E-Commerce and E-Business Definition-: Electronic

E-commerce and E-business
Definition-Electronic commerce or e-commerce refers to a wide range of online business

activities for products and services. [1] It also pertains to “any form of business transaction in
which the parties interact electronically rather than by physical exchanges or direct physical
contact. A more complete definition is: E-commerce is the use of electronic communications
and digital information processing technology in business transactions to create, transform,
and redefine relationships for value creation between or among organizations, and between
organizations and individuals.
TYPES OF E-COMMERCE
1. BUSINESS TO BUSINESS(B2B)- B2B e-commerce is simply defined as e-commerce

between companies. This is the type of e-commerce that deals with relationships
between and among businesses.
2. BUSINESS TO CONSUMER(B2C)- Business-to-consumer e-commerce, or commerce
between companies and consumers, involves customers gathering information;
purchasing physical goods (i.e., tangibles such as books or consumer products) or
information goods (or goods of electronic material or digitized content, such as
software, or e-books); and, for information goods, receiving products over an
electronic network.
3. BUSINESS TO GOVERNMENT(B2G)- Business-to-government e-commerce or B2G is
generally defined as commerce between companies and the public sector. It refers to
the use of the Internet for public procurement, licensing procedures, and other
government-related operations.
4. CONSUMER TO CONSUMER(C2C)- Consumer-to-consumer e-commerce or C2C is
simply commerce between private individuals or consumers. This type of e-commerce
is characterized by the growth of electronic marketplaces and online auctions,
particularly in vertical industries where firms/businesses can bid for what they want
from among multiple suppliers.
5. M-COMMERCE- M-commerce (mobile commerce) is the buying and selling of goods
and services through wireless technology-i.e., handheld devices such as cellular
telephones and personal digital assistants (PDAs). Japan is seen as a global leader in
m-commerce.
FORCES FUELLING E-COMMERCE
There are at least three major forces fueling e-commerce:
Economic forces-One of the most evident benefits of e-commerce is economic
efficiency resulting from the reduction in communications costs, low-cost
technological infrastructure, speedier and more economic electronic transactions with
suppliers, lower global information sharing and advertising costs, and cheaper
customer service alternatives. Economic integration is either external or internal.
External integration refers to the electronic networking of corporations, suppliers,
customers/clients, and independent contractors into one community communicating
in a virtual environment (with the Internet as medium). Internal integration, on the
other hand, is the networking of the various departments within a corporation, and of
business operations and processes. This allows critical business information to be
stored in a digital form that can be retrieved instantly and transmitted electronically.
Internal integration is best exemplified by corporate intranets. Among the companies
with efficient corporate intranets are Procter and Gamble, IBM, Nestle and Intel.
Market forces- Corporations are encouraged to use e-commerce in marketing and
promotion to capture international markets, both big and small. The Internet is
likewise used as a medium for enhanced customer service and support. It is a lot
easier for companies to provide their target consumers with more detailed product
and service information using the Internet.
Technology forces- The development of ICT is a key factor in the growth of e-
commerce. For instance, technological advances in digitizing content, compression
and the promotion of open systems technology have paved the way for the
convergence of communication services into one single platform. This in turn has
made communication more efficient, faster, easier, and more economical as the need
to set up separate networks for telephone services, television broadcast, cable
television, and Internet access is eliminated. From the standpoint of firms/businesses
and consumers, having only one information provider means lower communications
costs.
How does e-commerce link customers, workers, suppliers, distributors and
competitors?
E-commerce facilitates organization networks, wherein small firms depend on “partner” firms
for supplies and product distribution to address customer demands more effectively.
To manage the chain of networks linking customers, workers, suppliers, distributors, and
even competitors, an integrated or extended supply chain management solution is needed.
Supply chain management (SCM) is defined as the supervision of materials, information, and
finances as they move from supplier to manufacturer to wholesaler to retailer to consumer. It
involves the coordination and integration of these flows both within and among companies.
The goal of any effective supply chain management system is timely provision of goods or
services to the next link in the chain (and ultimately, the reduction of inventory within each
link).29
There are three main flows in SCM, namely:
 The product flow, which includes the movement of goods from a supplier to a
customer, as well as any customer returns or service needs;
 The information flow, which involves the transmission of orders and the update of the
status of delivery; and
 The finances flow, which consists of credit terms, payment schedules, and
consignment and title ownership arrangements.
Some SCM applications are based on open data models that support the sharing of data both
inside and outside the enterprise, called the extended enterprise, and includes key suppliers,
manufacturers, and end customers of a specific company. Shared data resides in diverse
database systems, or data warehouses, at several different sites and companies. Sharing this
data “upstream” (with a company’s suppliers) and “downstream” (with a company’s clients)
allows SCM applications to improve the time-to-market of products and reduce costs. It also
allows all parties in the supply chain to better manage current resources and plan for future
needs.
What are the components of a typical successful e-commerce transaction loop?
E-commerce does not refer merely to a firm putting up a Web site for the purpose of selling
goods to buyers over the Internet. For e-commerce to be a competitive alternative to
traditional commercial transactions and for a firm to maximize the benefits of e-commerce, a
number of technical as well as enabling issues have to be considered. A typical e-commerce
transaction loop involves the following major players and corresponding requisites:
The Seller should have the following components:
 A corporate Web site with e-commerce capabilities (e.g., a secure transaction server);
 A corporate intranet so that orders are processed in an efficient manner; and
 IT-literate employees to manage the information flows and maintain the e-commerce
system.
Transaction partners include:
 Banking institutions that offer transaction clearing services (e.g., processing credit card
payments and electronic fund transfers);
 National and international freight companies to enable the movement of physical
goods within, around and out of the country. For business-to-consumer transactions,
the system must offer a means for cost-efficient transport of small packages (such that
purchasing books over the Internet, for example, is not prohibitively more expensive
than buying from a local store); and
 Authentication authority that serves as a trusted third party to ensure the integrity
and security of transactions.
Consumers (in a business-to-consumer transaction) who:
 Form a critical mass of the population with access to the Internet and disposable
income enabling widespread use of credit cards; and
 Possess a mindset for purchasing goods over the Internet rather than by physically
inspecting items.
Firms/Businesses (in a business-to-business transaction) that together form a critical mass of

companies (especially within supply chains) with Internet access and the capability to place
and take orders over the Internet.
Government, to establish:
 A legal framework governing e-commerce transactions (including electronic

documents, signatures, and the like); and
 Legal institutions that would enforce the legal framework (i.e., laws and regulations)
and protect consumers and businesses from fraud, among others.
And finally, the Internet, the successful use of which depends on the following:
 A robust and reliable Internet infrastructure; and

 A pricing structure that doesn’t penalize consumers for spending time on and buying
goods over the Internet (e.g., a flat monthly charge for both ISP access and local
phone calls).
For e-commerce to grow, the above requisites and factors have to be in place. The least
developed factor is an impediment to the increased uptake of e-commerce as a whole. For
instance, a country with an excellent Internet infrastructure will not have high e-commerce
figures if banks do not offer support and fulfillment services to e-commerce transactions. In
countries that have significant e-commerce figures, a positive feedback loop reinforces each
of these factors.

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E-commerce and E-business

Definition-Electronic commerce or e-commerce refers to a wide range of online business

1. BUSINESS TO BUSINESS(B2B)- B2B e-commerce is simply defined as e-commerce

There are three main flows in SCM, namely:

The Seller should have the following components:

Transaction partners include:

Consumers (in a business-to-consumer transaction) who:

Firms/Businesses (in a business-to-business transaction) that together form a critical mass of

 A legal framework governing e-commerce transactions (including electronic

 A robust and reliable Internet infrastructure; and

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