Module 1
Introduction to E-commerce
IAN JADE E. LOZADA, MBA
COLLEGE OF BUSINESS AND ACCOUNTANCY
CENTRAL PHILIPPINE UNIVERSITY
LEARNING OBJECTIVES:
01 Understand why it is important to study e-commerce.
Define e-commerce, understand how e-commerce differs from e-business, identify the primary
02 technological building blocks underlying e-commerce, and recognize major current themes in
e-commerce
03 Identify and describe the unique features of e-commerce technology and discuss their business
significance.
04 Describe the major types of e-commerce.
05 Understand the evolution of e-commerce from its early years to today.
06 Describe the major themes underlying the study of e-commerce.
07 Identify the major academic disciplines contributing to e-commerce.
Discussion Question:
What is the shape of the world
today?
INTRODUCTION TO E-COMMERCE
Ubernization of E-commerce
• UberX
• UberBlack
• UberPool
• UberRush
• UberCargo
• UberEats
Digital Disruption
• Offers superior, fast and convenient service
INTRODUCTION TO E-COMMERCE
Scandals involving Uber / Problems
It involves social costs and conflicts (misclassifying its drivers)
Mistreatment
Lack of due process
Underpayment
Violation of state employee laws
Violating public transportation laws and regulations
Discussion Question:
Add to Cart:
Why Study E-Commerce ?
WHY STUDY E-COMMERCE?
E-commerce technology is different, more powerful than
previous technologies
E-commerce brings fundamental changes to commerce
Traditional commerce:
• Consumer as passive targets
• Mass-marketing driven
• Sales-force driven
• Fixed prices
• Information asymmetry
E-commerce vs. E-business
Involves the use of the
Internet, the Web, and mobile
apps and browsers running on
mobile devices to transact
business.
More formally, digitally
enabled commercial
transactions between and
among organizations and
individuals.
E-commerce vs. E-business
• Shopping online
• Enrolling in an online class
• Paying bills online
• Booking a ticket
• Human Resource database
• Budget tracking
• Payroll records
• Inventory systems
E-commerce vs. E-business
Building Blocks of E-commerce
Internet - worldwide network of computer networks built on
common standards
World wide web (WWW) - an information system running on
Internet infrastructure that provides access to billions of web
pages
Examples: www.facebook.com, www.Instagram.com.
Mobile platform - provides the ability to access the Internet from
a variety of mobile devices such as smartphones, tablets, and other
ultralightweight laptop computers.
Internet access in the Philippines
Discussion Question:
Will mobile app dethrone the
web?
Major Trends in E-commerce – Business
Retail e-commerce continues to grow worldwide.
Retail m-commerce sales skyrocket as well as advertising.
Social e-commerce, based on social networks and supported by advertising,
emerges and continues to grow
Local e-commerce, the third dimension of the mobile-social-local e-commerce wave,
is also growing
B2B e-commerce revenues continue to expand.
On-demand service firms like Uber and Airbnb attract billions in capital.
Small businesses and entrepreneurs continue to flood into the e-commerce
marketplace, often riding on the infrastructures created by industry giants such as
Apple, Facebook, Amazon, Google, and eBay.
Major Trends in E-commerce - Technology
A mobile computing and communications platform based on smartphones,
tablet computers, wearable devices, and mobile apps becomes a reality, creating
an alternative platform for online transactions, marketing, advertising, and
media viewing.
Smart speakers such as Amazon Echo and Google Home become increasingly
popular, providing an additional platform for e-commerce.
Cloud computing completes the transformation of the mobile platform.
The Internet of Things (IoT), comprised of billions of Internet-connected devices,
continues to grow exponentially.
In order to make sense out of big data, firms turn to sophisticated
software called business analytics (or web analytics) that can identify
purchase patterns as well as consumer interests and intentions in
milliseconds.
Major Trends in E-commerce – Society
User-generated content, published online as social network posts, tweets, blogs,
and pins, as well as video and photo-sharing, continues to grow and provides a
method of self-publishing that engages millions.
Social networks encourage self-revelation, threatening privacy, as Facebook comes
under fire for allowing third parties.
The EU General Data Protection Regulation takes effect, impacting all companies
that operate in any of the EU member nations.
Concerns increase about the increasing market dominance of Facebook, Amazon,
and Google, leading to calls for government regulation in both the European Union
and United States.
Conflicts over copyright management and control continue, but there is
substantial agreement among online distributors and copyright owners that they
need one another.
Surveillance of online communications by both repressive regimes and
Western democracies grows.
Major Trends in E-commerce – Society
Concerns over commercial and governmental privacy invasion increase.
Online security continues to decline as major companies are hacked and lose control
over customer information.
Spam remains a significant problem.
On-demand service e-commerce produces a flood of temporary, poorly paid jobs
without benefits.
Unique Features of E-commerce
UNIQUE FEATURES OF E-COMMERCE
Ubiquity - available just about everywhere, at all times
• Marketplace - physical space you visit in order to transact
• Marketspace - marketplace extended beyond traditional
boundaries and removed from a temporal and geographic location
Effect:
• Marketplace removed the traditional geographic locations to become
marketspace
• Enhanced customer shopping convenience and costs
UNIQUE FEATURES OF E-COMMERCE
Global reach – the total number of users or customers an e commerce
business can obtain
Effect:
• Commerce enabled across cultural and national boundaries
seamlessly and without modification
• Marketspace includes, potentially, billions of consumers and millions
of businesses worldwide
UNIQUE FEATURES OF E-COMMERCE
Universal standards – standards that are shared by all nations around the
world
Effect:
• Computer systems easily communicate to each other
• Lower market entry costs – costs merchant has to pay to bring
goods and services to market
• Lower consumer’s search costs – effort required to find suitable
products
UNIQUE FEATURES OF E-COMMERCE
Richness – the complexity and content of a message, supports video, audio
and text messages
Effect:
• Possible to deliver rich messages with text, audio and video
simultaneously to large number of people
• Video, audio and text marketing messages can be integrated into a
single marketing message and consumer experience
UNIQUE FEATURES OF E-COMMERCE
Interactivity – technology that allows for two-way communication between
merchant and consumer
Effect:
• Consumers engaged in a dialog box that dynamically adjust
experience to the individual
• Consumers become co-participant in process of delivering goods to
the market
UNIQUE FEATURES OF E-COMMERCE
Information density – the total amount and quality of information
available to all market participants
Effect:
• Greater price transparency
• Greater cost transparency
• Enables merchant to engage in price discrimination
UNIQUE FEATURES OF E-COMMERCE
Personalization and Customization
• Personalization - the targeting of marketing messages to specific
individuals by adjusting the message to a person’s name, interests, and
past purchases
• Customization - changing the delivered product or service based on a
user’s preferences or prior behavior
Effect:
• Personalized messages can be sent to individuals as well as groups
• Products and services can be customized to individual preferences
UNIQUE FEATURES OF E-COMMERCE
Social Technology
• The technology that promotes user content generation and social
networking
Effect:
• New internet social and business models enable user content creation
and distribution, support social networks
• Many-to-many model
UNIQUE FEATURES OF E-COMMERCE
Types of E-commerce
Business – to – Consumer (B2C)
online businesses selling to individual consumers
Business – to – Business (B2B)
online businesses selling to other businesses
Consumer – to – Consumer
consumers selling to other consumers
Mobile Commerce
use of mobile devices to enable online transactions
Social Commerce
e-commerce enabled by social networks and online social relationships
Local Commerce
e-commerce that is focused on engaging the consumer based on his or her current
geographic location
TYPES OF E-COMMERCE
BRIEF HISTORY OF E-COMMERCE
DISINTERMEDIATION
Major Themes of E-commerce
Technology:
Development and mastery of digital computing and communications technology
Business:
New technologies present businesses with new ways of organizing production
and transacting business
Society:
Intellectual property, individual privacy, public welfare policy
INTERNET AND THE EVOLUTION OF
CORPORATE COMPUTING
Academic Disciplines
Concerned with E-commerce
Behavioral approach Technical approach
• Information systems • Computer science
• Economics • Management science
• Marketing • Information system
• Management
• Finance/accounting
• Sociology
Review Questions
Why is it important to study e-commerce?
Define e-commerce, understand how e-commerce differs from e-business.
Identify the primary technological building blocks underlying e-commerce.
What are some of the unique features of e-commerce technology and discuss
their business significance?
How does the ubiquity of e-commerce impact consumers?
Describe the major types of e-commerce.
What impact does the increased interactivity provided by e-commerce technologies have
on business?
Assignment:
1. Choose an e-commerce company and assess it in terms of the eight unique features
of e-commerce technology described in terms of the eight unique features of e-
commerce. Which of the features does the company implement well, and which
features poorly, in your opinion? Prepare a short memo to the president of the
company you have chosen detailing your findings and any suggestions for
improvement you may have. 10 pts.
FEATURES OF E-COMMERCE DESCRIPTION STATUS (POOR OR WELL)
Ubiquity
Global reach
Universal standards
Richness
Interactivity
Information density
Personalization / Customization
Social technology
Assignment:
3. Given the development and history of e-commerce in the years
1995–2019, what do you predict we will see during the next five
years of e-commerce? Describe some of the technological,
business, and societal shifts that may occur as the Internet
continues to grow and expand. Prepare a written report to
explain your vision of what e-commerce will look like in 2024. 10
pts
4. Prepare a brief report on how companies are using Instagram
or another company of your choosing as a social e-commerce
platform. 10 pts
Thank you！
