E-commerce • Describe E-Commerce • Identify benefits and risks of E-Commerce • Describe E-Commerce business models • Describe E-Commerce Security and Encryption • Describe EDI (Electronic Data Interchange) • Describe trends and projections for E-Commerce • Describe issues related to E-Commerce • Describe order and payment processing • Describe E-Commerce solution options
What isE-Commerce? • The integration of communications, data management, and security technologies to allow individuals and organizations to exchange information related to the sale of goods and services. • Major functions of E-Commerce include: • the buying of goods, • the selling of goods, and • performance of financial transactions on the Internet.
E-CommerceIssues • Intellectual Property • Security • Fraud • Taxation • International Commerce
e-Business solutions Customers ERP, CRM, Database Internet / WWW Mobile Users Web EDI Intranet Internal Users Suppliers, public
E-Commerce Advantages for Businesses • Reduced Costs • Increased Customer Satisfaction • More Effective Data Management • Potentially Higher Sales
E-Commerce Advantages for Consumers • Convenience • Easier Comparison Shopping • Wider Selection of Goods
E-Commerce Risksfor Businesses • Need for a robust, reliable web site • Fraudulent transactions • Customer reluctance to purchase online • Increased competition
E-Commerce Risksfor Consumers • Possible Security Issues • Possible Privacy Issues • Purchasing from photos & descriptions • Possible difficulty with returns
E-CommerceBusiness Models • B2C – Business-to-Consumer • B2B – Business-to-Business • C2C – Consumer-to-Consumer • B2G – Business-to-Government
Electronic Data Interchange (EDI) • EDI is the transfer of data between different companies using networks. • This facilitates the exchange of standard business documents including purchase orders and invoices. • EDI is not new; it has been in existence since the 1960s. • Organizations that exchange EDI transmissions are called trading partners. • Newer technologies such as XML and Web Services are replacing traditional EDI by allowing trading partners virtually unlimited opportunities to customize their information exchange over the Internet.
Questions • Describe three advantages of e-commerce for an entrepreneur just starting a business. • Describe three risks that businesses face when engaging in e-commerce.
Order &Payment Processing • E-Commerce Payment Models: • Cash • Check • Credit • Smart Card • Micropayments
E-CommerceStorefront Solutions • Instant Online Storefront • Yahoo!, Bigstep, Earthstores, FreeMerchant • Off-The-Shelf Shopping Cart Software • Miva Merchant, Mercantec • Custom Built Solution • IBM's WebSphere Commerce Suite, Microsoft's Commerce Server • Visual Studio.NET, Macromedia Dreamweaver MX, IBM’s WebSphere Commerce Studio • Semi-Custom Built Solutions on a Budget • E-Commerce add-ons for FrontPage and Dreamweaver • Paypal order processing • Free shopping cart scripts
Questions • List three payment models commonly used on the Web. Which one is the most popular, why? • Have you purchased online? If so, think of the last item that you purchased. • Why did you purchase it online instead of at a store? • Did you check to see if the transaction was secure? Why or why not? • How will your shopping habits be different in the future? • Describe three types of e-commerce solutions available. Which provides the easiest entry to e-commerce? Explain.
Application Service Provider • What is ASP? • Application Service Provider • (not the ASP from microsoft) • A company offers individuals or enterprises to host their applications or services on this ASP company. (low budgets for small companies, outsourcing for large companies)
Hosting Solutions • Mid-High Volume: Amazon • Other: • Servelink.com, CyberSharks.net, Hostek.com, LiquidWeb.com, Tikios.com(windows-based)
Terminology • Dedicated line– A point-to-point, hard wire connection between two service locations. • Leased line– A telecommunications line dedicated to a particular customer along predetermined routers. • Outsourcing– The transfer of components or large segments of an internal IT infrastructure, staff, processes or applications to an external resource such as Application service provider (ASP).
Example e-Business • Storefront model • Auction model • Portal Model • Dynamic Pricing Models • B2B Exchanges • B2B Service Providers • e-Learning
Storefront Model • The storefront model combines transaction processing, security, online payment which allows merchants to sell their products to the customers on the Web. • Many famous storefront model companies are Business-to-Consumer (B2C) companies. • www.amazon.com • www.ticketmaster.com • Sell tickets
Storefront Model • Allow companies to conduct business 24-by-7 (all-day, everyday). • One of the most commonly used model is “shopping cart” • An order-processing technology that allows user to accumulate the shopping list and continue shopping. • Supported by product catalog, merchant server and database technology. • www.gap.com • www.icare.com.hk (international)
Shopping Example Shopping cart Go shopping
Shopping Carts • Templates for shopping carts in dreamweaver at ecommercetemplates.com (you host solution) • Many other providers (http://www.fortune3.com) • Managed Solutions • Make your own
Shopping Cart SW Sometimes will also include Product pages –that are created from statically entered in product information (not stored in databases)
Comparisons of Shopping Cart SW Search online to see what is popular Check out wiki page (http://en.wikipedia.org/wiki/Comparison_of_shopping_cart_software)
Free Shopping Cart SW • Do a search • Check out www.free-carts.com • PHP: http://www.opencart.com/ • This does cart + product pages • Install on a Web Server • As part of install of SW must specify a MySQL database and give the admin name and a password to it. • Finish install of OpenCart SW – will include creation the database tables to support OpenCart • Using Interface of opencart: Setup categories of products, product info with images, etc. • Java: http://www.jadasite.com/
Shopping Cart Payment Processing Services Google Checkout PayPall Amazonpayments Others: (search yourself)- 2checkout.com, authorize.net, itransact, cyberbit, and more Direct Credit Card
Storefront Model • Another model is “online shopping mall” which provides a wide selection of products and services. • Customers can purchase items from many stores in a single transaction. • Offer speed and add convenience • www.mall.com • www.shopnow.com • www.e-buy.com.hk
Shopping Mall Example Different shops
Auction Model • Internet User can login to the online auction sites, either bidder or seller. • Sellers post their items and wait for the buyers to bid. • Auction sites get commission on every successful auction. • E.g. most profitable: www.ebay.com • International: auction.timway.com • http://auctions.yahoo.com/ • Reverse Auction model • Allow buyer to set the price, www.epurchasingagent.com
http://ebay.com/ Auction Model Example
Portal Model • Allow visitors to find everything within the website. • Horizontal Portal • Wide-ranged of topics • E.g. www.yahoo.com • Vertical Portal • Offer specific information on a single area of interest. • E.g. www.webmd.com (medical information)
Dynamic Pricing Model • Name-your-price Business Model • Customers choose their price for the products or services (www.priceline.com). • Comparison Pricing Model • Customers poll some merchants and find the lowest prices (www.bottomdollar.com) • Demand-Sensitive Pricing Model • Enables customers to get better services and prices. (www.mobshop.com) • Bartering Model • Exchange items (www.ubarter.com)
Group Pricing Model • Customers get group pricing if enough purchase the offer (www.groupon.com).
B2B Exchanges • Define as buying, selling, partnering, bartering or trading conducted between two or more business (B2B). • Allow Business to buy, sell, auction, barter and distribute products and services. • Examples: • www.ework.com (Exchange employee) • www.itoi.com (Industry to Industry) • www.biz2biz.com (Business to Business) • www.icgcommerce.com, www.tradeaccess.com
B2B Service Providers • B2B service providers make the B2B transactions easier. • These e-Businesses help other businesses improve their policies, procedures, services and general operations. • Solutions include supply chain management, logistics, procurement. • www.ariba.com • www.freemarkets.com • www.liveperson.com
Chat online? • Why? To solve your E-business problem via the Internet.
Loan Online • A growing segment of E-commerce. • Loan online at a lower rate than other traditional channels. • E-loan –www.eloan.com • E-credit –www.ecredit.com • Clients – HP, Intel, other businesses • Loan direct –www.loansdirect.com
Recruitment on the Web • Effectively job searching on the Web. • Improve the recruitment for both employer and seeker. • Search International Jobs (www.monster.com) • Focus on computer industry (www.dice.com) • www.guru.com • www.jobdb.com
Online News Services • Web is playing an important role in the publishing and news industries. • The Wall Street Journal (www.wsj.com) • Articles by leading investment analysts (www.barrons.com) • Latest sports news (www.espn.com) • Comprehensive news site (www.drudgereport.com)
Online Travel Services • Customers can bypass the travel agents. • Allow discount and low fare rate online. • air-tickets, hostel, and car-rentals. • “Last minutes” tickets offer low price. • www.cheaptickets.com, www.kayak.com, orbitz.com, expedia.com, ….www.travelocity.com
Online Entertainment • Multimedia rich websites provide Audio and Video, popular music and videos are available online for free. • Internet Movie Database • www.imdb.com • www.icast.com, netflix.com, blockbuster.com,…
e-Learning • e-Learning is growing rapidly as the number of Internet users increases. • Universities and other training companies offer HQ distance education over the Web. • www.click2learn.com • www.saba.com • www.online.uillinois.edu • wwwtools.cityu.edu.hk • www.polyu.edu.hk/elearning • E-books –www.xlibris.com
M-Commerce • What is Mobile Commerce? • Mobile commerce is the term applied to online financial transactions - shopping or the electronic transfer of funds - using a mobile device. • Mobile commerce transactions are being enhanced by developments in the world of mobile communication.