CS7330ELECTRONIC COMMERCE

Mr. Dilawar

Lecturer,Computer Science Faculty,

Bakhtar UniversityKabul, Afghanistan.

Previous Lecture• Computer and Computer Network

• Introduction to Internet, Web & Their Growth

• Define E-Commerce and Describe How it Differs From E-Business

• Why we Study E-Commerce?

• Unique Features of E-Commerce

• Major Types and Dimensions of E-Commerce

The Revolution is Just BeginningChapter 1

Lecture Outline• Origins and growth of e-commerce

• Potential limitations on growth of B2C e-commerce

• Visions, assessing, predictions & major themes of e-commerce

• Major academic discipline contributing to e-commerce research

• Case Study: Napster Rocked. But was it Legal?

Origins and Growth of E-commerce• Precursors• 1970s, a pharmaceutical firm named Baxter Healthcare – B2B e-commerce.

• Telephone-based system and expanded into PC-based entry system in 1980s.

• 1980s, Electronic Data Interchange (EDI) that permits firms to exchange commercial documents.• 1981s, French Minitel System that was a video text system.

• Telephone with an 8-inch screen and having over 13,000 different services.

• Private network owned by France Telecom.

Origins and Growth of E-commerce• Beginning of E-Commerce• 1995s, First sale banner advertisement – Netscape, Volvo, sprint etc…• Since then, e-commerce has been the fastest growing form of commerce in

the US.

Origins and Growth of E-commerceGrowth of B2B

Sources: U.S. Census Bureau, 2009b; authors’ estimates.

Origins and Growth of E-commerceGrowth of B2C

Sources: U.S. Census Bureau, 2009b; authors’ estimates.

Origins and Growth of E-commerce

A commercial history

Potential Limitations on Growth of B2C• Expensive technology.

• Sophisticated skill set.

• Persistent cultural attraction of physical markets and traditional shopping experiences.

• Persistent global inequality limiting access to telephones and computers.

Early Visions of E-Commerce• Computer scientists

• Inexpensive, universal communications and computing environment accessible by all.

• Economists• Nearly perfect competitive market and friction-free commerce.• Disintermediation, lowered search costs.

• Entrepreneurs• Extraordinary opportunity for first movers.• To create network effect.

Assessing E-Commerce• Friction-Free commerce

• Information asymmetries persist

• Disintermediation

• First mover advantage

Benefits of EC• Benefits to organization

• Expands the marketplace to national and international markets.• Decreases the cost of creating, processing, distributing, storing, and retrieving

paper-based information.• Reduces the time while distributing documents, information, receipt of

products, and services.• Lowers telecommunications cost – the internet is much cheaper than value

added networks (VANs – in previous years network for transmitting data).• Based on technical infrastructure.• Allowing customization of products and services.

Benefits of EC• Benefits to consumer

• Provides consumers with more choices.• Enables consumers to shop or do other transactions 24 hours a day, all year round from almost any

location.• Consumers can receive relevant and detailed information in seconds, rather than in days or weeks.• Allows quick delivery of products and services.• Makes it possible to participate in virtual sales.• Facilitates competition, which results in large discounts• Allows consumers to interact with other consumers in electronic communities and exchange ideas

as well as compare experiences.• Provides consumers with less expensive products and services by allowing them to shop in many

places and conduct quick comparisons.

Benefits of EC• Benefits to society• Enables more individuals to work at home, and to do less traveling for

shopping, resulting in less traffic on the roads, and lower air pollution.• Allows some merchandise to be sold at lower prices, benefiting less rich

people.• Enables people in Third World countries and rural areas to enjoy products and

services which otherwise are not available to them.

Limitations of EC• Technical Limitation• There is a lack of universally accepted standards for quality, security, and

reliability.• The telecommunications bandwidth is insufficient.• Software development tools are still evolving.• There are difficulties in integrating the Internet and EC software with some

existing applications and databases.• Internet accessibility is still expensive and/or inconvenient.

Predictions for the Future• E-commerce technology will continue to propagate through all

commercial activity, with overall revenues from e-commerce, the number of products and services sold over the Web, and the amount of Web traffic all rising.

• E-commerce prices will rise to cover the real costs of doing business on the Web.

• Traditional well-endowed and experienced Fortune 500 companies will play a growing and more dominant role.

Predictions for the Future• Number of successful pure online stores will remain smaller than

integrated offline/online stores.

• The number of successful pure online companies will continue to decline and most successful e-commerce firms will adopt an integrated, multi-channel bricks and-clicks strategy.

• Regulation of e-commerce and the Web by government will grow both in the United States and worldwide.

EC Organizing Themes• Technology• Understanding of IT upon which it is built including internet and WWW.

• Business• Understanding business concepts such as electronic markets, information

goods, business models, firm and industry value chains, industry structure, and consumer behavior in electronic markets.

• Society• Understanding the pressure of EC on modern society.• Primary issues – intellectual property, individual privacy, and public policy.

Academic Disciplines Concern with EC• Technical Approach• Computer Science

• They are concerned with the development of computer hardware, software, and tele-communication systems, standard, encryption and database design.

• Management Science• They are interested in building mathematical model of business processes, optimization

of processes, opportunity to use Internet technology to achieve efficient business operations.

Academic Disciplines Concern with EC• Behavioral Approach• Information Systems

• Data mining, Search engine design and AI.

• Economics• Consumer behavior, pricing, and features of EC market.

• Marketing• Brand development and extension, consumer behavior on web sites, using web

technology target different segment consumer groups.

Academic Disciplines Concern with EC• Behavioral Approach• Finance/Accounting

• Valuation and accounting practices.

• Sociology/Psychology • Internet usage, the role social inequalities, use of web as a social network and group

communications.

Discussion Points• Evaluation of E-Commerce.

• What techniques of privacy attack are usual through social media?

• How do you protect your privacy on the web?

• Is EC any different than traditional markets with respect to privacy? Don’t merchant always want to know their customer?

• What impact has created by OLX in our society? Discuss the risks too.

• Why do you think investors today would like to interested in investing in or purchasing EC companies? Would you invest in an EC company today?

Summery• Evolution of E-commerce.

• Origins and growth of e-commerce

• Potential limitations on growth of B2C e-commerce

• Visions, assessing, predictions & major themes of e-commerce

• Major academic discipline contributing to e-commerce research

• Case Study: Napster Rocked. But was it Legal?

Thank YouFor your Patience