Electronic Commerce CSC1720 – Introduction to Internet Essential Materials.

Electronic CommerceElectronic Commerce

CSC1720 – Introduction to CSC1720 – Introduction to InternetInternet

Essential MaterialsEssential Materials


All copyrights reserved by C.C. Cheung All copyrights reserved by C.C. Cheung 2003.2003.

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OutlineOutline

IntroductionIntroduction e-Business modelse-Business models How toHow to

– Build an e-Commerce siteBuild an e-Commerce site– Attract and keep customersAttract and keep customers– Get PaidGet Paid– Manage the e-commerce businessManage the e-commerce business– Secure the siteSecure the site

e-Business Implementationse-Business Implementations Application Service Provider (ASP)Application Service Provider (ASP)



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Questions?Questions?

What exactly is e-Commerce?What exactly is e-Commerce? What is B2B e-Commerce?What is B2B e-Commerce? Can I start my own e-Commerce site?Can I start my own e-Commerce site? How do I accept payments by credit card?How do I accept payments by credit card? How do I get customers to visit my site?How do I get customers to visit my site? Do I have to accept credit cards?Do I have to accept credit cards? How to succeed in e-Commerce?How to succeed in e-Commerce? Any more questions about e-Commerce?Any more questions about e-Commerce?



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IntroductionIntroduction

What is e-Commerce?What is e-Commerce?– Electronic Commerce (EC) or “e-Business”Electronic Commerce (EC) or “e-Business”– Buying and Selling goods or services on the Buying and Selling goods or services on the

Internet (WWW)Internet (WWW)– What is the latest development? M-Commerce?What is the latest development? M-Commerce?

What is ASP?What is ASP?– Application Service ProviderApplication Service Provider– Also means Active Server Page (HTML)Also means Active Server Page (HTML)– A company offers individuals or enterprises to A company offers individuals or enterprises to

host their applications or services on this ASP host their applications or services on this ASP company. (low budgets for small companies, company. (low budgets for small companies, outsourcing for large companies)outsourcing for large companies)



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The importanceThe importance



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TerminologyTerminology

Dedicated lineDedicated line – A point-to-point, hard – A point-to-point, hard wire connection between two service wire connection between two service locations.locations.

Leased lineLeased line – A telecommunications line – A telecommunications line dedicated to a particular customer along dedicated to a particular customer along predetermined routers.predetermined routers.

OutsourcingOutsourcing – The transfer of components – The transfer of components or large segments of an internal IT or large segments of an internal IT infrastructure, staff, processes or infrastructure, staff, processes or applications to an external resource such applications to an external resource such as Application service provider (ASP).as Application service provider (ASP).



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e-Business solutionse-Business solutions

ERP, CRM, Database

Intranet

Internal Users

Suppliers, public

Mobile Users

Customers

Internet / WWW

Web EDI



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e-Business Modelse-Business Models

Storefront modelStorefront model Auction modelAuction model Portal ModelPortal Model Dynamic Pricing ModelsDynamic Pricing Models B2B ExchangesB2B Exchanges B2B Service ProvidersB2B Service Providers e-Learninge-Learning



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Storefront ModelStorefront Model

The storefront model combines transaction The storefront model combines transaction processing, security, online payment processing, security, online payment which allows merchants to sell their which allows merchants to sell their products to the customers on the Web.products to the customers on the Web.

Many famous storefront model companies Many famous storefront model companies are Business-to-Consumer (B2C) are Business-to-Consumer (B2C) companies.companies.– www.more.comwww.more.com

Health and beauty productsHealth and beauty products

– www.www.ticketmasterticketmaster.com.com Sell ticketsSell tickets



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Allow companies to conduct business Allow companies to conduct business 24-by-724-by-7 (all-day, everyday). (all-day, everyday).

One of the most commonly used One of the most commonly used model is “model is “shopping cartshopping cart””– An order-processing technology that An order-processing technology that

allows user to accumulate the shopping allows user to accumulate the shopping list and continue shopping.list and continue shopping.

– Supported by product catalog, merchant Supported by product catalog, merchant server and database technology.server and database technology.

– www.www.amazonamazon.com.com– www.www.icareicare.com..com.hkhk



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Shopping Cart Shopping Cart ExampleExample

Go shopping

Shopping cart



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Shopping Cart SotwareShopping Cart Sotware http://www.poorrichard.com/freeinfo/shop.htmhttp://www.poorrichard.com/freeinfo/shop.htm



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Another model is “Another model is “online shopping online shopping mallmall” which provides a wide ” which provides a wide selection of products and services.selection of products and services.

Customers can purchase items Customers can purchase items from many stores in a single from many stores in a single transaction.transaction.– Offer speed and add convenienceOffer speed and add convenience– www.mall.comwww.mall.com– www.www.shopnowshopnow.com.com– www.e-buy.com.www.e-buy.com.hkhk



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Shopping Mall ExampleShopping Mall Example

Differentshops



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Auction ModelAuction Model

Internet User can login to the online Internet User can login to the online auction sites, either bidder or seller.auction sites, either bidder or seller.

Sellers post their items and wait for the Sellers post their items and wait for the buyers to bid.buyers to bid.

Auction sites get commission on every Auction sites get commission on every successful auction.successful auction.– E.g. most profitable: E.g. most profitable: www.www.ebayebay.com.com– HK: HK: auction.auction.timwaytimway.com.com– http://hk.auctions.yahoo.com/http://hk.auctions.yahoo.com/

Reverse Auction modelReverse Auction model– Allow buyer to set the price, Allow buyer to set the price, www.www.epurchasingagentepurchasingagent

.com.com



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Auction Model Auction Model ExampleExample

http://hk.auctions.yahoo.com/http://hk.auctions.yahoo.com/



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Portal ModelPortal Model

Allow visitors to find everything Allow visitors to find everything within the website.within the website.– Horizontal PortalHorizontal Portal

Wide-ranged of topicsWide-ranged of topics E.g. E.g. www.www.googlegoogle.com.com, , www.yahoo.comwww.yahoo.com

– Vertical PortalVertical Portal Offer specific information on a single Offer specific information on a single

area of interest.area of interest. E.g. www.webmd.com (medical E.g. www.webmd.com (medical

information)information)



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Dynamic Pricing ModelDynamic Pricing Model

Name-your-price Business ModelName-your-price Business Model– Customers choose their price for the products Customers choose their price for the products

or services (or services (www.www.pricelinepriceline.com.com).). Comparison Pricing ModelComparison Pricing Model

– Customers poll some merchants and find the Customers poll some merchants and find the lowest prices (lowest prices (www.www.bottomdollarbottomdollar.com.com))

Demand-Sensitive Pricing ModelDemand-Sensitive Pricing Model– Enables customers to get better services and Enables customers to get better services and

prices. (prices. (www.www.mobshopmobshop.com.com)) Bartering ModelBartering Model

– Exchange items (Exchange items (www.www.ubarterubarter.com.com))



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Pricing model examplePricing model example



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B2B ExchangesB2B Exchanges

Define as buying, selling, partnering, Define as buying, selling, partnering, bartering or trading conducted between two bartering or trading conducted between two or more business (B2B).or more business (B2B).

Goldman Sachs has estimated that B2B will Goldman Sachs has estimated that B2B will generate $1.5 trillion in revenues by 2004.generate $1.5 trillion in revenues by 2004.

Allow Business to buy, sell, auction, barter Allow Business to buy, sell, auction, barter and distribute products and services.and distribute products and services.

Examples: Examples: – www.www.eworkework.com.com (Exchange employee) (Exchange employee)– www.www.itoiitoi.com.com (Industry to Industry) (Industry to Industry)– www.biz2biz.comwww.biz2biz.com (Business to Business) (Business to Business)– www.www.icgcommerceicgcommerce.com.com, , www.www.tradeaccesstradeaccess.com.com



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B2B examplesB2B examples



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B2B Service ProvidersB2B Service Providers

B2B service providers make the B2B B2B service providers make the B2B transactions easier.transactions easier.

These e-Businesses help other These e-Businesses help other businesses improve their policies, businesses improve their policies, procedures, services and general procedures, services and general operations.operations.

Solutions include supply chain Solutions include supply chain management, logistics, procurement.management, logistics, procurement.

www.www.aribaariba.com.com www.www.freemarketsfreemarkets.com.com www.liveperson.comwww.liveperson.com



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Chat online?Chat online?

Why?Why? To solve your E-business To solve your E-business problem via the Internet.problem via the Internet.



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Loan OnlineLoan Online

A growing segment of E-commerce.A growing segment of E-commerce. Loan online at a lower rate than Loan online at a lower rate than

other traditional channels.other traditional channels. E-loan – E-loan – www.www.eloaneloan.com.com E-credit – E-credit – www.www.ecreditecredit.com.com

– Clients – HP, Intel, other businessesClients – HP, Intel, other businesses Loan direct – Loan direct – www.www.loansdirectloansdirect.com.com



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Recruitment on the Recruitment on the WebWeb Effectively job searching on the Web.Effectively job searching on the Web. Improve the recruitment for both Improve the recruitment for both

employer and seeker.employer and seeker. Search International Jobs (Search International Jobs (

www.monster.comwww.monster.com)) Focus on computer industry (Focus on computer industry (

www.dice.comwww.dice.com)) www.guru.comwww.guru.com www.jobdb.comwww.jobdb.com



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Online News ServicesOnline News Services

Web is playing an important role in the Web is playing an important role in the publishing and news industries.publishing and news industries.

The Wall Street Journal (The Wall Street Journal (www.www.wsjwsj.com.com)) Articles by leading investment analysts Articles by leading investment analysts

((www.www.barronsbarrons.com.com)) Latest sports news (Latest sports news (www.www.espnespn.com.com)) Comprehensive news site (Comprehensive news site (www.www.

drudgereportdrudgereport.com.com))



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Recruitment / NewsRecruitment / News



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Online Travel ServicesOnline Travel Services

Customers can bypass the travel Customers can bypass the travel agents.agents.

Allow discount and low fare rate Allow discount and low fare rate online.online.

air-tickets, hostel, and car-rentals.air-tickets, hostel, and car-rentals. ““Last minutes” tickets offer low Last minutes” tickets offer low

price.price. www.www.cheapticketscheaptickets.com.com www.www.travelocitytravelocity.com.com



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Online EntertainmentOnline Entertainment

Multimedia rich websites provide Multimedia rich websites provide Audio and Video, popular music Audio and Video, popular music and videos are available online and videos are available online for free.for free.

Internet Movie DatabaseInternet Movie Database– www.www.imdbimdb.com.com

www.www.icasticast.com.com



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e-Learninge-Learning

e-Learning is growing rapidly as the e-Learning is growing rapidly as the number of Internet users increases.number of Internet users increases.

Universities and other training companies Universities and other training companies offer HQ distance education over the Web.offer HQ distance education over the Web.

www.click2learn.comwww.click2learn.com www.www.sabasaba.com.com www.online.uillinois.eduwww.online.uillinois.edu wwwtools.cityu.edu.hkwwwtools.cityu.edu.hk www.www.polyupolyu..eduedu..hkhk//elearningelearning E-books – E-books – www.www.xlibrisxlibris.com.com



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M-CommerceM-Commerce

What is Mobile Commerce?What is Mobile Commerce? Mobile commerce is the term applied Mobile commerce is the term applied

to online financial transactions - to online financial transactions - shopping or the electronic transfer of shopping or the electronic transfer of funds - using a mobile device. funds - using a mobile device.

Mobile commerce transactions are Mobile commerce transactions are being enhanced by developments in being enhanced by developments in the world of mobile communication.the world of mobile communication.



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MasterCard & M-MasterCard & M-CommerceCommerce

Reference : demo



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Break Time – 15 Break Time – 15 minutesminutes



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Build an e-Commerce Build an e-Commerce sitesite Register a Domain nameRegister a Domain name

– Search for domain names (InterNIC)Search for domain names (InterNIC)– What is the criteria of selecting a good What is the criteria of selecting a good

name?name? Find a Web HostFind a Web Host

– Select the suitable ISPSelect the suitable ISP Web DevelopersWeb Developers

– Hire a web designerHire a web designer– Cut cost and work with the designerCut cost and work with the designer– If your site is easy to use, the customers If your site is easy to use, the customers

will stay longer and come more frequent.will stay longer and come more frequent.



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Web HostingWeb Hosting

It is a very important step in e-It is a very important step in e-Commerce.Commerce.– Good uptime?Good uptime?– Good technical support?Good technical support?– Fast connection to the Net?Fast connection to the Net?– Staffs are knowledgeable about e-Staffs are knowledgeable about e-

Commerce?Commerce?– Compatibility with other e-Compatibility with other e-

Commerce providers?Commerce providers?



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Attract and keep Attract and keep customerscustomers e-Business Advertisinge-Business Advertising

– Banner AdvertisingBanner Advertising Recently, losing their effectivenessRecently, losing their effectiveness

– Buying and Selling advertisingBuying and Selling advertising You can become a host, or an advertiserYou can become a host, or an advertiser www.valueclick.comwww.valueclick.com

– Webcasting and Interactive Webcasting and Interactive AdvertisingAdvertising

Use streaming media to broadcast Use streaming media to broadcast information on the web.information on the web.



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Enterprise Resources Enterprise Resources Planning (ERP)Planning (ERP) An industrial term defines as the An industrial term defines as the

activities supported by activities supported by application application softwaresoftware that helps company to manage that helps company to manage the important parts of the business.the important parts of the business.– Product planning, parts purchasing, Product planning, parts purchasing,

maintaining inventories, contacting maintaining inventories, contacting suppliers, customer servicing.suppliers, customer servicing.

Integrated with database (such as Integrated with database (such as Oracle) to provide other features, Oracle) to provide other features, business process analysis, employee business process analysis, employee training, …training, …



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ERP exampleERP example

Finance:How can I help you?

Fulfillment:Yes, Sir?

Inventory:Which item?

Customer Service:We’re ready to help.

I have questions about billing,product availability, shippingand customer service.



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Customer Relationship Customer Relationship Management (CRM)Management (CRM) All the customer services provided by All the customer services provided by

the company form the CRM.the company form the CRM. CRM includesCRM includes

– Call handlingCall handling (in/out calls from customers (in/out calls from customers and service representatives)and service representatives)

– Sales trackingSales tracking (tracing and recording the (tracing and recording the sales made)sales made)

– Transaction supportTransaction support (the technology used (the technology used for transactions)for transactions)

– Improve customer satisfactionImprove customer satisfaction and and maximize the profitsmaximize the profits



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Electronic Data Electronic Data Interchange (EDI)Interchange (EDI) Standard format to exchange Standard format to exchange

business data.business data. EDI message is a string of data EDI message is a string of data

that represents “that represents “priceprice”, “”, “product product numbernumber”, “”, “product nameproduct name”, etc.”, etc.

EDI message can be encrypted.EDI message can be encrypted. EDI is one form of E-commerce, EDI is one form of E-commerce,

also include email, fax.also include email, fax.



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Electronic Data Electronic Data Interchange (EDI)Interchange (EDI)

http://www.disa.org/http://www.disa.org/



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Get PaidGet Paid

How to you pay on the website?How to you pay on the website?– Credit cardCredit card transactions transactions– CybercashCybercash: www.cybercash.com: www.cybercash.com– E-WalletsE-Wallets allows you to keep track allows you to keep track

your transactions, your transactions, www.visa.com/pd/ewallet/main.htmlwww.visa.com/pd/ewallet/main.html

– Digital CashDigital Cash: store your money : store your money electricallyelectrically www.ecash.comwww.ecash.com

– More complex: B2B Transactions.More complex: B2B Transactions.



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Manage the E-Manage the E-commerce businesscommerce business Have a good communication between Have a good communication between

the business production line (including the business production line (including the customer services team), and the the customer services team), and the IT development line.IT development line.

““Online transaction history logOnline transaction history log” and ” and ““Historical investment performance Historical investment performance reportsreports” also helps to decide and plan ” also helps to decide and plan for the product and service trend.for the product and service trend.

Migration of the traditional trading Migration of the traditional trading client to the new e-business.client to the new e-business.



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Secure the siteSecure the site

Customers fear for their online privacy.Customers fear for their online privacy. Make sure all transactions on your e-Make sure all transactions on your e-

commerce site are protected.commerce site are protected. Security is provided by different kind of Security is provided by different kind of

cryptography (encryption, digital cryptography (encryption, digital signatures, digital certificates)signatures, digital certificates)

Sometimes, you may provide your Sometimes, you may provide your personal information for: personal information for: member-only member-only discounts, giveaway, sweepstakes, discounts, giveaway, sweepstakes, couponscoupons. . Beware!Beware!



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Online shopping risksOnline shopping risks

A list of safeguards to keep in mind.A list of safeguards to keep in mind.– Shop with trusted merchants.Shop with trusted merchants.– Read the site’s delivery, return, and privacy Read the site’s delivery, return, and privacy

policies.policies.– Only enter your details with the URL that Only enter your details with the URL that

begins with begins with https://https:// and either a locked and either a locked padlock or an unbroken key icon.padlock or an unbroken key icon.

– Be careful not to hit the ORDER NOW button Be careful not to hit the ORDER NOW button more than once.more than once.

– Never send credit card information via e-mail.Never send credit card information via e-mail.– Keep a record of your transactions until Keep a record of your transactions until

shipped.shipped.



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HK Government SupportHK Government Support http://www.info.gov.hk/digital21/chi/ecommerce/ecom_supp.htmlhttp://www.info.gov.hk/digital21/chi/ecommerce/ecom_supp.html



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Application Service Application Service ProviderProvider What is an Application Service What is an Application Service

Provider?Provider?– Deliver and manage applications or Deliver and manage applications or

computer services via the Internet.computer services via the Internet.– Provide a cost-effective solution from Provide a cost-effective solution from

an outside supplier. (maintenance, an outside supplier. (maintenance, upgrades and customization)upgrades and customization)

– It can be a commercial entity, a not-for-It can be a commercial entity, a not-for-profit organization or government profit organization or government related.related.



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ASP in HKASP in HKReferencehttp://hk.dir.yahoo.com/Regional/Countries_and_Regions/Hong_Kong/Business_and_Economy/Companies/Electronic_Commerce/



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Using ASP BenefitsUsing ASP Benefits

Speed to marketSpeed to market– ASP has the latest equipment, applications, ready ASP has the latest equipment, applications, ready

to provide market access.to provide market access. Operational freedomOperational freedom

– The customer can focus on their core business.The customer can focus on their core business. Improved performanceImproved performance

– ASP provides vast experience on different issues.ASP provides vast experience on different issues. Financial flexibilityFinancial flexibility

– Reduced fixed cost and overall expenditures.Reduced fixed cost and overall expenditures. Reduced riskReduced risk

– Customers can test a new technology with minimal Customers can test a new technology with minimal impact to their existing system.impact to their existing system.



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ASP AdvantagesASP Advantages



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What kind of What kind of application can be application can be delivered?delivered? Citrix, GraphOn and SCOCitrix, GraphOn and SCO

– The applications run on a central The applications run on a central server managed by the ASP, but not server managed by the ASP, but not the applications on the end-user the applications on the end-user desktop or company’s server.desktop or company’s server.

– Portal means a gateway (starting Portal means a gateway (starting point), for a WWW site, it is the point), for a WWW site, it is the starting site for user to browse.starting site for user to browse.



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Portal SoftwarePortal Software

Video show



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Choosing ASPChoosing ASP

ShareShared d

ServeServerr

Shared Server Shared Server with Application with Application

Isolation SystemsIsolation Systems

Server Farm Server Farm (Each company (Each company

with its own with its own server)server)

Customer Customer CostCost

LowLow LowLow HighHigh

Initial Initial Customer Customer

InvestmentInvestment

LowLow LowLow HighHigh

Maintainance Maintainance costcost

LowLow ModerateModerate ModerateModerate

Server Server ArchitectureArchitecture

CompComplexlex

ModerateModerate SimpleSimple

Security RiskSecurity Risk HighHigh LowLow ModerateModerate



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SummarySummary

e-Commerce is defined as a e-Commerce is defined as a company has an online presence.company has an online presence.

We have discussed different types We have discussed different types of e-Commerce models.of e-Commerce models.

Discuss the important issues on Discuss the important issues on developing e-Business.developing e-Business.

ASP provides very good supports ASP provides very good supports to the e-Commerce development.to the e-Commerce development.



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Reference: HK Gov.Reference: HK Gov.



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ReferencesReferences

www.ecommercetimes.comwww.ecommercetimes.com ecommerce.internet.comecommerce.internet.com Microsoft TechNetMicrosoft TechNet

The End.The End. Thank you for your patience!Thank you for your patience!

Electronic Commerce CSC1720 – Introduction to Internet Essential Materials.

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