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Chapter 1 Introduction to E-Business and E-Commerce

Copyright © 2013 Pearson Education

Teaching Objectives Define e-commerce and describe how it differs

from e-business. Identify and describe the unique features of e-

commerce technology and discuss their business significance.

Recognize and describe Web 2.0 applications. Describe the major types of e-commerce. Discuss the origins and growth of e-commerce. Explain the evolution of e-commerce from its early

years to today.

Copyright © 2013 Pearson Education Slide 1-2

E-commerce vs. E-business E-commerce

the process of buying, selling, or exchanging products, services, and information via computer networks

E-business

a broader definition of E-commerce that includes not just the buying and selling of goods and services, but also servicing customers, collaborating with business partners and conducting electronic transactions within an organization

Source: Turban, E. and King, D., Electronic Commerce 2012: A Managerial and Social Networks Perspective, 7th Edition. Pearson Education Ltd., 2012


Presenter

Presentation Notes

จองตั๋วเครื่องบินออนไลน์ ลงรายการบัญชี เดบิต เครดิต ตัดสต็อค สินค้า/ ตรวจสอบจำนวนสินค้าในคลัง/ track การขนส่ง

E-commerce vs. E-business (cont.) E-commerce

primarily involves transactions that cross firm boundaries

E-business

primarily involves the application of digital technologies to business processes within the firm


Presenter

Presentation Notes

จองตั๋วเครื่องบินออนไลน์ ลงรายการบัญชี เดบิต เครดิต ตัดสต็อค สินค้า/ ตรวจสอบจำนวนสินค้าในคลัง/ track การขนส่ง

What Is E-commerce? Use of Internet and Web to transact

business More formally: Digitally enabled commercial transactions

between and among organizations and individuals


What Is E-commerce? (cont.) The Internet is A worldwide network of computer networks

The Web is One of the Internet’s most popular services,

providing access to billions of Web pages


Eight Unique Features of E-commerce Technology

1. Ubiquity Internet/Web technology is available everywhere (via

mobile devices), at all times 2. Global reach The technology reaches across national boundaries,

around the earth 3. Universal standards There is one set of technology standards, namely

Internet standards 4. Information richness Video, audio, and text messages are possible


Eight Unique Features of E-commerce Technology (cont.)

5. Interactivity The technology works through interaction with the

user (two-way communication) 6. Information density The technology reduces information costs and raises

quality 7. Personalization/customization The technology allows personalized messages to be

delivered to individuals as well as groups 8. Social technology User content generation and social networks (create

and share content)


Limitations of E-commerce The telecommunications bandwidth is insufficient,

especially for m-commerce, videos, and graphics It is difficult to integrate Internet and E-commerce

software with some existing (especially legacy) applications and databases

Internet accessibility is still expensive and/or inconvenient

Security and privacy concerns deter customers from buying


Limitations of E-commerce (cont.) People do not yet sufficiently trust paperless,

faceless transactions Some customers like to feel and touch products Online fraud is increasing


Web 2.0 User-centered applications and social

media technologies User-generated content and communication Highly interactive, social communities Large audiences; yet mostly unproven business

models e.g.: Twitter, YouTube, Facebook, Instagram,

Wikipedia, Tumblr, and LinkedIn


Social network services The following are representative capabilities

and services provided by social network sites: Users can construct a Web page that they can

use to present themselves to the larger community

Users can create a circle of friends who are linked together

The site provides discussion forums (by group, by topic)


Social network services (cont.) Photo, video, and document viewing and

sharing (streaming videos, user-supplied videos) are supported

Wikis can be used to jointly create documents Blogs can be used for discussion, dissemination

of information, and much more


Virtual worlds These environments provide entertainment,

trading virtual property, discussion groups, learning, training, and much more

Everything is simulated, animated, and supported by avatars

Thousands of companies have established presences in virtual worlds Especially in Second Life, offering mainly

dissemination of information and advertising


Types of E-commerce 1. Business-to-Consumer (B2C) Online business selling to individual consumers Amazon is a general merchandiser that sells

consumer products to retail consumers

2. Business-to-Business (B2B) Online business selling to other businesses Go2Paper.com is an independent third-party

marketplace that servers the paper industry


Types of E-commerce (cont.) 3. Consumer-to-Consumer (C2C) Consumers selling to other consumers On a large number of Web auction sites such as

eBay or Etsy

4. Social e-commerce E-commerce enabled by social networks and

online social relationships Facebook is both the leading social network and

social e-commerce site


Types of E-commerce (cont.) 5. Mobile e-commerce (M-commerce)

Use of mobile devices to enable transactions on the Web Mobile devices such as tablet computers and

smartphones can be used to conduct commercial transactions


Categories of M-commerce applications

Banking and financial services For example, e-banking, mobile banking, mobile payments

Mobile enterprise applications For example, mobile office applications, sales force automation

(SFA), field force automation, mobile CRM All of these applications are focused on supporting the mobile

worker

Consumer services and entertainment Mobile music, games, gambling, and specialized user-generated

content


Categories of M-commerce applications (cont.)

Location-based mobile commerce The use of positioning devices, such as GPS, to find where a

customer or client is and deliver products and services based on his or her location

The global positioning system (GPS) is a worldwide satellite-based tracking system that enables users to determine their position anywhere on the earth

Ubiquitous computing applications Computing capabilities that are being embedded into the objects

around us, which may be mobile or stationary For example, smart homes, smart cars


Benefits of M-commerce Increased sales due to ease of ordering from anywhere,

anytime Allows location-based commerce for more sales Provides an additional channel for advertising and

distribution of coupons (wider reach) Improves customer satisfaction through real-time apps Delivers digitized products and services directly to mobile

devices Reduces time to order Allows for competitive pricing


Types of E-commerce (cont.) 6. Local e-commerce

E-commerce that is focused on engaging the consumer based on his or her current geographic location

Groupon offers subscribers daily deals from local businesses in the form of “Groupons,” discount coupons that take effect once enough

subscribers have agreed to purchase


Origins and Growth of E-commerce 1995: Beginning of e-commerce First sales of banner advertisements: AT&T,

Volvo, etc.

E-commerce fastest growing form of commerce in United States


The Growth of B2C E-commerce Figure 1.2, Page 27


SOURCE: Based on data from eMarketer, Inc., 2012; authors’ estimates.

The Growth of B2B E-commerce Figure 1.3, Page 28


SOURCE: Based on data from U.S. Census Bureau, 2012b; authors’ estimates.

E-commerce: A Brief History 1995–2000: Innovation The first widespread use of the Web to

advertise products Selling retail goods Dot-coms; heavy venture capital investment Disintermediation: manufacturers and content

originators would develop direct market relationships with their customers


E-commerce: A Brief History (cont.) 2001–2006: Consolidation Changed to include not just retail products but

also more complex services For example, travel and financial services

Use search engine advertising targeted to user queries, rich media and video ads, and behavioral targeting of marketing messages

Use the Web to enhance the existing businesses


E-commerce: A Brief History (cont.) 2007–Present: Reinvention Social: rapid growth of online social networks Mobile: widespread adoption of consumer

mobile devices such as smartphones and tablet computers

Local expansion: expansion of e-commerce to include local goods and services


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