Unit-1

E-commerce and its technological

aspects:
 History of E-commerce
• 1960- Basically initiates the history of e-
commerce-called Electronic data Interchange
permits to company to carry out electronic
transitions
• 1979- Michael Aldrich invents online shopping
giving the “concept of teleshopping “
• 1981-Thomos Holiday submits the first ever
B2B electronic transaction using online
technology
• 1982- France Telecom invents Pre-World wide
web online service
• 1984- The Electronic Mail –users purchase items
directly from 11 online merchants in format
ASCX12X12(Accredited Standards Committe-
1979) is the first B2C online shopping
• 1987-Swreg creates the first electronic merchant
account to let software developers sell online
• 1995 –Amazon .com starts selling each and
everything in online and A company called
Verisingn begins developing digital IDs
• 1998- PayPal launches pay service. Google debuts
on E-commerce. Yahoo launches Yahoo stores
• 2001-Amazon .com a trail launching a mobile
commercial site
• 2003 –apple launches iTune store
• 2005- YouTube launched.
• 2006 –Google debuts Google Checkout.
• 2007- Apple launches the iPhone with full web
browsing and downloadable apps ,advancing
commerce
 Defining e-Commerce
E-commerce, short for electronic commerce,
refers to the buying and selling of goods or
services using the internet, and the transfer of
money and data to execute these transactions.
 Features of E-commerce
1. Ubiquitous-ness (found everywhere):through
internet
2. Worldwide Reach
3. Universal standards (ability to connect at the
same “level”)
4. Business rich (video , audio , animation )
5. Interactivity (two-way b/w com & con)
6. Information density( provide all information
about product –reduce the cost
7. Customization( delivered –on user’s preference )
Traditional Commerce Vs e-Commerce
 Intranet/Extranet/ Internet
Intranet : The network connection between the
company and its other locations.
Extranets : The network connection between the
company and its business partners ( like suppliers
,customers, collaborations , distributors,)
Internet : The network connection outside the
company to other firms to connection globally
 E-commerce transactions
E-commerce refers to paperless exchange of
business information using following ways
 Electronic data interchange(EDI)
 Electronic mail(E-mail)
 Electronic bulletin board
 Electronic fund transfer(EFT)
 Other network based technologies
 E-commerce models/types of e-commerce

E-commerce models can generally categorized as follows:

o Business-to-business(B2B)
o Business-to-consumer(B2C)
o Consumer-to-consumer(C2C)
o Consumer-to-business(C2B)
o Peer-to-peer(P2P)
o Business –to-government(B2G)
o Business-to-employee (B2E)
o Consumer-to-government (C2G)
 Advantages of E-commerce
 For organization
1. Global Accessibility
2. 24-hour Availability
3. Increase profit
4. Lower cost (transaction ,advertising ,labor
,communication , inventory mgt)
5. Customer satisfaction
6. Time saving (re-engineering)
7. Create market for Niche product
8. Target market segmentation
9. Flexibility for adding and changing resource
10. Improved customer interaction
11. Easy delivery of information
12. Improved competitiveness
For customer
1. Gives freedom to make choices
2. Time saving and convenient
3. Support to decision making
4. Readily available information
5. Quick delivery of digitized product
6. More competitive price
7. Easy payment option
 Disadvantages of E-Commerce
for Customers
1. Lack of securities ,and privacy
2. Lack of trust
3. Insufficient communication bandwidth( speed of
internet)
4. Lack of knowledge
5. Hidden costs
6. Quality
7. Delay in receiving goods
8. Need access to internet
9. Lack of personal interaction
for Businesses
1. Security issues
2. Credit card issues.
3. Extra expense and expertise for e-commerce
infrastructure.
4. Needs for expanded reverse logistics.
5. Sufficient internet service.
6. Constant upkeep.
 Scope in E-Commerce
1. Exchange of digitized information
2.Technology-enabled
3. Customers retention(effective customers
relationship management (CRM)
4. Accounting
5. Supplier integration
6. Support the exchange
Categories of E-Commerce/E-commerce
technologies
 ELECTRONIC MARKET
• An electronic market, also known as an online marketplace
or e-marketplace, is a virtual platform where buying and
selling of goods or services take place electronically.

• It facilitates transactions between multiple buyers and

sellers over the internet without the need for physical
interaction.

• Electronic markets utilize various technologies, such as

websites,mobile apps, or online platforms, to connect
participants, streamline transactions, and facilitate
communication.
• These markets offer a convenient and accessible space for
businesses and consumers to conduct transactions, breaking
geographical barriers and allowing global participation.

• Through electronic markets, sellers showcase their products

or services, while buyers can browse, compare, and make
purchases from a diverse range of offerings.

• The advantages include increased global reach, cost-

effectiveness, convenience, and enhanced efficiency. These
platforms promote transparency by providing access to
product information, prices, and reviews, enabling informed
decision-making.

Example: Airline Booking System

 Functions of
Electronic Market:
Facilitation of
Transactions

Product/Service
Showcasing

Global Reach

Transaction
security

Communication
Hub

Transaction
monitoring

Feedback and
Reviews
 Electronic Market Trade Cycle:
Search
↓
Negotiable
↓
Order
↓
Deliver
↓
Invoice
↓
Payment

Examples: shopify, Wix, BigCommerce ,WooCommerce

,BigCartel ,Shift4Shop
 Electronic Data Interchange (EDI)

• Electronic Data Interchange (EDI) is the electronic interchange

of business information using a standardized format.

• A process which allows one company to send information to

another company electronically rather than with paper.

• Many business documents can be exchanged using EDI, but

the two most common are purchase orders and invoices.

• At a minimum, EDI replaces the mail preparation and handling

associated with traditional business communication. However,
the real power of EDI is that it standardizes the information
communicated in business documents, which makes possible
a "paperless" exchange.
• It provides a standardized system
• Communicated from one computer to another without the need for printed
orders and invoices & delays & errors in paper handling
• It is used by organizations that a make a large no. of regular transactions.
• EDI is the way of transferring business documents in an organization
internally between its various departments or externally with suppliers,
customers etc.

EDI Documents:
- Invoices
- Purchase orders
- Shipping requests
- Acknowledgements
- Business Correspondence letters
- Financial Information letters.

• Example: Transentric's
• Online Rapid Invoicing and Supply Solution
• ORISS) system for non EDI-compliant Suppliers allows those Suppliers to
receive Purchase Orders and send Invoices via a Web browser.
 Most used EDI file format standards
• UN/EDIFACT.
• TRADACOMS.
• ANSI ASC X12.
• VDA
• UBL.
 Functions of EDI

Data Translation

Data Mapping

Document
Routing
Transaction
Control

Error Handling

Security
Measures
Integration with
Business Systems
 Benefits of EDI

Faster
Transactions

Efficiency

Cost Reduction

Accuracy

Enhanced
Security
Improved
Compliance
Better Partner
Relationships
 Internet Commerce
• It is used to advertise & make sales of wide range of goods
& services.

• This application is for both business to business & business

to consumer transactions.

• Commercial activities on the internet like auctioning, placing

orders, making payments, transfering funds, collaborating
with trading partners.
Functions of Internet Commerce

 Transaction Facilitation
 Global Market Reach
 24/7 Accessibility
 Payment Processing
 Logistics and Delivery
 Customer Engagement
 Data Management
 Security Measures
Benefits of Internet Commerce

Global Reach
Convenience
Cost Efficiency
Increased Sales
Data Insights
Accessibility
Enhanced Customer Experience
Environmental Impact
What is Cloud Computing?
• Cloud computing is the delivery of different services
through the Internet. These resources include tools
and applications like data storage, servers,
databases, networking, and software.

• Rather than keeping files on a proprietary hard drive

or local storage device, cloud-based storage makes it
possible to save them to a remote database.
Types of Cloud:
 Meaning of Big Data
• Big Data is a collection of data that is huge in volume, yet
growing exponentially with time. It is a data with so large size
and complexity that none of traditional data management
tools can store it or process it efficiently. Big data is also a data
but with huge size.
 Social Media
• The statistic shows that 500+terabytes of new
data get ingested into the databases of social
media site Facebook, every day. This data is
mainly generated in terms of photo and video
uploads, message exchanges, putting
comments etc.
 Meaning of AI:
• Artificial intelligence (AI) refers to the
simulation of human intelligence in machines
that are programmed to think like humans and
mimic their actions.
• AI is techniques that help machines and
computers mimic human behavior. Or in
simple words, AI is intelligence demonstrated
by machines.
• Influencer marketing involves a brand collaborating
with an online influencer to market one of its
products or services.
 FRAMEWORK OF E-COMMERCE:
A general E-Commerce Framework
Layer 5
Practical Application of E-Commerce

Layer 4
Security Protection in Business Services

Layer 3
Messaging and Information Dissemination

Layer 2
Multimedia Content and Network
Dissemination

Layer 1
Network Infrastructure
1.The First Layer : Network Infrastructure
• which provides the link between the customer
and the supplier.
• It is also known as the "Information
Superhighway".
• This layer consists of all the wired (POTS,
coaxial, fibreoptics), and wireless (cellular,
radio, PCs) information transport systems.
• Telephone, wires, cable TV wire - Radio-based
wireless-cellular & satellite
 2. The Second Layer: Multimedia Content and
Network Dissemination
• The second layer provides an architecture that
enables the content to be developed in a
programming language know as Hyper Text
Markup Language (HTML) for publishing on
the World Wide Web (WWW).
• Another programming language in use is Java,
which enables multimedia content to be
transmitted to end users' personal computers
via various networks such as cable, wireless,
fiber optics and satellites.
 3. The Third Layer: Messaging and Information
Dissemination
• In any business, electronic messaging is an important issue.
• The messaging transmission for both formatted data and non-formatted
data is accomplished under this layer.
• The transmission of formatted data is done by using Electronic Data
Interchange (EDI) without human intervention. It is mainly used for
business documents such as purchase orders, invoices and packing lists.
• The transmission of non-formatted data(fax) is done by using facsimile,
electronic mail, which mainly directs to individuals.
• The message transmission on the internet is done by Hyper Text Transfer
Protocol (HTTP).
• It uses a common display format to publish non-formatted multimedia
messages in various environments.
 4. The Fourth Layer: Security Protection in
Business Services
• The essential constraints for doing business
electronically are security, privacy and confidentiality.
• It is required by both business corporations and
individuals in business transactions.
• The ultimate goal of this layer is to provide secured
transmission of business information, electronic
payment system and the authentication of identity of
both trading parties.
• Electronic payment systems have become key
component to enable e-commerce. Hence, the success
of e-commerce depends upon effective electronic
payment systems.
 5. The Fifth layer: Practical Application of E-
commerce

This layer decides that what type of e-commerce

application is going to be implemented. The e-
commerce is widely employed in supply chain
management, electronic marketing, electronic
advertising, online shopping, online
entertainment, pay-information service and
network banking.
 Web-based e-commerce
The buying and selling of goods or services
entirely online, through a website accessible via
the internet, where customers can browse,
select, and purchase products directly using
digital platforms, essentially a virtual storefront
on the web.
 WEB BASED E-COMMERCE ARCHITECTURE:
• Web browser
• Web server
• Application server
• Backend system
• Internet
Web Browsers
• Google Chrome
• Mozilla Firefox
• Opera Web Browser
• Internet Explorer
• Maxthon
• UC Browser

Web Server
• A program that uses HTTP for serving files that create web
pages for users in response to their requests that are sent by
the HTTP clients of their computer is called as a web server.
• In simple words, a web server is an Internet server that
responds to HTTP requests for delivering content and
services.
• The backend system helps websites process, transfer,
and store data. To make this happen, backend
components like database, web server, application
server, etc. play a pivotal role. It helps customers
view products, place orders, and manage their
purchases using their own devices.