What is E-commerce?

Defining E-commerce

Kalakota and Whinston define E-commerce as, “A modern business methodology

that addresses the needs of organizations, merchants and consumers to cut costs while improving the quality of goods and services and increasing the speed of 

service delivery. The term also applies to the use of computer networks to search and retrieve information in support of human and corporate decision-making.”

 

They further add that EC involves, “The buying and selling of information, products and services via computer networks today and in the future via the myriad of networks that make up the Information Superhighway”.

 

Kestenbaum and Straight say, “E-commerce is the integration of e‑mail, Electronic Funds Transfer (EFT), Electronic Data Interchange (EDI) and similar techniques into a comprehensive electronic-based system of business functions.”

 

The Buyer’s Guide to E-commerce gives yet another definition: “E-commerce is

 using information technology to improve relationships between business partners.”

 

Classification scheme

 

Kalakota and Whinston articulate a classification scheme for E-commerce, which involves transactions:

 

·         Between a company and consumer over public networks for the purpose of home shopping or home banking;

·         With trading partners using EDI (electronic data interchange);

·         For information gathering such as market research;

·         For information distribution including advertising, sales and marketing.

                                          

                       Convergence of previously disparate functions around E-commerce

Vital issues

 

Matters of particular importance in E-commerce are:

·         Consumer protection and confidence

·         Competition

·         Financial and payment systems

·         Taxation

·         Intellectual Property Rights

·         Security

·         Legal safeguards against criminal activities and

·         Dispute settlement mechanisms

 

Non-transactional elements

 

Some elements of E-commerce are ‘non-transactional’ — geared to the provision of information about products and services, the delivery of information-based (‘intangible’) products to customers and the support of supply chains. The complete process, however, is ‘transactional’ — geared directly to processes of trade in goods and services.

 

Many non-transactional E-commerce elements like catalogues, advertising are oriented towards an eventual face-to-face transaction. E-commerce interacts not only with electronic distribution systems, as in electronic publishing or financial service applications, but also with the physical infrastructure for the distribution

of manufactured products.

 

                                  E-Commerce: A conceptual framework

 

Application services	Customer-to-business,  Business-to-business,  Intra-organizational
Brokerage and data management	Order processing---mail-order houses Payment schemes---electronic cash Clearing house or virtual mall
Interface layer	Interactive catalogues, Directory support functions, Software agents
Secure messaging	Secure hypertext transfer protocol, Encrypted e-mail, EDI, Remote programming (RPC)
Middleware services	Structured documents (SGML, HTML), Compound documents (OLE, Open Doc)
Network infrastructure	Wireless---cellular, radio, PCs  Wireline---POTS, coaxial, fibre optic.

 

Participant groups

E-commerce occurs within and between three basic participant groups — business, government and individuals.

Participant groups in E-Commerce

Applications

 

  

Different types of Electronic Commerce Applications

 

Organizations use E-commerce to simplify and streamline business processes by substituting electronic means for paper documents. The most prevalent and well-known applications of EC are:

·         Electronic Data Interchange (EDI),

·         Electronic Funds Transfer (EFT),

·         Electronic Mail (e-mail) and

·         The World Wide Web (WWW)