ZERO TO MASTERY IN E-COMMERCE: Become Zero To Hero In E-Commerce, This E-Commerce Book Covers A-Z E-Commerce Concepts, 2022 Latest Edition

Zero to Mastery in E-Commerce

By RAJIV JAIN

CHAPTER-1 INTRODUCTION TO E-COMMERCE

1.1 MEANING

Electronic commerce, commonly known as e-commerce or E-commerce, is a type of industry where the buying and selling of products or services is conducted over electronic systems such as the Internet and other computer networks. Electronic commerce draws on technologies such as mobile commerce, electronic funds transfer, supply chain management, Internet marketing, online transaction processing, electronic data interchange (EDI), inventory management systems, and automated data collection systems. Modern electronic commerce typically uses the World Wide Web at least at one point in the transaction’s life-cycle, although it may encompass a wider range of technologies such as e-mail, mobile devices, social media, and telephones as well.

Electronic commerce is generally considered to be the sales aspect of e-business.

It also consists of the exchange of data to facilitate the financing and payment aspects of business transactions. This is an effective and efficient way of communicating within an organization and one of the most effective and useful ways of conducting business.

1.2 E-COMMERCE CAN BE DIVIDED INTO

• E-tailing or virtual storefronts on websites with online catalogs, sometimes gathered into a virtual mall

• Buying or selling on websites and/or online marketplaces

• The gathering and use of demographic data through web contacts and social media

• Electronic data interchange, the business-to-business exchange of data

• E-mail and fax and their use as media for reaching prospective and established customers (for example, with newsletters)

• Business-to-business buying and selling

• The security of business transactions]

1.3 DEFINITION OF E-COMMERCE

Turn to any paper or trade magazine and you are almost guaranteed to find an article on E- commerce. Politicians see E- commerce as the way forward and essential in making the UK business community compete successfully around the world. The benefits are put forward as being so obvious for both large and small companies that everyone should move into this new way of doing business. Small and medium sized enterprises (SMEs) will be able to compete with their much larger competitors on a world stage. However, in reality, the situation is somewhat different and possibly over-hype and over-sell of E- commerce has been detrimental in the overall adoption of modern trading practices by SMEs.

1.4 A TYPICAL AND VAGUE DEF

The buying and selling of products and services by businesses and consumers over the Internet.

However, E- commerce is much more than selling from a Web site. A far more accurate definition of E- commerce is as follows: E- Commerce covers any form of business, or administrative transaction, or information exchange, between the company and the outside world that is executed using any information and communication technology (ICT).

The use of E- commerce within SMEs will vary and any implementation should be driven by business needs rather than by technology. E- Commerce can open up radically new ways of working, but most SMEs should start by using E- commerce to improve the effectiveness of what they currently do, such as providing an improved approach to marketing, communications and customer service, improvements which they could never afford if using conventional methods. This is the E- commerce vision which they should work towards, rather than the get-rich-quick, sell-from-a-Web site approach - the vision which so much of the UK press would have us believe is the way forward.

E- Commerce shouldn’t be seen as a development which always reduces staff numbers. There are several examples of SMEs that have increased the number of staff they employ, attributing this expansion to the increased business that E- commerce has brought them.

Much of the initial hype relating to E- commerce was in the area of business-toconsumer, particularly in the selling of products such as CDs, videos, computer-related products and travel services. There is now a realization that in the scheme of things this is a limited area, and whilst there will still be tremendous growth, the future will be in the application of E- commerce in a business-to-business environment.

Most companies that succeed with E- commerce will be founded on a firm business footing. New innovative services will be offered by some SMEs but most will use Ecommerce to improve the effectiveness of what they do now. Certainly new dot.com companies will feature but these are typically driven by entrepreneurs who will succeed in their own right, with or without E- commerce. The dot.com scenario is not a vision which many SMEs could or should strive to emulate.

1.5 TIMELINE

A timeline for the development of e-commerce:

• 1971 or 1972: The ARPANET is used to arrange a cannabis sale between students at the Stanford Artificial Intelligence Laboratory and the Massachusetts Institute of Technology, later described as the seminal act of e-commerce in John Markoff’s book What the Dormouse Said.

• 1979: Michael Aldrich demonstrates the first online shopping system.

• 1981: Thomson Holidays UK is first business-to-business online shopping system to be installed.

• 1982: Minitel was introduced nationwide in France by France Telecom and used for online ordering.

• 1983: California State Assembly holds first hearing on electronic commerce

in Volcano, California.Testifying are CPUC, MCI Mail, Prodigy, CompuServe, Volcano Telephone, and Pacific Telesis. (Not permitted to testify is Quantum Technology, later to become AOL.)

• 1984: Gateshead SIS/Tesco is first B2C online shopping system and Mrs.

Snowball, 72, is the first online home shopper

• 1984: In April 1984, CompuServe launches the Electronic Mall in the USA and Canada. It is the first comprehensive electronic commerce service.

• 1984: California becomes first US state to enact an Electronic Commerce Act defining basic consumer rights online.

• 1990: Tim Berners-Lee writes the first web browser, Worldwide Web, using a NeXT computer.

• 1992: Book Stacks Unlimited in Cleveland opens a commercial sales website (www.books.com) selling books online with credit card processing.

• 1992: St. Martin’s Press publishes J.H. Snider and Terra Ziporyn’s Future Shop: How New Technologies Will Change the Way We Shop and What We Buy.

• 1992: Terry Brownell launches a fully graphical, iconic navigated Bulletin board system online shopping using RoboBOARD/FX.

• 1993: Paget Press releases edition No. 3 of the firstAppStore, The Electronic AppWrapper

• 1994: Netscape releases the Navigator browser in October under the code name Mozilla. Netscape 1.0 is introduced in late 1994 with SSL encryption that made transactions secure.

• 1995: The US National Science Foundation lifts its former strict prohibition of commercial enterprise on the Internet.

• 1995: Thursday 27 April 1995, the purchase of a book by Paul Stanfield, Product Manager for CompuServe UK, from W H Smith’s shop within CompuServe’s UK Shopping Centre is the UK’s first national online shopping service secure transaction. The shopping service at launch featured W H Smith, Tesco, Virgin Megastores/Our Price, Great Universal Stores (GUS), Interflora, Dixons Retail, Past Times, PC World (retailer) and Innovations.

• 1995: Jeff Bezos launches Amazon.com and the first commercial-free 24-hour, internet-only radio stations, Radio HK and NetRadio start broadcasting. Dell and Cisco begin to aggressively use Internet for commercial transactions. eBay is founded by computer programmer Pierre Omidyar as AuctionWeb.

• 1996: IndiaMART B2B marketplace established in India.

• 1996: ECPlaza B2B marketplace established in Korea.

• 1996: Sellerdeck, formerly Actinic, the UK’s first PC/LAN e-commerce platform established.

• 1998: Electronic postal stamps can be purchased and downloaded for printing from the Web.

• 1999: Alibaba Group is established in China. Business.com sold for US $7.5

million to eCompanies, which was purchased in 1997 for US $149,000. The peer-to-peer filesharing software Napster launches. ATG Stores launches to sell decorative items for the home online.

• 2000: The dot-com bust.

• 2001: Alibaba.com achieved profitability in December 2001.

• 2002: eBay acquires PayPal for $1.5 billion. Niche retail companies Wayfair and Net Shops are founded with the concept of selling products through several targeted domains, rather than a central portal.

• 2003: Amazon.com posts first yearly profit.

• 2004: DHgate.com, China’s first online b2b transaction platform is established, forcing other b2b sites to move away from the yellow pages model.

• 2007: Business.com acquired by R.H. Donnelley for $345 million.

• 2009: Zappos.com acquired by Amazon.com for $928 million. Retail Convergence, operator of private sale website RueLaLa.com, acquired by GSI Commerce for $180 million, plus up to $170 million in earn-out payments based on performance through 2012.

• 2010: Group on reportedly rejects a $6 billion offer from Google. Instead, the group buying websites went ahead with an IPO on 4 November 2011. It was the largest IPO since Google.

• 2011: Quidsi.com, parent company of Diapers.com, acquired by Amazon.com for $500 million in cash plus $45 million in debt and other obligations. GSI Commerce, a company specializing in creating, developing and running online shopping sites for brick and mortar businesses, acquired by eBay for $2.4

billion.

• 2012: US E- commerce and Online Retail sales projected to reach $226 billion, an increase of 12 percent over 2011.

• 2012: US E- commerce and Online Retail holiday sales reach $33.8 billion, up 13 percent.

• 2014: India’s e-commerce industry is estimated to have grown more than 30%

from a year earlier to $12.6 billion in 2013.

1.6 BUSINESS APPLICATIONS

Fig. 1.1: An example of an automated online assistant on a

merchandising website.

1.6.1 SOME COMMON APPLICATIONS RELATED TO

ELECTRONIC COMMERCE ARE:

• Document automation in supply chain and logistics

• Domestic and international payment systems

• Enterprise content management

• Group buying

• Automated online assistants

• Instant messaging

• Newsgroups

• Online shopping and order tracking

• Online banking

• Online office suites

• Shopping cart software

• Teleconferencing

• Electronic tickets

• Social networking

1.7 GOVERNMENTAL REGULATION

In the United States, some electronic commerce activities are regulated by the Federal Trade Commission (FTC). These activities include the use of commercial emails, online advertising and consumer privacy. The CAN-SPAM Act of 2003 establishes national standards for direct marketing over e-mail. The Federal Trade Commission Act regulates all forms of advertising, including online advertising, and states that advertising must be truthful and non-deceptive.[26] Using its authority under Section 5

of the FTC Act, which prohibits unfair or deceptive practices, the FTC has brought a number of cases to enforce the promises in corporate privacy statements, including promises about the security of consumers’ personal information. As result, any corporate privacy policy related to e-commerce activity may be subject to enforcement by the FTC.

The Ryan Haight Online Pharmacy Consumer Protection Act of 2008, which came into law in 2008, amends the Controlled Substances Act to address online pharmacies.

Internationally there is the International Consumer Protection and Enforcement Network (ICPEN), which was formed in 1991 from an informal network of government customer fair trade organizations. The purpose was stated as being to find ways of co-operating on tackling consumer problems connected with cross-border transactions in both goods and services, and to help ensure exchanges of information among the participants for mutual benefit and understanding. From this came Econsumer.gov, an ICPEN initiative since April 2001. It is a portal to report complaints about online and related transactions with foreign companies.

There is also Asia Pacific Economic Cooperation (APEC) was established in 1989 with the vision of achieving stability, security and prosperity for the region through free and open trade and investment. APEC has an Electronic Commerce Steering Group as well as working on common privacy regulations throughout the APEC region.

In Australia, Trade is covered under Australian Treasury Guidelines for electronic commerce, and the Australian Competition and Consumer Commission regulates and offers advice on how to deal with businesses online, and offers specific advice on what happens if things go wrong.

Also Australian government e-commerce website provides information on ecommerce in Australia.

In the United Kingdom, The FSA (Financial Services Authority) is the competent authority for most aspects of the Payment Services Directive (PSD). The UK

implemented the PSD through the Payment Services Regulations 2009 (PSRs), which came into effect on 1 November 2009. The PSR affects firms providing payment services and their customers. These firms include banks, non-bank credit card issuers and non-bank merchant acquirers, e-money issuers, etc. The PSRs created a new class of regulated firms known as payment institutions (PIs), who are subject to prudential requirements. Article 87 of the PSD requires the European Commission to report on the implementation and impact of the PSD by 1 November 2012.

1.8 FORMS

Contemporary electronic commerce involves everything from ordering digital

content for immediate online consumption, to ordering conventional goods and services, to meta