Nandi Institute of Management & Science (NIMS), BALLARI.

E-COMMERCE
Unit 1 => E-COMMERCE & it’s TECHNOLOGICAL ASPECTS

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RAHUL
 Nandi Institute of Management & Science (NIMS), BALLARI.

UNIT 1- E-COMMERCE AND ITS TECHNOLOGICAL ASPECTS: OVERVIEW OF

DEVELOPMENTS IN INFORMATION TECHNOLOGY AND DEFINING
E-COMMERCE: THE SCOPE OF E-COMMERCE, ELECTRONIC MARKET,
ELECTRONIC DATA INTERCHANGE, INTERNET COMMERCE, BENEFITS AND
LIMITATIONS OF E-COMMERCE, PRODUCE A GENERIC FRAMEWORK FOR
E-COMMERCE, ARCHITECTURE FRAMEWORK OF ELECTRONIC COMMERCE,
WED-BASED E-COMMERCE ARCHITECTURE.

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 Nandi Institute of Management & Science (NIMS), BALLARI.

Definition of E-Commerce:

“E-commerce is the activity of buying or selling of products on online services or over the
Internet.”

“E-commerce (Electronic Commerce) refers to the buying and selling of goods and services over
the internet. It includes various online business models, such as retail shopping, digital
marketplaces, subscription services, and business-to-business (B2B) transactions”

“E-commerce, or electronic commerce, is the buying and selling of goods and services online. It
can involve transactions between businesses, consumers, or both”

Scope of E-commerce

The Scope of Electronic Commerce:

1.Global Reach:

● One of the most significant advantages of E-commerce is its ability to transcend

geographical boundaries. Businesses can reach a global audience without the constraints
of physical location, enabling them to tap into diverse markets and customer bases.

2.Increased Convenience:

● For consumers, E-commerce provides unparalleled convenience. The ability to browse,

compare, and purchase products from the comfort of their homes, 24/7, has
revolutionized the shopping experience.

3.Diverse Business Models:

E-commerce accommodates various business models, including Business-to-Consumer (B2C),

Business-to-Business (B2B), Consumer-to-Consumer (C2C), and more. This versatility allows
businesses to choose models that align with their goals and target audience.

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 Nandi Institute of Management & Science (NIMS), BALLARI.

4.Enhanced Customer Engagement:

● Digital platforms enable businesses to engage with their customers in real-time. Social
media, personalized marketing strategies, and interactive websites contribute to building
strong customer relationships and loyalty.

5.Data-Driven Decision Making:

● E-commerce platforms generate vast amounts of data that can be analyzed to gain
insights into consumer behavior, preferences, and market trends. This data-driven
approach empowers businesses to make informed decisions and tailor their strategies for
optimal results & electronic commerce meaning.

6.Technological Advancements:

As technology continues to advance, so does the scope of E-commerce. Innovations such as

artificial intelligence, virtual reality, and augmented reality are being integrated into E-commerce
platforms to enhance user experiences and drive sales.

7.Evolving Business Landscape:

E-commerce has transformed traditional business models and given rise to new opportunities.
Brick-and-mortar businesses are increasingly adopting online strategies to stay competitive,
blurring the lines between physical and digital commerce.

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 Nandi Institute of Management & Science (NIMS), BALLARI.

Electronic Market (E-Market)

An Electronic Market (E-Market) is an online platform where buyers and sellers interact to
exchange goods, services, or information electronically, often facilitated by digital technologies
such as the internet, cloud computing, and AI. It eliminates the need for physical marketplaces,
offering a more efficient, global, and accessible trading environment.

Types of Electronic Markets

1. Business-to-Consumer (B2C) E-Markets

● Online retail stores where businesses sell directly to consumers.
● Examples: Amazon, Walmart Online, Shopify

2. Business-to-Business (B2B) E-Markets

● Platforms for businesses to trade goods or services in bulk.
● Examples: Alibaba, ThomasNet, Global Sources.

3. Consumer-to-Consumer (C2C) E-Markets

● Individuals sell products to other individuals via third-party platforms.
● Examples: eBay, Craigslist, Facebook Marketplace.

4. Consumer-to-Business (C2B) E-Markets

● Consumers offer products or services to businesses.
● Examples: Freelancer platforms like Upwork, Fiverr.

5. Government-to-Business (G2B) and Government-to-Consumer (G2C)

● Digital platforms for public services, procurement, and tenders.
● Examples: E-procurement portals, tax filing websites.

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 Nandi Institute of Management & Science (NIMS), BALLARI.

Characteristics of an Electronic Market

● Global Reach: Enables cross-border trade and access to a wider customer base.
● Lower Costs: Reduces overhead costs by eliminating physical store requirements.
● Automation & AI: Uses intelligent algorithms for personalized recommendations and
dynamic pricing.
● Secure Payment Systems: Integrates online payment gateways (PayPal, Stripe,
cryptocurrencies).
● Transparency & Efficiency: Provides real-time data, reviews, and price comparisons.

Benefits of Electronic Markets

● For Businesses:
● Cost savings on logistics and inventory.
● Better market penetration and scalability.
● Data analytics for improved decision-making.
● For Consumers:
● Convenience of shopping anytime, anywhere.
● Wider selection of products and competitive pricing.
● Enhanced customer experience with AI-driven personalization.

Challenges in Electronic Markets

● Cybersecurity threats (hacking, fraud).

● Trust issues in transactions and product authenticity.
● Intense competition leading to price wars.
● Regulatory and tax complexities in cross-border e-commerce.

Electronic Data Interchange (EDI)

Electronic Data Interchange (EDI) is the structured transmission of business documents between
organizations in a standardized electronic format, replacing paper-based transactions. It enables
companies to exchange data such as purchase orders, invoices, shipping notices, and payments
seamlessly, improving efficiency and accuracy.

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 Nandi Institute of Management & Science (NIMS), BALLARI.

Key Features of EDI

● Standardized Format: Uses predefined formats like ANSI X12, EDIFACT, and XML
for data exchange.
● Automation: Eliminates manual data entry, reducing errors and processing time.
● Security: Ensures data integrity and confidentiality with encryption and authentication.
● Integration: Works with enterprise systems like ERP (Enterprise Resource Planning) and
CRM (Customer Relationship Management).

Internet Commerce

Internet Commerce, also known as e-commerce, refers to the buying and selling of goods,
services, and digital products over the internet. It includes all online transactions, from retail
shopping and business-to-business (B2B) sales to digital downloads and financial services.

Key Components of Internet Commerce

1. Online Storefronts & Marketplaces

● Businesses sell products through websites or platforms.
● Examples: Amazon, eBay, Shopify, Etsy.

2. Payment Systems
● Digital payments enable secure transactions.
● Examples: PayPal, Stripe, Apple Pay, cryptocurrencies.

3. Digital Marketing & SEO

● Businesses use search engines, social media, and email marketing to attract customers
● Strategies: Google Ads, influencer marketing, content marketing.

4. Order Fulfillment & Logistics

● Warehousing, shipping, and delivery services manage the supply chain.
● Examples: Amazon FBA, FedEx, DHL.

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 Nandi Institute of Management & Science (NIMS), BALLARI.

5. Customer Support & Engagement

● AI chatbots, live chat, and personalized recommendations improve customer experience.
● Examples: Zendesk, ChatGPT-powered chatbots.

Types of Internet Commerce

1. Business-to-Consumer (B2C) – Businesses sell directly to consumers. (e.g., Walmart

Online)
2. Business-to-Business (B2B) – Companies sell in bulk to other businesses. (e.g., Alibaba)
3. Consumer-to-Consumer (C2C) – Individuals trade with each other. (e.g., eBay,
Facebook Marketplace)
4. Consumer-to-Business (C2B) – Individuals offer products or services to businesses.
(e.g., Fiverr, Upwork)
5. Direct-to-Consumer (D2C) – Brands sell directly to customers without intermediaries.
(e.g., Nike, Tesla)

Advantages of Internet Commerce

a) Global Reach – Businesses can sell to customers worldwide.

b) 24/7 Availability – Customers can shop anytime, increasing sales potential.
c) Lower Operational Costs – No need for physical stores, reducing overhead.
d) Data-Driven Decisions – AI and analytics provide insights into consumer behavior.
e) Personalization & AI Integration – AI-driven recommendations enhance user experience.

Challenges of Internet Commerce

a) Cybersecurity Risks – Data breaches and fraud can compromise transactions.

b) Logistics & Delivery Issues – Shipping delays and inventory management can be
complex.
c) Competition & Market Saturation – Businesses must differentiate through branding and
marketing.
d) Regulatory Compliance – Privacy laws (e.g., GDPR, CCPA) impact online data handling.

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 Nandi Institute of Management & Science (NIMS), BALLARI.

Benefits and Limitations of E-Commerce

E-commerce has revolutionized the way businesses operate and consumers shop. While it offers
numerous advantages, there are also challenges that businesses must consider.

Benefits of E-Commerce

1. Global Reach
● Businesses can sell products and services to customers worldwide without geographical
limitations.
● Enables small businesses to compete with larger brands.

2. 24/7 Availability
● Online stores are open all the time, increasing sales potential.
● Customers can shop anytime, improving convenience.

3. Lower Operational Costs

● Reduces expenses related to physical stores, such as rent, utilities, and staff.
● Automated processes like inventory management and order fulfillment cut costs.

4. Better Customer Insights & Personalization

● AI-driven analytics track customer behavior and preferences.
● Personalized recommendations improve user experience and conversion rates.

5. Faster Transactions & Convenience

● Online payments and automated checkout streamline the buying process.
● Customers can compare products and prices easily.

6. Scalability
● E-commerce businesses can expand quickly without major infrastructure investments.
● Cloud-based solutions help businesses handle increased demand efficiently.

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 Nandi Institute of Management & Science (NIMS), BALLARI.

7. Improved Marketing & Customer Engagement

● Digital marketing tools (SEO, social media, email campaigns) help target specific
audiences.
● AI-powered chatbots enhance customer support.

Limitations of E-Commerce

1. Cybersecurity Risks
● Online transactions are vulnerable to hacking, fraud, and data breaches.
● Businesses must invest in secure payment gateways and encryption.

2. Lack of Personal Interaction

● Customers cannot physically see, touch, or try products before purchase.
● Lack of in-person customer service can affect trust and satisfaction.

3. Logistics & Shipping Challenges

● Delivery delays, damaged goods, and return processes can impact customer satisfaction.
● International shipping involves customs regulations and high costs.

4. Market Competition & Saturation

● High competition makes it difficult for new businesses to stand out.

● Price wars and customer acquisition costs can reduce profitability.

5. Dependence on Internet & Technology

● Poor website performance, downtime, or cybersecurity issues can impact sales.

● Customers without internet access cannot shop online.

6. Legal & Regulatory Compliance

● Businesses must comply with global e-commerce laws, tax regulations, and data privacy
rules (e.g., GDPR, CCPA).
● Different regions have varying policies on consumer rights and refunds.

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 Nandi Institute of Management & Science (NIMS), BALLARI.

Generic Framework for E-Commerce

A well-structured e-commerce framework provides a roadmap for building and managing an

online business effectively. It includes key components such as technology, operations,
marketing, and customer engagement.

1. Business Model & Strategy

Define the type of e-commerce business:

● B2C (Business-to-Consumer) – Online retail stores, marketplaces.

● B2B (Business-to-Business) – Wholesale suppliers, bulk ordering.
● C2C (Consumer-to-Consumer) – Peer-to-peer sales, resale platforms.
● C2B (Consumer-to-Business) – Freelancer platforms, influencer marketing.
● D2C (Direct-to-Consumer) – Brands selling directly to consumers without
intermediaries.

2. Technology & Infrastructure

a) Website & Platform Development

● Choose between custom-built websites or e-commerce platforms (Shopify,
WooCommerce, Magento).
● Ensure mobile responsiveness and fast load speeds for better user experience.
b) Payment Gateway Integration
● Support multiple payment options: credit/debit cards, PayPal, Apple Pay, Google
Pay, cryptocurrencies.
● Secure transactions using SSL encryption and PCI compliance.
c) Database & Inventory Management
● Automate inventory tracking to prevent stockouts or overstocking.
● Use ERP (Enterprise Resource Planning) systems for better supply chain
coordination.
d) Security & Compliance
● Implement firewalls, encryption, and fraud detection systems.
● Ensure compliance with data privacy laws (GDPR, CCPA).

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 Nandi Institute of Management & Science (NIMS), BALLARI.

3. Product & Content Management

● Maintain a structured product catalog with clear descriptions and high-quality

images.
● Implement search filters and AI-driven recommendations for better navigation.
● Provide user-generated content (reviews, ratings) to build trust.

4. Marketing & Customer Acquisition

a) Digital Marketing Strategies

● SEO (Search Engine Optimization) – Optimize for search visibility.
● PPC (Pay-Per-Click) Advertising – Google Ads, Facebook Ads.
● Social Media Marketing – Engage customers on Instagram, TikTok, LinkedIn.
● Email Marketing – Personalized promotions, abandoned cart recovery.
b) Customer Engagement & Retention
● Chatbots & AI Assistants – Provide instant responses.
● Loyalty Programs – Rewards, discounts for repeat customers.
● Personalization – AI-driven product recommendations based on user behavior.

5. Logistics & Order Fulfillment

● Shipping & Delivery Management

● Partner with logistics providers (FedEx, UPS, DHL).
● Offer multiple shipping options (standard, express, same-day).
● Order Tracking & Notifications
● Send automated updates via email or SMS.
● Return & Refund Policy
● Ensure a simple, hassle-free return process.

6. Performance Monitoring & Optimization

● Analytics & KPIs Tracking

● Use Google Analytics, CRM tools to monitor sales, traffic, and user behavior.
● A/B Testing
● Optimize website design, checkout process, and marketing campaigns.
● Conversion Rate Optimization (CRO)
● Improve customer experience to increase sales.

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 Nandi Institute of Management & Science (NIMS), BALLARI.

Architectural Framework for Electronic Commerce

The architectural framework of e-commerce refers to the structural design and components that
collectively enable the functionality of an e-commerce system. It involves various layers and
elements working together to provide a seamless and secure online shopping experience for both
businesses and customers. Here’s an overview of the key architectural components of
e-commerce:

1. User Interface (UI) Layer:

○ Web or Mobile Interface: This is the front-end layer that customers interact
with. It includes the website or mobile app where users can browse products, add
items to the cart, and complete transactions.
○ User Experience (UX) Design: Design elements such as layout, navigation, and
user-friendly interfaces are crucial to providing a positive shopping experience.
2. Presentation Layer:
○ Content Management System (CMS): A CMS manages the presentation of
content, product listings, and images on the e-commerce platform.
○ Templates and Themes: Customizable templates and themes help in designing
the visual appearance of the online store.
3. Application Layer:
○ Shopping Cart: The shopping cart module manages items added by customers
for purchase. It calculates totals, taxes, and shipping costs.
○ Payment Processing: This component handles secure payment transactions,
connecting to various payment gateways for credit card processing, digital
wallets, and other payment methods.
○ Order Management: It manages the lifecycle of orders, including order
placement, processing, tracking, and order history.
○ Inventory Management: This module tracks product availability, restocking, and
inventory levels.
○ Search and Navigation: Implementing efficient search functionality with filters,
sorting options, and product categorization.
○ User Accounts: Managing customer accounts, profiles, preferences, and order
history.

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 Nandi Institute of Management & Science (NIMS), BALLARI.
○ Personalization: Utilizing data analytics and algorithms to provide personalized
product recommendations and content to users.
4. Middleware Layer:
○ Integration Services: Middleware connects various components and third-party
services, such as payment gateways, shipping carriers, and inventory systems.
○ APIs (Application Programming Interfaces): APIs facilitate communication
between different systems, allowing for the seamless exchange of data.
5. Data Layer:
○ Database Management System (DBMS):The DBMS stores product information,
customer data, orders, and other relevant data.
○ Data Warehousing: Storing and processing large volumes of data for analytics
and reporting.
○ Caching Mechanisms: Implementing caching strategies to improve website
performance.
6. Security Layer:
○ SSL/TLS Encryption: Secure Sockets Layer (SSL) or Transport Layer Security
(TLS) encryption is used to protect data in transit.
○ Firewalls and Intrusion Detection Systems (IDS): These security measures help
safeguard the system against unauthorized access and cyber threats.
○ Authentication and Authorization:Managing user access rights and permissions
to ensure data security.
○ Secure Payment Processing: Ensuring the security of payment transactions and
customer payment data.
7. Infrastructure Layer:
○ Server Infrastructure: Hosting services, load balancers, and server clusters are
used to handle website traffic.
○ Content Delivery Network (CDN): CDNs improve page load times by
distributing content geographically.
○ Scalability and Redundancy: Ensuring the system can handle increased traffic
and that redundant systems are in place for failover.
○ Cloud Services: Many e-commerce businesses use cloud platforms for scalability
and flexibility.
8. Analytics and Reporting Layer:
○ Data Analytics Tools: Tools for tracking website traffic, customer behavior, and
sales metrics.
○ Reporting and Business Intelligence:Generating reports to gain insights and
make data-driven decisions.
9. External Interfaces:
○ Payment Gateways: Integration with third-party payment processors.

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 Nandi Institute of Management & Science (NIMS), BALLARI.
○ Shipping and Logistics Providers:Integration with carriers for order fulfillment
and shipping.
○ Marketplace Integration: Integration with online marketplaces like Amazon or
eBay for extended reach.

Web Based e-commerce Architecture : A web-based e-commerce

architecture is the structure that defines how different components of an online shopping
system interact to provide a seamless shopping experience. It typically consists of several
layers, including the presentation layer, business logic layer, data layer, and infrastructure
layer. Here’s an overview of a typical web-based e-commerce architecture:

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 Nandi Institute of Management & Science (NIMS), BALLARI.

1. Client-Side (Front-End) - Presentation Layer

This is the user interface where customers interact with the e-commerce platform.

● Web & Mobile Applications: Customers access the store via a website or mobile
app.
● UI/UX Design: Ensures a seamless and user-friendly experience.
● Technologies: HTML, CSS, JavaScript (React, Angular, Vue.js).
● Payment Gateway UI: Integration with Stripe, PayPal, Razorpay, etc.

2. Server-Side (Back-End) - Business Logic Layer

This is the core of the e-commerce system that processes transactions, manages users, and
handles business logic.

● Application Server: Handles requests, processes payments, and manages business rules.
● Authentication & Authorization: User login, role-based access control (RBAC).
● E-Commerce Features:
● Product catalog & search
● Shopping cart & checkout
● Order processing & tracking
● Promotions, coupons, and discounts
● Payment Processing: Secure transaction handling (SSL/TLS encryption).
● Technologies: Node.js, Django, Ruby on Rails, Spring Boot, Laravel, etc.

3. Database Layer - Data Storage & Management

This layer stores and manages all e-commerce-related data.

● Database Management System (DBMS):

● Relational Databases (SQL): MySQL, PostgreSQL
● NoSQL Databases: MongoDB, Firebase
● Data Components:
● User profiles & order history
● Product catalog & inventory
● Transaction records
● Reviews & ratings

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 Nandi Institute of Management & Science (NIMS), BALLARI.
● Caching for Performance: Redis, Memcached

4. Infrastructure Layer - Hosting & Deployment

This includes the servers, cloud services, and networking infrastructure needed to support the
e-commerce system.

● Hosting Solutions:
● Cloud Hosting: AWS, Google Cloud, Azure
● Serverless: AWS Lambda, Firebase Functions
● Dedicated Servers: Apache, Nginx
● CDN (Content Delivery Network): Cloudflare, Akamai for faster content delivery.
● Load Balancers: Distributes traffic across multiple servers.
● Security & Compliance:
● SSL/TLS Encryption
● DDoS Protection
● GDPR, PCI DSS Compliance for payment

5. External Integrations

To enhance functionality, e-commerce systems integrate with third-party services:

● Payment Gateways: Stripe, PayPal, Square

● Shipping & Logistics: FedEx, UPS, DHL APIs
● CRM & Marketing: HubSpot, Mailchimp, Google Analytics
● Social Media Integration: Facebook, Instagram, TikTok Shopping
● AI & Chatbots: Personalized recommendations, customer support automation

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