Technical Environment

1.5.1 Technical Environment

The presence of e-commerce not only influences the traditional trade process but changes the components of market to a large extent. Traditionally, market transaction chain is formed in the exchange process of commodity, service and currency. At present, owing to e-commerce, information is reinforced and brings about information of commodity, information service, electronic money etc. Though the essence of e-commerce remains unchanged, some links in the transaction process have changed because of the changes of e-commerce carriers. From the perspective of individual enterprise, trade method has taken some changes, while from the perspective of the whole business environment, the whole business has taken on a new look, for some business losing opportunities while some new one grasping the opportunities, and some industries decline while some flourishing.

Figure 1.15 briefly shows the framework and principal factors in the environment. As the figure shows that, e-commerce consists of four levels (Internet infrastructure, multimedia and online publishing infrastructure, newspaper and media infrastructure, newspaper and information communication infrastructure and business service infrastructure) and two mainstays (public policies, laws, privacy, and other standards of various technologies).

Figure 1.15 Application of e-commerce

Introduction to E-commerce

1. Internet infrastructure

This level is made up of the basic hardware infrastructure to realize e-commerce. The infrastructures are systems for information transmission, including remote communication network, cable TV network, telecommunication network and Internet etc. The above mentioned networks provide the transmission line for e-commerce, while at present most applications of e-commerce are based on Internet consisted of telephones, modems, hubs, routers, SPC exchange and cable TV.

2. Multimedia and online publication

The increasing perfection of Internet infrastructure makes the transmission of information through network possible, such as texts, sounds and images etc. At present, the latest craze for publishing on WWW is by HTML, by which the multimedia contents can be easy to search and expressive. In this way can enterprises publish various commercial information on Internet by homepage and e-mails etc., and can clients obtain information needed by means of online search tools.

3. Newspapers and information communication infrastructure

This level mainly supplies tools and methods to transmit information. It is mainly in the following two ways:

ķ Non-formatted data communication. For example, information is transmitted to people by making use of fax and e-mails, in which man shall take part.

ĸ Formatted data communication. For example, information is transmitted to machines automatically by EDI, in which man shall not take part.

4. Commercial service infrastructure

This level is mainly for realizing standard online commercial business service for the sake of convenience. The above service will be used by all enterprises and persons in doing business, including establishment of commodity catalog/price list, electronic payment, secure transmission of commercial information, authentification of legality of both sellers and buyers.

But for the e-commerce, the transmission of information shall meet the requirement of e-commerce and provide a secure authentification mechanism to guarantee the data are reliable and undeniable . When disputes arise, appropriate proof can be submitted. The sixty-four-dollar question is the safety of electronic payment that will be dealt with in details in latter chapters. Presently, many technologies are for this purpose, such as password, digital certificate, and SET protocol.

5. Public policies, laws and privacy

Public policies comprise the following policies centering on e-commerce, which

1 Fundamentals of E-commerce

shall be worked out by government. They are taxation regulations, information pricing, information access fee, information transmission cost, and privacy etc.

Laws maintain the regular operation of e-commerce. Accordingly the irregular activities will suffer sanction of laws. From the perspective of law, authentification of e-commerce refers to the reliability and security of data and products involved in e-commerce. Because e-commerce is same as the traditional trade, a serious social activity, two parties involved in e-commerce shall join in the market with true identity, and provide real information, that is the real e-commerce. The security of e-commerce refers to the parties involved are in duty bound to keep the documents/products of the other party secret when not authorized to give publicity to them, for these documents and products are all real. The first step of establishing e-commerce law is to establish the system of e-commerce authentification. Without laws, any system of e-commerce authentification is only an empty promise. Therefore, American government has enacted The Framework for Global E-commerce; Russia, Germany, and U.K etc. have enacted in succession many regulations concerned. The United Nation Trade Organization passed E-commerce Demonstration in 1996, and Chinese government is speeding up to lay down the E-commerce Law, which undoubtedly will speedup the sound development of e-commerce in China.

Authentification of e-commerce is far from perfect only with corresponding laws. In other words, the participation of the government is of necessity by means of Internet to manage e-commerce. In e-commerce transaction, the privacy of an enterprise covers its product price, channels for purchasing and selling goods, promotion methods etc. As regard to personal privacy, it is related to one’s name, image, gender, identify and so on.

6. Technology standard

Technology standard is the basis of information releasing and transmission and the guarantee of agreement of online information. Furthermore, it defines the technology details of customer interface, transport protocol, releasing information standard, security protocol and so forth. From the perspective of the whole network environment, standard is of significance for compatibility and universality. This can be compared to adopting different voltages to transfer electronic current and different systems for video frequency signal transmission so as to confine the universality of many products in the world. Similar problems have arisen in e-commerce, such as EDI standard, and ebXML standard. To our delight, some international credit organizations as VISA, MasterCard with all social circles have worked out SET protocol for secure e-payment.