E-Commerce – BIT 7th Semester

Unit-1: Introduction

E-commerce
Electronic commerce (e-commerce) is often thought simply to refer to buying and
selling using the Internet. People immediately think of consumer retail purchases
from companies such as Amazon, eBay etc. But e-commerce involves much more
than electronically mediated financial transactions between organizations and
customers. E-commerce should be considered as all electronically mediated
transactions between an organization and any third party that it deals with. By this
definition, non-financial transactions such as customer requests for further
information would also be considered to be part of e-commerce.

To many people, the term “electronic commerce” means shopping on the part of the
Internet called the World Wide Web (the Web). However, electronic commerce also
includes many other activities, such as businesses trading with other businesses and
internal processes that companies use to support their buying, selling, hiring,
planning, and other activities.

Some people use the term e-business when they are talking about electronic
commerce in this broader sense. That is they use the terms “electronic commerce”
and “electronic business” interchangeably. Internet technologies include the
Internet, the World Wide Web, and other technologies such as wireless
transmissions on mobile telephone networks.

Examples of Ecommerce

Online shopping:
Online Shopping occurs when a customer buys through a digital platform. If you
buy something from online, for example, retail giant Amazon (Retail Giant Store),
you are online shopping.

Internet Banking:
We also call it online banking. Nearly all banks today offer services through their
website. We can transfer money, apply for an overdraft facility, and pay off our
credit cards online. An overdraft facility is an arrangement with the bank in which

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your account may be in debit. We can also apply for loans and even mortgages on
some websites.

Electronic payments:
Some companies have an online electronic payments service which allows you to
perform transactions digitally. They say their service is extremely safe and effective.

For example, pay pal is a global online payments system that supports online money
transfers. It is an electronic alternative to traditional paper methods like money
orders and checks.

Purchasing tickets online:

This E-commerce service helps consumers purchase tickets for concerts and movies.
We can even buy bus and train tickets online. There is no need go to a ticket office
and stand in line. We can purchase the tickets online from the comfort of our homes.

Online Auctions:
People can place bids and acquire products at competitive prices online.

Digital products:
Downloadable items like templates, courses, e-books, software, or media that must
be purchased for use. Whether it’s the purchase of software, tools, cloud-based
products or digital assets, these represent a large percentage of ecommerce
transactions.

Advantages of E-Commerce
1. E-commerce provides the sellers with a global reach. They remove the barrier
of place (geography). Now sellers and buyers can meet in the virtual world,
without the hindrance of location.
2. Electronic commerce will substantially lower the transaction cost. It
eliminates many fixed costs of maintaining brick and mortar shops. This
allows the companies to enjoy a much higher margin of profit.
3. It provides quick delivery of goods with very little effort on part of the
customer. Customer complaints are also addressed quickly. It also saves time,
energy and effort for both the consumers and the company.

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4. One other great advantage is the convenience it offers. A customer can shop
24×7. The website is functional at all time, it does not have working hours
like a shop.
5. Electronic commerce also allows the customer and the business to be in touch
directly, without any intermediaries. This allows for
quick communication and transactions. It also gives a valuable personal touch.

Disadvantages of E-Commerce
1. The start-up costs of the e-commerce portal are very high. The setup of the
hardware and the software, the training cost of employees, the constant
maintenance and upkeep are all quite expensive.
2. Although it may seem like a sure thing, the e-commerce industry has a high
risk of failure. Many companies riding the dot-com wave of the 2000s have
failed miserably.
3. At times, e-commerce can feel impersonal. So it lacks the warmth of an
interpersonal relationship which is important for many brands and products.
This lack of a personal touch can be a disadvantage for many types of services
and products like interior designing or the jewelry business.
4. Security is another area of concern. Only recently, we have witnessed many
security breaches where the information of the customers was stolen. Credit
card theft, identity theft etc. remain big concerns with the customers.
5. Then there are also fulfillment problems. Even after the order is placed there
can be problems with shipping, delivery, mix-ups etc. This leaves the
customers unhappy and dissatisfied.

E-business
E-Business refers to a broader definition of EC, not just the buying and selling of
goods and services but conducting all kinds of business online such as servicing
customers, collaborating with business partners, delivering e-learning, and
conducting electronic transactions within organizations. However, others view e-
business only as comprising those activities that do not involve buying or selling
over the Internet, such as collaboration and intra-business activities; that is, it is a

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complement of the narrowly defined e-commerce. In its narrow definitions, e-

commerce can be viewed as a subset of e-business.

E-business is similar to E-commerce but it is more than just a simple act of buying
and selling services or goods online. In fact, it is the method of utilizing digital
information and advanced communication technologies to streamline different
business processes from the initial to implementation phase.

Electronic commerce focuses on the use of information and communication

technology to enable the external activities and relationships of the business with
individuals, groups, and other businesses, while e-business refers to business with
help of the internet.

Electronic business differs from electronic commerce as it does not only deal with
online transactions of selling and buying of a product and/or service but also enables
to conduct of business processes (inbound/outbound logistics, manufacturing &
operations, marketing and sales, customer service) within the value chain through
internal or external networks.

E-business includes a lot of business processes including online order processing,

CRM (Customer Relationship Management), supply chain management and many
more. E-commerce is a part of e-business.

Components of E-Business

The core components of e-business are information, communication,

and transaction. Apart from them E-business has several components including BI
(Business Intelligence), CRM (Customer Relationship Management), ERP
(Enterprise Resource Planning), SCM (Supply Chain Management), Collaboration,
online activities, and electronic transactions within the firm etc.

These components are described below:

Business intelligence:
Business intelligence is about the activities that a small business may undertake to
collect, store, access, and analyze information about its market or competition to

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help with decision making. When conducted online, BI is efficient and quick,
helping companies to identify noteworthy trends and make better decisions faster.

Customer relationship management (CRM):

CRM refers to a customer service approach that focuses on building long-term and
sustainable customer relationships that add value for the customer and the
company. It is a company-wide strategy that brings together information from all
data sources within an organization (and sometimes from external data sources) to
give one holistic view of each customer in real time. The goal is to reduce costs and
increase profitability while providing customer satisfaction.

Supply chain management (SCM):

Every small business has a supply chain, the network of vendors that provide the
raw components that are needed to make a product or deliver a service. The
management of this network is known as supply chain management (SCM).
Efficiently and effectively improving the way that a company finds raw components
and then delivers the product or the service to the customer; SCM is about efficiently
and effectively improving the way that a company finds those raw components and
then delivers the product or the service to the customer.

Enterprise resource planning (ERP):

ERP is about integrating all departments and functions across a company (sales,
marketing, human resources, finance, accounting, production, engineering, etc.) into
a single computer system that can serve the particular needs of each department. The
objective is to provide information quickly and efficiently to those who need it.
Small businesses have many vendor choices for ERP systems. There are more than
thirty vendors in the field, and they are looking to small and midsize businesses as
their primary growth market.

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Areas of e-business:

Areas where e-business can function is described below:

E-procurement:

It is also known as supplier exchange in which business to business, business to

government, business to consumer, and sales of services are made with the help of
the internet. Basically, e-procurement is a way adopted by the companies to reduce
the costs and efforts by sourcing products or services electronically.

E-procurement is the process of buying and selling supplies and services over the
Internet. It differs from e-commerce in that it makes use of a supplier’s closed system
typically available only to registered users.

When implemented properly, e-procurement opens the lines of communication

between a company and a supplier by creating a direct link and facilitating
interactions such as bids, purchase orders and emails.

Online stores:

It is an electronic sourcing (website or application) for products or services, such

as online shopping stores. Online stores are also known as e-shop, internet shop,
web-store, virtual store, web-shop, m-commerce, and online storefront.

Online marketplaces:

It is an electronic commerce that connects the buyers and suppliers to the services
or products over the internet. The operator of an online marketplace only presents
the inventory of other people and provides the transaction facility.

An online marketplace is an e-commerce site that connects sellers with buyers. It’s
often known as an electronic marketplace and all transactions are managed by the
website owner. Companies use online marketplaces to reach customers who want to
purchase their products and services. Examples of online marketplaces include
Amazon, eBay, and Craigslist.

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Online communities:

An online community is simply a group of people coming together for a common

purpose, interest, or vision, and doing so via the internet. Online communities
typically use chat rooms, mailing lists, and forums as their primary mode of
interaction.

Or it can be said that, electronic communication network between individuals and

organizations, which supports data and knowledge sharing as well as the preparation
of transaction decisions.

Online companies:

Electronic business cooperation for connecting individual company services,

resulting in a virtual business with a common transaction offer.

Difference between e-business and e-commerce:

E-COMMERCE E-BUSINESS

E-Commerce refers to the performing E-Business refers to performing all

online commercial activities, transactions type of business activities through
over internet. internet.

E-Business is a broad concept and it is

E-Commerce is a narrow concept and it is considered as a superset of E-
considered as a subset of E-Business. Commerce.

Commercial transactions are carried out in Business transactions are carried out
e-commerce. in e-business.

In e-business transactions are not

In e-commerce transactions are limited. limited.

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It includes activities like procurement

of raw materials/goods, customer
It includes activities like buying and education, supply activities buying
selling product, making monetary and selling product, making monetary
transactions etc over internet. transactions etc over internet.

It requires the use of multiple

It usually requires the use of only a websites, CRMs, ERPs that connect
website. different business processes.

It involves the use of internet, intranet

It involves mandatory use of internet. or extranet.

E-commerce is more appropriate in E-business is more appropriate in

Business to Customer (B2C) context. Business to Business (B2B) context.

E-Commerce covers outward/external E-Business covers internal as well as

business process. external business process/activities.

Trends in E-Commerce:

In the constantly shifting, rapidly expanding ecommerce ecosystem, businesses must

think creatively about their digital strategies and how best to create dynamic,
interactive shopping experiences that improve customer relationships. In the midst
of a massive shift in how consumers purchase goods and services, here are some
ecommerce trends that are projected to impact the global USD 3.3 trillion market and
enhance a customer’s digital experience:

 Artificial intelligence (AI)

 Augmented reality
 Live commerce
 Online-to-offline ecommerce

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 Social commerce

Artificial Intelligence (AI):

It’s often said that AI is ushering in the fourth industrial revolution, and the
technology’s impact on digital commerce has been immense. Personalized shopping
experiences are no longer an aberration, but something customers expect. Digital
optimization and automation tools have made it cheaper and easier for businesses to
use customer data or third-party data, creating intelligent ecommerce sites. AI-
enabled marketing and product discovery tools help facilitate customer engagement
and retention, if deployed correctly.

Augmented Reality (AR):

With the advancement of augmented reality (AR) and virtual reality (VR)
technologies, brands are increasingly able to enhance digital experiences and weave
digital touch-points into traditional buying channels. For purchases that are heavily
dependent on environmental context e.g., a new living room couch-consumers can
reduce uncertainty and the likelihood of returning a product by “trying it out” in their
living room. Particularly in markets like travel, hospitality, and consumer retail, AR
and VR have the potential to enhance customer experiences by giving them the best
possible preview of a product before they buy.

Live commerce:
During live commerce events, customers can interact with a host over a live-stream
as they purchase products often by using digital wallets in real-time. The sales tactic,
which started with the Chinese social media network Alibaba, has been adopted by
businesses like TikTok, Amazon, and the clothing resale platform Poshmark. During
shopping events, influencers or celebrities might offer specific products,
encouraging consumers to discuss the item and eventual sale over a chat client.
Using live commerce, businesses can highlight markdowns or promotions,
encouraging a sense of camaraderie around a specific event.

Live commerce originated in China. Just six years after it emerged in 2016, the
industry was projected to bring in USD 647 billion in the country. In the United
States, the market is still emerging, bringing in a forecasted USD 32 billion as of
2023.
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Online-to-offline ecommerce:
Online-to-offline (O2O) ecommerce refers to a wide variety of ecommerce
experiences that seamlessly integrate digital channels with physical retail
experiences, thus creating a holistic customer journey spanning both online and
offline touch-points. And while it might initially sound counterintuitive, getting
customers back to shopping in-store has become a major imperative for some
ecommerce retailers. Offering select experiences in physical locations can engender
customer loyalty and uncover new target markets.

Social commerce:
Social commerce, a form of ecommerce in which a social media platform serves as
both a marketing channel and a shopping destination, is expected to grow by more
than 50% between 2021 and 2025. Like live commerce, it often takes the form of a
mobile shopping experience, and is a leading ecommerce trend that is expected
to generate USD 1.2 trillion globally by 2025.

Using this approach, organizations can use social media’s reach to facilitate product
discovery, encourage social purchasing decisions, and foster customer engagement.
Several platforms, including Facebook, Instagram, and TikTok, have built social
commerce into their platforms to facilitate the process.

Unique Features of E-commerce:

Ubiquity (Available Everywhere at all times):

In traditional commerce, a marketplace is a physical place you visit in order to
transact. For example, television and radio typically motivate the consumer to go
someplace to make a purchase. E-commerce, in contrast, is characterized by its
ubiquity: it is available just about everywhere, at all times. It liberates the market
from being restricted to a physical space and makes it possible to shop from your
desktop, at home, at work, or even from your car, using mobile e-commerce. The
result is called a market-space a marketplace extended beyond traditional boundaries
and removed from a temporal and geographic location. From a consumer point of
view, ubiquity reduces transaction costs, the costs of participating in a market. To
transact, it is no longer necessary that you spend time and money traveling to a
market. At a broader level, the ubiquity of e-commerce lowers the cognitive energy

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required to transact in a market-space. Cognitive energy refers to the mental effort

required to complete a task. Humans generally seek to reduce cognitive energy
outlays.

Global Reach:
E-commerce technology permits commercial transactions to cross cultural, regional,
and national boundaries far more conveniently and cost-effectively than is true in
traditional commerce. As a result, the potential market size for e-commerce
merchants is roughly equal to the size of the world’s online population. More
realistically, the Internet makes it much easier for start-up e-commerce merchants
within a single country to achieve a national audience than was ever possible in the
past. The total number of users or customers an e-commerce business can obtain is
a measure of its reach.

In contrast, most traditional commerce is local or regional it involves local

merchants or national merchants with local outlets. Television and radio stations,
and newspapers, for instance, are primarily local and regional institutions with
limited but powerful national networks that can attract a national audience. In
contrast to e-commerce technology, these older commerce technologies do not easily
cross-national boundaries to a global audience.

Universal Standards:
One strikingly unusual feature of e-commerce technologies is that the technical
standards of the Internet, and therefore the technical standards for conducting e-
commerce, are universal standards they are shared by all nations around the world.

In contrast, most traditional commerce technologies differ from one nation to the
next. For instance, television and radio standards differ around the world, as does
cell phone technology. The universal technical standards of e-commerce greatly
lower market entry costs the cost merchants must pay just to bring their goods to
market. At the same time, for consumers, universal standards reduce search costs the
effort required to find suitable products. And by creating a single, one-world market-
space, where prices and product descriptions can be inexpensively displayed for all
to see, price discovery becomes simpler, faster, and more accurate.

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Users, both businesses and individuals, also experience network externalities

benefits that arise because everyone uses the same technology. With e-commerce
technologies, it is possible for the first time in history to easily find many of the
suppliers, prices, and delivery terms of a specific product anywhere in the world,
and to view them in a coherent, comparative environment. Although this is not
necessarily realistic today for all or even most products, it is a potential that will be
exploited in the future

Richness:
Information richness refers to the complexity and content of a message. Traditional
markets, national sales forces, and small retail stores have great richness: they are
able to provide personal, face-to-face service using aural and visual cues when
making a sale. The richness of traditional markets makes them a powerful selling or
commercial environment. Prior to the development of the Web, E-commerce
technologies have the potential for offering considerably more information richness
than traditional media such as printing presses, radio, and television because they
are interactive and can adjust the message to individual users. Chatting with an
online sales person, for instance, comes very close to the customer experience in a
small retail shop. The richness enabled by e-commerce technologies allows retail
and service merchants to market and sell “complex” goods and services that
heretofore required a face-to-face presentation by a sales force to a much larger
audience.

Interactivity:
Unlike any of the commercial technologies of the twentieth century, with the
possible exception of the telephone, e-commerce technologies allow for
interactivity, meaning they enable two-way communication between merchant and
consumer and among consumers. Traditional television, for instance, cannot ask
viewers questions or enter into conversations with them, or request that customer
information be entered into a form. In contrast, all of these activities are possible on
an e-commerce site and are now commonplace with smartphones, social networks,
and Twitter. Interactivity allows an online merchant to engage a consumer in ways
similar to a face-to-face experience.

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Information Density:
E-commerce technologies vastly increase information density the total amount and
quality of information available to all market participants, consumers, and merchants
alike. E-commerce technologies reduce information collection, storage, processing,
and communication costs. At the same time, these technologies greatly increase the
currency, accuracy, and timeliness of information making information more useful
and important than ever. As a result, information becomes more plentiful, less
expensive, and of higher quality. A number of business consequences result from
the growth in information density. In e-commerce markets, prices and costs become
more transparent. Price transparency refers to the ease with which consumers can
find out the variety of prices in a market; cost transparency refers to the ability of
consumers to discover the actual costs merchants pay for products. But there are
advantages for merchants as well. Online merchants can discover much more about
consumers; this allows merchants to segment the market into groups willing to pay
different prices and permits them to engage in price discrimination selling the same
goods, or nearly the same goods, to different targeted groups at different prices. For
instance, an online merchant can discover a consumer’s avid interest in expensive
exotic vacations, and then pitch expensive exotic vacation plans to that consumer at
a premium price, knowing this person is willing to pay extra for such a vacation. At
the same time, the online merchant can pitch the same vacation plan at a lower price
to more price-sensitive consumers. Merchants also have enhanced abilities to
differentiate their products in terms of cost, brand, and quality.

Personalization/Customization:
E-commerce technologies permit personalization: merchants can target their
marketing messages to specific individuals by adjusting the message to a person’s
name, interests, and past purchases. Today this is achieved in a few milliseconds and
followed by an advertisement based on the consumer’s profile.

The technology also permits customization changing the delivered product or service
based on a user’s preferences or prior behavior. Given the interactive nature of e-
commerce technology, much information about the consumer can be gathered in the
marketplace at the moment of purchase. With the increase in information density, a

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great deal of information about the consumer’s past purchases and behavior can be
stored and used by online merchants.

The result is a level of personalization and customization unthinkable with

traditional commerce technologies. For instance, you may be able to shape what you
see on television by selecting a channel, but you cannot change the contents of the
channel you have chosen. In contrast, the online version of the Financial Times
allows you to select the type of news stories you want to see first, and gives you the
opportunity to be alerted when certain events happen. Personalization and
customization allow firms to precisely identify market segments and adjust their
messages accordingly.

Pure vs. Partial E-commerce

Pure E-electronic commerce refers to a situation where a business transacts its

business activities PURELY online, that is, the goods or services sold do not have
any physical presence.

Pure e-commerce is when everything happens on the internet.

For example: A business that sells software in Playstore, Appstore or other platforms
where you just pay and download, or one that sells music files online, buying
music/movies on iTunes, Netfilix subscription for movies etc.

Partial E-Commerce on the other hand refers to a slightly opposite situation where
a business has an online presence, but still has a physical location for the goods and
services it sells.

Partial e-commerce is when a company will sell a good through the internet but the
fulfillment of goodwill needs to take place in the "real" world.

For example, Amazon, Walmart, Daraz and any other you can think of, you buy the
goods online but receive them physically.

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Dimensions of E-Commerce:

 Product (service) sold [physical / digital];

 Process [physical / digital]
 Delivery agent (or intermediary) [physical / digital]

Traditional commerce: all dimensions are physical

Pure E-commerce: all dimensions are digital

 Pure online (virtual) organizations

 Sell products or services only online

Partial E-Commerce: a mix of digital and physical dimensions

 Click-and-mortar organizations
 Conduct EC activities
 Do their primary business in the physical world

Fig: Dimensions of EC
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History of E-commerce
History of ecommerce dates back to the invention of the very old notion of "sell and
buy", electricity, cables, computers, modems, and the Internet. Ecommerce became
possible in 1991 when the Internet was opened to commercial use. Since that date
thousands of businesses have taken up residence at web sites.

Ecommerce was introduced about 40 years ago in its earliest form. Since then,
electronic commerce has helped countless businesses grow with the help of new
technologies, improvements in internet connectivity, added security with payment
gateways, and widespread consumer and business adoption.

 1969: CompuServe, the first significant e-Commerce company is established

by Dr John R. Goltz and Jeffrey Wilkins by utilizing a dial-up connection.
This is the first time e-Commerce was introduced.
 1979: Michael Aldrich invented electronic shopping (he is also considered as
founder or inventor of e-Commerce). This was done by connecting a
transaction-processing computer with a modified TV through a telephone
connection. This was done for transmission of secure data.
 1982: The continued growth of technology, particularly in electronics led to
the launch of the first e-Commerce platforms by Boston Computer Exchange.
 1992: The 90s took the online business to the next level by introducing Book
Stacks Unlimited as an online bookstore by Charles M. Stack. It was one of
the first online shopping site created at that time.
 1994: Web browser tool introduced by Netscape Navigator by Marc
Andreessen and Jim Clark. It was used on the Windows platform.
 1995: The year marked the iconic development in the history of e-Commerce
as Amazon and eBay were launched. Amazon was started by Jeff Bezos, while
Pierre Omidyar launched eBay.
 1998: PayPal launched the first e-Commerce payment system as a tool to
make money transfers.
 1999: Alibaba started its online shopping platform in 1999 with more than
$25 million as capital. Gradually it turned out to be an e-Commerce giant.

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 2000: Google launched the first online advertising tool named Google
AdWords as a way to help retailers to utilize the pay-per-click (PPC) context.
 2005: Amazon Prime membership was launched by Amazon to help
customers get free two-day shipping at an annual fee. Similarly at the same
time “Etsy was launched to enable small and medium scale retailers to sell
goods online”, “Square, Inc as an app-based service was launched”, “ Eddie
Machaalani and Mitchell Harper launched BigCommerce as an online
storefront platform” .
 2011: Google launches its online wallet payment app, One of the earliest
moves by Facebook to launch sponsored stories for advertisements
 2014: Apple launched Apply Pay, an online payment application
 2014: Jet.com was launched as an online shopping portal.
 2017: Instagram introduces shoppable tags-enabling people to sell directly
from the social media platform

Types of E-commerce:
Electronic commerce can be classified into four main categories. The basis for this
simple classification is the parties that are involved in the transactions. So the four
basic electronic commerce models are:

 B2B
 B2C
 C2B
 C2C
 M-Commerce
 U-Commerce
 Social-Commerce
 Local E-Commerce

Business to Business (B2B):

This is Business to Business transactions. Here the companies are doing business
with each other. The final consumer is not involved. So, the online transactions only
involve the manufacturers, wholesalers, retailers etc.
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Business to Consumer (B2C):

Here the company will sell their goods and/or services directly to the consumer. The
consumer can browse their websites and look at products, pictures, read reviews.
Then they place their order and the company ships the goods directly to them.

For Examples are Amazon, Flipkart, Daraz, Jabong etc.

Consumer to Consumer (C2C):

Where the consumers are in direct contact with each other to buy and sell the
product. No company is involved. It helps people sell their personal goods and assets
directly to an interested party. Usually, goods traded are cars, bikes, electronics etc.

For Example: OLX, Quikr, HamroBazar etc.

Consumer to Business (C2B):

This is the reverse of B2C, it is a consumer to business. So the consumer provides a

good or some service to the company.

For example: An IT freelancer who demos and sells his software to a company.

M-Commerce:

Mobile commerce, also known as m-commerce, involves using wireless handheld

devices like cell phones and tablets to conduct commercial transactions online,
including the purchase and sale of products, online banking, and paying bills etc.

Mobile commerce is categorized into three main categories (mobile shopping,

mobile payments, and mobile banking), the highest growth areas for m-commerce
are:

 In-app purchasing (such as buying clothing items via a retail app)

 Mobile banking
 Virtual marketplace apps like Amazon
 Digital wallets like Apple Pay, Android Pay, and Samsung Pay
 Mobile ticketing

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U-commerce (Everywhere):

Ubiquitous Commerce, Universal Commerce or Ultimate Commerce is the

combination of traditional e-commerce and wireless, television, voice and silent
commerce.

It describes the concept that buyers and sellers have the potential to interact
anywhere, by using wireless devices, such as cell phones etc. Buyers and sellers
interact with each other via the Internet where orders can be placed online and
payments can be made via credit card or PayPal etc. The Association for Information
Systems states that the qualities of U-Commerce include Ubiquitous, uniqueness,
Universal and unison

 Ubiquitous: represents the ability to be connected at any time and in any place
as well as the integration of human-computer interaction into most devices
and processes, e.g. household objects.
 Uniqueness: stands for the unique identification of each customer or user
regarding his identity, current context, needs and location resulting in an
individual service.
 Universal: is related to everyone’s devices which can be used multifunctional
and as well as universal you will always be connected no matter of your place.
 Unison: constitutes the data integration across applications and devices to
provide users consistent and fully access to required information independent
of device and location. The term unison also relates to fully synchronized
devices at any time.

Social-Ecommerce:

Social ecommerce is, when social media platforms are used to make a more
personalized and targeted in-app experience shopping experience for customers.
Simply put, it brings ecommerce functionality directly into social media platforms
or it is the process of selling products directly on social media i.e. merchants sell
products directly through social media platforms, allowing potential customers to
interact with brands, browse goods and make purchases.

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When customers are satisfied with your business, social media makes it easy for
them to share and recommend your brand. Because of its very nature, social media
is a place where content goes viral. These channels therefore play a very important
role in your word-of-mouth marketing.

Examples of social commerce platforms and social commerce sites include

Facebook business retail store pages where users can browse and shop without
leaving the platform, or buy buttons on Twitter and Pinterest.

Many people wonder if social e-commerce will work for their business. In fact,
it offers a myriad of business benefits for your brand from increasing sales to driving
traffic, to increasing customer engagement and website traffic.

Local E-commerce:

Local e-Commerce is using your online shop to sell products only to a local customer
24/7. It is also known as hyper-local commerce. It falls under the umbrella of
Offline-to-Online commerce (O2O). O2O means that retailers with physical stores
can (should) offer their inventory and sell to local online shoppers in the same way
online pure plays sell to online shoppers.

Local commerce is the act of selling goods and services within a locality. It involves
setting up a shop in your local area to sell items that are unique to your area.

There are many advantages of running a business locally. The cost of doing business
locally is usually much lower than selling online. Also, you can reach more
customers with less marketing costs as compared to large markets like the United
States where all products are centralized in one place. The biggest advantage though
is that people will be able to directly interact with you, which can lead to higher
customer satisfaction levels because they will feel like they're buying from someone
who lives nearby them.

Challenges in E-commerce
 An absence of online identity verification
 Competitor Analysis
 Shopping cart abandonment
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 Maintaining customer loyalty

 The headache of product return and refund
 The struggle of competing on price and shipping
 Competing against retailers and manufacturers
 A problem of data security

Status of E-Commerce Globally:

In 2022, global ecommerce sales are expected to reach $5.7 trillion. This marks an
increase of 9.7 percent from the previous year as the global ecommerce market
continues to grow year after year.

But where is this growth coming from, and who are the largest contributors to the
growing global ecommerce size? Here’s a breakdown of the global ecommerce
market size by country in 2022.

The following table shows the list of Top Ten countries by E-commerce sales, 2022
and in the later years the figure is increasing.

Status of E-Commerce in Nepal:

Talking about Status of E-Commerce in Nepal, as the popularity of E-Commerce is
increasing globally, so is in Nepal. Today, as of 2019, there are 31 private ISP's In

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Nepal with nearly 16.67 million internet users nationwide. And According to
export.gov roughly 40% of these accounts are commercial. Online E-Commerce
Activities is mainly concentrated on Kathmandu Valley and some major cities.
However with the increase of internet penetration the number of mobile users are
increasing in rural areas and so is online activities. Today there are many E-
Commerce Websites that are providing e-commerce in Nepal along with delivery
service. Below is the list of some of the top E-Commerce websites in Nepal.

List of Some Popular E-Commerce Webite In Nepal

Daraz (daraz.com.np):

Daraz was founded in 2012 in Pakistan by a German Venture Capital

Company, Rocket Internet as a fashion retailer. It is South Asia’s premier online
shopping marketplace with an active presence in Pakistan, Bangladesh, Sri Lanka,
Myanmar, and Nepal. Supported by a wide range of tailored marketing, data, and
service solutions, Daraz has 30,000 sellers and 500 brands and serves 5 million
consumers across the region. Daraz has more than 2.5 million products to offer,
growing at a very fast pace. Daraz offers a diverse assortment in categories ranging
from consumer electronics to household goods, beauty, fashion, sports equipment,
and groceries.

Daraz provides an excellent customer experience, ease-of-purchase, comprehensive

customer care, and hassle-free shopping and returns experience. Alibaba Group
acquired Daraz in May 2018.

Alexa Rank in Nepal: 79

Alexa Rank Global: 30,020

Thulo (thulo.com):

On thulo.com, you can shop online for your basic daily necessities to other
necessities you might need. Browse through thousands of products from our array
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of online categories such as Personal Care, Electronics, Apparel, Sports and

Outdoors, Office Supplies, Fashion, Books, Groceries, and many more. They have
served thousands of satisfied customers who have remained loyal to our cause.
Through our online shopping platform, we are grateful to have served customers
from all over the world.

Alexa Rank in Nepal: 179

Alexa Rank Global: 120,103

Ok dam (okdam.com):

Ok Dam is one of Nepal’s finest online shopping portal. With online customers on
the skyscraper, Nepal is moving towards a digital revolution. Ok Dam is Nepal’s
Leading e-commerce marketplace launched in November 2017 OkDam is an
emerging online Shopping solution in Nepal.

Okdam.com is a definitive online shopping goal for Nepal, offering a bother-free

shopping background through secure and trusted portals. Okdam provides a popular
and unique shopping experience with all your most loved brands, which is just the
beginning. Customers never again need to hold up in traffic, expect rebates and
invest hours searching for the products and services that they need. All it takes is a
couple of snaps and a couple of moments to find the product and to put order(s) at
OkDam. Ok Dam exhibits items from all classes, for example, Fashion, clothing,
footwear, ornaments, gadgets, Kitchen Appliances, Home Appliances, Furniture,
Accessories, Health Care, Machinery, Sports & Fitness, beauty products, Send Gifts
To Nepal and as yet tallying! Our collection consolidates the most trending in the
fashion list as well as the all-time high demands.

Alexa Rank in Nepal: 238

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Alexa Rank Global: 172,230

Sasto Deal (sastodeal.com):

Sastodeal’s story began in Dec 2011, when internet penetration in Nepal was just
about 9%. Yet, we were encouraged to start not just a company but an e-Commerce
industry that would have a significant impact in Nepal’s economy for generations to
come. Bootstrapped with just Rs.50,000, we rented a small garage, worked on
broken furniture and chairs, and worked hard to build a strong company and
significantly contributing to building an e-Commerce industry.

Today, Sastodeal is one of the leading eCommerce companies in Nepal, with

millions of customers and thousands of vendors/partners all over Nepal. We have a
logistic network that ensures deliveries in most parts of the nation, except for some
locations (work in progress). Our goal is to ensure that our users and customers can
buy products at affordable prices, get their products delivered as assured and on time
regardless of their location. On the other hand, we provide a platform for our vendors
to cater to millions of customers without additional cost to their business.

Alexa Rank in Nepal: 268

Alexa Rank Global: 157,034

GYAPU (gyapu.com):

GYAPU is the most rewarding online shopping platform led by Nepali

Entrepreneurs to expand and flourish e-commerce industries in Nepal and across
South East Asia. The primary objective of GYAPU is to build the Nepali Global
Brand and promote domestic Nepali products in Nepal and throughout the globe.

GYAPU pledges to disintermediate the monopoly of mediators and existing e-

commerce industrial trends. GYAPU envisions uplifting the local business
enthusiasts and overall Economy of Nepal while simultaneously creating job
opportunities nationwide.
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Alexa Rank in Nepal: 408

Alexa Rank Global: 350,113

Deal Ayo (dealayo.com):

Deal Ayo is a trusted and easy-to-use shopping site that offers a surprising and
exciting range of top-quality products at affordable prices.

Deal Ayo is easy to use, and we provide a level of customer service that we believe
is second to none. They aim to make Deal Ayo people’s first choice to look for top
quality and affordable online shopping in Nepal.

Alexa Rank in Nepal: 673

Alexa Rank Global: 364,616

Socheko (socheko.com):

Socheko.com has aimed to provide you a one-stop solution for all your need.
Nowadays, the internet has been the most common and part of our life. We are
searching for products of our need, but we cannot manage time to go and get it.
“Socheko” is the solution for all this you will get the right product on the right way
precisely at your doorstep. Socheko doesn’t commit we’ll sell our product at a
cheaper price than others because we don’t believe in a price war; we are more
committed to quality. In other words, they tag the right price for the right product.

Nepal’s renowned business group promotes Socheko.Com in Nepal’s business arena

for the last 20 years. They understood the value of a customer and always believe
that the customer comes first. Enjoy Shopping.

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Alexa Rank in Nepal: 1,585

Alexa Rank Global: 393,557

Meroshopping (meroshopping.com):

Meroshopping.com is the solution for any online shopping in Kathmandu,

Bhaktapur, Lalitpur, and any other major city in Nepal. Meroshopping is becoming
more and more popular as you can enjoy shopping from the comfort of your home.

Shopping has never been easy and fun; with our user-friendly online shopping
platform, customers can browse and directly purchase their desired products using a
secure and safe online payment system. In other words, Meroshopping is Reliable,
affordable, and offering Free home delivery inside Nepal. The major cities in
Kathmandu provide online shopping in Pokhara, Butwal, Chitwan, Dharan, Surkhet,
Birgunj, Biratnagar, Jhapa, and Nepalgunj, Mero Shopping has reached many
shoppers in Nepal. With a fast and free delivery within 24 hours, Mero Shopping
proves to be reliable and affordable.

Alexa Rank in Nepal: 1,763

Alexa Rank Global: 1,154,110

SmartDoko (smartdoko.com):

SmartDoko is an online shopping destination in Nepal, offering a wide range of

products at competitive prices! They focus on quality products and fast delivery to
give customers the best shopping experience. Their reward point system is the first
and only one of its kind in the Nepali e-commerce industry in Nepal.

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A subsidiary of IMS Group, one of Nepal’s most prominent business houses,

SmartDoko is a reliable platform. SmartDoko has created a simple and safe platform
for both customers and vendors. They can shop or sell from the comfort of their
homes. It is your One-Click Solution to all things shopping!

Alexa Rank in Nepal: 2,322

Alexa Rank Global: 1,548,877

Muncha (muncha.com):

Muncha.com is the most prominent name in gifting among Nepalese all over the
world. We started as Muncha House in the 1920s, the first department store in Nepal,
and ventured into online shopping in 2000 to offer a gifts gallery to non-resident
Nepalese looking to surprise family and friends back home.

Muncha started with the vision of forging lifelong relationships with our customers,
taking pride in being reliable, and undertaking special deliveries every day.

Their customers remember Muncha to send gifts for birthdays, anniversaries,

Nepalese festivals, occasions, rituals, internationally celebrated festivals, weddings,
celebrations for achievements, missing family and friends, and numerous other
reasons.

Muncha seeks to serve and delight each customer where in the world they may be
and stick to our roots even as we are technologically innovative.

Alexa Rank in Nepal: 3,275

Alexa Rank Global: 651,676

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Besides there are various other ecommerce websites operating in nepal that are
providing quality service and is taking nepal to the next level of shopping. Some of
the other e-comerce websites are:

1. gazabko.com
2. shopmandu.com
3. rojeko.com
4. merotarkari.com
5. merokirana.com
6. Urban Girls (ugbazaar.com)

Overview of Electronic Transaction Act of Nepal:

Electronic transaction is:

 Transactions of electronic records data by using any types of electronic means

 Contains electric records and valid digital medium
 The exchange of all types of records which are in the form of electronic

Electronic Transaction Act 2006 of Nepal:

The Electronic Transactions Act, 2006 (“Act”) came into effect on 02 September
2006. The objective of this Act is to ensure the reliability and security of electronic
transactions including the control of unauthorized use of electronic records or
alteration in such records through illegal manner.

Objectives of the Electronic Transaction Act 2063

1. To make legal provision for authentication and regulation of electronic data.
2. To make a reliable date generation, communication, and transmission.
3. To make a secured and authentic means of electronic communication.
4. To regulate all the relating matters of electronic transactions.

A brief overview of, some of the distinctive provisions of the Act are described
below:

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1) Electronic record and digital signature:

The Act ensures every subscriber’s right to authenticate to any electronic record by
their personal digital signature.

2) License for certifying authority

An application with required documents must be submitted to the Controller
appointed pursuant to the Act to obtain license as a “Certifying Authority”. The
license must be renewed every year by filing an application in the prescribed format
to the Controller at least 2 months prior to the expiry period.

3) Digital signature and certificates

3.1 Procedure of obtaining digital signature certificate

a) An application must be submitted to the Certifying Authority along with the

applicable fees.
b) Certifying Authority must issue a digital signature certificate within 7 days
affixing their signature if it decides to issue such certificate.
c) If the Certifying Authority decides to reject the application, the applicant must
be notified with the reasons for rejection within 7 days.

3.2 Suspension of certificate

The certificate may be suspended in following conditions:

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a) If the subscriber obtaining the certificate or any person authorized to act on

behalf of such a subscriber, requests to suspend the certificate;
b) If it is found necessary to suspend the certificate that contravenes (violate)
public interest;
c) If it is found that significant loss might be caused to those persons who depend
on the certificate by the reason that provisions of this Act or the rules framed
hereunder (terms and conditions) were not followed at the time of issuance of
the certificate; or
d) If the Controller instructs to suspend the certificate having specified the
aforementioned (previously mentioned) grounds.

3.3 Revocation (Cancel) of certificate

The certificate may be revoked in following conditions:

1. Where the subscriber or any other person authorized by such person request
to revoke a certificate;
2. If it is necessary to revoke in a certificate that contravenes the public interest;
3. Upon the death of the subscriber;
4. Upon the insolvency (Bankrupt), winding up (Sale of Company) or
dissolution (Collapse) of the company or corporate body under the prevailing
laws, where the subscriber is a company or a corporate body;
5. If it is proved that a requirement for issuance of the certificate was not
satisfied;
6. If a material fact represented in the certificate is proved to be false; or
7. If a key used to generate key pair or security system was compromised in a
manner that affects materially the certificate’s reliability.

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4) Offence relating to computer

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5) Tribunal (Panel):

The Act contemplates (think about) the formation of Information Technology

Tribunal consisting of 3 members for proceedings for offences under the Act.
Further, Information Technology Appellate Tribunal formed under this Act will hear
the appeal against the decision or order made by the Controller, Certifying Authority
and Information Technology Tribunal.

End of Unit-1

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