Module 3

Buying and sellingOnline

2Agenda

Regional Training Workshop for Enterprise Support Agencies to Promote E-business for SMEs in the Greater Mekong Subregion (GMS), 26-28 June 2006, Bangkok

• Internet shopping: buying and selling online

• How it works: expectation and reality• Buyers’ perspectives• Sellers’ perspectives

• Types of e-business models

• Classic cases

3

Why Internet Shopping?• Enables consumers to shop or do other transactions 24 hours a

day, all year round from almost any location• Provides consumers with more choices• Provides consumers with less expensive products and services by

allowing them to shop in many places and conduct quick comparisons

• Allows quick delivery of products and services, especially with digitized products

• Consumers can receive relevant and detailed information in seconds, rather than in days or weeks

• Allows consumers to interact with other consumers in electronic communities and exchange ideas as well as compare experiences

• Facilitates competition, which results in substantial discounts

4

Why NOT Internet Shopping?• Security and Privacy

• Difficult to convince customers that online transactions and privacy very secure

• Customers do not trust:• Unknown faceless sellers• Paperless transactions• Electronic money

• Switching from a physical to a virtual store may be difficult• Lack of touch and feel online• Many unresolved legal issues• Expensive and/or inconvenient accessibility to the Internet• E-payment is not in place in many places

5

Online consumer behaviour model

6Buyers and sellers in B2B e-business

7Buy-side and Sell-side

8Buyer-side and Seller-side

Buyer Seller

On Buyer/Buying

-Want to make the decision to purchase-Want to effect payment-Want to assume ownership

-Statistics-Get exposure

On Seller/Selling

-Perception of the cheapest price-Perception of fewer hassles-Perception of trustworthiness-Visibility of the site

-Make profit-Be visible-Increase traffic

9

Types of e-business models• Brokerage model: Bring buyers and sellers together and

facilitate transactions• Auction broker (ebay.com, alibaba.com)• Transaction broker (paypal.com, escow.com)• Search agent (jobdb.com)• Virtual marketplace (amazon.com)

• Advertising model: Extension of the traditional media broadcast model• Portal (yahoo.com)• Classifieds (classifieds.com)• Content-targeted advertising (google.com)

10

Types of e-business models (cont.)

• Merchant model: Merchants (e-tailers) expand businesses into selling online (borders.com)

• Manufacturer model: Manufacturers open online channel to reach buyers directly (dell.com)

• Subscription model: Web sites offering news, market survey and charging fees (nytimes.com)

• Affiliate model: Revenue sharing through banner/link exchange, etc. (bravenet.com)

11

Classic cases

12

Classic cases: ebay.com

13

Classic cases: amazon.com

14

Classic cases: dell.com

15

Classic cases: alibaba.com

16

Classic cases: tarad.com

17

Q & A

Conclusion

Regional Training Workshop for Enterprise Support Agencies to Promote E-business for SMEs in the Greater Mekong Subregion (GMS), 26-28 June 2006, Bangkok