E-Commerce: Definition, Types and Trends

Luis Abugattas JSMP TA Team Leader EE-Commerce Awareness Workshop for Jordanian Enterprises; Amman 10 November 2009

E-commerce: Definition
No widely accepted definition. In loose definition. sense it means doing business over the internet, selling products [goods and services] which are delivered offline as well as products which can be digitalized and delivered on line. line.
ee-commerce is the online transaction of business, featuring linked computer systems of the vendor, host and buyer. Electronic transactions involve the transfer of ownership or rights to use a good or service [US Department of Commerce] Commerce]

E-commerce: Scope
E-commerce is a sub-set of e-business subE-business: application of ICT to all aspects of business:
companies operations: i.e. customer relations management operations: (CRM); (CRM); enterprise resource planning (ERP); sales force (ERP); management (SFM); electronic procurement (EP) (SFM);

E-commerce: Functions commerce:

 

Communication [on-line catalogue] [onTransaction [shopping carts: browse and select carts: items and make buying decision] Payment [electronic payment methods]

E-commerce Characteristics
 

Operates on a bonafide basis [no prior arrangement between customer and seller] Operates over the Internet; using all or any Internet; combination of technologies designed to exchange data [email, mobile phone, EDI]; to EDI]; access data [share databases or electronic bulleting boards]; and to capture data [bar boards]; coding and magnetic or optical character readers Requires buyer adhering to a contract [I AGREE, I DONT AGREE, latter terminate negotiations]. negotiations]. Jurisdiction imposed by the seller and a mandatory alternative dispute resolution mechanism. mechanism.

E-commerce Market Structure



Engages in building a community of consumers of information about products. products. Focal points for influencing the channel traffic into web sites managed by providers. providers. Market Maker (MMK): Facilitates business (MMK): transactions that take place between supplier and buyer, and provides value through a system of implicit or explicit guarantee of security and trust. trust.

Portal

(POR): (POR):

Product/service

Conduct directly business over the internet, customized information systems and business processes. processes.

Provider

(PSP): (PSP):

E-commerce: Elements
 

A good or service to be offered Customer needs to know how to find the product [marketing, portals] Exchange of money [electronic or conventional financial transactions] Delivery mechanism [on-line, off[onoffline] Customer service and communication

E-commerce and Broader Internet Applications

Government Business Consumer

G2G
Government

G2B

G2C

e.g. coordination

e.g. information e.g. information

B2G
Business

B2B
e.g. eecommerce

B2C
e.g. eecommerce

e.g. procurement

C2G
Consumer

C2B
e.g. price comparisons

C2C
e.g. action markets

e.g. taxes

Source OECD (2000)

E-commerce Market Segments



B2B: Transactions between companies. The biggest and companies. more successful [70-75% of total e-commerce sales] 70-75% Linked with supply chain management, going beyond simple buying and selling transactions increasingly involving supply chain technologies. technologies. B2C: Business selling to households. Growing segment of households. the market. More complex due to information gaps; has not market. gaps; done as good as B2B. C2C: Facilitates transactions between two individuals. individuals. Requires a platform (MMK). E-Bay (MMK). B2G: Government procurement through internet. Seeks internet. more transparency and greater competition C2B: Reverse auction [new trend]

E-Commerce: Trends


B2C: More successful opportunities [apparel, books, computer hardware; hardware; software and accessories; electronics; accessories; electronics; entertainment, financial services; flowers. services; flowers. gifts; information; music; gifts; information; music; travel services; services; and, toys] B2B: All sectors on-line sales 15.9%; onon15. online purchases 46.1% 46. [number of companies, E-Watch 2003] Sales and 2003] purchases linked with company size Larger + on-line transactions. ontransactions.