ECommerce: Business, Technology, and Society

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Introduction to E-Commerce

WWW
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Learning Objectives

• Define e-commerce and describe how it differs
  from e-business
• Identify the unique features of e-commerce
  technology and their business significance
• Describe the major types of e-commerce

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Amazon.com Before and After
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Amazon.com Before and After

• Most well-known e-commerce company
• Conceived by Jeff Bezos in 1994
• Opened in July 1995
• Four compelling reasons to shop
• Selection (1.1 million titles)
• Convenience (anytime, anywhere)
• Price (high discounts on bestsellers)
• Service (automated order confirmation, tracking,
  and shipping information)

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Amazon.com Before and After
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E-commerce vs. E-business

• E-commerce involves
• Digitally enabled commercial transactions between
  organizations and individuals.
• Digitally enabled transactions include all
  transactions mediated by digital technology
• Commercial transactions involve the exchange of
  value across organizational or individual
  boundaries in return for products or services

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E-commerce vs. E-business

• E-business involves
• Digital enablement of transactions and processes
  within a firm, involving information systems
  under the control of the firm
• E-business does not involve commercial
  transactions across organizational boundaries
  where value is exchanged

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The Difference Between E-commerce and E-Business
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Unique of E-commerce Technology and Their
Business Significance

• E-commerce
• is ubiquitous
• has global reach
• operates according to universal standards
• provides information richness
• is interactive
• increases information density
• permits personalization

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Seven Unique Features of E-commerce Technology
and Their Business Significance
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Major Types of E-Commerce

• Market relationships
• Business-to-Consumers (B2C)
• Business-to-Business (B2B)
• Consumer-to-Consumer (C2C)
• Technology-based
• Peer-to-Peer (P2P)
• Mobile Commerce (M-commerce)

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Major Types of E-Commerce
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Business-to-Consumer E-commerce

• Most commonly discussed type
• Online businesses attempt to reach individual
  consumers
• Consumers spent 65 billion in 2001.

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Business-to-Business E-commerce

• Businesses focus on sell to other businesses
• Largest form of e-commerce
• 700 billion in transactions in 2001
• Primarily involved inter-business exchanges at
  first
• Other models have developed
• e-distributors
• infomediaries
• B2B service providers

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Consumer-to-Consumer E-commerce

• Provide a way for consumers to sell to each other
• Estimated 5 billion market
• Consumer
• prepares the product for market
• places the product for auction or sale
• relies on market maker to provide catalog, search
  engine, and transaction clearing capabilities

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Peer-to-Peer E-commerce

• Enables Internet users to share files and
  computer resources
• Napster

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Mobile E-commerce

• Wireless digital devices enable transactions on
  the Web
• Uses personal digital assistants (PDAs) to
  connect
• Used most widely in Japan and Europe

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Growth of the Internet and the Web

• Created in the late 1960s
• About 350 million computers worldwide to date
• Links businesses, educational institutions,
  government agencies, and individuals
• Provides services such as e-mail, document
  transfer, newsgroups, shopping, research, instant
  messaging, music, video, and news

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Growth of the Internet and the Web

• Internet hosts are growing at a rate of 45 per
  year
• Extraordinary growth -- time to reach 30 US
  households
• Radio - 38 years
• Television - 17 years
• Internet/Web - 8 years (1993)

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The Growth of the Internet
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The Growth of Web Content
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The Growth of B2C E-Commerce
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The Growth of B2B E-Commerce
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Origins and Growth of E-Commerce

• Baxter Healthcare
• Primitive form of B2B using telephone-based modem
  to permit hospitals to reorder supplies (early
  1970s)
• PC-based remote order entry system (1980s)
• Electronic Data Interchange (EDI) standards
  developed that permitted firms to exchange
  commercial documents and conduct digital
  commercial transactions across private networks
  (1980s)

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Origins and Growth of E-Commerce

• French Minitel videotext system
• First B2C arena (1981)
• 15 million in use throughout France
• World Wide Web
• 1993 first browsers
• 1995 first banner ads

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Technology and E-Commerce in Perspective

• Internet and the Web are just two of a long list
  of technologies that have greatly change commerce
• Other technologies spawned business models and
  strategies
• Explosive early growth followed by retrenchment
  and then long-term successful exploitation of the
  technology

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Technology and E-Commerce in Perspective

• Although e-commerce has grown explosively, there
  is no guarantee it will continue to grow
• Confront own fundamental limitations
• B2C only about 1 of overall retail market
• With current growth rates, B2C will roughly equal
  the annual revenue of Wal-Mart in 2005

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Limitations of the Growth of B2CE-Commerce
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Web Access Via Wireless Devices in the United
States
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Amounts Raised by Venture-Backed Internet
Companies in 1996-2000
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Insight on BusinessA Short History of dot.com
IPOS

• Between 1998 and 2000 venture capitalists poured
  an estimated 120 billion into approximately
  12,450 dot.com start-up ventures
• Investment bankers took 1,262 of these companies
  public in IPOS
• IPO shares were targeted to open around 15 per
  share, and it was not uncommon for them to be
  trading at 45 a share or more later the same
  trading day

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Understanding E-Commerce Organizing Themes

• Technology Infrastructure
• development and mastery of digital computing and
  communications technology
• Business Basic Concepts
• new technologies present businesses and
  entrepreneurs with new ways of organizing
  production and transacting business
• Society Taming the Juggernaught
• global nature of e-commerce poses public policy
  issues of equity, equal access, content
  regulation, and taxation

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Disciplines Concerned with E-Commerce