AN ASSIGNMENT ON:

WHY DO WE NEED E-COMMERCE

PREPARED BY:

GROUP 8

SUBMITTED TO:

THE DEPARTMENT OF COMPUTER SCIENCE

FACULTY OF INFORMATION AND COMMUNICATION TECHNOLOGY

THE POLYTECHNIC IRESI

IRESI, OSUN STATE.

COURSE FACILITATOR

MR. OLUWOLE J.S.

NOVEMBER, 2023
 LIST OF GROUP 8 GROUP MEMBERS

NAMES MATRIC NO

• TIJANI KEHINDE CSNP2100189

• OLURANTI BOLUWATIFE CSN2100101

• ADEBAYO TOBILOBA CSNP2100178

• JESUDARE KAYODE CSNP2100169

• BOLAJI VICTORIA CSN2100027

• KULOGUN AYOOLA CSN2100110

•
 DEDICATION

We hereby dedicate this group assignment to Almighty God.

We are also dedicate this work to all the group members of group 8 and also to the lecturer in
charge Mr. Oluwole J.S.
 ABSTRACT

The purpose of this write up is to expose the reader and to answer the of why we need E-
commerce in the society.
This write up explain extensively what E-commerce is and explain the needs for E-Commerce in
the society.
This write up is divided into two chapters;
The first chapter explains extensively what E-commerce is
The second chapter explain the needs foe E-commerce in the society
 CHAPTER ONE

INTRODUCTION

What Is Electronic Commerce (E-commerce)

Electronic commerce (e-commerce) refers to companies and individuals that buy and sell goods
and services over the internet. E-commerce operates in different types of market segments and
can be conducted over computers, tablets, smartphones, and other smart devices. Nearly every
imaginable product and service is available through e-commerce transactions, including books,
music, plane tickets, and financial services such as stock investing and online banking. As such,
it is considered a very disruptive technology.

KEY TAKEAWAYS

• E-commerce is the buying and selling of goods and services over the internet.

• It is conducted over computers, tablets, smartphones, and other smart devices.

• Almost anything can be purchased through e-commerce today, which makes e-commerce
highly competitive.

• It can be a substitute for brick-and-mortar stores, though some businesses choose to

maintain both.

• E-commerce operates in several market segments including business-to-business,

business-to-consumer, consumer-to-consumer, and consumer-to-business.

Understanding E-commerce

As noted above, e-commerce is the process of buying and selling tangible products and services
online. It involves more than one party along with the exchange of data or currency to process a
transaction. It is part of the greater industry that is known as electronic business (e-business),
which involves all of the processes required to run a company online.
E-commerce has helped businesses (especially those with a narrow reach like small businesses)
gain access to and establish a wider market presence by providing cheaper and more efficient
distribution channels for their products or services. Target (TGT) supplemented its brick-and-
mortar presence with an online store that allows customers to purchase everything from clothes
and coffeemakers to toothpaste and action figures right from their homes.

Providing goods and services isn't as easy as it may seem. It requires a lot of research about the
products and services you wish to sell, the market, audience, competition, as well as expected
business costs.

Once that's determined, you need to come up with a name and set up a legal structure, such as a
corporation. Next, set up an e-commerce site with a payment gateway. For instance, a small
business owner who runs a dress shop can set up a website promoting their clothing and other
related products online and allow customers to make payments with a credit card or through a
payment processing service, such as PayPal.

E-commerce may be thought of as a digital version of mail-order catalog shopping. Also called
online commerce, e-commerce is the transaction between a buyer and a seller that leverages
technology.

Special Considerations

E-commerce has changed the way people shop and consume products and services. More people
are turning to their computers and smart devices to order goods, which can easily be delivered to
their homes. As such, it has disrupted the retail landscape. Amazon and Alibaba have gained
considerable popularity, forcing traditional retailers to make changes to the way they do
business.

But that's not all. Not to be outdone, individual sellers have increasingly engaged in e-commerce
transactions via their own personal websites. And digital marketplaces such as eBay or Etsy
serve as exchanges where multitudes of buyers and sellers come together to conduct business.

History of E-commerce
Most of us have shopped online for something at some point, which means we've taken part in e-
commerce. So it goes without saying that e-commerce is everywhere. But very few people may
know that e-commerce has a history that goes back to before the internet began.

E-commerce actually goes back to the 1960s when companies used an electronic system called
the Electronic Data Interchange to facilitate the transfer of documents. It wasn't until 1994 that
the very first transaction. took place. This involved the sale of a CD between friends through an
online retail website called NetMarket.

The industry has gone through so many changes since then, resulting in a great deal of evolution.
Traditional brick-and-mortar retailers were forced to embrace new technology in order to stay
afloat as companies like Alibaba, Amazon, eBay, and Etsy became household names. These
companies created a virtual marketplace for goods and services that consumers can easily access.

New technology continues to make it easier for people to do their online shopping. People can
connect with businesses through smartphones and other devices and by downloading apps to
make purchases. The introduction of free shipping, which reduces costs for consumers, has also
helped increase the popularity of the e-commerce industry.

Types of E-commerce

Depending on the goods, services, and organization of an ecommerce company, the business can
opt to operate several different ways. Here are several of the popular business models.

• Business-to-Consumer (B2C)

B2C e-commerce companies sell directly to the product end-user. Instead of distributing goods to
an intermediary, a B2C company performs transactions with the consumer that will ultimately
use the good.

This type of business model may be used to sell products (like your local sporting goods store's
website) or services (such as a lawn care mobile app to reserve landscaping services). This is the
most common business model and is likely the concept most people think about when they hear
the term e-commerce.

• Business-to-Business (B2B)
Similar to B2C, an e-commerce business can directly sell goods to a user. However, instead of
being a consumer, that user may be another company. B2B transactions often entail larger
quantities, greater specifications, and longer lead times. The company placing the order may also
have a need to set recurring goods if the purchase is for recurring manufacturing processes.

• Business-to-Government (B2G)

Some entities specialize as government contractors providing goods or services to agencies or

administrations. Similar to a B2B relationship, the business produces items of value and remits
those items to an entity.

B2G e-commerce companies must often meet government requests for proposal requirements,
solicit bids for projects, and meet very specific product or service criteria. In addition, there may
be joint government endeavors to solicit a single contract through a government-wide acquisition
contract.

• Consumer-to-Consumer (C2C)

Established companies are the only entities that can sell things. E-commerce platforms such as
digital marketplaces connect consumers with other consumers who can list their own products
and execute their own sales.

These C2C platforms may be auction-style listings (i.e. eBay auctions) or may warrant further
discussion regarding the item or service being provided (i.e. Craigslist postings). Enabled by
technology, C2C e-commerce platforms empower consumers to both buy and sell without the
need for companies.

• Consumer-to-Business (C2B)

Modern platforms have allowed consumers to more easily engage with companies and offer their
services, especially related to short-term contracts, gigs, or freelance opportunities. For example,
consider listings on Upwork.

A consumer may solicit bids or interact with companies that need particular jobs done. In this
way, the e-commerce platform connects businesses with freelancers to enable consumers greater
power to achieve pricing, scheduling, and employment demands.
 • Consumer-to-Government (C2G)

Less of a traditional e-commerce relationship, consumers can interact with administrations,

agencies, or governments through C2G partnerships. These partnerships are often not in the
exchange of service but rather, the transaction of obligation.

For example, uploading your federal tax return to the Internal Revenue Service (IRS) digital
website is an e-commerce transaction regarding an exchange of information. Alternatively, you
may pay your tuition to your university online or remit property tax assessments to your county
assessor.

Types of E-commerce Revenue Models

In addition to crafting what type of e-commerce company a business wants to be, the business
must decide how it wants to make money. Due to the unique nature of e-commerce, the business
has a few options on how it wants to process orders, carry inventory, and ship products.

• Dropshipping

Often considered one of the easier forms of e-commerce, dropshipping allows a company to
create a digital storefront, generate sales, then rely on a supplier to provide the good. When
generating the sale, the e-commerce company collects payment via credit card, PayPal,
cryptocurrency, or other means of digital currency.

Then, the e-commerce store passes the order to the dropship supplier. This supplier manages
inventory, oversees the warehouse of goods, packages the goods, and delivers the product to the
purchaser.

• White Labeling

White-label e-commerce companies leverage already successful products sold by another

company. After a customer places an order, the e-commerce company receives the existing
product, repackages the product with its own package and label, and distributes the product to
the customer. Although the e-commerce company has little to no say in the product they receive,
the company usually faces little to no in-house manufacturing constraints.
 • Wholesaling

A more capital-intensive approach to e-commerce, wholesaling entails maintaining quantities of

inventory, keeping track of customer orders, maintaining customer shipping information, and
typically having ownership of the warehouse space to house products.

Wholesalers may charge bulk pricing to retailers or unit prices for consumers. However, the
broad approach to wholesaling is to connect to buyers of large quantities or many smaller buyers
of a similar, standardized product.

• Private Labeling

Private labeling is a more appropriate e-commerce approach for companies that may not have
large upfront capital or do not have their own factory space to manufacture goods. Private label
e-commerce companies send plans to a contracted manufacturer who makes the product.

The manufacturer may also have the ability to ship directly to a customer or ship directly to the
company receiving the order. This method of e-commerce is best suited for companies that may
receive on-demand orders with short turnaround times but are unable to handle the capital
expenditure requirements.

• Subscription

E-commerce companies can also leverage repeating orders or loyal customers by implementing
subscription services. For a fixed price, the e-commerce company will assemble a package,
introduce new products, and incentivize locking to a long-term agreement at a lower monthly
price.

The consumer only places an order once and receives their subscription order at a fixed cadence.
Common subscription e-commerce products include meal prep services, agriculture boxes,
fashion boxes, or health and grooming products.

Example of E-commerce
Amazon is a behemoth in the e-commerce space. In fact, it is the world's largest online retailer
and continues to grow. As such, it is a huge disrupter in the retail industry, forcing some major
retailers to rethink their strategies and shift their focus.

The company launched its business with an e-commerce-based model of online sales and product
delivery. It was founded by Jeff Bezos in 1994 as an online bookstore but has since expanded to
include everything from clothing to housewares, power tools to food and drinks, and electronics.

Company sales increased by 9% in 2022 from the previous year, totaling $513.98 billion
compared to $469.82 billion in 2021. Amazon's operating income dropped from $24.88 billion in
2021 to $$12.25 billion in 2022. The company posted a net loss of $2.72 billion in 2022,
compared to net income of $33.36 billion in 2021.
 CHAPTER TWO

THE NEED FOR E-COMMERCE

• E-Commerce Eased Sales

24*7/365 availability of goods and unlimited customer reach generate more sale. When you
aren’t limited to the local market or to physical store capacity, you automatically sell more and
can adjust your stock to your customers’ needs. You can provide your services or sell goods
abroad by adjusting prices to the global market. By spending less of your budget running a store
and making more capital at the same time, you can save a significant amount of money and
expand your business faster.

• Reduced Operational Expenses

E-Commerce is the most economical way to grow your retail business. It doesn’t require high
levels of initial capital and it’s very cost-effective. Most of the investment is repaid by early sales
profits.

From a long-term perspective buying a domain and hosting or paying for web development and
good ecommerce service is less expensive than buying or renting physical business premises.
Some ecommerce platforms provide sellers with drop-shipping services, which helps cut storage
and delivery expenses. Chatbots can support you with customer enquiries and automation keeps
all the inventory and finances in one place so you don’t have to spend money on additional
software.

• Increased Availability of Products And Services

With products and services listed online, retailers have a better chance to reach out their
customers and promote their businesses. Your products and services are constantly visible as
ecommerce platforms offer online listings and price comparison. Moreover, you can serve those
who couldn’t find items locally and decided to turn to the internet to source the product. As
websites are visual, online stores also give you limitless opportunities to present your items in an
aesthetically pleasing way and stand out from the crowd.

• A Broader Range of Customers

There is no doubt that ecommerce platforms help sellers reach buyers globally and sell their
goods on the wider market. You’re scaling the business globally and being online means that you
can sell to people all over the world. There is no limit to whom and where you reach. Broadening
your business horizons not only earns you more money but helps your business grow.

• Simplified Buying Process

The most convenient aspect of ecommerce is that the customer can purchase directly from you
after searching for an item online, without leaving home or interacting with a salesperson.
Consumers expect goods to be available instantly, e-stores answer that needs. Because buying
online doesn’t require a visit to a retail store and products can be shipped from any place in the
world, consumers aren’t limited to shops in their local vicinity and spend less time shopping.
That’s what makes ecommerce an attractive alternative for them. As a retailer, you need to meet
them online and give them what they’re looking for.

• Automation

Ecommerce platforms offer full automation, including finance systems, inventory, shipping and
customer service. That means everything is in one place and can easily be managed by one
person at their convenience. Chatbots can help you out with most enquiries and artificial
intelligence provides a personal touch into this communication. These simple solutions give you
more time to grow your business and keep your customers happy at the same time, and all of this
without hiring additional team members.

• Derive Benefit From Customer Advocacy

Whisper marketing works very well online and helps spread the word about your brand globally.
People depend heavily on reviews and others’ opinions. They are more likely to buy a particular
product from a particular seller if it was recommended by someone famous, someone they know
or someone they can identify with. The Digital Marketing Institute shows that 49% of consumers
rely on influencer recommendations and 40% have purchased goods after seeing them on social
media.

• Lower Advertising Costs

Customer advocacy and increased brand awareness help reduce marketing and advertising costs.
As word spreads quickly on the Internet you can reach potential customers with every review of
your product or opinion about your brand left on Google or other independent consumer review
websites. Moreover, product listings on ecommerce platforms make your goods visible to a
potential customer. Your products can be showcased using photos, videos banners or GIFs.
There is an entire set of affordable tools available for you to promote your products. Not to
mention that ecommerce platforms are very well positioned in Google and the algorithms ensure
that whatever is listed on websites will be ranked highly in the search results.

• Flexibility

According to KPMG, the main reason people buy online is that they can do it whenever they
want from anywhere on the planet. This feature makes the shopping experience very easy and
convenient. It allowed ecommerce to thrive during the Pandemic when people were stuck at
home unable to buy in physical stores. But it’s not just buyers who benefit from ecommerce
flexibility. Solutions like service automation or AI software give retailers more freedom when
selling online.

• Analysis of Consumer Behaviour

Imagine being able to predict what and when will be bought from you. Imagine you can tailor
your offer to each customer’s needs. Imagine you can guide your customers to buy certain
products. These things aren’t entirely possible when running a physical store but can be achieved
with an online store. A variety of analytics tools and the newest AI software gives you insights
into consumer buying habits and helps you to not only personalise the offer but also respond
quickly to your customers’ needs and changing trends. That’s one small step towards greater
sales.
Slowly taking over retail during the past decade, ecommerce has suddenly become the only
viable to reach out the customers when public health measures forced store closures. The Covid-
19 pandemic has drastically and possibly permanently changed buyer behaviour in the past 12
months. The online store became essential for retail businesses and buying online became a
necessity. Despite the circumstances, it’s a win-win solution and this sudden change comes with
some significant benefits for both customers and sellers. To name a few: greater accessibility to
products and service simplification of the buying process, greater reach and most importantly
flexibility. These factors make it a perfect fit for all.
 CONCLUSION

Nearly every imaginable product and service is available through e-commerce transactions. So
therefore, E-commerce is very important in every businesses such as goods services and financial
service. E-commerce is a very disruptive technology.

It is interesting to know that e-commerce, an emerging technology is growing globally and there
are many more to come from this new way of doing business. It is important for us individually
and collectively to understand e-commerce both the prospects and likely challenges
accompanying it.
 REFERENCES

https://www.investopedia.com/terms/e/ecommerce.asp
https://spyro-soft.com/blog/ecommerce-business
www.thebalancemoney.com>needsfore-commerce