Ecommerce Digital Markets, Digital Goods

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EcommerceDigital Markets, Digital Goods

• Business Information Systems
• Laudon Laudon, Ch.9 (P.296)

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E-Commerce Today

• E-commerce the use of the Internet and Web to
  transact business digitally enabled transactions
• Began in 1995 with Netscape.com accepted its
  first add and grew exponentially still growing
  at an annual rate of 25 percent
• Companies that survived the dot-com bubble burst
  and now thrive
• The e-commerce revolution is still in its early
  stages

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The Growth of E-Commerce
Figure 9-1
Retail e-commerce revenues have grown
exponentially since 1995 and have only recently
slowed to a very rapid 25 percent annual
increase, which is projected to remain the same
until 2008.
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Why E-commerce Is Different?
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Why E-commerce Is Different

• Ubiquity (It is available everywhere at all time)
• Global reach(Potential market size more than 1
  billion)
• Universal standards (market entry costs, search
  costs)
• Richness (complexity and content of a message)
  Richness versus Reach

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Why E-commerce Is Different

• Interactivity
• Information density (price transparency, cost
  transparency, price discrimination)
• Personalization/Customization(Based on consumers
  purchases and behavior)

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Key Concepts in E-commerce

• Information symmetry
• Flexibility due to lower search cost, transaction
  costs, menu costs(merchants costs of changing
  prices) and dynamic pricing( The price of product
  varies depending on the demand characteristics or
  supply situation)
• Disintermediation

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Key Concepts in E-commerce

• Digital goods delivered over a digital network
• Internet business models (Virtual store front,
  Information broker, Transaction broker, Online
  market place, Content place, Social network,
  Portal, Service provider )

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Internet Business Models

• Communication and Social Networking (eBay,
  GoIndustry , banner ads, pop-up) Social
  Shopping(Kaboodle, ThisNext, StyleHive)
• Digital content, entertainment, and services (New
  York Times, Online games,Movies,
  music,podcasting, vcast)

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Categories of Electronic Commerce

• Business-to-consumer (B2C)
• Business-to-business (B2B)
• Consumer-to-consumer (C2C)
• Mobile commerce (m-commerce)

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Business-to-Business Electronic Commerce

• Procurement/E-procurement
• Catalogs, Auctions
• Vendor-managed inventory systems
• Automated purchasing Electronic Data Interchange
• Payment systems
• Private industrial networks (Private Exchanges)
• E.g. Network of all suppliers of Wal-Mart
• Net marketplaces (or Exchanges)
• Across industries
• Within a specific Industry (e.g. FoodTrader.com)

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Electronic Data Interchange (EDI)
Figure 9-5
Companies use EDI to automate transactions for
B2B e-commerce and continuous inventory
replenishment. Suppliers can automatically send
data about shipments to purchasing firms. The
purchasing firms can use EDI to provide
production and inventory requirements and payment
data to suppliers.
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M-Commerce Services and Applications

• Mobile bill payment
• Banking and financial services
• Wireless advertising
• Location-based services
• Games and entertainment

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M-Commerce Challenges

• Awkwardness of keyboards and screens
• Data transfer speeds
• Cost
• Limited memory and power supplies on devices
• Content

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Types of Electronic Payment Systems

• Digital credit card payment systems (eCharge)
• Digital wallet (QWallet)
• Shoppers dont need to enter their address
  and card information repeatedly.
• Micropayment
• Accumulated balance digital payment systems
• (QPass)
• Stored value payment systems (eCount)
• Payment is based on the value stored in an
  online digital account.

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Types of Electronic Payment Systems

• Peer-to-peer payment systems (e.g. PayPal)
• Digital checking payment systems (e.g. eCheck)
• Electronic billing presentment and payment
  systems (e.g. your banks online bill payment
  feature CheckFree consolidates bills)