ECom Unit1

Module 1:History of E-commerce & Indian
Business Context
INTRODUCTION
 E-commerce is short for electronic commerce.
It includes all business transactions that use
electronic communications and digital information
processing technology.
 EDI(Electronic Data interchange) is an early form
of e-commerce.
 Electronic data interchange (EDI) is the digital
exchange of business documents between
companies using computers.
MEANING&CONCEPT
 E-commerce is concerned with the buying and
selling information,products and services over
computer communication n/ws.
 Information is electronically transfered from
computer to computer in an automated
manner.
Definitions :-
1. E-commerce
business refers
information to theEDI,
using paperless
E- bulleting
boards(Computerized
mail, exchange of system used to
exchange
public messages or files) and other n/w
based technologies.
Definitions
2. Use of computers and n/ws to do commerce is
known as e-commerce.
3. WTO defines e-commerce as a commercial process
that includes productions , distribution , sales or
delivary of goods and services through the
electronic means .
4.E-commerce is where business transactions take place
via telecommunications n/ws,especially the
Internet.
History of e-commerce
⚫ EDI is widely viewed as the beginning of E-commerce.
⚫ EDI originated in the mid-1960s.(paperless offices)
⚫ The ability to use these technologies appeared in the late
1970s and allowed business companies and organizations to
send commercial documentation electronically.
⚫ In the mid 1970s ,EDI was formalized by the Accredited by
the Accredited stds committee of Industry representatives.
⚫ 1970-1980:Companies began to adopt EDI.
First generation of e-commerce:
 EDI allowed companies to exchange information, place
orders,and conduct electronic funds transfer through
computers.
Second generation of e-commerce:
 It is characterized by the transaction of goods and
services through the Internet.
 1960-Inception of Internet.(ARPANET-predecessor to the
Internet was established)
 1986-NSF(national science fondation) launched
NSFNET(providing high speed communication links b/w
major super computers across the United States.
⚫ By the end of the 1980s,the internet had still used
for non-commercial purpose,and all of its n/ws were
based on the free use of the NSFNET backbone
directly or indirectly.
⚫ Development of GUI &WWW
⚫ 1990- creation of HTML with URL specifications
⚫ 1991-NSFNET decided to remove
commercial restrctions on the use of the
n/w.
⚫ First internet companies to allow
electronic transactions-Amazone &Ebay.
Features of e-commerce
1.Ubiquity
2.Global Reach
3.Universal
stds
4.Ample information
5.Interactivity
6.Information Density.
7.personalization/
customization
Ubiquity
⚫ Ubiquity means it is available everywhere,at
all times.(shopping can take place anywhere)
⚫ The new market place extended beyond
traditional boundaries.
⚫ It gives much freedom to consumers and
reduces transaction costs.
⚫ Customer convenience enhanced.
Global Reach
⚫ E-commerce reaches beyond cultural & national
boundaries.
⚫ Buying&selling-more convenient &cost
effective.
⚫ The potential market size for e-commerce
is expanding very fast.
Universal stds
⚫ Stds that are shared by all nations around the world
⚫ Reduce product search cost, and by creating a single,

one world market place, where price discovery
becomes simpler, faster and more accurate.
4.Ample information
⚫ Customers need not depend on the services of sales
people to get information about products and
services.It is available in internet.
Interactivity
⚫ It allows two way communication b/w merchant
and consumer.
⚫ It allows a feeling both to merchants and customers
of face-to –face experience
Information Density
⚫ It reduces information cost and raises
quality.
⚫ It also reduce information collection,
storage, processing and communication
costs.
⚫ It gives more plent.iful information.
.personalization/customization
⚫ E-commerce permit personalization & customization.
⚫ Personalization-It allows personalized msgs to
be delivered to specific individuals.
⚫ Customization-changing the delivered product/service
based on user’s preference.
advantages of e-commerce
⚫ E-Commerce advantages can be broadly classified
in three major categories −
⚫ Advantages to Organizations
⚫ Advantages to Consumers
⚫ Advantages to Society
Advantages to Organizations
International Marketplace:
 The market for a web based busines s is
not restricted by any geographical
boundaries
 Traditional physical marketplace located
in a geographical area has now become a
borderless marketplace including national
and international markets.
 By becoming e-commerce enabled,businesses now
have access to people all around the world. In effect
all ecommerce businesses have become virtual
multinational corporations.
Operational Cost Savings
The cost of creating, processing, distributing, storing
and retrieving paper-based information has decreased.
Reduced Inventories And Overheads
⚫ Ecommerce need not Stock large inventory .

⚫ This is based on collecting the customer order
and then delivering through JIT (just-in-time)
manufacturing. This is particularly beneficial for
companies in the high technology sector.
Mass customization
⚫ E-commerce has revolutionized the way
consumers buy goods and services.
⚫ It allows for products and services to be customized
to the customer’s requirements.
Lower telecommunications cost
⚫ The Internet is much cheaper than value added
networks (VANs) which were based on leasing
telephone lines for the sole use of the organization
and its authorized partners.
⚫ It is also cheaper to send a fax or e-mail via
the Internet than direct dialing.
Digitisation of products and processes
⚫ Particularly in the case of software and music/video
products which can be downloaded or e-mailed
directly to customers via the Internet in digital or
electronic format.
⚫ No more 24-hour-time constraints. Businesses can be
contacted by or contact customers or suppliers at
any time.
BENEFITS OF E-COMMERCE TO CONSUMERS
1.Easy accessibility
⚫ Enables customers to shop or conduct other
transactions 24 hours a day, all year round from
almost any location.
⚫ For example, checking balances, making
payments, obtaining travel and other information.
Benefits of e-commerce to
consumers
2. More choices :
⚫ Customers can choose a wide range of productsand
customize,
⚫ Customers can buy products and services from
international suppliers.
consumers
3.Price comparisons
Customers can ‘shop’ around the world and conduct
comparisons either directly by visiting different
sites, or by visiting a single site where prices of
different sellers are exhibited.
consumers
4.Improved delivery processes
⚫ Immediate delivery of digitized or electronic

goods.
⚫ On –line packages are delivered by mail or courier.
Benefits of e-commerce to society
FLEXIBLE WORKING PRACTICES:

⚫ enhances the quality of life of people in
society, enabling them to work from home.
⚫ provides happier and less stressful
working environments.
⚫ reduces environmental pollution as fewer people have
to travel to work regularly.
BENEFITS OF E-COMMERCE TO SOCIETY
Connects people:
⚫ Enables people in developing countries and
rural areas to enjoy and access products,
services, information.
Facilitates delivery of public services:
For example, health services available over the Internet
(on-line consultation with doctors or nurses).
Transition to ecommerce in India
⚫ Commercial internet sevices in India-1995
Advantages:
1. Huge savings in time and money.
2. People can shop anywhere within
minutes.
THE INTERNET &INDIA
⚫ Current internet penetration rate in India:34%
⚫ 2011-17% internet users
Ecommerce opportunities for
industries
 E-merchandise
 E-finance
 Stock trading
 Travel & tourism
 Health care
1.E-merchandise
⚫ Ecommerce is useful for selling goods and services
electronically and moving items through distribution
channels.
eg: Internet shopping for h/w,books,clothes etc.

2.E-finance
⚫ E-commerce for banking ,debit cards , telephone
and Internet banking and mortgages
on-line.
mortgages on-line:It is a loan of money which

you get from a bank
3.Stock trading
⚫ E-commerce mortages on-line is presently used for
stock trading.
⚫ Investors will be able to understand latest trends in
stock market .
Stock market:it is a place where shares of public listed companies

are traded
• They can trade in securities at competitive rates.
Stock trading : buying and selling shares of publicly traded
companies.
4.Travel &tourism
E-commerce is bringing new business opportunities to
the global travel & tourism industry.
 Online travel sales
 Tourism related institutions
 Internet companies
5.Health care
 Rising population & increasing life expectancy has
led to a high domestic demand for health care
products and services .
 Offl ine health retailers can’t cover this services.
 Health care sector offered online health
retailers .They can provide larger consumer base
with lesser operational cost.
E-transition challenges for Indian
corporates
Classification:
(i) Internal resisting issues
(ii)External driving factors
Internal resisting issues
1.Bureaucratic resistance
2.Cultural changes
3.Lack of preparation
4.Lack of resources
1.Bureaucratic resistance:
 E-commerce may compel staff to follow

new method of operation. Hence they fear the
destabilization of existing power equations in
the organization.
 Fear among staff is a major barrier

for a transition to e-commerce.
2.Cultural changes
 Introduction of e-commerce results in conflict of

cultures in the organization because
implementation of ecommerce is done by young
talented peoples(externally recruited).
 Conflict b/w modern & traditional culture

3.Lack of preparation
 Lack of adequate preparation .
 E-commerce require a good amount of home work.

But many organizations are not seriously viewing its
transition.
4.lack of resources
⚫ Lack of funds
⚫ Non availability of expert
staff
⚫ Absence of training facilities
External driving forces:
1.Global economy
2.Strong competition
3. Market forces
4.Awareness among consumers
5.Increase expectation of
consumers 6.Government
regulations 7.Technological
changes 8.Communication
technology 9.Stay competitive
1.Global economy
 huge gap b/w the growth rate of developed

&developing nation. so more and more developed
nations are investing in every part of world.
 E-commerce is the solution for it

2.Strong competition
⚫ Business organizations & companies are

implementing new techniques every day to face the
attack from their competitors.
⚫ E-commerce-tool adopted by the companies.
3. Market forces
 corporations are encouraged to use ecommerce in

marketing and promotion to capture international
markets.
 Internet –medium for customer service & support
4.Awareness among consumers
 Internet,print media and electronic media keep

update the consumers about new products and
their rates.
5.Increase expectation of consumers
 Expectation of conumers about quality and
services are very high.
6.Government regulations
In order to regulate e-commerce business and other

Internet activities ,IT act gives various provisions
which provide a right environment the
commerce for e-
.
7.Technological changes
 perfect solution for business
8.Communication technology
 Devt of ICT-growth of e-commerce
 Faster,easier and more efficient communication.
 Less communication cost
9.Stay competitive
 customer-driving force behind an ecommerce
channel .

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Module 1:History of E-commerce & Indian

⚫ Reduce product search cost, and by creating a single,

⚫ Ecommerce need not Stock large inventory .

⚫ Immediate delivery of digitized or electronic

FLEXIBLE WORKING PRACTICES:

eg: Internet shopping for h/w,books,clothes etc.

mortgages on-line:It is a loan of money which

Stock market:it is a place where shares of public listed companies

 E-commerce may compel staff to follow

 Fear among staff is a major barrier

 Introduction of e-commerce results in conflict of

 Conflict b/w modern & traditional culture

 Lack of adequate preparation .

 E-commerce require a good amount of home work.

 huge gap b/w the growth rate of developed

 E-commerce is the solution for it

⚫ Business organizations & companies are

 corporations are encouraged to use ecommerce in

 Internet,print media and electronic media keep

In order to regulate e-commerce business and other

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