2.1 types of e-commerce
TRANSCRIPT
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Types of e-Commerce
Jagdish C. Kapur [email protected]
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Types of e-Commerce
• e-Commerce is the process of buying and
selling of various products and services by
businesses through the Internet.
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Types of e-Commerce
• There are many types of e-Commerce ;
some of these are:
– business-to-business (B2B);
– business-to-consumer (B2C);
– business-to-government (B2G);
– consumer-to-consumer (C2C); and
– mobile commerce (m-commerce).
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B2B e-Commerce
• What is B2B e-commerce?
• B2B e-commerce is simply defined as e-
commerce between companies/businesses.
• This is the type of e-commerce that deals with
relationships between and among businesses.
•
About 80% of e-commerce is of this type, andmost experts predict that B2B e-commerce will
continue to grow faster than the B2C segment.
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B2B e-Commerce (contd.)
• The B2B market has two primary components:
– e-frastructure and
– e-markets
– e-frastructure is the architecture of B2B, primarily
consisting of the following:
• Logistics
• Application Service Providers
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B2B e-Commerce (contd.)
• Logistics - transportation, warehousing and
distribution (e.g., Procter and Gamble);
• Application service providers
– deployment,
– hosting and
– management of packaged software from a central
facility (e.g., Oracle);
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B2B e-Commerce (contd.)
• Outsourcing of functions in the process of e-commerce, such as
– Designing,
– Development, – Web-hosting,
– 24X7 Customer Support,
–
Security, and – Web Marketing (e.g., NetCreativeMind, New
Delhi);
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B2B e-Commerce (contd.)
• Auction solutions software for the operation
and maintenance of real-time auctions in the
Internet (e.g., WebSolutions India, Amritsar,
Moai Technologies and OpenSite
Technologies, both in the US);
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B2B e-Commerce (contd.)
• Content management software for the
facilitation of Web site content management
and delivery (e.g., Kaveri Communications
and Suprawin Technologies, Bangalore,
Interwoven and ProcureNet); and
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B2B e-Commerce (contd.)
• Web-based commerce enablers (e.g.,
Commerce One, a browser-based, XML-
enabled purchasing automation software).
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B2B e-Commerce (contd.)
• The more common B2B examples and best
practice models are IBM, Hewlett Packard
(HP), Cisco and Dell. Cisco, for instance,
receives over 90% of its product orders over
the Internet.
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B2B e-Commerce (contd.)
• Most B2B applications are in the areas of
– supplier management (especially purchase order
processing),
– inventory management (i.e., managing order-ship-
bill cycles),
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B2B e-Commerce (contd.)
– distribution management (especially in the
transmission of shipping documents),
– channel management (i.e., information
dissemination on changes in operationalconditions), and
– payment management (e.g., electronic payment
systems or EPS).
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B2B e-Commerce (contd.)
• The impact of B2B markets on the economy of
developing countries is evident in the
following:
• Transaction costs. There are three cost areas
that are significantly reduced through the
conduct of B2B e-commerce.
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B2B e-Commerce costs
• First is the reduction of search costs, as buyers
need not go through multiple intermediaries to
search for information about suppliers,
products and prices as in a traditional supply
chain.
• In terms of effort, time and money spent, the
Internet is a more efficient information channelthan its traditional counterpart.
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B2B e-Commerce costs (contd.)
• In B2B markets, buyers and sellers are
gathered together into a single online trading
community, reducing search costs even further.
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B2B e-Commerce costs (contd.)
• Second is the reduction in the costs of
processing transactions (e.g. invoices,
purchase orders and payment schemes), as
B2B allows for the automation of transaction
processes and therefore, the quick
implementation of the same compared to other
channels (such as the telephone and fax).
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B2B e-Commerce costs (contd.)
• Efficiency in trading processes and
transactions is also enhanced through the B2B
e-market’s ability to process sales through
online auctions. Third, online processing
improves inventory management and logistics.
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B2B e-Commerce costs (contd.)
• Disintermediation. Through B2B e-markets,
suppliers are able to interact and transact directly
with buyers, thereby eliminating intermediaries
and distributors and costs associated therewith.• However, new forms of intermediaries are
emerging. For instance, e-markets themselves can
be considered as intermediaries because theycome between suppliers and customers in the
supply chain.
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B2B e-Commerce costs (contd.)
• Transparency in pricing .
–Among the more evident benefits of e-
markets is the increase in price transparency. –The gathering of a large number of buyers
and sellers in a single e-market reveals
market price information and transaction
processing to participants.
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B2B e-Commerce (contd.)
• The Internet allows for the publication of
information on a single purchase or transaction,
making the information readily accessible and
available to all members of the e-market.• Increased price transparency has the effect of
pulling down price differentials in the market.
• In this context, buyers are provided much moretime to compare prices and make better buying
decisions.
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B2B e-Commerce (contd.)
• Moreover, B2B e-markets expand borders for
dynamic and negotiated pricing wherein
multiple buyers and sellers collectively
participate in price-setting and two-wayauctions.
• In such environments, prices can be set
through automatic matching of bids and offers.
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B2B e-Commerce (contd.)
• In the e-marketplace, the requirements of both
buyers and sellers are thus aggregated to reach
competitive prices, which are lower than those
resulting from individual actions.
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B2B e-Commerce (contd.)
• Economies of scale and network effects.
–The rapid growth of B2B e-markets
creates traditional supply-side cost- based economies of scale.
–Furthermore, the bringing together of a
significant number of buyers andsellers provides the demand-side
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B2B e-Commerce (contd.)
–Each additional incremental participant
in the e-market creates value for all
participants in the demand side. –More participants form a critical mass,
which is key in attracting more users to
an e-market.
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B2C e-Commerce
• What is B2C e-commerce?
• Business-to-consumer e-commerce, or commerce between companies and consumers, involves
–customers gathering information;
– purchasing physical goods (i.e., tangibles such as books or consumer products) or information goods (or goods of electronic material or digitized content, such
as software, or e-books); and, – for information goods, receiving products over an
electronic network.
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B2C e-Commerce (contd.)
• It is the second largest and the earliest form of e-commerce.
• Its origins can be traced to online retailing (or e-
tailing).• Thus, the more common B2C business models are
the online retailing companies such as
– Amazon.com, Mygrahak.com, Drugstore.com, etc.
– Other B2C examples involving information goods areE-Trade and Travelocity, Regulus InformationTechnologies, Pune.
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B2C e-Commerce (contd.)
• The more common applications of this type of
e-commerce are in the areas of purchasing products and information, and personal
financemanagement, which pertains to themanagement of personal investments and
finances with the use of online banking tools.
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B2C e-Commerce (contd.)
• B2C e-commerce reduces transactionscosts(particularly search costs) by increasing consumer access to information and allowing consumers to
find the most competitive price for a product or service.
• B2C e-commerce also reduces market entrybarriers since the cost of putting up and
maintaining a Web site is much cheaper thaninstalling a “brick -and-mortar” structure for afirm.
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B2C e-Commerce (contd.)
• In the case of information goods, (What areinformation goods) B2C e-commerce is evenmore attractive because it saves firms from
factoring in the additional cost of a physicaldistribution network.
• Moreover, for countries with a growing androbust Internet population, deliveringinformation goods becomes increasinglyfeasible.
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Information Goods
• Information good in economics and law is a
type commodity whose main market value is
derived from the information it contains.
• It may also include services, like information
services.
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Information Goods
• The typical examples of information goods
include a CD containing pieces of music, a
DVD containing a movie, a computer file
which is a piece of program, a book containing short stories, and so on.
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B2G e-Commerce
• What is B2G e-commerce?
• Business-to-government e-commerce or B2G
is generally defined as commerce between
companies and the government/public sector.
• It refers to the use of the Internet for public
procurement, licensing procedures, and other
government-related operations.
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B2G e-Commerce (contd.)
• This kind of e-commerce has two features:
first, the public sector assumes a pilot/leadingrolein establishing e-commerce; and
• second, it is assumed that the public sector has
the greatest need for making its procurement
system more effective and efficient.
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B2G e-Commerce (contd.)
• Web-based purchasing policies increase the
transparency of the procurement process (and
reduces the risk of irregularities).
• While, until recently, the size of the B2G e-
commerce market as a component of total e-
commerce has not been very significant, it has
caught up significantly during the last 6-7years.
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G2B Services
• While B2G e-Commerce is generally
concerned with supply of goods (and services
to some extent) to government in the e-
procurement domain, G2B is primarilyconcerned with making governance services
available to business in the total life cycle of
the business.
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Close
Expand
Operate
Start-up Explore
Opportunities
• Approvals
• Permissions
• Registrations
• Approvals
• Permissions
• Project Profiles
• Infrastructure
• State Support
• Approvals
• Compliance
• Returns
• Taxes
• Permits
• Compliance
37
Government to Business(G2B) Services - Lifecycle
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G2B
Start UP
• How to Start a business in the country or State?
• Processes, procedures and applicable payments?
• Licenses and permissions needed for business
establishment?
• Application forms and where to submit the forms?
• Timelines for registration and obtaining certifications
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G2B
Operate
• Applicable taxes for various categories of business?
• How much tax to be paid at what duration?
• Regulatory and compliance requirements to befollowed during business operations?
• Various documents and information to be filed
with the government?• Government exemption policies?
• Penalties and legal implications for delays?
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G2B
Expansion
• Information on additional permits/licenses
needed for business operations expansion?
• Tax implications and liabilities?
• Government exemption policies?
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Government Services (information and transactions)
– Each government service consist of a sub-set of:
– Information services
– Transaction services
Information Services Transaction Services
How to register company? Receipt of application forms
and payments
Forms and documents needed
for registration
Processing of application and
registration
Applicable payments? Issuing registration certificate
Status of registration
processing?
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C2C e-Commerce (contd.)
• What is C2C e-commerce?
• Consumer-to-consumer e-commerce or C2C is
simply commerce between private individuals
or consumers.
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C2C e-Commerce (contd.)
• This type of e-commerce is characterized by
the growth of electronic marketplaces and
online auctions, particularly in vertical
industries where firms/businesses can bid for what they want from among multiple
suppliers.
• It perhaps has the greatest potential for developing new markets.
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C2C e-Commerce (contd.)
• This type of e-commerce comes in at least
three forms:
• Auctions facilitated at a portal, such as eBay,
which allows online real-time bidding on items
being sold in the Web;
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C2C e-Commerce (contd.)
• Peer-to-peer systems, such as the Napster model (a protocol for sharing files betweenusers used by chat forums similar to IRC,
Internet Relay Chat) and other file exchangeand later money exchange models; and
• Classified ads at portal sites such as ExciteClassifieds and eWanted (an interactive, online
marketplace where buyers and sellers cannegotiate).
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C2B e-Commerce
• Consumer-to-business (C2B) transactions
involve reverse auctions, which empower the
consumer to drive transactions.
• A concrete example of this when competing
airlines gives a traveller best travel and ticket
offers in response to the traveller’s post that
he/she wants to fly from place A to place B(say, Delhi to Mumbai).
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m-Commerce
• What is m-commerce?
• M-commerce (mobile commerce) is the buying
and selling of goods and services through
wireless technology-i.e., handheld devices
such as cellular telephones and personal digital
assistants (PDAs).
• Japan is seen as a global leader in m-commerce.
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m-Commerce (contd.)
• As content delivery over wireless devices
becomes faster, more secure, and scalable,
some believe that m-commerce will surpass
wireline e-commerce as the method of choicefor digital commerce transactions.
• This may well be true for the Asia-Pacific
where there are more mobile phone users thanthere are Internet users.
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m-Commerce (contd.)
• Industries affected by m-commerce include:
• Financial services, including mobile banking
(when customers use their handheld devices to
access their accounts and pay their bills), as
well as brokerage services (in which stock
quotes can be displayed and trading conducted
from the same handheld device);
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m-Commerce (contd.)
• Telecommunications, in which service changes,
bill payment and account reviews can all be
conducted from the same handheld device;
• Service/retail, as consumers are given the abilityto place and pay for orders on-the-fly; and
• Information services, which include the delivery
of entertainment, financial news, sports figuresand traffic updates to a single mobile device.
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