fig 12.7: A2B Business Model

B2G business, as illustrated in Fig. 12.7, is generally also referred to as public
sector marketing, which indicates the marketing of products and services
to various government agencies and various levels. The business network
provides a platform for businesses to bid on government opportunities such
as auctions, tenders application submission, and so on for various services,
etc. These activities are increasingly being conducted through the internet
via real-time bidding
C2A (Consumer-to-Administration)
The model refers to the E-commerce process followed by the consumers
when interacting directly with the government agencies. This may be in
the form of payments, information access requests, or feedback to various
agencies among other things. The consumer-to-government/administration
model for E-commerce is the ideal answer for establishing communication
between the consumers and the government. Examples of ‘C2A’ models
include payment of bills including electricity and water, tax payments, health
insurance payments made via web and mobile applications. A simplified
representation of the model is illustrated in Fig.12.8.

Fig 12.8: A2C Business Model

P2P (Peer-to-Peer)
This model of E-governance refers to a distributed platform enabling
different individuals to partake in transactions with each other without an
intermediary third party via a P2P service. There are some examples of
‘P2P’ services that do not involve economic transactions for buying and
selling but simply provide a platform or individuals to interact for various
ends. These services may be operated as free non-profit services or generate
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revenue by advertising to users or by selling users’ data. This model of E-commerce and
network arrangement is different from the client-server model where M-commerce
communication takes place from the central server.

Fig 12.9: P2P Business Model

The absence of a ‘Third party’ may increase the risk of service not being
delivered, service being of poor quality, delay or refusal of payment as well
as the exploitation of asymmetric information. This added risk generally
results in increased transaction costs for the parties involved. Often
businesses are created to facilitate P2P transactions and reduce the risk for
both the buyer and the seller. Some examples of ‘P2P’ services are open-
source software, online marketplaces, cryptocurrency and Blockchain,
ridesharing, and so on.
D2C (Direct-to-Consumer)
Direct-to-consumer refers to selling products in a straight line to customers,
bypassing any third-party retailers, wholesalers, or any other middlemen.
DTC brands are usually sold online only and specialize in a specific product
category: Casper, Warby Parker, Everlane, Harry’s, Outdoor Voices, AWAY,
and Dollar Shave Club.

Fig 12.10: D2C Business Model

Direct-to-consumer companies are transforming how people shop. In the
progression, these brands, spanning everything from detergent to sneakers,
are radically changing consumer preferences and expectations. Finally,
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Enterprise Information System Direct-to-consumer brands have used that infrastructure to grow fast and
connect directly to their customers. In addition to establishing a direct
relationship with customers, these brands are building a community of
ambassadors on social media. The result is a long-lasting relationship, and
strong interaction, commitment, and loyalty.
Check Your Progress 12.1
Note: a) Use the spaces given below for your answers.
b) Check your answer with those given at the end of the unit.
1. Define E-commerce?
..............................................................................................................
.............................................................................................................
2. What are the different categories of e-commerce?
..............................................................................................................
..............................................................................................................

12.3 BUSINESSES TO BUSINESS (B2B)

E-COMMERCE
B2B is e-commerce between businesses. Internet-based business-to-
business (B2B) e-commerce is conducted through industry-sponsored
marketplaces and private exchanges set up by large companies for their
suppliers and customers. Companies use such marketplaces mainly to
purchase commodity goods, manage their supply chains, and conduct
indirect procurement transactions not related to their core business.
Business-to-business (B2B) e-commerce is significantly different from
business-to-consumer (B2C) e-commerce. While B2C merchants sell
on a first-come, first-served basis, most B2B commerce is done through
negotiated contracts that allow the seller to anticipate and plan for how
much the buyer will purchase. In some cases, B2B is not so much a matter
of generating revenue as it is a matter of making connections with a business
partner.
B2B Web sites can be sorted into:
●● Company Web sites: Since the target audience for the company is
other companies and their employees. Company sites can be thought
of as round-the-clock mini-trade exhibits. Sometimes a company
Web site serves as the entrance to an exclusive extranet available only
to customers or registered site users. Some company Web sites sell
directly from the site, effectively e-tailing to other businesses.
●● Product supply and procurement exchanges: A company’s agent
may purchase supplies from vendors, request proposals, and, in some
cases, bid to purchase at the desired price. Sometimes referred to as
e-procurement sites, some serve a range of industries and others focus
on a niche market.
●● Specialized or vertical industry portals: Such portals provide a
“subWeb” of information, product listings, discussion groups, and
other features. These vertical portal sites have a broader purpose than
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 the procurement sites (although they may also support buying and E-commerce and
selling). M-commerce

●● Brokering sites: These sites act as an intermediary between someone

wanting a product or service and potential providers. Equipment
leasing is an example.
●● Information sites: These sites are sometimes known as infomediary,
which provide information about a particular industry for its companies
and their employees. These include specialized search sites and trade
and industry standards organization sites.
Many B2B sites may seem to fall into more than one of these groups. Models
for B2B sites are still evolving.
The difference between B2B and B2C e-commerce are listed in Table 12.1.
Table 12.1: Difference between B2B and B2C e-commerce
Business-to- Business-to-Business
Consumer
Type of The consumer uses a A representative of a business
Relationship PC browser to order uses the company’s Web
products via the browser to order products or
merchants’ Websites. to inquire via another business
(e.g., suppliers) Website.
Level of Get finished product. Get raw material or unfinished
Procurement product.
Level of Trust May not be trusted Trusted partners.
partners.
Flow of a. Placing orders a. Online procurement
Information b. Executing b. Tracking order status
payments c. Executing payments
c. Fulfilling orders d. Managing promotions,
d. Browsing of returns, catalog
merchant’s catalog information
e. Sending feedback e. Fulfilling orders
or e-mail messages
Nature of The unidirectional Mutual agreement among
control relationship defined businesses
by the merchant
Level or nature Not very focused, More focused than B2C e.g.,
of need-based e.g., a B2C website An automobile company buys
segmentation can sell various types only motor parts not aircraft
of gift items. parts
Sales Not very complex Complex supply chain
Complexity
Types of Internet-based Intranet or Extranet (based on
Network Internet)

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Enterprise Information System
Activity12.1:
List the various e-commerce sites, list some of its important aspects such
as distribution of product and services, payment mechanism, web layout,
Pre–and post-sales support, etc.
.....................................................................................................................
.....................................................................................................................
.....................................................................................................................
.....................................................................................................................

Check Your Progress 12.2

Note: a) Use the spaces given below for your answers.
b) Check your answer with those given at the end of the unit.
1. Fill in the blanks
(a) B2B is trading between ______ partners and B2C is trading
between _____ partners. (Untrusted and Trusted)
(b) In B2B network is either ________ or _____________ based
on Internet.
2. Differentiate between B2B and B2C e-commerce?
..............................................................................................................
..............................................................................................................
..............................................................................................................
..............................................................................................................

12.4 ACHIEVING CUSTOMER INTIMACY IN

B2C E-COMMERCE
Intimacy generally refers to the feeling of being in close personal association
and belonging together. Customer intimacy is a marketing strategy where an
online merchant gets close to his/her customers. Greater customer intimacy
leads to higher customer loyalty levels. It describes the ability of an online
merchant to become accepted and known as the regular partner with its
customers. Below mentioned are some of the ways to achieve customer
intimacy in B2C E-Commerce.
12.4.1 Interactive Marketing
John Deighton at Harvard has defined interactive marketing as the ability
to address the customer, remember what the customer says, and address the
customer again in a way that illustrates that we remember what the customer
has told us. The emphasis on interactive marketing has changed from
transaction-based effort to conversation. Interactive marketing features “the
ability to address an individual and the ability to gather and remember the
response of that individual” leading to “the ability to address the individual
once more in a way that takes into account his or her unique response”.
As the nature of e-commerce technology is interactive, a great deal of
information about the customer can be gathered in the marketplace at
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the moment of purchase. The information about the customer’s past E-commerce and
purchases and behavior can be stored and used by online merchants. This M-commerce
permits personalization and customization. E-commerce technologies
make it possible for merchants to know more about customers and use
this information more effectively. This information can be used by online
merchants to:
●● Enhance their ability to brand products.
●● Charge premium prices for high-quality service.
●● Divide the market for their product into different subgroups and
charge different prices to different segments.
●● Develop new information asymmetries.
12.4.2 Personalization
E-commerce technologies permit personalization. Personalization has
become a very common marketing technique. Online merchants can send
their marketing messages to specific individuals by adjusting the message to
a person’s name, interests, and past purchases. A highly targeted personalized
e-mail campaign merged with the internal behavioral, transaction and
demographic data about the customers can result in a significant increase
in revenue. By greeting customers (based on cookie files), an online
merchant can recommend the recent products to its customers based on
their preferences (based on user profile in the database). The four primary
ways of performing personalization are:
1. Greetings: Greetings are the most basic form of personalization.
The customer is greeted by name and welcomed back when he or
she comes on the site. Personalization engines recognize a visitor’s
Internet protocol address or cookies stored on his personal computer
and correlate that information with past visits to recognize the visitor.
2. Customization: Customization means changing the product according
to the user’s preferences. By offering “build-to-order” customized
products, the online merchant can win customer loyalty. Moreover,
the customer would always be willing to pay a little more for a unique
product.
3. Narrowcasting: Narrowcasting is the delivery of time-sensitive
information, personalized to each customer. Instead of sending
messages to a large number of customers, they can be intimated
about particular events they want to be alerted about. These kinds of
messages can be sent through e-mail, and phone which enables the
customer to be informed without having to connect to the site.
4. Recommendations: Recommendation enables a site to propose a
product that is tailored to customers’ requirements, whether they have
been explicitly expressed by the customer or implicitly calculated by
the e-commerce engine. \
Personalization in e-commerce can be achieved through Personalized order
tracking; Maintaining the purchase histories of customers; Maintaining the
personalized information of customers such as their birthdays and wedding
anniversary dates, etc.
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Enterprise Information System 12.4.3 Self-Service
Self-service is the process by which consumers engage in all or a portion
of the provision of a service or product. Customer Self-service technology
allows the customer to perform the service himself without the interference
of service personnel. Self-service allows a customer to do business from
anywhere at any time at his convenience. It allows customers to manage
their purchasing requirements and rules. Self-service enables the customers
to conduct in-depth sales information, check user manuals and get technical
help. Some customers prefer self-service. With the growth of internet
usage, the world nowadays is increasingly dependent on technology-
facilitated transactions. Customers interact more with technology instead
of interacting with the firm’s employees to create an outcome. They want
to research purchases at their leisure, get answers to technical questions
24x7, and make decisions on their own time. The consumer controls the
search process, the time spent on various sites, the degree of price/product
comparison, the people with whom he/she comes in contact, and the decision
to buy. Customer self-service offerings transform customer relationships,
improve profitability, and increase customer loyalty. Self-service provides
the following benefits to consumers:
●● Faster service.
●● More convenience as self-service technologies make a business
available 24 hours a day, seven days a week.
●● Ease of use.
●● Monetary savings associated with the self-service option as an online
merchant may offer discounts to customers opting for self-service.
●● Self-service tools can also be enabled to provide a customer real-
time access to their account activity, such as order status, shipment
tracking, invoices, payments, and credit notes.
Check Your Progress 12.3
Note: a) Use the spaces given below for your answers.
b) Check your answer with those given at the end of the unit.
1. Fill in the blanks
a) ________ is the process by which consumers engage in all
or a portion of the provision of a service or product.
b) _______ is the ability to address the customer, remember what
the customer says.
2. True and False
a) Self-service provides faster service and ease of use to
consumers.
b) Self-service technologies make a business available 12 hours a
day, five days a week.

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 E-commerce and
12.5 M-COMMERCE M-commerce
M-commerce refers to the practice of conducting financial and promotional
activities with the use of a wireless handheld device. The term m-commerce
is short for Mobile commerce and recognizes that the transactions may
be conducted using cell phones, personal digital assistants (PDAs),
smartphones, and other hand-held devices that we operate with Internet
access. M-commerce site is a version of a company’s webpage that
is designed to fit within the constraints of a cell phone or PDA. It is an
E-Commerce with mobile devices (PDAs, Cell Phones, Pagers, etc.).
In contrast to e-commerce, m-commerce does not include laptops and
computers. With the advancement of technologies, computers these days are
being replaced by smartphones. Computers these days are being replaced by
Smartphones they can do many things that our everyday laptops, gadgets, and
desktops offer us. Smartphones are like microcomputers that are capable to
access and processing a host of data and have a camera, interfaces, internet
browsing, text and instant messaging, Wi-Fi, and Geographical Positioning
System (GPS) capabilities. On a Smartphone input can be provided through
a touch screen interface and output can be seen on the screen. Today’s
smartphones are incredibly more influential as compared to the desktop and
laptops we have been using since years ago. The smartphone is an incredibly
essential tool in our daily lives; they are smaller in size and are portable
which a computer monitor and keyboard aren’t. From replying to emails to
checking out your daily feed on social media, and uploading the occasional
selfie to share to the world, smartphones can do a bunch of imaginable
things. In addition to performing the basic functions, smartphones are
capable enough to perform various computing activities.
Today’s smartphones are more advanced than ever before. The beauty in all
of this is the heightened level of productivity that can now be achieved by
our smartphones. A smartphone can be quickly and easily transformed into
a versatile desktop PC. Even though it won’t replace the desktop experience
it can come in handy when required. Take a Bluetooth keyboard and mouse,
along with one of those portable external displays, and you can get your
desktop setup situated just about anywhere.
Mobile commerce can be based on two technologies:
a) Mobile sites which appear inside the browser on any internet-enabled
mobile device
b) Mobile applications which require a device-specific download from
a marketplace, such as the Apple App Store or the Android Market.
One of the basic examples of m-commerce is receiving sales promotions via
a hand-held device. The most common application would involve the service
provider sending text messages to the subscriber that promote new product
offerings, free trials on additional services, or other types of promotional
campaigns. The subscriber is not charged a fee for the text message and
often can respond with a return text message without incurring any type of
fee. Several major cellular services offer subscribers to opt into this type of
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Enterprise Information System m-commerce or be excluded from receiving the message. M-commerce is
not just about using mobile phones as end-user devices. The following list
gives an overview of different kinds of mobile devices.
●● Mobile phone
●● PDA (Personal Digital Assistant)
●● Smart phone: the smartphone combines mobile phone and PDA
technology into one device.
●● Laptop
●● Earpiece (as part of a personal area network)
12.5.1 Advantages and Disadvantages of M-Commerce
M-commerce offers both advantages and disadvantages. The following list
summarizes the advantages of m-commerce:
1. Ubiquity: The use of advanced wireless handheld accessories
become available, more applications are released to enables the user
to receive information and conduct transactions anywhere, at any
time “anywhere shopping,”
2. Accessibility: Mobile device enables the user to be contacted at
virtually any time and place. The user also has the choice to limit
their accessibility to particular persons or times.
3. Convenience: The portability of the wireless device and its functions
from storing data to access information or persons.
4. Localization: The emergence of location-specific based applications
enables the user to receive relevant information on which to act.
5. Instant Connectivity: The emergence of 5G networks, GPRS, or
EDGE is becoming more prevalent as it provides instant connectivity
or “always-on” connectivity. Users of 5 services are benefited from
easier and faster access to the Internet.
6. Personalization: The combination of localization and personalization
is creating a new channel/business opportunity for reaching and
attracting customers. Personalization takes the form of customized
information, meeting the users’ preferences, followed by payment
mechanisms that allow for personal information to be stored,
eliminating the need to enter credit card information for each
transaction.
7. Time Sensitivity: Access to real-time information such as a stock
quote that can be acted upon immediately or a sale at a local boutique.
The following list summarizes the disadvantages of m-commerce:
1. Absence of services in rural areas: Most of India lives in rural
areas. In most of the rural areas, m-commerce is still unknown to
many and there is still a dearth of availability of mobile phones and
Internet connection, which is a big hindrance in proper applicability
and penetration of m-commerce.

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2. Fraud risks and security concerns: With the rising trends of fraud E-commerce and
risks and security concerns, m-commerce is no exception to them. M-commerce
There is still a lack of proper grievance redressal, proper awareness,
and a robust regulatory framework. People usually fear losing their
money while using m-commerce.
3. Connectivity issue: The massive obstacle for M-commerce is the
internet connection issue. If the net connection is poor then the
transaction cannot be executed.
4. Resistance to change: People usually don’t like to come out of their
comfort zone which leads to their lack of adaptability of trying out and
accepting new things and technologies and thus they resist change.
Some people deny getting into modern technology and some take too
much time in adopting new technologies.
12.5.2 Applications of M-Commerce
In the current commerce industry, mobile commerce or M-Commerce has
been entered in finance, services, retails, telecommunication and information
technology services. In these sectors, M-Commerce is not only being
widely accepted but also is being more used as a popular way of business/
commerce. The applications of M-commerce are explained below:
Finance Sectors
●● Mobile Commerce works vastly in the finance sector including all big
and major financial institutes, banks, stock markets, and sharebrokers.
Whenever any user needs money or wants any sort of banking and
finance-related services, he/she can access the services or register
services via voice calling or via Short Message Services (SMS)
services. WAP-based mobile handsets allow the user to access the
official website of the institute.
●● Users can transact money or transfer money, or pay the bill from their
bank account using mobile commerce facilities. Banks also provide
round-the-clock customer care services, which can be used any time
through voice calls. Some customer care services are also providing
non-voice services on mobile that is known as the instant-alert facility.
●● While in the stock market, the user can access the stock market quotes
and get in live touch with the current trading status on its mobile
in two forms either voice (customer assistance) or non-voice (SMS
alerts) or both.
●● The share broker sends market trends and tips of trading on their
clients’ mobile. Also, the broker can suggest the appropriate stock for
intra-day trading to their users.
Telecommunication Sectors
●● Mobile has played a giant role in communication technology through
its versatility and superiority. Its ubiquity and easy usage have
further made it extremely popular across the globe. It has already
surpassed the fixed phone in the world. The software platform is
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Enterprise Information System essential for operating any mobile and this tool has revolutionized
the communication world because it functioned as a small computer.
●● The booming popularity has forced the corporate world to develop a
new commerce platform that can reach to masses. Mobile commerce
has attracted massive traffic because of its unique characteristics. The
user can change the service of any financial institution or bank if gets
a better product and service or user is unsatisfied with the service of
the subscribing company.
Service / Retail sectors
●● Service and Retail sectors are also among the leading sectors, which
have nurtured most from mobile commerce. M-Commerce has proved
a major boon for these sectors. Several business dealings no matter
how big or small are being finalized on the mobile phone. Customers
would be able to book the order, can hire carrier/courier services, and
above all could also pay the dues related to it through mobile.
Information Sector
●● The evolution of mobile commerce has evolved to exercise IT-enabled
commerce for IT experts.
●● In the IT field, mobile commerce has been used massively to deliver
financial news, stock updates, sports figures, traffic updates, and many
more onto a single handheld device ‘mobile’. Besides this several
bills can be paid using mobile and users can also check the available
balance, the status of cheques, the status of requested processing, and
customer care support.
12.5.3 Mobile Commerce Services
Mobile commerce services are increasingly dynamic, value-rich services for
the consumer market. As technology improves consumers are increasingly
relying on mobile devices for access to services that touch all areas of their
life. Today’s consumers use their mobile phone to function as an all-in-one
wallet, organizer, Internet connection, jukebox, game console, messaging
device. Using mobile devices for commerce is a natural extension of this
lifestyle. It offers consumers the convenience of ubiquitous access to value-
added services and allows organizations to differentiate their services,
create new revenue streams, and build customer loyalty.
Over the past several years, mobile operators, merchants, content providers,
and financial institutions have successfully launched a range of mobile
applications worldwide. These initial deployments—and their adoption by
consumers—have created a demand for a larger set of commerce services
that allow consumers to use their mobile device to conduct transactions
flexibly and conveniently (e.g., to purchase a digital good such as a ring
tone or video clip, or tangible good, such as a book or a CD). These services,
predominantly in the areas of entertainment, marketing, advertising,
banking, ticketing, and retail are likely to drive consumer adoption of
mobile commerce services They will enable providers to differentiate
themselves by offering highly personalized services and delivering a rich
user experience.
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●● Entertainment: Mobile entertainment includes content services such E-commerce and
as watching movies, listening to music, videos, gaming, etc. M-commerce

●● Marketing and advertising: Mobile operators and other companies

are using targeted mobile advertising and mobile coupons to connect
advertisers with specific demographics. Recent mobile campaigns
have enabled users to quickly search various categories of products
and services in their immediate area, and then access, save and
redeem related discounts, promotions, and coupons all via their phone
numbers.
●● Banking and bill payment: Mobile banking enables customers to
use their mobile phones to receive alerts, manage their accounts, pay
bills, and transfer funds.
●● Ticketing: Mobile ticketing allows device users to purchase tickets
for events, transportation, and parking. These services have been
widely being used all over the world where consumers use mobile
devices to feed parking meters and purchase cinema, train, and ski lift
tickets online.
●● Retail and peer-to-peer payments: Mobile payments have triggered
peer-to-peer payments. Consumers are increasingly comfortable with
paying for goods and services and transferring money electronically,
and mobiles are the best alternative to it. Some of its services are
for home-delivery shopping services, vending machines and in-store
purchases, taxis, and purchases at fuel stations and other retail outlets,
etc.
Their emergence and increasing popularity are evidence of mobile
commerce’s growing momentum. As the starting point for a new generation
of services, they are already shaping the mobile culture and driving
requirements for a comprehensive mobile commerce system.
Activity 12.2:
Make an observation what all e-commerce activity you can perform using
M-commerce?
....................................................................................................................
....................................................................................................................
....................................................................................................................
....................................................................................................................
....................................................................................................................
....................................................................................................................

Check Your Progress 12.4

Note: a) Use the spaces given below for your answers.
b) Check your answer with those given at the end of the unit.
1. Define the term ‘Mobile commerce’.
..............................................................................................................
..............................................................................................................
..............................................................................................................

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Enterprise Information System 2. What are the applications of M-commerce?
..............................................................................................................
..............................................................................................................
..............................................................................................................
3) True and False
a) Mobile Platform allows you to make micro and macro
payments.
b) M-commerce is devoid of security challenges.

12.6 LET US SUM UP

E-commerce means the ability to conduct business electronically, or over
the Internet. B2C is the selling of goods and services to a customer and the
transaction takes place through the Internet. B2B is a commercial transaction
between two or more businesses. B2B E-commerce primarily refers to
supply chain technology, which is by far the largest and most successful
e-commerce technology employed today. The C2B model, also called,
“reverse auction” or “demand collection model,” enables buyers to name
their own prices, often binding, for a specific good or service generating
demand. With the C2C e-business model, consumers sell directly to other
consumers via online classified ads and auctions, or by selling personal
services and expertise online. Customer intimacy is a marketing strategy
where an online merchant gets close to his/her customers. Interactive
marketing features “the ability to address an individual and the ability to
gather and remember the response of that individual” leading to “the ability
to address the individual once more in a way that takes into account his or
her unique response”. The term m-commerce is short for Mobile commerce
and recognizes that the transactions may be conducted using cell phones,
personal digital assistants (PDAs), smartphones, and other hand-held
devices that we operate with Internet access.
12.7 KEYWORDS
B2B : Commercial transactions between two or
more businesses.
B2C : Selling of goods and services to a customer
and the transaction takes place through the
Internet
C2B model : Also called, “reverse auction” or “demand
collection model,” enables buyers to name
their prices, often binding, for a specific good
or service generating demand.
C2C : An e-business model, consumers sell directly
to other consumers via online classified ads
and auctions, or by selling personal services
and expertise online.
E-commerce : Refers generally to all forms of commercial

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 transactions involving both organizations E-commerce and
and individuals, that are based upon the M-commerce
electronic processing and transmission of
data, including text, sound, and visual images
Interactive marketing : The ability to address the customer, remember
what the customer says, and address that
customer again.
Intranet : Uses Internet technology to allow employees
to view and use internal Web sites that are not
accessible to the outside world.
M-commerce : Refers to the practice of conducting financial
and promotional activities with the use of a
wireless handheld device.
Mobile applications : Require a device-specific download from a
marketplace, such as the Apple App Store or
the Android Market.
Mobile sites : They appear inside the browser on any
internet-enabled mobile device
Self-service : The process by which consumers engage in
all or a portion of the provision of a service
or product.
12.8 SUGGESTED FURTHER READINGS/
REFERENCES
1. Laudon, K. & Laudon, J., 2008, Management Information Systems,
Eleventh Edition, Prentice Hall.
2. Million Dollar Web Presence: Leverage the Web to Build Your Brand
and Transform Your Business by Chad Barr, Alan Weiss
3. Mobile Commerce Applications By Nansi Shi, Idea Group Publishing.
4. P. T. Joseph, S. J., E-Commerce – An Indian Perspective Second
Edition, PHI, 2007.
5. Sushila Madan, E-commerce Sixth Edition, Mayur Paperbacks, 2011.
6. The Complete E-Commerce Book, Second Edition: Design, Build &
Maintain a Successful Web-based Business by Janice Reynold.
7. The Ultimate Guide to Marketing Your Business with Pinterest by
Gabriela Taylor.
12.9 ANSWERS TO CHECK YOUR PROGRESS
Check Your Progress 12.1
1. E-commerce means the ability to conduct business electronically, or
over the Internet.
2. B2B, B2G, C2A, D2C,C2C, P2P, B2C

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Enterprise Information System Check Your Progress 12.2
1. a) Trusted and Untrusted
b) Intranet or Extranet
2. In Business-to-Consumer, the consumer uses a PC browser to order
products via the merchants’ Websites. In Business-to-Business, a
representative of a business uses the company’s Web browser to order
products or to inquire via another business (e.g., suppliers) Website.
Check Your Progress 12.3
1. a). Self-service b). Customer intimacy
2. a). True b). False
Check Your Progress 12.4
1. M-commerce refers to the practice of conducting financial and
promotional activities with the use of a wireless handheld device. The
term m-commerce is short for Mobile commerce and recognizes that
the transactions may be conducted using cell phones, personal digital
assistants (PDAs), smartphones, and other hand-held devices that we
operate with Internet access. An M-commerce site is a version of a
company’s webpage that is designed to fit within the constraints of a
cell phone or PDA.
2. Applications in the finance, services, retails, telecommunication and
information technology services
3. a) True
b) False

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