E-Commerce notes

● Concept of e-commerce; 

● Evolution of e-commerce;

● Types of e-commerce 

● classification of  e-commerce  

● Advantages and Disadvantages of e-commerce

INTRODUCTION E-Commerce -

Internet has revolutionized all aspects of our existence. If one has access to an internet enabled digital device such as a desktop, laptop, tablet or a smartphone, then world seems to be such a small place. This easy access to various kinds of information, services, and product, which is now just a click away, has particularly influenced the way the businesses are transacted using Internet. Businesses, also called ‘commerce’, is fundamentally a cost-effective movement involving buying and selling of goods between a buyer and a seller. For example, in a traditional format, a buyer would enter a shop, examine the product, select a particular product and pay for it. To complete this business transaction, the seller too, at his/her end would carry out several business transactions like issuing an invoice, delivering the product and so on. The seller would also undertake several other business functions including management of inventory, financial records, logistics, and so on. Now, with advent and proliferation of Internet, all such business functions, undertaken both by the buyer and the seller, could be smoothly undertaken electronically using Internet by creating a website or a web portal. Buyers and the sellers come together on this specially designed website or web-portal and their transactions cross physical boundaries of the firm.  

What Is E-Commerce ? -

As is obvious, the term e-commerce is an abbreviated term for ‘electronic commerce’, which refers to the process of undertaking business transactions over internet. Almost anything - ranging from basic items such as breads or soaps, to high end expensive products such as computers or cars and even highly specialised services such as sale of second-hand products to purchase of property, are all available on the related e-commerce web-portals. Depending on the products and services available, e-commerce web-portals could be understood to be ‘Generic’ and ‘Specific’. Examples of generic ecommerce portals are ‘FlipCart’, ‘Amazon’, where one could buy any product, ranging from furniture to flowers. On the other hand ‘Big Basket’ could be termed as a specific e-commerce web portal as the customer can order for only grocery related products on this web portal. As we have understood earlier, e-commerce enables buyers to undertake all steps of a purchase decision with the support of various features provided by an e-commerce software. Majority of the business steps are undertaken electronically and not physically. No (or negligible) paperwork is required, nor is any physical contact necessary. Such revolutionary characteristics of ecommerce have made it extremely popular, particularly in present pandemic times. 

E-Commerce Web Portal 

A web portal, also referred only as a ‘portal’, is an integrated collection of webpages on a particular theme and serves as a single-stop window for that theme. Unlike a website, a portal provides not just the desired information at a single point but also provides other facilities such as an internal search engine, personalized logins and emails to its regular visitors, online forums and much more. All these features are accessible to the visitor in a user-friendly manner. In several ways, a web-portal could be considered as a collection of several interrelated websites to provide users a more cohesive experience on that theme, for which it is designated. A web-portal that is specially designed to host the products and services details is called an ‘e-commerce web-portal’. It is only through a well-designed web-portal that sellers can provide its buyers with a wide set of option of products, price-choices, and related services that they offer, using it as an online shopping arena. Therefore, an e-commerce web portal provides a range of online activities related to selling of services as well as products. All these activities are undertaken and managed using specially designed ‘ecommerce software’ that serves as its ‘driving force’. 

1.2.2 E-Commerce Software An e-commerce software typically ensures that the entire commercial cycle of buying and selling over the Internet is conducted smoothly, both for the buyer as well as the seller. For instance, a typical e-commerce software provides several features including a dedicated engine for searching various products, vendors and/or price preferences for a buyer. It further helps a buyer to select and choose the items to purchase. It enables secure monetary transactions to complete the purchase. While helping a buyer to undertake these steps, an e-commerce software also helps the buyer to collate multiple orders in a dedicated basket, additions/deletions/modifications are permitted to be undertaken anytime on this basket. This software even manages address details and order history for each of its buyers, provides multi-channel product booking/delivery and much more. By and large, it is the role of the e-commerce software to not just help to conduct the entire business smoothly but also to provide various facilities and utilities to both the buyer and the seller that would evoke trust in them to continue their transactions on these portals. 

1.2.3 E-Commerce APIs All e-commerce related technologies and features are connected to each other using Application Programming Interfaces (APIs). APIs are ready-to-use, computing interfaces/software intermediaries that help to exchange information from one feature to another, from one software to another, from one platform to another. For example, using a pre-designed e-commerce API, an e-commerce seller can smoothly integrate the portal with a shipping portal and easily ‘import’ data of the shipments and orders lying on that shipping portal (called Shipping APIs) and so on. Similarly, there are scores of ecommerce APIs available for getting product details (Product Information APIs), for tracking the inventory management (Inventory APIs), for creating buyer baskets (Order APIs). Similarly, there are Authentication APIs, Catalog APIs, Marketing APIs, Payment APIs and so on. All data exchanges are, therefore, smoothly undertaken by ready-to-use APIs without the explicit need of programming. 

1.2.4 M-Commerce and Multi-channel Commerce All software features, that are available on an e-commerce web-portal are popularly accessible through mobile-friendly application interfaces , called apps ( a common abbreviation for Applications). Apart from a web-portal or a mobile phone, several other channels, such as social-media accounts and even physical outlets, too are configured to provide ease-of-access to the buyers. Buyers can select or specify their choices of all the channels that are already provided on the online shopping account. Multichannel commerce extensively employs e-mails and social media as their digital marketing channels. Similarly, sales could be carried out by a seller using either a webportal alone or coupled with a physical, brick-and-mortar store outlets too. The whole purpose of multichannel commerce is to interact in multiple ways with the buyers, which has led to several kinds of e-commerce models (to be covered in the subsequent section). 

1.2.5 Use of Emerging Technologies in e-Commerce These online accounts are not just routinely programmed but are mostly personalized and contextualized for each individual, using advance programming features provided by Artificial Intelligence (AI) / Machine Learning (ML) techniques. Further with gradual advent, e-commerce web portals now also employ other emerging technologies like Augmented reality (AR), Virtual reality (VR), Block chain and many more. The purpose of employing emerging technologies in an e-commerce web portal is to provide its customers with an enhanced user experience (UX) and comfortable user interface (UI). Overall, such kind of Internet based business ecosystem that comprises of an e-commerce web-portal, e-commerce software, e-commerce ‘app’ and ecommerce APIs permit various buyers and sellers to undertake a business transaction comfortably and securely, is referred as ‘e-commerce’. 

WHY E-COMMERCE ?

At present, if we look around us, the books we read, the dresses we wear, the grocery we consume , the new furniture additions we have at our homes / offices, have been primarily bought from e-commerce web portals . Undoubtedly, e-commerce is emerging as a key field for business expansion as it is economical, accessible, and easy to use. It provides choices and improved service delivery options to the buyers. Buyers do not have to invest in travelling to various shops to compare and buy the ‘best’ product. Similarly, a seller does not have to establish a ‘brick and mortar’- physical infrastructure for selling any product/ service and can also access more buyers at a much lesser cost. In fact, both buyers and sellers can transact on e-commerce portal, inconsequential of their location or size of the transaction More particularly, e-commerce portals provide buyers an added advantage of comparing varied prices and features of products available on any marketplace. Competition has tremendously increased, and business models used by companies in conducting their businesses have been completely redefined. This has led to reengineering and digital transformation of all the related business processes such as inventory management, marketing, and customer management and so on. It offers opportunities on a universal basis to give a push to and expand business processes, while developing new models and markets for business organizations across the board. It is a comparatively new and emerging concept, and hence can transform conventional forms of economic activities, not just at an organization level but also at the national level. Its impact is already visible in large scale sectors such as finance, retail trade and even in public service delivery including education, health, transportation etc. Indeed e-commerce has made business more competitive, more-fun and surely more easy and diverse. 

EVOLUTION OF E-COMMERCE 

It was in the year 1991 that the ease of use of Internet was established by the design of World Wide Web. In the year 1994, Pizza Hut was the first company to offer its Pizza online on its own site and almost after a gap of a year eBay is was found. Initially it was considered only as the process of online submission of supporting documents when a transaction was undertaken. From the year 1995 onwards, rise of e-commerce, earlier known as “web-commerce” became more prominent. This primarily happened due to the global use and adoption of Internet. This was the time when several retail  websites had been planned and launched for sale/purchase of goods and services over internet. However, this was not only to bounce back in next five years consistent success. In the late 1990s (1999), the dot.com bubble burst thereafter. More particularly, by the year 2005, the increase in online purchases on certain days became so much that the term “Cyber Mondays” was coined . Based on review of literature, the initial milestones in e-commerce evolution are detailed herewith.

The growth of social media over the past few years too has ensured that the relationship between the sellers and the buyers is more engaging and more extensive. The Present : At present, in the year 2023, Internet and digital devices such as smart phones and tablets have expanded the application of e-commerce to include global buyers and sellers. Most businesses, now have an online presence intensifying the price competition. Newer channels of distribution have been created leading to development of alternative business models for conducting transactions. The structure and nature of business firms have also changed. Promotions and online advertising have also become direct and targeted at the buyer. 

As a result of all these changes, there is marked transformation in the prevalent trade practices, trade techniques, and standards having direct impact on the marketplace. Indeed, e-commerce brings out the possibility of better organ businesses, which offers not only the replacement of existing business strategies, but also the viability of complimentary business models to the existing ones. We shall study that in the subsequent section 

TYPES OF E-COMMERCE 

Many different models of electronic transactions exist in the world of e commerce today. Generally, these are classified as Business), 

B2C (Business-to-Consumer), 

C2C (Consumer C2B (Consumer-to-Business), Administration), 

C2A (Consumer-to Direct to consumer (D2C) This classification is based on the nature of their transactions elaborated upon below: 

1.5.1 B2B: Business-to-Business Model of E- Commerce

In business-to-business (B2B) type of e-commerce system, companies that are involved in the supply chain, such as a manufacturer selling a product to a wholesaler, the wholesaler selling the product to a retailer, all come together to conduct business with each other using a common portal. In such an instance, the manufacturer could have a website / web portal that could also be used by the wholesaler to place orders for the product; this order could

then be processed and sent to the wholesaler. The wholesaler could further

use the same portal to advertise the product or take orders from a retailer for the same. This kind of business is called B2B type of e-commerce 

1.5.2   B2C: Business-to-Consumer Model of E-Commerce

This model of e-commerce is understood to be the process where a company or business sells their goods, services and products directly to the buyer using Internet. The buyer has the liberty of browsing through the Internet to filter, check and view products and then order them. After receiving an order, the company proceeds to process and send the order directly to the buyer. shows the process followed in this model, the buyer can surf the web portals or mobile applications of the seller companies and directly order the products. After receiving the order, the seller company processes the same before sending it to the buyer. Hence, in this ‘B2C’ model of e-commerce, the company tries to sell a product directly to the buyer.

Popular examples of B2C are "indiamart",'Groofer', ‘Amazon’, and ‘Flipkart’. It is important to note that majority of the e-commerce companies do not manufacture products or produce these services, but rather list them on their website/ web portal for payments. 

1.5.3   C2C: Consumer-to-Consumer Model of E-Commerce

This form of e-commerce is understood to be a model where consumers sell goods, services and products to another consumer using web technologies and the internet. This model comprises the selling of a wide range of products including movable assets and properties.

Companies such as ‘Quicker’, ‘OLX’ and so on are some examples of this model of C2C e-commerce.

1.5.4   C2B: Consumer-to-Business Model of E-Commerce

Unlike ‘B2C’ model, it is a type of commerce where consumers themselves provide goods, services and products to an organization (or business) as illustrated below.

There is another version of this model; in this version, the consumer create and utilize their own social media profiles (blogs etc.) to link back to the product sold on the company's ecommerce website / web portal, thereby consumers facilitates the sale of company’s products and are usually rewarded by these companies for doing so.

Business-to-government, also known as business-to-administration, refers to trade between the business sector as a supplier and a government body as a customer. This kind of e-commerce refers to the situation where businesses conduct commerce with the government; it is essentially a part of the ‘B2B’ model.

B2G business, as illustrated above ( Fig1.8) , is generally also referred to as public sector marketing, which indicates the marketing of products and services to various government agencies and various levels. The business network provides a platform to businesses to bid on government opportunities such as auctions, tenders and application submission and so on for various services etc. These activities are increasingly being conducted through the internet using real time bidding. “ Government e-Marketplace - GEM” portal by Government of India, is an example of the same.

1.5.6 C2A: Consumer-to-Administration Model of E-Commerce

The model refers to the e-commerce process followed by the consumers when interacting directly with the government agencies. This may be in the form of payments, information access requests or feedback to various agencies among other things. Consumer to government/administration model for e-commerce is the ideal answer for establishing communication between the consumers and the government.

1.5.7   P2P: Peer-to-Peer Model of E-Commerce

P2P model is essentially a networked model of commerce without any intermediary. It is therefore a distributed platform enabling different individuals to partake in transactions with each other without an in-between third party. This model of network arrangement is different from the client server model where communication takes place from the central server.

P2P model is essentially a networked model of commerce without any intermediary. It is therefore a distributed platform enabling different individuals to partake in transactions with each other without an in-between third party. This model of network arrangement is different from the client server model where communication takes place from the central server 

The absence of a ‘third party’ may increase the risk of service not being delivered, service being of poor quality, delay or refusal of payment as well as exploitation of asymmetric information. This added risk generally results in increased transaction costs for the parties involved. Another variation of ‘P2P’ models could be without any economic transactions for buying and selling, but simply provide a platform or individuals to interact for various ends. These services may be operated as free non-profit services or generate revenue by advertising to users or by selling users data. Some examples of ‘P2P’ services are open-source software, online marketplaces, crypto currency and Blockchain, ridesharing and so on.

10.5.8 D2C: Direct-to-Consumer Model of E-Commerce

Direct-to-consumer refers to selling products in a straight line to customers, bypassing any third-party retailers, wholesalers, or any other middlemen.

Direct-to-consumer companies are transforming how people shop. In the progression, these brands, spanning everything from detergent to sneakers, are radically changing consumer preferences and expectations. In addition to establish a direct relationship with customers, these brands are building a community of ambassadors on social media.

D2C brands are usually sold online only and specialize in a specific product category: Casper, Warby Parker, Everlane, Harry’s, Outdoor Voices, AWAY, and Dollar Shave Club.

1.0 ADVANTAGES AND DISADVANTAGES OF E-COMMERCE

 There are no doubts in the minds of the stakeholders of e-Commerce about its ability to make businesses more profitable due to its capacity to sell goods, services online. At the same time, there are multiple factors to keep in mind too.

Advantages 

The e-shop is open 24 hours a day, 7 days a week

Customers don’t need to stand in queues of stores

Larger product selection. . 

Possibility to shop from anywhere. 

Attractive discounts are offered. 

Disadvantages.

When ordering a product online, it often takes longer delivery time and more shipping charges. 

Repaying your online purchase may be more difficult than buying a traditional store. 

Online shopping will not be able to measure goods. 

Money security of the customers depend on their own vigilance. 

Lack of privacy. 

It is necessary to look upon its advantages and disadvantages to be able to rationally decide and make strategic decisions. 

1.6.1 Advantages of E-Commerce The various advantages of E-Commerce are discussed below: 

1. Accelerated buying process for saving time: One of the problems conventional stores face is the delay in buying by a consumer during the problem of accessing a physical store which may or may not be available. E-Commerce overcomes this hurdle by aiding the consumer avail the specific product at their own pace and with ease. It helps the consumer choose from a wide range of products by making available goods from other chained stores as well, widening the net of available goods as well fast forward the process to process payments. With the availability of a wide range of options from a spectrum of vendors, eCommerce not only aids in diversification of the marketplace, but also helps access the online global market. All these processes also aid in reducing travel and delivery time of the products.

2. Personalised store as per Consumer preference: A major asset of conducting online business is the enhanced shopping experience. As each user is introduced to a different first page based on their location and advanced search for conducting a purchase. The consumer's history of purchases also reflects in the personalized experience of online commerce. This allows consumers to avail special services like benefits and discounts due to their loyalty, order history and so on, hence fulfilling customer expectations. 

3. Reduce recurring cost while hiring virtual support resources: One of the key factors that aids in reducing cost when it comes to e-commerce is the outsourcing of tasks to even different countries or employees for use to many other e-commerce businesses. This makes the presence of a company possible in multiple locations possible at a fraction of the cost of physical presence. 

4. Customers retargeting is easier: Retargeting a customer is a key part of retaining a customer base. Below are some of the techniques which can be used to retarget customers:- 

● It is a good strategy to share a coupon when customers leave the checkout page. 

● By sending emails which are pitching upsell and cross-sell. 

● By redirecting the consumer to the desired web page or targeted advertisement based on Consumer data. 

5. Easier to encourage an impulse buy: Impulse buying is an important tool in the arsenal of the sellers where it works as a path for consumers to act as per their choices towards particular products. It plays on the psychological behaviour of humans where some of us have personality traits that encourage impulse buying. It is often because of the urge to feel good, and at the same time the attempt at deriving emotional value from certain products makes them feel good; or things that have an emotional value. 

6. Reviews Available: The review system allows the consumer to make decisions as well as pass judgement on a wide range of variables. The presence of positive comments or a higher rating of one's business not only adds value, it also builds trust of the consumer on the product as well as the business. This not only projects the business as transparent, it helps the consumer to voice their opinion about their choices in products. 

7. Detailed information available for the consumer: The availability of detailed information is one of the key strengths of e-commerce. All consumers are always seeking detailed insights into the product they are interested in as it aids them in making an informed decision. The availability of information allows the consumer to gauge the relevance and value of the product or service according to their needs. It is the detailed description of the product that helps the consumer to make a confident choice according to their requirements. 

8. Quality service at reasonably low operation cost: Operational costs are a major expenditure when it comes to asserting the physical presence of any businesses. Usually for a business to maintain a physical presence, they have to pay a lot of money in the form of rent, salaries for employees, maintenance and other expenses. E-Commerce plays an important role in reducing the cost of operations significantly by eliminating a significant part of that expense as the business does not have to rely on a physical presence to provide quality service. 

9. Quick and affordable marketing: E-commerce provides a cost effective way to businesses for marketing anything effectively. This is in contrast to the expensive and time consuming processes used in physical marketing practices. Some pointers for understanding marketing techniques are listed below: 

● Availability of quality content for attracting the customers, it is an important factor for being more visible or noticeable in the market. 

● Creative marketing videos explaining the product and services for better understanding. 

● Social networking is important for asserting one's presence everywhere and helps in the development of popularity for a product. 

● Employing different tricks to reach the customers, which is easy through digital marketing techniques. 10. E-Commerce has flexibility with 24/7 service capability: Flexibility in terms of both accessibility and affordability are major areas where Ecommerce is powerful than conventional stores and retail spaces as it allows the service to consumer 24/7. It is not only the capability of providing a shopping option round the clock, E-Commerce also helps consumers with chat support, provide recommendations and identify products being sought by the consumer at any time and place. 

1.6.2 Disadvantages of E-Commerce The various disadvantages of E-Commerce are discussed below: 

1. Lack of personal touch: One of the thing that play a huge role in consumer satisfaction is the ability to personally view and touch any product. It is an important factor when it comes to customer satisfaction as even the best detailed, expressed and explained products can fail to convince and attract the consumer.

 2. Unsure about the quality: When it comes to purchasing products online, it is difficult for the consumer to determine its quality. It is also common knowledge that there has been malpractice when it comes to fake reviews to artificially boost sales and of a low quality or faulty product. 

3. Late Delivery: One of the assurances of businesses practicing ECommerce is the delivery time of the product. There are a whole range of issues that can arise when it comes to the delivery of the purchased product; hence businesses avoid giving exact delivery dates and try providing windows for the same. Many times, this results in the consumer waiting for the product for more than the assured period of time. 

4. Difficulty in purchasing some products: Some precious products such as gold and customised products like made-to-order furniture (because of measurement issues) are difficult to be purchased online . Trust is an important factor when it comes to these products, and the lack of ability to verify them physically could serve as a hindrance in purchasing such products online. 

5. Site crash issues: There is still some uncertainty when it comes to the functioning of servers and the availability of round the clock and quality internet service. This can create a lot of hindrance from sales perspective, and can result in loss of consumers as they might have to wait for an unspecified period of time to proceed with transactions. 6. Cybercrime and Data privacy issues: Last but not the least, ecommerce is prone to cyber security threats as well as data breaches typical to the cyber world. E-commerce web portals than any other online information, as these sites/portals store users’ data including financial and other personal details of the buyers and the sellers. Hence there is a constant challenge of securing this data from a wide range of security challenges including malware, hacking, ransom ware as well as misuse of personal sensitive information / preferences for targeted marketing / campaigning etc.com

Conclusion

E-commerce is a concept that explains and elaborates upon the idea of buying and selling of products, goods, services and information using computer including Internet. There are various advantages of e-commerce for the buyers such as it provides detailed information, accelerates buying process, personalises store as per their preferences, reduces recurring cost, while hiring virtual support resources for the consumer, etc. For the sellers, it offers opportunities to expand business processes, reach new customers, and reduce costs while developing new models and markets for business organizations across the board. Generally, there are eight different types of e-commerce models namely; B2B (Business-to-Business), B2C (Business-to-Consumer), C2C (Consumer-to Consumer), C2B (Consumer-to-Business), B2G (Business-to-Government/ Administration), C2A (Consumer-to-Administration) and P2P (Peer-to-Peer) and D2C (Direct-to-Consumer). There are various disadvantages of e-commerce such as it lacks personal touch, when it comes to purchasing products online, it is difficult for the consumer to determine its quality. E-commerce is prone to cybercrime and unauthorised data access typical to the cyber world.com

 ● B2B (Business-to-Business): This form of E-Commerce is understood to be of the kind that takes place between companies. In the Business-to-Business type of E-Commerce system, the companies involved come together to conduct business with each other.

 ● B2C (Business-to-Consumer): This model of E-Commerce is understood to be the process where a company or business sells their goods, services and products directly to the consumer via the internet. 

● C2A (Consumer-to-Administration): The model refers to the ECommerce process followed by the consumers when interacting directly with the government agencies. 

● C2B (Consumer-to-Business):It is a type of commerce where a consumer provides goods, services and products to an organization or business. 

● C2C (Consumer-to-Consumer): This form of E-Commerce is understood to be a model where consumers sell goods, services and products to another consumer via web technologies and the internet. 

● D2C (Direct-to-Consumer): The D2C e-commerce model quite literally “cuts out” the middleman. D2C e-commerce is when the manufacturer/ producer sells its products/produce directly to consumers from their web store. 

● P2P (Peer-to-Peer): This model of E-governance refers to a distributed platform enabling different individuals to partake in transactions with each other without an intermediary third party via a P2P service.