Introduction to e Commerce e-commerce e-commerce e-commerce(1)
Introduction to E-Commerce and E-Business
___________________________________________________________________________________________
Technical University Berlin
Foawziah Naseri
Huma Yari
August 2012
1. Abstract
In this paper we tried to analyze the contribution of e-commerce and e-business in
general. This paper holds valuable information that must be interesting for readers who
are interested in terms e-commerce and e-business. Electronic commerce facilitates
many way for consumers and businesses such as on-line shopping which applies ecommerce and easily can deliver the products to the markets unlike traditional
commerce that is carried out physically with effort of a person to go and get products.
In some cases e-commerce is secure and still there are challenges to improve the
security and make the customers confident. The purpose of this research was to
determine the current level of e-commerce in general and in some causes in
developing countries.
This paper is written by two persons. Actually, we both worked and studied together, but
all the introduction and type of e-commerce is written by Foawziah Naseri and the
explanation of the other terminologies are written by Huma Yari.
2. Introduction
The world seeks to progress their governing and strategy environment to simplify ecommerce. At first, the information infrastructure should be improved. This includes
improving access to telecommunications and Internet facilities at the cost, reliability and
speed is needed for e-commerce.
E-commerce is a key factor in business to exchange information and maintaining
business transaction via telecommunication network. E-commerce has a wide range of
economic and other solicitations, like broadcasting and interchange of digital data,
electronic payment and electronic supplies exchange activities. It affects to both the
sale of things and service transport and development of digital goods and services. eBusiness marks a company visions, strategy and operations. It is beyond the
technology. Furthermost businesses have opened the procedure of transformation
inside of e-business by financing in email, Intranet and a web presence.
3. What is e-business and e-commerce?
e-Business mentions to all methods of electronic business procedures, involving ecommerce, the business of goods and skills via electronic media, like web. Trades,
1
which are the e-Business, are committed, great with stockholders in the growth. These
companies make losses are acceptable in e-business. e-Business indicates utilization of
ICT to increase productivity in trade operations, with point to interior and exterior
procedures. Simply e-business can deal to help business.
Electronic commerce is a new business and commerce is enhanced. e-Business and
commerce both involve the on-line purchasing and selling goods. It is a business deal
that proceeds via digital routes over a network. E-commerce allows technology and
business objects to spread up the correctness and effectiveness of business
management. Several organizations and entities are observing to the web as the
complete foundation for information, marketing, services, business and
communications. For instance, over the web application business handles the price of
goods, tools and information switched over the Internet and growth each year. Ecommerce is an application of present, information and communication technologies to
handle trade. E-commerce contains accessible technologies like fax, land-line
telephone, but ICT offers most possibility for small businesses, mobile phones,
electronic mail and other Internet-based services. The following point gives some
examples and explains, when an enterprise is doing e-business. [5]
•
It is able to connect electronically associates, consumers and dealers through
dealing .
•
It has the ability to communicate automatically with other organizations to order
products and facilities.
•
Sells products and purchase using a website.
•
Using web to find information, like costs and reviews of products.
•
Using the web for research, like latest manufacturing trends.
•
To provide information about its products and services, it uses website.
•
Internet is used for on-line investment and for payment (billing). [5]
4. Type of E-commerce
E-commerce is the process of buying and selling of various products and services by
businesses through the Internet. It deals various kind of business concern, from retail
site of the consumer, which includes auction. The main focus is to concentrate on
business substitutes involving goods and services between various corporations.
Generally, e-commerce is fragmented into four principal categories: Business-toBusiness (B2B), Business-to-Consumer(B2C),Consumer-to-Business(C2B), Consumerto-Consumer(C2C),Peer-to-Peer(P2P) and m-Commerce .
4.1. Business to Business (B2B)
B2B discusses the electronic commerce between businesses and also delivery chain
technology and currently, it is the major and most popular e-commerce technology.
Internet stages have given the chance to significantly all steps of the operations and
made it speedy. For instance, HP sells computers and other linked accessories on-line,
2
but does not manufacture all those products. In order to sell those products, they first
have to purchase them from special businesses. Therefore B2B is the best way
processes a recognized working association and it is a better solution to deliver. [2]
4.2. Business to Consumer (B2C)
As the name indicates, it is the standard which is involved with businesses and
consumers. This is the best common e-commerce part. On-line trades are sold to single
consumer. The fundamental idea behind this type is, that the on-line suppliers can sell
their goods to the on-line customer by using clear documents, which is ready via several
on-line selling tools. For instance, an on-line open source giving free software and
selling some software to customer is following B2C model. [2]
4.3. Consumer to Consumer (C2C)
It enables the on-line business of properties or services between two people. Though
there is no visible transitional between, the gatherings can not transmit the dealings
without the stage, which is afforded by the on-line promote reason like amazon. [2]
4.4. Peer to Peer (P2P)
It is a technology which supports people to directly assign PC collections and computer
supplies with any main web server. The necessary software should be installed so that
to be able to communicate on the common program. This type of e-commerce has
totally low income invention as from the foundation it has been tending to the open
tradition, which it sometimes got entangled in cyber laws. [2]
4.5. Consumer to Business (C2B)
Consumers request certain goods or facilities from corresponding businesses by giving
themselves as a customer group. Example of this type is communicating a visit and
travel machinist through their website for buying a vacation bundle as well as such sites
as CTB and SpeakOut.com. These sites require consumers with market strategies and
also are used by businesses to improve understanding into customer desires. [2]
4.5. m‐Commerce
This is the use of mobile devices for managing the communications. The mobile device
owners can communicate to each other and can manage the business. Similar the web
company and development companies adjust the websites to be good design properly
on mobile devices. As well, there are some other types of e-commerce business such
as; Business-to-Employee (B2E), Government-to-Business (G2B) and Government-toCitizen (G2C). [2]
5. E-commerce Infrastructure
Many studies have been done and considered at basic infrastructure requirements (e.g.
security interests, payment problems, network security, Internet access, electricity
problem network economic problem and education problems) for e-commerce in all over
3
the world ,specially in developing countries. Some developing countries do not have any
elements distributed between network access, network society, network professionals
and network policy as area concern.The electronic commerce infrastructure in
development authority of Singapore (IDA) has been described that key mechanisms of
this infrastructure contains frame services, like network protocols, email, information
exchange, source payment services and etc. e-Business is quiet young segment
through rising tasks. Development in dissimilar fragments of the world is likely different;
the essential mutual practices are not still defined.
6. Internet and The Digital Economy
The Internet or we can say a network of networks is the essential item of ICT in the
economy. It is an affective element that people connect with each other, getting
information, study, do business, and interrelate socially. The World Wide Web, a main
factor of the Internet, has provided the graphical boundary and hypertext linking
procedures to permit people to communicate via text, sound, and video conference.
From 1990 until now there is million of sites that people can trade and make many
transactions, buyers, visitors and sellers web site.
ICT, remarkably wireless telephony and the Internet, offer to the backward countries and
poor people in those countries to use further incorporation into the world economy, how
and in which way. Important is that ICT holds for entrepreneurs in developing countries
and what do developing country governments essentially do to encourage its
comprehension.
Allows extra coordinated practical working that enhances the property of life for a full
host of individuals in association and allows people to work from home. Not just this
even more provides easy hand and joyful environment and it also theoretically
decreases conservation pollution, as less people have to go to work regularly.
In developing countries permits individuals and closed areas of experience and access
product. It is a really inexpensive way to get information through a web site instead of
buy a book. Enables supply of public services, for example, health service advantages
able over the Internet such as on-line appointment with doctors or nurses, on-line
studies, on-line payments and many more.
7. Components of a Typical E-commerce Transaction
Loop
Some people think that e-commerce means putting up a website for the purpose of
selling goods to buyers over the Internet, in deed, to have successful e-commerce some
technical as well as enabling issues have to be considered. That will be efficient for ecommerce for being competitive alternative to traditional commercial transactions and
for a firm to maximizing the benefits of e-commerce. The following players and
corresponding requisites will impel us to have successful typical e-commerce
transaction loop. [3]
1. There are some major components that are needed for the seller ,for instance a
secure transaction server and a corporate web site with e-commerce capabilities;
4
for processing the orders in a n efficient way, having a corporate Intranet is the
best idea; and for maintaining the e-commerce system and managing the
information flows , the employees should be IT-literate or IT experts. [3]
2. The components which are required for transaction partners such as; banking
institutions that offer transaction clearing services; to enable the movement of
physical goods, national for within the country and international for out side the
country. There are some points that should be noted in the systems for example,
for business-to-consumer transaction there should be a system to offer a means
for cost-efficient transport of small packages ;and for the security and integrity of
transactions, a trusted service is needed for authentication authority. [3]
3. A big critical mass of the population is formed in a business-to-consumer
transaction with access to the Internet and disposable income enabling
widespread use of credit cards by consumers; and possess a mindset for
purchasing goods over the Internet rather than by physically inspecting items. [3]
4. To place and take orders over the Internet , firms/businesses in a B2B
transaction are the major component that form a critical mass of companies with
Internet access and the capability. [3]
5. Government is a phenomenal component which has the the role to establish a
legal framework that should be included with electronic documents, signatures
and some other needed terms to govern e-commerce transactions; and to impel
the consumers to understand laws and regulations clearly and to protect them
and the businesses from fraud, government should establish legal institutions
and that would cause to enforce a legal framework. [3]
6. Without the Internet applying e-commerce is incomplete, so the terms which
cause the Internet to be successful, are such as; the infrastructure of the Internet
should be stable and reliable; and consumers will need to spend time on and buy
goods over the Internet and there should be a pricing structure that does not
penalize consumers and they do not be hesitant about the goods because of the
the limited time. [3]
Some countries that have significant e-commerce figures, a positive feedback loop
reinforces each of the factors which are explained above . Actually, for e-commerce to
grow, the above requisites and factors have to be in place. If any of the factors above is
not applied in the right way, it will be an impediment to the increased uptake of ecommerce as a whole. For instance, a country with an excellent Internet infrastructure
will not have high e-commerce figures if banks do not offer support and fulfillment
services to e-commerce transactions.
8. Key Principles of e-Business
e-Business nature is globally. However, this is further an image of the future than the
experience of today. The business of large enterprises is extra and new global and ebusiness instruments are precarious to their success. e-Business streamlines
international business for SMEs and give suggestions to big markets, but maximum of
SMEs are nowadays fulfilled through national or native business. The e-business
5
infrastructures network is worldwide level, somewhere e-business is local. e-Business is
instantaneously a chance. At the initiative company's market putting within the
manufacturing, internal skills and policy normally affect to the result to use e-business.
e-Business might have substantially special effects inside the governments. [5]
9. Forces to Fuel E-commerce
E-Commerce is fueled by many forces and the most huge once are economic forces,
marketing and customer interaction forces and technology (in the area of multimedia
convergence) forces . As these forces have more affects on e-commerce , each will be
explained to you.
9.1. Economic Forces
There are many key factors such as; reduction in communications costs, low-cost
technological infrastructure, speedier and more economic electronic transactions with
suppliers, lower global information sharing and advertising costs, and cheaper customer
service which cause to bring a very efficient affect on e-commerce. Economic is
integrated externally or internally. All corporations, suppliers,customers are networked
electronically and are communicating in a virtual environment , this is all in the category
of external economic integration. The internal integration ,that allows critical business
information to be stored in a digital form that can be retrieved immediately and
transmitted electronically, refers to the networking of business operations and
processes and also the various departments within a corporation. One eminent example
is the SESAMI.NET (Linking Asian Markets through B2B Hubs). It exchanges and
connects businesses virtually to trading partners, e-marketplaces and internal enterprise
systems for all business operations and processes. [3]
9.2. Marketing and Customer Interaction
For more promotion and to walk inside the international markets, corporations should
use e-commerce in marketing. In addition, for enhanced customer service and support
using Internet is the best way. To have more consumers , companies are supposed to
provide better description with more detailed product and service which all the
information can be provided in a better and easy way using Internet. Brazil’s Submarino
is a classic example of successful use of the Internet for improved customer service and
support. [3]
9.3. Technology Forces:
When we talk about e-commerce ,all activities and operations refer to ICT and that is a
reality by development of ICT there will be a huge effect on e-commerce. Since the
communication services is converged into one single platform, communication has
become more efficient, faster, easier, and more economical and there is no need of
setting up separate networks for telephone services, television broadcast, cable
television, and Internet access is eliminated. It is cost effective communication for
businesses and consumers to have one information provider. [3]
6
10. E-commerce Affect on Labor Market
There is a standard and organizational culture between business and workers. The
performance and behavior of businesses in the market specifies this culture. On the
other hand communication styles vary and have some bearing on the success of trade
relations between businesses. With E-Commerce and the Internet, a new digital culture
and new forms of communication will be replaced with the existing organizational
culture to conform to external norms. Businesses, especially small and medium ones ,
will have to adapt to this new culture and at the same time attempting to retain their own
unique style and individuality. Businesses will also need to foster innovativeness by
developing an organizational culture that encourages employees to be forward thinking
and creative. Electronic Commerce will drive the creation of a new workforce and
work ethic. Through the use of personal computers, fax machines and cellular
phones, workers are already operating from their homes in “virtual offices”.
Spatially, workers can become more flexible in the way they produce goods and
services. They will function in a less rigid work environment and will not be confined
to a desk or an office. Having more freedom to manage their work time, the
workers of this environment working from “virtual offices” will decide whether they
want to work at night or during the day while maintaining a part-time job. For those
workers operating from corporate offices, the opportunity is provided for the
implementation of a shift system or flexitime, making it easier for businesses to operate
on a 24-hour basis. [3]
11. Impact of E-commerce on SMEs in Developing
Countries
E-commerce has the advantages of reduced information search costs and transaction
for SMEs in developing countries. The most valuable information to SMEs are
customers and markets, product design, process technology, and financing source and
terms and to access to these information the Internet and other ICTs are great facilities.
Most SMEs in developing countries have local markets, so they rely on the local
information and content, that is why sometimes we can not say confidently that there is
enough information on the web which is relevant and valuable to make investment in
Internet feasible. The better way to be confident is to somehow increase the amount
and quality of local content on the Internet . [9]
According to markets, it is estimated that SME e-business revenues will increase: from
$6.53 billion to $28.53 billion in Eastern Europe, Africa and the Middle East combined;
$127.25 billion in 2003 to $502.69 billion by 2005 in the Asia-Pacific region; $23.51
billion in 2003 to $89.81 billion by 2005 in Latin America; from $340.41 billion in 2003 to
$971.47 billion by 2005 in Western Europe; and from $384.36 billion in 2003 to $1.18
trillion by 2005 in Northern America. [9]
7
12. The Role of Government in The Development of eCommerce in Developing Countries
Generally, the lead role of development and use of e-commerce is taken by private
sectors and the government role is to plays an efficient role in encouraging ecommerce improve through applying the following tasks as practical. [9]
•
To create a great and reasonable policy environment for e-commerce.
•
The government itself should be a user of e-commerce and its applications and
to encourage the huge use of e-commerce it should be a provider to citizens of egovernment services. [9]
Now we come to the point to explain ,what can be a great and reasonable policy
environment for e-commerce. There are some public policy issues in e-commerce that
governments should count them important to focus on . Some of them are as below:
•
Access to information networks should be promote in an inexpensive and easy
way.
•
Ensure that the e-commerce transactions are legal recognition.
•
Make consumer sure that he/she is protected from fraud.
•
There should be some privacy to protect consumers’ right.
•
There should be legal protection to prevent people from cracking and use of
unauthorized computer systems.
•
Intellectual property which belongs to specified person should be protected. []9
The mentioned issues must be included in any country’s policy. To develop a national
framework which be compatible with international norms on e-commerce and to
promote confidence among e-commerce participants , each government should adopt
policies, law and any incentives that readjust great and suitable environment for ecommerce.
12.1. How and in which ways can government use e-commerce?
Government can use e-commerce in many ways that some majors are, e-procurement,
tax administration and customs clearance. Better to explain them briefly.
12.1.1. E-procurement
The agencies in a government should be able to trade electronically with each other and
all suppliers. To have electronically trade the they can use some programs to enable
agency and the supplier and information systems such as e-procurement. [9]
12.1.2. Customs Clearance
If customs' processes and operations become digital, for instance, submissions,
payments and some automated systems for data entry to integrate customs' tables,
codes and pres-assessment then it is easy for everyone to expect more predictable and
8
more precise information on clearing time and delivery shipments, and increased
legitimate revenues. [9]
12.1.3. Tax Administration
It can be a system for processing and transmitting tax return information, on-line
issuances of tax clearances, permits, and licenses, and also it can be an electronic
process registration of businesses and new taxpayers among others.
The development and the use of e-commerce at the initiative of e-commerce in a
government directly is related that whether or not the infrastructure supports ecommerce use by private firms. If the government is unable to engage in eprocurement, secure records on-line, or have customs fees remitted electronically, then
the private sector will also have difficulties in e-commerce uptake. [9]
Now the question come that are existing legal systems sufficient to protect those
engaged in e-commerce?
In most developing countries ,there are some existing legal systems which
unfortunately, are not sufficient to protect those engaged in e-commerce. For instance,
with respect to contracts, existing laws were conceived at a time when the word
“writing,” “document” and “signature” referred to things in paper form. On the other
hand, in today’s electronic business transactions paper is not used for record-keeping or
entering into contracts. One other important legal issue which many developing
countries face is uncertainty regarding whether the courts will accept electronic
contracts, documents or electronic signatures as evidence. The issue of admissibility of
electronically generated evidence will be resolved if only a law specifically referring to
its past. [9]
12.2. Other Relevant Policy Issues
There are some other policy issues which concern basic prerequisites of infrastructure
for successful e-commerce and they are mentioned below:
12.2.1. Telecoms Pricing and Performance
Having access to basic telecommunication's services at a reasonable cost, is very
important for the public and it should be one of the aims of telecommunication's policy
and legislation to focus on it and make sure the public that their required services are
provided. Policies should encourage some terms to enhance the quality of
telecommunication services, for instance, open access which means absence of some
practices by network providers; open architecture which refers to the design of a system
that facilitates interconnection among different systems and services which exist and
also the new system and their development over time; and flexible access which refers
to the networks of telecommunications, broadcasting, and electronic publishing that are
interconnected and the format will be digital and does not have unlimited bandwidth ,
9
unless it will be adjusted according to the character of communications and the
demands of the users. [9]
12.2.2. Speed of Distribution and Quality of Logistics
In developing countries still have a lot of problems in applying e-commerce and
distributing the purchased goods, for instance, roads and bridges still form part of the ecommerce infrastructure. Despite there are some less goods (the exceptions are music
and software) that are delivered over the information infrastructure or the Internet, most
of the goods purchased over the Internet are still delivered the physical. That is why,
poor roads and bridges, inefficient transport systems, coupled with the high cost of
international parcel services and bureaucratic customs clearance processes, are major
obstacles in the uptake of e-commerce in developing countries. Here the responsibility
comes for government that should create a policy environment which contains two
important concept; first ,encourage investments in the national physical and transport
infrastructure and second, allow for more transparent, predictable and efficient customs
operations and provide clearance processing to streamline the bureaucracy for
electronic customs. Then it will help to reduce logistics' cost and distribution. [9]
13. How relevant is the Internet to e-commerce?
The Internet is a very easy, reliable and inexpensive way of connecting people from all
over the world. If we think technically the infrastructure of Internet is a global collection
of networks which are connected and share information using a common set of
protocols. Or generally as a vast we can say a network of people and information. The
Internet is an important tool for e-commerce that allows businesses to showcase and
sell their products and services on-line and gives potential customers, prospects, and
business partners access to information about these businesses and their products and
services that would lead to purchase. At the beginning the early form of e-commerce
companies used private networks such as; the EDI or Electronic Data Interchange to
transact business with each other, on that time the Internet was not utilized for
commercial purposes. With the Internet, e-commerce spread rapidly because of the
lower costs involved. Because the Internet is based on open standards, however,
installing and maintaining private networks was very expensive, most company start to
use it rapidly and got benefits out of having access to the Internet. [4; page # 27]
14. Impact of E-commerce on Women Sector
By improving the use of the Internet and e-commerce, sectors previously discriminated
against each other have been empowered much more. The Guyanese experience can
attest to this. Generally, women have gained a foothold in different areas and as well in
e-commerce. In some developing countries, the consumers are found largely that
indicates there is a need for sufficient infrastructure for the delivery of products for the
business to prosper and establish credibility. For example, if an enterprise can venture
into producing digital goods such as music or software that can be transmitted
electronically or if such goods can be distributed and/or delivered locally, then this is the
option that is more feasible and practicable. There are many other successful cases
of B2C e-commerce aside from the Guyanese experience that the women sector can
10
emulate. For instance Tortasperú which is a business in Perú and it is cakes marketing
which is run and maintained by women in several Peruvian cities and this is the web site
(http://www.tortasperu.com.pe); Ethiogift is another women business which belongs to
Ethiopians that they can buy sheep and other gifts over the Internet to deliver to their
families in other parts of the country, in this way they dispense with the physical
delivery of goods abroad and the web site is: (http://www.ethiogift.com) ; and also there
is a women Association which is called Rural Women’s Association of the Northern
Province of South Africa. This association uses the web to advertise its chickens to rich
people in Petersburg and in this way the women try to be involved in e-commerce.
They can begin to penetrate B2B or B2G markets as well if they continue as they are in
progress. On the other, the other businessmen should encourage them that they also
have the ability to manage e-commerce,so they will have a rapid progress in ecommerce areas. [9]
15. Interconnection of Customers, Workers, Suppliers,
Distributors and Competitors by E-commerce
For well and more effectively addressing of customer demands, the e-commerce
facilitates organization networks. In this networks small firms depend on other firms for
supplies and product distribution. On the other hand, it will be a chain of networks
linking customers, workers, suppliers, distributors, and even competitors. Now, the need
is an integrated or extended supply chain management solution to manage the chain
and keep stable the connection between them. What is a SCM? It stands for Supply
Chain Management and is defined as the supervision of materials, information, and
finances as they move from supplier to manufacturer to wholesaler to retailer to
consumer. The coordination and integration of these flows both within and among
companies is involved in SCM. The provision of goods/services to the next link in the
chain and the reduction of inventory within each link, is one of the major aim of any
effective SCM. The three main flows in SCM are mentioned briefly here: The product
flow, which includes the movement of goods from a supplier to a customer, as well as
any customer returns or service needs;The information flow, which involves the
transmission of orders and the update of the status of delivery; and The finances flow,
which consists of credit terms, payment schedules, and consignment and title
ownership arrangements. [6]
16. E-commerce 2.0 Concepts
There are three terms which indicates e-commerce 2.0 concepts and they are such as
Crowd-sourcing, Mass Customization, and the Long Tail that each of them are
explained briefly.
16.1. Crowd-sourcing
Crowd-sourcing denotes the utilization of the intelligence of the masses. Web based
platforms mostly are used for free by some active community members to carry out the
tasks. In 2006, Jeff Howe introduced this term. To create and collaborate processes
11
between organizations and community members, the Internet is used as a medium.
There are five categories of crowd-sourcing which are differentiated by the level user
involvement. Wikipedia is the most prominent example that the pages are being
generated by a countless number of authors without any payment. The platform
spreadshirt.de is also a typical example which produces user-designed t-shirts. Some
other companies that have well known brands, try to involve customers and users into
product development. For instance, Tchibo Ideas (www.tchibo-ideas.de), My Starbucks
Idea (mystarbucksidea.force.com), or Dell IdeaStorm (www.ideastorm.com). In fact
companies as a result learn about their customers' ideas and needs and at the same
time customer loyalty may rise. These approaches can be view as a kind of outsourced
market research. In the meantime some functionalities of crowd-sourcing are offerd by
some professional platforms and the companies are allowed to use them. The
commercial examples are such as; atizo.ch or Bonspin and the non commercial
example is the cooperation of the Library of Congress with Flickr. Google as a huge
search engine also utilizes the crowd-sourcing approach. To increase the search quality
of google, users can tag images using this approach. [1; page #6]
16.2. Mass Customization
The basic idea of this approach is to combine individualization of products with
efficiencies of mass products. This approach allows users/customers to create individual
products such as books (e.g., www.pegastar.com), watches (e.g., www.121time.com) or
sport shoes. [1; page #6]
16.3. The Long Tail
Actually the concept of e-commerce 2.0 refers to term The Long Tail. Some products
which are not relevant to mass market and are only relevant to a small group of people ,
may also get visible to other customers. Therefore ,the long tail means the revaluation
of niche products in niche markets. In order to use the concept of the long tail social
networks are absolutely needed. The spreadshirt.de platform is one example for the
long tail concept that allows every user to market his or her design globally. [1; page #6]
17. From E-commerce to E-commerce 2.0
E-commerce applications only have been the extended workbench of traditional
commerce at the beginning and even for a long time. It means the Internet has not been
utilized at all. There was a lack of concepts as well as experiences available, on the
other hand, the Internet flat rates and infrastructure was not ready at all for consumers
to access or use. There was a research named “Electronic Mall” at the University of St.
Gallen in 1994. Beyond enabling commercial transaction the communication and
interaction between users was in the center: People not only gathered to buy and sell
,but also they were gathered to socialize and to argue politics on this classical
marketplace. As new technologies rapidly have more achievements and also facilities
make it easy to access them, these both bring the opportunities for interactivity. In brief,
e-commerce2.0 in not anything else unless the relative developments in the ecommerce domain. [1 ; page #4]
12
18. Advantages of E-commerce
The invention of faster Internet connectivity and powerful on-line tools has resulted in a
new commerce arena . E-commerce offered many advantages to companies and
customers that some common ones are explained here briefly:
18.1. Lower Cost
One of the most important reason of doing e-business is, lower cost; logical problems
are reduced by e-commerce and it puts a small business on a par with giants such as
amazon.com. Electronically process of every financial transaction cause the lower cost.
[7]
18.2. Economy
There is no physical store space, insurance or infrastructure investment in e-commerce.
E-commerce is more economic because just an idea, a unique product, and a welldesigned web storefront are needed to reach your customers and a partner to do
fulfillment. [7]
18.3. Higher Margins
Businesses can gain more control and flexibility and are able to save time when manual
transactions are done electronically. For instance, if you book an airline ticket in a travel
agency, it will cost you £5 and if you book it on-line, it costs £1. [7]
18.4. Better Customer Service
On-line customer service makes customers happier, that is why e-commerce refers to
better customer service. There will be on-line directions to customers on the web
through their accounts and there is no need of calling the company on the phone. This
saves time and money. [7]
18.5. Quick Comparison Shopping
E–commerce lets consumers to comparison shops. Automated on-line shopping
assistants called hopbots scour on-line stores and find deals on everything from apples
to printer ribbons. [7]
18.6. Teamwork
Collaborating through e-mail to exchange information and work on solutions, is one
example of e-commerce. More interactions means better results. It has transformed the
way organizations interact with suppliers, vendors, business partners, and customers.[7]
18.7. Knowledge Markets
Knowledge markets are created through e-commerce. New ideas are developed inside
big firms through small groups. For instance, to look for new trends and products
13
DaimlerChrysler has created small teams. A Silicon Valley team is doing consumer
research on electric cars and advising car designers. [7]
18.8. Information Sharing, Convenience And Control
Information sharing between merchants and customers and promoting quick, just–in–
time deliveries, are improved by electronic marketplaces. Various industries are
differentiated by creating convenience for their consumers and each tries to attract
more consumers by making more convenience. There much more facilities for both
customers and merchants for instance, saving money; being on-line 24 hours a day, 7
days a week; facing no traffic jams, no crowds, and carrying no heavy things. [7]
19. Barrier of e commerce
Generally, everything has disadvantages besides its advantages. There are some
barriers in e-commerce too that we are going to explain a few major ones below:
19.1. Infrastructural barriers
The acknowledged listed infrastructure barriers delaying the acceptance of ecommerce. Some of the barriers include lack of credit cards and suitable payment
means, poor delivery logistics, lack of expert, trustworthy on-line traders of reasonable
size, insufficient legal system, and lack of large scale telecommunication broadcast
ability, Internet security, problems in returning products, and selection. [7]
19.2. Security
However, network security professional are trying to work more on security of web
sites , still for some people security continues to be a problem for on-line businesses.
Customers have to feel confident about the integrity of the payment process before they
commit to the purchase. [7]
19.3. Technology
There are helpful infrastructure interferences in the world. We acknowledge various
infrastructural appearances as barriers of e-commerce implementation. Between the
most persistent infrastructure restraints are access to technology (computers, Internet
connection, and access to Internet), narrow bandwidth that decrease the size to handle
audio and graphic data. [7]
19.4. Transaction Trust
The movement of e-commerce experiments, many of the basic guess is about trust. The
most important element for electronic business is Confidence and trust. The issue of
trust is even extra noticeable in the computer-generated world than in the real world.
The physical place of buyers and sellers, often joined with absence of real-time visual or
oral communication, creates a barrier to e-commerce implementation in the world.
There is many ways of spreading the institution for trust within the unbiased
enforcement of the law and its adjustment to a new technological environment. The
14
foundation of trust, which supports e-commerce in the world, the legal institutions are
immature. Businesses discover themselves at a disadvantage as not sure about
security. Maximum consumers in developing countries are not ready to keep subtle
financial information over the web. And there are many other barriers in developing
countries like obstacle on personal contact, shopping as a social place, language,
socioeconomic barriers and etc. [7]
20. Conclusion
Electronic commerce was a new form of marketing with a predicted explosive growth a
few years ago. Now, it really have growth explosively and rapidly. The technology
underlying the market is quite complex, and will become more so as new payment
methods and web technologies come on stream. The marketing approach has also
getting better day by day even in developing countries. The key to success more than
now is to find innovative ways to use new technology to attract customers and build
business.
This paper is intended to give a general overview of the most important concepts in
electronic commerce in the world. Now is a good time to enter this market at a relatively
low cost, to learn how the market works, and be ready to take advantage of new
opportunities as they arise.
References
[1] Hans-Dieter Zimmermann . (November 2010) . FROM ECOMMERCE TO
ECOMMERCE 2.0: THE CHANGING ROLE OF THE CUS . [Cited: 07-05-2012]
http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1671344
[2] www.uop.edu.jo/download/research/members/chapter2.pdf and
http://www.designzzz.com/the-five-different-types-of-e-commerce/ [Cited:11-05-2012]
[3] http://en.wikibooks.org/wiki/E-Commerce_and_E-Business/Concepts_and_
Definitions . [Cited: 11-05-2012]
[4] Aleksandra Belousova, 2010, Relevant Market: the application to the E-commerce
area in the EU . [Cited: 12-05-2012]
[5] Leonardo da Vinci . GENERAL INTRODUCTION OF eBUSINESS . [Cited: 2-8-2012]
http://www.ebcm-vet.net/Uploads/document/English/PDF/LO01_Gen_Intro_eBiz.pdf
[Cited: 10-05-2012]
[6] Dr. Sumanjeet Singh, IMPACT INTERNET AND E-COMMERCE ON THE LABOUR
MARKET ,
http://www.merit.unu.edu/MEIDE/papers/2009/1235186682_SS.pdf
[Cited: 09-05-2012]
[7] www.ajml.com.au/.../Benefits%20of%20ecommerce.pdf [Cited: 14-05-2012]
[8] http://www.google.com/urlsa=t&rct=j&q=&esrc=s&source=web&cd=2&ved=0CDQQFj
15
AB&url=http%3A%2F%2Fwww.londonmet.ac.uk%2Ffms%2FMRSite%2Facad%2Fdass
%2FISJ%2520Journal%2FV3N1%2F03_Barriers%2520to%2520E-commerce%2520in
%2520developing%2520countries_Lawrence%26Tar.pdf&ei=iF5UUK3oKOSE4gTZjoCI
CQ&usg=AFQjCNFMvjOiy78bbteST4cGltAfi9US5w&sig2=3uqzWrfvJev9r4YUoAYxOA
[Cited: 12-05-2012]
[9]
http://en.wikibooks.org/w/index.php?title=E-Commerce_and_E-Business/E-Comm
erce_ in_Developing_Countries&stable=0#How_important_is_e-commerce_to_ SMEs
_in_ developing_countries.3F_How_big_is_the_SME_e-business_market.3
[Cited: 11-05-2012]
[10] Guilherme Alberto Almeida de Almeida, Alfonso Avila and Violeta Boncanoska .
March 2007 . Promoting E-Commerce in Developing Countries . [Cited: 06-07-2012]
[11] http://people.dsv.su.se/~miwebb/kapitel/kap38.pdf . [Cited: 06-06-2012]
16
___________________________________________________________________________________________
Technical University Berlin
Foawziah Naseri
Huma Yari
August 2012
1. Abstract
In this paper we tried to analyze the contribution of e-commerce and e-business in
general. This paper holds valuable information that must be interesting for readers who
are interested in terms e-commerce and e-business. Electronic commerce facilitates
many way for consumers and businesses such as on-line shopping which applies ecommerce and easily can deliver the products to the markets unlike traditional
commerce that is carried out physically with effort of a person to go and get products.
In some cases e-commerce is secure and still there are challenges to improve the
security and make the customers confident. The purpose of this research was to
determine the current level of e-commerce in general and in some causes in
developing countries.
This paper is written by two persons. Actually, we both worked and studied together, but
all the introduction and type of e-commerce is written by Foawziah Naseri and the
explanation of the other terminologies are written by Huma Yari.
2. Introduction
The world seeks to progress their governing and strategy environment to simplify ecommerce. At first, the information infrastructure should be improved. This includes
improving access to telecommunications and Internet facilities at the cost, reliability and
speed is needed for e-commerce.
E-commerce is a key factor in business to exchange information and maintaining
business transaction via telecommunication network. E-commerce has a wide range of
economic and other solicitations, like broadcasting and interchange of digital data,
electronic payment and electronic supplies exchange activities. It affects to both the
sale of things and service transport and development of digital goods and services. eBusiness marks a company visions, strategy and operations. It is beyond the
technology. Furthermost businesses have opened the procedure of transformation
inside of e-business by financing in email, Intranet and a web presence.
3. What is e-business and e-commerce?
e-Business mentions to all methods of electronic business procedures, involving ecommerce, the business of goods and skills via electronic media, like web. Trades,
1
which are the e-Business, are committed, great with stockholders in the growth. These
companies make losses are acceptable in e-business. e-Business indicates utilization of
ICT to increase productivity in trade operations, with point to interior and exterior
procedures. Simply e-business can deal to help business.
Electronic commerce is a new business and commerce is enhanced. e-Business and
commerce both involve the on-line purchasing and selling goods. It is a business deal
that proceeds via digital routes over a network. E-commerce allows technology and
business objects to spread up the correctness and effectiveness of business
management. Several organizations and entities are observing to the web as the
complete foundation for information, marketing, services, business and
communications. For instance, over the web application business handles the price of
goods, tools and information switched over the Internet and growth each year. Ecommerce is an application of present, information and communication technologies to
handle trade. E-commerce contains accessible technologies like fax, land-line
telephone, but ICT offers most possibility for small businesses, mobile phones,
electronic mail and other Internet-based services. The following point gives some
examples and explains, when an enterprise is doing e-business. [5]
•
It is able to connect electronically associates, consumers and dealers through
dealing .
•
It has the ability to communicate automatically with other organizations to order
products and facilities.
•
Sells products and purchase using a website.
•
Using web to find information, like costs and reviews of products.
•
Using the web for research, like latest manufacturing trends.
•
To provide information about its products and services, it uses website.
•
Internet is used for on-line investment and for payment (billing). [5]
4. Type of E-commerce
E-commerce is the process of buying and selling of various products and services by
businesses through the Internet. It deals various kind of business concern, from retail
site of the consumer, which includes auction. The main focus is to concentrate on
business substitutes involving goods and services between various corporations.
Generally, e-commerce is fragmented into four principal categories: Business-toBusiness (B2B), Business-to-Consumer(B2C),Consumer-to-Business(C2B), Consumerto-Consumer(C2C),Peer-to-Peer(P2P) and m-Commerce .
4.1. Business to Business (B2B)
B2B discusses the electronic commerce between businesses and also delivery chain
technology and currently, it is the major and most popular e-commerce technology.
Internet stages have given the chance to significantly all steps of the operations and
made it speedy. For instance, HP sells computers and other linked accessories on-line,
2
but does not manufacture all those products. In order to sell those products, they first
have to purchase them from special businesses. Therefore B2B is the best way
processes a recognized working association and it is a better solution to deliver. [2]
4.2. Business to Consumer (B2C)
As the name indicates, it is the standard which is involved with businesses and
consumers. This is the best common e-commerce part. On-line trades are sold to single
consumer. The fundamental idea behind this type is, that the on-line suppliers can sell
their goods to the on-line customer by using clear documents, which is ready via several
on-line selling tools. For instance, an on-line open source giving free software and
selling some software to customer is following B2C model. [2]
4.3. Consumer to Consumer (C2C)
It enables the on-line business of properties or services between two people. Though
there is no visible transitional between, the gatherings can not transmit the dealings
without the stage, which is afforded by the on-line promote reason like amazon. [2]
4.4. Peer to Peer (P2P)
It is a technology which supports people to directly assign PC collections and computer
supplies with any main web server. The necessary software should be installed so that
to be able to communicate on the common program. This type of e-commerce has
totally low income invention as from the foundation it has been tending to the open
tradition, which it sometimes got entangled in cyber laws. [2]
4.5. Consumer to Business (C2B)
Consumers request certain goods or facilities from corresponding businesses by giving
themselves as a customer group. Example of this type is communicating a visit and
travel machinist through their website for buying a vacation bundle as well as such sites
as CTB and SpeakOut.com. These sites require consumers with market strategies and
also are used by businesses to improve understanding into customer desires. [2]
4.5. m‐Commerce
This is the use of mobile devices for managing the communications. The mobile device
owners can communicate to each other and can manage the business. Similar the web
company and development companies adjust the websites to be good design properly
on mobile devices. As well, there are some other types of e-commerce business such
as; Business-to-Employee (B2E), Government-to-Business (G2B) and Government-toCitizen (G2C). [2]
5. E-commerce Infrastructure
Many studies have been done and considered at basic infrastructure requirements (e.g.
security interests, payment problems, network security, Internet access, electricity
problem network economic problem and education problems) for e-commerce in all over
3
the world ,specially in developing countries. Some developing countries do not have any
elements distributed between network access, network society, network professionals
and network policy as area concern.The electronic commerce infrastructure in
development authority of Singapore (IDA) has been described that key mechanisms of
this infrastructure contains frame services, like network protocols, email, information
exchange, source payment services and etc. e-Business is quiet young segment
through rising tasks. Development in dissimilar fragments of the world is likely different;
the essential mutual practices are not still defined.
6. Internet and The Digital Economy
The Internet or we can say a network of networks is the essential item of ICT in the
economy. It is an affective element that people connect with each other, getting
information, study, do business, and interrelate socially. The World Wide Web, a main
factor of the Internet, has provided the graphical boundary and hypertext linking
procedures to permit people to communicate via text, sound, and video conference.
From 1990 until now there is million of sites that people can trade and make many
transactions, buyers, visitors and sellers web site.
ICT, remarkably wireless telephony and the Internet, offer to the backward countries and
poor people in those countries to use further incorporation into the world economy, how
and in which way. Important is that ICT holds for entrepreneurs in developing countries
and what do developing country governments essentially do to encourage its
comprehension.
Allows extra coordinated practical working that enhances the property of life for a full
host of individuals in association and allows people to work from home. Not just this
even more provides easy hand and joyful environment and it also theoretically
decreases conservation pollution, as less people have to go to work regularly.
In developing countries permits individuals and closed areas of experience and access
product. It is a really inexpensive way to get information through a web site instead of
buy a book. Enables supply of public services, for example, health service advantages
able over the Internet such as on-line appointment with doctors or nurses, on-line
studies, on-line payments and many more.
7. Components of a Typical E-commerce Transaction
Loop
Some people think that e-commerce means putting up a website for the purpose of
selling goods to buyers over the Internet, in deed, to have successful e-commerce some
technical as well as enabling issues have to be considered. That will be efficient for ecommerce for being competitive alternative to traditional commercial transactions and
for a firm to maximizing the benefits of e-commerce. The following players and
corresponding requisites will impel us to have successful typical e-commerce
transaction loop. [3]
1. There are some major components that are needed for the seller ,for instance a
secure transaction server and a corporate web site with e-commerce capabilities;
4
for processing the orders in a n efficient way, having a corporate Intranet is the
best idea; and for maintaining the e-commerce system and managing the
information flows , the employees should be IT-literate or IT experts. [3]
2. The components which are required for transaction partners such as; banking
institutions that offer transaction clearing services; to enable the movement of
physical goods, national for within the country and international for out side the
country. There are some points that should be noted in the systems for example,
for business-to-consumer transaction there should be a system to offer a means
for cost-efficient transport of small packages ;and for the security and integrity of
transactions, a trusted service is needed for authentication authority. [3]
3. A big critical mass of the population is formed in a business-to-consumer
transaction with access to the Internet and disposable income enabling
widespread use of credit cards by consumers; and possess a mindset for
purchasing goods over the Internet rather than by physically inspecting items. [3]
4. To place and take orders over the Internet , firms/businesses in a B2B
transaction are the major component that form a critical mass of companies with
Internet access and the capability. [3]
5. Government is a phenomenal component which has the the role to establish a
legal framework that should be included with electronic documents, signatures
and some other needed terms to govern e-commerce transactions; and to impel
the consumers to understand laws and regulations clearly and to protect them
and the businesses from fraud, government should establish legal institutions
and that would cause to enforce a legal framework. [3]
6. Without the Internet applying e-commerce is incomplete, so the terms which
cause the Internet to be successful, are such as; the infrastructure of the Internet
should be stable and reliable; and consumers will need to spend time on and buy
goods over the Internet and there should be a pricing structure that does not
penalize consumers and they do not be hesitant about the goods because of the
the limited time. [3]
Some countries that have significant e-commerce figures, a positive feedback loop
reinforces each of the factors which are explained above . Actually, for e-commerce to
grow, the above requisites and factors have to be in place. If any of the factors above is
not applied in the right way, it will be an impediment to the increased uptake of ecommerce as a whole. For instance, a country with an excellent Internet infrastructure
will not have high e-commerce figures if banks do not offer support and fulfillment
services to e-commerce transactions.
8. Key Principles of e-Business
e-Business nature is globally. However, this is further an image of the future than the
experience of today. The business of large enterprises is extra and new global and ebusiness instruments are precarious to their success. e-Business streamlines
international business for SMEs and give suggestions to big markets, but maximum of
SMEs are nowadays fulfilled through national or native business. The e-business
5
infrastructures network is worldwide level, somewhere e-business is local. e-Business is
instantaneously a chance. At the initiative company's market putting within the
manufacturing, internal skills and policy normally affect to the result to use e-business.
e-Business might have substantially special effects inside the governments. [5]
9. Forces to Fuel E-commerce
E-Commerce is fueled by many forces and the most huge once are economic forces,
marketing and customer interaction forces and technology (in the area of multimedia
convergence) forces . As these forces have more affects on e-commerce , each will be
explained to you.
9.1. Economic Forces
There are many key factors such as; reduction in communications costs, low-cost
technological infrastructure, speedier and more economic electronic transactions with
suppliers, lower global information sharing and advertising costs, and cheaper customer
service which cause to bring a very efficient affect on e-commerce. Economic is
integrated externally or internally. All corporations, suppliers,customers are networked
electronically and are communicating in a virtual environment , this is all in the category
of external economic integration. The internal integration ,that allows critical business
information to be stored in a digital form that can be retrieved immediately and
transmitted electronically, refers to the networking of business operations and
processes and also the various departments within a corporation. One eminent example
is the SESAMI.NET (Linking Asian Markets through B2B Hubs). It exchanges and
connects businesses virtually to trading partners, e-marketplaces and internal enterprise
systems for all business operations and processes. [3]
9.2. Marketing and Customer Interaction
For more promotion and to walk inside the international markets, corporations should
use e-commerce in marketing. In addition, for enhanced customer service and support
using Internet is the best way. To have more consumers , companies are supposed to
provide better description with more detailed product and service which all the
information can be provided in a better and easy way using Internet. Brazil’s Submarino
is a classic example of successful use of the Internet for improved customer service and
support. [3]
9.3. Technology Forces:
When we talk about e-commerce ,all activities and operations refer to ICT and that is a
reality by development of ICT there will be a huge effect on e-commerce. Since the
communication services is converged into one single platform, communication has
become more efficient, faster, easier, and more economical and there is no need of
setting up separate networks for telephone services, television broadcast, cable
television, and Internet access is eliminated. It is cost effective communication for
businesses and consumers to have one information provider. [3]
6
10. E-commerce Affect on Labor Market
There is a standard and organizational culture between business and workers. The
performance and behavior of businesses in the market specifies this culture. On the
other hand communication styles vary and have some bearing on the success of trade
relations between businesses. With E-Commerce and the Internet, a new digital culture
and new forms of communication will be replaced with the existing organizational
culture to conform to external norms. Businesses, especially small and medium ones ,
will have to adapt to this new culture and at the same time attempting to retain their own
unique style and individuality. Businesses will also need to foster innovativeness by
developing an organizational culture that encourages employees to be forward thinking
and creative. Electronic Commerce will drive the creation of a new workforce and
work ethic. Through the use of personal computers, fax machines and cellular
phones, workers are already operating from their homes in “virtual offices”.
Spatially, workers can become more flexible in the way they produce goods and
services. They will function in a less rigid work environment and will not be confined
to a desk or an office. Having more freedom to manage their work time, the
workers of this environment working from “virtual offices” will decide whether they
want to work at night or during the day while maintaining a part-time job. For those
workers operating from corporate offices, the opportunity is provided for the
implementation of a shift system or flexitime, making it easier for businesses to operate
on a 24-hour basis. [3]
11. Impact of E-commerce on SMEs in Developing
Countries
E-commerce has the advantages of reduced information search costs and transaction
for SMEs in developing countries. The most valuable information to SMEs are
customers and markets, product design, process technology, and financing source and
terms and to access to these information the Internet and other ICTs are great facilities.
Most SMEs in developing countries have local markets, so they rely on the local
information and content, that is why sometimes we can not say confidently that there is
enough information on the web which is relevant and valuable to make investment in
Internet feasible. The better way to be confident is to somehow increase the amount
and quality of local content on the Internet . [9]
According to markets, it is estimated that SME e-business revenues will increase: from
$6.53 billion to $28.53 billion in Eastern Europe, Africa and the Middle East combined;
$127.25 billion in 2003 to $502.69 billion by 2005 in the Asia-Pacific region; $23.51
billion in 2003 to $89.81 billion by 2005 in Latin America; from $340.41 billion in 2003 to
$971.47 billion by 2005 in Western Europe; and from $384.36 billion in 2003 to $1.18
trillion by 2005 in Northern America. [9]
7
12. The Role of Government in The Development of eCommerce in Developing Countries
Generally, the lead role of development and use of e-commerce is taken by private
sectors and the government role is to plays an efficient role in encouraging ecommerce improve through applying the following tasks as practical. [9]
•
To create a great and reasonable policy environment for e-commerce.
•
The government itself should be a user of e-commerce and its applications and
to encourage the huge use of e-commerce it should be a provider to citizens of egovernment services. [9]
Now we come to the point to explain ,what can be a great and reasonable policy
environment for e-commerce. There are some public policy issues in e-commerce that
governments should count them important to focus on . Some of them are as below:
•
Access to information networks should be promote in an inexpensive and easy
way.
•
Ensure that the e-commerce transactions are legal recognition.
•
Make consumer sure that he/she is protected from fraud.
•
There should be some privacy to protect consumers’ right.
•
There should be legal protection to prevent people from cracking and use of
unauthorized computer systems.
•
Intellectual property which belongs to specified person should be protected. []9
The mentioned issues must be included in any country’s policy. To develop a national
framework which be compatible with international norms on e-commerce and to
promote confidence among e-commerce participants , each government should adopt
policies, law and any incentives that readjust great and suitable environment for ecommerce.
12.1. How and in which ways can government use e-commerce?
Government can use e-commerce in many ways that some majors are, e-procurement,
tax administration and customs clearance. Better to explain them briefly.
12.1.1. E-procurement
The agencies in a government should be able to trade electronically with each other and
all suppliers. To have electronically trade the they can use some programs to enable
agency and the supplier and information systems such as e-procurement. [9]
12.1.2. Customs Clearance
If customs' processes and operations become digital, for instance, submissions,
payments and some automated systems for data entry to integrate customs' tables,
codes and pres-assessment then it is easy for everyone to expect more predictable and
8
more precise information on clearing time and delivery shipments, and increased
legitimate revenues. [9]
12.1.3. Tax Administration
It can be a system for processing and transmitting tax return information, on-line
issuances of tax clearances, permits, and licenses, and also it can be an electronic
process registration of businesses and new taxpayers among others.
The development and the use of e-commerce at the initiative of e-commerce in a
government directly is related that whether or not the infrastructure supports ecommerce use by private firms. If the government is unable to engage in eprocurement, secure records on-line, or have customs fees remitted electronically, then
the private sector will also have difficulties in e-commerce uptake. [9]
Now the question come that are existing legal systems sufficient to protect those
engaged in e-commerce?
In most developing countries ,there are some existing legal systems which
unfortunately, are not sufficient to protect those engaged in e-commerce. For instance,
with respect to contracts, existing laws were conceived at a time when the word
“writing,” “document” and “signature” referred to things in paper form. On the other
hand, in today’s electronic business transactions paper is not used for record-keeping or
entering into contracts. One other important legal issue which many developing
countries face is uncertainty regarding whether the courts will accept electronic
contracts, documents or electronic signatures as evidence. The issue of admissibility of
electronically generated evidence will be resolved if only a law specifically referring to
its past. [9]
12.2. Other Relevant Policy Issues
There are some other policy issues which concern basic prerequisites of infrastructure
for successful e-commerce and they are mentioned below:
12.2.1. Telecoms Pricing and Performance
Having access to basic telecommunication's services at a reasonable cost, is very
important for the public and it should be one of the aims of telecommunication's policy
and legislation to focus on it and make sure the public that their required services are
provided. Policies should encourage some terms to enhance the quality of
telecommunication services, for instance, open access which means absence of some
practices by network providers; open architecture which refers to the design of a system
that facilitates interconnection among different systems and services which exist and
also the new system and their development over time; and flexible access which refers
to the networks of telecommunications, broadcasting, and electronic publishing that are
interconnected and the format will be digital and does not have unlimited bandwidth ,
9
unless it will be adjusted according to the character of communications and the
demands of the users. [9]
12.2.2. Speed of Distribution and Quality of Logistics
In developing countries still have a lot of problems in applying e-commerce and
distributing the purchased goods, for instance, roads and bridges still form part of the ecommerce infrastructure. Despite there are some less goods (the exceptions are music
and software) that are delivered over the information infrastructure or the Internet, most
of the goods purchased over the Internet are still delivered the physical. That is why,
poor roads and bridges, inefficient transport systems, coupled with the high cost of
international parcel services and bureaucratic customs clearance processes, are major
obstacles in the uptake of e-commerce in developing countries. Here the responsibility
comes for government that should create a policy environment which contains two
important concept; first ,encourage investments in the national physical and transport
infrastructure and second, allow for more transparent, predictable and efficient customs
operations and provide clearance processing to streamline the bureaucracy for
electronic customs. Then it will help to reduce logistics' cost and distribution. [9]
13. How relevant is the Internet to e-commerce?
The Internet is a very easy, reliable and inexpensive way of connecting people from all
over the world. If we think technically the infrastructure of Internet is a global collection
of networks which are connected and share information using a common set of
protocols. Or generally as a vast we can say a network of people and information. The
Internet is an important tool for e-commerce that allows businesses to showcase and
sell their products and services on-line and gives potential customers, prospects, and
business partners access to information about these businesses and their products and
services that would lead to purchase. At the beginning the early form of e-commerce
companies used private networks such as; the EDI or Electronic Data Interchange to
transact business with each other, on that time the Internet was not utilized for
commercial purposes. With the Internet, e-commerce spread rapidly because of the
lower costs involved. Because the Internet is based on open standards, however,
installing and maintaining private networks was very expensive, most company start to
use it rapidly and got benefits out of having access to the Internet. [4; page # 27]
14. Impact of E-commerce on Women Sector
By improving the use of the Internet and e-commerce, sectors previously discriminated
against each other have been empowered much more. The Guyanese experience can
attest to this. Generally, women have gained a foothold in different areas and as well in
e-commerce. In some developing countries, the consumers are found largely that
indicates there is a need for sufficient infrastructure for the delivery of products for the
business to prosper and establish credibility. For example, if an enterprise can venture
into producing digital goods such as music or software that can be transmitted
electronically or if such goods can be distributed and/or delivered locally, then this is the
option that is more feasible and practicable. There are many other successful cases
of B2C e-commerce aside from the Guyanese experience that the women sector can
10
emulate. For instance Tortasperú which is a business in Perú and it is cakes marketing
which is run and maintained by women in several Peruvian cities and this is the web site
(http://www.tortasperu.com.pe); Ethiogift is another women business which belongs to
Ethiopians that they can buy sheep and other gifts over the Internet to deliver to their
families in other parts of the country, in this way they dispense with the physical
delivery of goods abroad and the web site is: (http://www.ethiogift.com) ; and also there
is a women Association which is called Rural Women’s Association of the Northern
Province of South Africa. This association uses the web to advertise its chickens to rich
people in Petersburg and in this way the women try to be involved in e-commerce.
They can begin to penetrate B2B or B2G markets as well if they continue as they are in
progress. On the other, the other businessmen should encourage them that they also
have the ability to manage e-commerce,so they will have a rapid progress in ecommerce areas. [9]
15. Interconnection of Customers, Workers, Suppliers,
Distributors and Competitors by E-commerce
For well and more effectively addressing of customer demands, the e-commerce
facilitates organization networks. In this networks small firms depend on other firms for
supplies and product distribution. On the other hand, it will be a chain of networks
linking customers, workers, suppliers, distributors, and even competitors. Now, the need
is an integrated or extended supply chain management solution to manage the chain
and keep stable the connection between them. What is a SCM? It stands for Supply
Chain Management and is defined as the supervision of materials, information, and
finances as they move from supplier to manufacturer to wholesaler to retailer to
consumer. The coordination and integration of these flows both within and among
companies is involved in SCM. The provision of goods/services to the next link in the
chain and the reduction of inventory within each link, is one of the major aim of any
effective SCM. The three main flows in SCM are mentioned briefly here: The product
flow, which includes the movement of goods from a supplier to a customer, as well as
any customer returns or service needs;The information flow, which involves the
transmission of orders and the update of the status of delivery; and The finances flow,
which consists of credit terms, payment schedules, and consignment and title
ownership arrangements. [6]
16. E-commerce 2.0 Concepts
There are three terms which indicates e-commerce 2.0 concepts and they are such as
Crowd-sourcing, Mass Customization, and the Long Tail that each of them are
explained briefly.
16.1. Crowd-sourcing
Crowd-sourcing denotes the utilization of the intelligence of the masses. Web based
platforms mostly are used for free by some active community members to carry out the
tasks. In 2006, Jeff Howe introduced this term. To create and collaborate processes
11
between organizations and community members, the Internet is used as a medium.
There are five categories of crowd-sourcing which are differentiated by the level user
involvement. Wikipedia is the most prominent example that the pages are being
generated by a countless number of authors without any payment. The platform
spreadshirt.de is also a typical example which produces user-designed t-shirts. Some
other companies that have well known brands, try to involve customers and users into
product development. For instance, Tchibo Ideas (www.tchibo-ideas.de), My Starbucks
Idea (mystarbucksidea.force.com), or Dell IdeaStorm (www.ideastorm.com). In fact
companies as a result learn about their customers' ideas and needs and at the same
time customer loyalty may rise. These approaches can be view as a kind of outsourced
market research. In the meantime some functionalities of crowd-sourcing are offerd by
some professional platforms and the companies are allowed to use them. The
commercial examples are such as; atizo.ch or Bonspin and the non commercial
example is the cooperation of the Library of Congress with Flickr. Google as a huge
search engine also utilizes the crowd-sourcing approach. To increase the search quality
of google, users can tag images using this approach. [1; page #6]
16.2. Mass Customization
The basic idea of this approach is to combine individualization of products with
efficiencies of mass products. This approach allows users/customers to create individual
products such as books (e.g., www.pegastar.com), watches (e.g., www.121time.com) or
sport shoes. [1; page #6]
16.3. The Long Tail
Actually the concept of e-commerce 2.0 refers to term The Long Tail. Some products
which are not relevant to mass market and are only relevant to a small group of people ,
may also get visible to other customers. Therefore ,the long tail means the revaluation
of niche products in niche markets. In order to use the concept of the long tail social
networks are absolutely needed. The spreadshirt.de platform is one example for the
long tail concept that allows every user to market his or her design globally. [1; page #6]
17. From E-commerce to E-commerce 2.0
E-commerce applications only have been the extended workbench of traditional
commerce at the beginning and even for a long time. It means the Internet has not been
utilized at all. There was a lack of concepts as well as experiences available, on the
other hand, the Internet flat rates and infrastructure was not ready at all for consumers
to access or use. There was a research named “Electronic Mall” at the University of St.
Gallen in 1994. Beyond enabling commercial transaction the communication and
interaction between users was in the center: People not only gathered to buy and sell
,but also they were gathered to socialize and to argue politics on this classical
marketplace. As new technologies rapidly have more achievements and also facilities
make it easy to access them, these both bring the opportunities for interactivity. In brief,
e-commerce2.0 in not anything else unless the relative developments in the ecommerce domain. [1 ; page #4]
12
18. Advantages of E-commerce
The invention of faster Internet connectivity and powerful on-line tools has resulted in a
new commerce arena . E-commerce offered many advantages to companies and
customers that some common ones are explained here briefly:
18.1. Lower Cost
One of the most important reason of doing e-business is, lower cost; logical problems
are reduced by e-commerce and it puts a small business on a par with giants such as
amazon.com. Electronically process of every financial transaction cause the lower cost.
[7]
18.2. Economy
There is no physical store space, insurance or infrastructure investment in e-commerce.
E-commerce is more economic because just an idea, a unique product, and a welldesigned web storefront are needed to reach your customers and a partner to do
fulfillment. [7]
18.3. Higher Margins
Businesses can gain more control and flexibility and are able to save time when manual
transactions are done electronically. For instance, if you book an airline ticket in a travel
agency, it will cost you £5 and if you book it on-line, it costs £1. [7]
18.4. Better Customer Service
On-line customer service makes customers happier, that is why e-commerce refers to
better customer service. There will be on-line directions to customers on the web
through their accounts and there is no need of calling the company on the phone. This
saves time and money. [7]
18.5. Quick Comparison Shopping
E–commerce lets consumers to comparison shops. Automated on-line shopping
assistants called hopbots scour on-line stores and find deals on everything from apples
to printer ribbons. [7]
18.6. Teamwork
Collaborating through e-mail to exchange information and work on solutions, is one
example of e-commerce. More interactions means better results. It has transformed the
way organizations interact with suppliers, vendors, business partners, and customers.[7]
18.7. Knowledge Markets
Knowledge markets are created through e-commerce. New ideas are developed inside
big firms through small groups. For instance, to look for new trends and products
13
DaimlerChrysler has created small teams. A Silicon Valley team is doing consumer
research on electric cars and advising car designers. [7]
18.8. Information Sharing, Convenience And Control
Information sharing between merchants and customers and promoting quick, just–in–
time deliveries, are improved by electronic marketplaces. Various industries are
differentiated by creating convenience for their consumers and each tries to attract
more consumers by making more convenience. There much more facilities for both
customers and merchants for instance, saving money; being on-line 24 hours a day, 7
days a week; facing no traffic jams, no crowds, and carrying no heavy things. [7]
19. Barrier of e commerce
Generally, everything has disadvantages besides its advantages. There are some
barriers in e-commerce too that we are going to explain a few major ones below:
19.1. Infrastructural barriers
The acknowledged listed infrastructure barriers delaying the acceptance of ecommerce. Some of the barriers include lack of credit cards and suitable payment
means, poor delivery logistics, lack of expert, trustworthy on-line traders of reasonable
size, insufficient legal system, and lack of large scale telecommunication broadcast
ability, Internet security, problems in returning products, and selection. [7]
19.2. Security
However, network security professional are trying to work more on security of web
sites , still for some people security continues to be a problem for on-line businesses.
Customers have to feel confident about the integrity of the payment process before they
commit to the purchase. [7]
19.3. Technology
There are helpful infrastructure interferences in the world. We acknowledge various
infrastructural appearances as barriers of e-commerce implementation. Between the
most persistent infrastructure restraints are access to technology (computers, Internet
connection, and access to Internet), narrow bandwidth that decrease the size to handle
audio and graphic data. [7]
19.4. Transaction Trust
The movement of e-commerce experiments, many of the basic guess is about trust. The
most important element for electronic business is Confidence and trust. The issue of
trust is even extra noticeable in the computer-generated world than in the real world.
The physical place of buyers and sellers, often joined with absence of real-time visual or
oral communication, creates a barrier to e-commerce implementation in the world.
There is many ways of spreading the institution for trust within the unbiased
enforcement of the law and its adjustment to a new technological environment. The
14
foundation of trust, which supports e-commerce in the world, the legal institutions are
immature. Businesses discover themselves at a disadvantage as not sure about
security. Maximum consumers in developing countries are not ready to keep subtle
financial information over the web. And there are many other barriers in developing
countries like obstacle on personal contact, shopping as a social place, language,
socioeconomic barriers and etc. [7]
20. Conclusion
Electronic commerce was a new form of marketing with a predicted explosive growth a
few years ago. Now, it really have growth explosively and rapidly. The technology
underlying the market is quite complex, and will become more so as new payment
methods and web technologies come on stream. The marketing approach has also
getting better day by day even in developing countries. The key to success more than
now is to find innovative ways to use new technology to attract customers and build
business.
This paper is intended to give a general overview of the most important concepts in
electronic commerce in the world. Now is a good time to enter this market at a relatively
low cost, to learn how the market works, and be ready to take advantage of new
opportunities as they arise.
References
[1] Hans-Dieter Zimmermann . (November 2010) . FROM ECOMMERCE TO
ECOMMERCE 2.0: THE CHANGING ROLE OF THE CUS . [Cited: 07-05-2012]
http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1671344
[2] www.uop.edu.jo/download/research/members/chapter2.pdf and
http://www.designzzz.com/the-five-different-types-of-e-commerce/ [Cited:11-05-2012]
[3] http://en.wikibooks.org/wiki/E-Commerce_and_E-Business/Concepts_and_
Definitions . [Cited: 11-05-2012]
[4] Aleksandra Belousova, 2010, Relevant Market: the application to the E-commerce
area in the EU . [Cited: 12-05-2012]
[5] Leonardo da Vinci . GENERAL INTRODUCTION OF eBUSINESS . [Cited: 2-8-2012]
http://www.ebcm-vet.net/Uploads/document/English/PDF/LO01_Gen_Intro_eBiz.pdf
[Cited: 10-05-2012]
[6] Dr. Sumanjeet Singh, IMPACT INTERNET AND E-COMMERCE ON THE LABOUR
MARKET ,
http://www.merit.unu.edu/MEIDE/papers/2009/1235186682_SS.pdf
[Cited: 09-05-2012]
[7] www.ajml.com.au/.../Benefits%20of%20ecommerce.pdf [Cited: 14-05-2012]
[8] http://www.google.com/urlsa=t&rct=j&q=&esrc=s&source=web&cd=2&ved=0CDQQFj
15
AB&url=http%3A%2F%2Fwww.londonmet.ac.uk%2Ffms%2FMRSite%2Facad%2Fdass
%2FISJ%2520Journal%2FV3N1%2F03_Barriers%2520to%2520E-commerce%2520in
%2520developing%2520countries_Lawrence%26Tar.pdf&ei=iF5UUK3oKOSE4gTZjoCI
CQ&usg=AFQjCNFMvjOiy78bbteST4cGltAfi9US5w&sig2=3uqzWrfvJev9r4YUoAYxOA
[Cited: 12-05-2012]
[9]
http://en.wikibooks.org/w/index.php?title=E-Commerce_and_E-Business/E-Comm
erce_ in_Developing_Countries&stable=0#How_important_is_e-commerce_to_ SMEs
_in_ developing_countries.3F_How_big_is_the_SME_e-business_market.3
[Cited: 11-05-2012]
[10] Guilherme Alberto Almeida de Almeida, Alfonso Avila and Violeta Boncanoska .
March 2007 . Promoting E-Commerce in Developing Countries . [Cited: 06-07-2012]
[11] http://people.dsv.su.se/~miwebb/kapitel/kap38.pdf . [Cited: 06-06-2012]
16