CU-BCOM-SEM-III-Introduction to E-Commerce-Second Draft

BACHELOR OF COMMERCE SEMESTER III INTRODUCTION TO E COMMERCE

First Published in 2021 All rights reserved. No Part of this book may be reproduced or transmitted, in any form or by any means, without permission in writing from Chandigarh University. Any person who does any unauthorized act in relation to this book may be liable to criminal prosecution and civil claims for damages. This book is meant for educational and learning purpose. The authors of the book has/have taken all reasonable care to ensure that the contents of the book do not violate any existing copyright or other intellectual property rights of any person in any manner whatsoever. In the event the Authors has/ have been unable to track any source and if any copyright has been inadvertently infringed, please notify the publisher in writing for corrective action. 2 CU IDOL SELF LEARNING MATERIAL (SLM)

CONTENTS Unit - 1: Introduction To E-Commerce.................................................................................. 4 Unit - 2: ComponentsOfE-Commerce ................................................................................. 22 Unit - 3: Functions .............................................................................................................. 36 Unit - 4: Applications.......................................................................................................... 51 Unit - 5: InternetMarketing ................................................................................................. 70 Unit - 6: InternetBusiness.................................................................................................... 97 Unit - 7: E-CycleOfInternetMarketing ............................................................................... 115 Unit - 8: E-BusinessPlan ................................................................................................... 129 Unit - 9: OrganizationalAndManagerialIssues ................................................................... 157 Unit - 10: Implementation ................................................................................................. 182 Unit - 11: E-BusinessSecuring........................................................................................... 200 Unit - 12: SecuringE-CommerceNetworks ........................................................................ 215 Unit - 13: ElectronicCommerceThreats ............................................................................. 232 Unit - 14: Cryptography .................................................................................................... 255 3 CU IDOL SELF LEARNING MATERIAL (SLM)

UNIT - 1: INTRODUCTION TO E-COMMERCE STRUCTURE 1.0 Learning Objectives 1.1 Introduction 1.2 E-Commerce Meaning and Definition 1.3 Main activities of E-Commerce 1.4 Scope of E-Commerce 1.5 E-Commerce Features 1.6 Summary 1.7 Keywords 1.8 Learning Activity 1.9 Unit End Questions 1.10 References 1.0LEARNING OBJECTIVES After studying this unit, you will be able to:  Understand the concept of E-Commerce  Know the Features of E-Commerce  Define the scope of E-Commerce  Identify the Major Activities of E-Commerce 1.1INTRODUCTION We are living in e-century. The Internet and information and communications technologies (ICT) are central to economic growth and productivity. Internet-based technologies and networks can increase productivity, decrease costs and open new market opportunities. Now-a- days,usingtheInternetandemailtoconductbusinessisnotuncommon.However,lackoftechnicalan dmanagementskillsinInformationandCommunicationsTechnologyisabarrier.Thereareawidevar ietyofresourcesavailabletohelpyoutoimprove youre- commerceskills.Simply,decidewhatskillsyouneedandidentifytheappropriateresources to helpyou tobuild thoseskills. The skills that may be required range from basic abilities, like word processing andInternet navigation, to more complex capabilities such as designing and building websites anddatabasemanagement. 4 CU IDOL SELF LEARNING MATERIAL (SLM)

Therearearangeofresourcestohelpyoubroadenyourunderstandingofthee- commerceenvironmentanddevelopyourtechnicalskills.Theseincludeonlineresources,books and magazines,seminars andtrainingcourses. Keeping this in mind, a summary on the background of Electronic Commerce is beingprovided. 1.2 E-COMMERCE:MEANING E-CommerceorElectronicsCommerceisamethodologyofmodernbusinesswhichaddresses the need of business organizations, vendors and customers to reduce cost and improvethe quality of goods and services while increasing the speed of delivery. E-commerce refers topaperless exchangeof business informationusingfollowingways.  ElectronicDataExchange(EDI)  ElectronicMail(e-mail)  ElectronicBulletinBoards  ElectronicFundTransfer(EFT)  OtherNetwork-basedtechnologies Theconceptofe-commerceisallaboutusingtheinternettodobusinessbetterandfaster. E-commerce is the process of buying and selling over the Internet, or conducting anytransaction involving the transfer of ownership or rights to use goods or services through acomputer-mediated networkwithoutusinganypaper document. Electronic commerce ore-commerce refers to awide range of online business activitiesfor productsand services. Italso pertains to “any form of business transaction in which thepartiesinteractelectronicallyratherthanbyphysicalexchangesordirectphysicalcontact.” Business transactedthroughtheuseof computers, telephones,fax machines, barcodereaders,creditcards,automatedtellermachines(ATM)orotherelectronicapplianceswitho ut the exchange ofpaper-based documents.Itincludesprocurement, orderentry, transactionprocessing,paymentauthentication,inventorycontrol,andcustomersupport. E-commerceissubdividedintothreecategories: businessto business or B2B(Cisco), business to consumer or B2C (Amazon), and consumer to consumer or C2C (eBay) alsocalledelectroniccommerce. E-commerce the phrase is used to describe business that is conducted over the InternetusinganyoftheapplicationsthatrelyontheInternet,suchase- mail,instantmessaging,shoppingcarts,Web services,UDDI,FTP,andEDI,amongothers. A type of business model, or segment of a larger business model, that enables a firm 5 CU IDOL SELF LEARNING MATERIAL (SLM)

orindividualtoconductbusinessoveranelectronicnetwork,typicallytheinternet.Electroniccomme rce operates in all four of the major market segments: business to business, business toconsumer, consumer toconsumer andconsumertobusiness. Ecommerce has allowed firms to establish a market presence, or to enhance an existingmarketposition,byprovidingacheaperandmoreefficientdistributionchainfortheirproduct sor services. ExamplesofE-Commerce  AnindividualpurchasesabookontheInternet.  AgovernmentemployeereservesahotelroomovertheInternet.  Abusinesscallsatollfreenumberandordersacomputerusingtheseller'sinteractivetelephone system.  Abusinessbuysofficesupplieson-lineorthroughanelectronicauction.  RetailerordersmerchandiseusinganEDInetworkorasupplier'sextranet.  Amanufacturingplantorderselectroniccomponentsfromanotherplantwithinthecompanyusin gthecompany'sintranet.  Anindividualwithdrawsfundsfromanautomatictellermachine(ATM).  Acceptingcreditcardsforcommercialonlinesales  Drivinginformationthroughacompany viaitsintranet  Drivingmanufacturinganddistributionthroughavaluechainwithpartnersonanextranet  Sellingtoconsumersonapay-per-downloadbasis,throughaWebsite,etc. E-CommerceDefinitions The definition of e-commerce includes business activities that are business-to- business(B2B),business-to- consumer(B2C),extendedenterprisecomputing(alsoknownas\"newlyemergingvaluechains\"),d- commerce, andm-commerce. Ecommerceissimplyaparte-business,morespecifically,thetradingaspectofe-business.Although there are many definitions and explanations of e-commerce, the followingdefinition provides a clear distinction. There are many definitions and understanding about E-Commerce. Theyareas follows: 1. According totheeditor-in- chiefofInternationalJournalofElectronicCommerce,VladimirZwass,‘Electroniccomme rceissharingbusinessinformation,maintainingbusiness relationships and conducting business transactions by means oftelecommunicationsnetworks’. 6 CU IDOL SELF LEARNING MATERIAL (SLM)

ElectronicCommerceiswherebusinesstransactionstakeplaceviatelecommunicationsnet works,especiallytheInternet–E.Turban,J.Lee,D.KingandH.M.Chung. 2. Electroniccommerceisaboutdoingbusinesselectronically–P.Timmers. 3. Electronic commerce ore-commerce refers to awide range of online business activitiesfor products andservices– AnitaRosen. 4. It pertains to “any form of business transaction in which the parties interact electronicallyratherthanbyphysicalexchangesordirectphysicalcontact.”– MK,EuroInfoCorrespondenceCentre(Belgrade, Serbia). 5. E-commerceisusuallyassociatedwithbuyingandsellingovertheInternet,orconducting any transaction involving the transfer of ownership or rights to use goods orservicesthrougha computer-mediatednetwork.–ThomasL.Mesenbourg. 6. A more complete definition is: E-commerce is the use of electronic communications anddigitalinformationprocessingtechnologyinbusinesstransactionstocreate,transform,a ndredefinerelationshipsforvaluecreationbetweenoramongorganizations,andbetweenor ganizationsandindividuals. – EmmanuelLallana, Rudy Quimbo,ZoraydaRuth Andam, e-Primer. From your reading it should be apparent to you that electronic commerce is morethan onlineshopping. TheInternetandIndia Before the appearance of VSNL's GIAS, Internet had been in India for many years in theform of ERNET. However, it was not possiblefor many people togetaccess to it, as it wasmeant for onlythe educational andresearchcommunities. EducationalResearchNetwork(ERNET) Internet in India was established as ERNET. It was a joint undertaking of the Departmentof Electronics (DOE) of the Government of India, and the United Nations Development Program(UNDP), which provides technical assistance to developing nations. ERNET is one of the mostsuccessful operationsthat UNDPhas funded. GatewayInternetAccessService(GIAS) On August 15th 1995, Videsh Sanchar Nigam Limited (VSNL) -- the Indian internationaltrunktelephonecarriercompany-- launchedtheGatewayInternetAccessService(GIAS).Subsequently,6nodeswereestablishedatMu mbai,Delhi,Madras,Calcutta,BangaloreandPune.EachGIASnodeisconnectedtoInternetviahigh speedMCIcircuitshavingabandwidthof approximately10 Mbps. Users in remote areas of India can reach GIAS service via I-NET. The Department ofTelecommunication (DOT) has a wide-spread network in India called I-NET, which has directconnectivitytoeachGIAS node. 7 CU IDOL SELF LEARNING MATERIAL (SLM)

TimelineChart ThetimelinechartshowingthedevelopmentofInternetinIndiaisgivenbelow: 1986:ERNETprojectstartsup;emailexchangeusingUUCPprotocolestablishedbetweenNational Centre forSoftware Technology,Bombay,andIITBombay. 1987:EmailexchangebetweenERNETinstitutionsinmetros;TCPoverX.25establishedbetweenth eERNETgatewayatNCSTandinternetviaCWIinAmsterdam. 1988:LeasedlinesusedtoconnectERNETpartnerinstitutionstoERNETgateway inBombay 1989: LWBBS (Live Wire BBS) and BBS CiX launch online services; VSNL commissions aGateway Packet Switching System (GPSS) running X.25 protocol; ERNET acquires an analogleasedlineoperatingat9600bpstoconnectERNETgatewayatNCST,Bombay,toUUNETint heUS. 1990:TCP/IPimplementedfor communicationbetweenERNET centersconnectedby leasedlines. 1991:LWBBSturnsintoapaidsubscriptionserviceandexpandstoothercitiessuchasAhmedabad, Madras(Chennai),Pune,Calcutta(Kolkata),Baroda,Vapi. 1992: Business India launches aXcess, a value-added service offering email as well as e- news,stock quotes. 1994: ERNET establishes a hub in Bangalore to provide TCP/IP-level connectivity over satellitelinkstolocationsotherwiseunreachable bydedicatedcircuits. 1995:VSNLintroducespublicinternetaccessinIndiaviadialupservicesin6citiesonAugust15, 1995;IndiaWorld portal launcheson March 13. 1996: Major newspapers such as The Times of India, The Hindu, The IndianExpress and HindustanTimes setupwebsites;Rediff.comlaunched;India’sfirstcybercafelaunched in Mumbai. 1997:TamilnewspaperDinamanisetsupwebsite;HotmailcreatorSabeerBhatiasellsHotmailto Microsoft for $400 million; first online banking site launched by ICICI Bank; Naukri.comlaunched;IndusIndalsolauncheswebsite;Khel.comcricketsite launched 1998: Private ISPs allowed to set up internet infrastructure; LWBBS’s Pune node, JabberWockyoperated by WMI becomes the first ISP licensee; Sify becomes India’s first national ISP licenseholder; first major hacking case (teenagers hack data on BARC’s servers); launch of NASSCOMtopromoteITindustry by effortsof DewangMehta;cyber cafesstartmushrooming acrossIndiancities;annualIndiaInternetWorldconference seriesstartsinPragatiMaidan 1999: India World sold to Sify for US$115 million (Rs.499 crore) triggering the dotcom 8 CU IDOL SELF LEARNING MATERIAL (SLM)

boom inIndia;WebDunia, India’s first and most successful Hindi portal, launched; large number ofdotcoms appear, mostly modeled as e-marketplaces but have untested revenue models and bigspends;Sify setsuphundredsofpublicinternetkiosksunderthebrandnamei- Way;NewTelecomPolicy1999launchedby DoT;IndiaISPsallowedtosetupsatelliteinternationalgateways;IndiaInfo portal launched 2000: Parliament passes Information Technology Act 2000; foreign portals like Yahoo and MSNsetupIndiansites;Bazee.comlaunchedbasedontheeBaymodel;Indya.comlaunchedwithRs. 4.5crorecampaignblitz;birthofonlinejournalism:Tehelka.comexposescricketbettingscandal; ITC launches e-Choupal initiative to take the internet to villages; Railtel Corporation ofIndialaunched;NSElaunchesonlinestocktrading;cableinternetstartsreplacingdialupconnectio ns;2000:RediffIPOonNASDAQ;Sulekha.comlegalentity foundedinAustin,Texas 2001: Subscription sites set up by thenewspapertoday.com and NaiDunia.com; Times of Indiagrouplaunches8888mobileservice;IndiaToday grouplaunches2424mobileservice;firstcyber-crime-related arrest (two arrested for hacking go2nextjob.com); Indian Railways launchesonline ticketing site(irctc.com) whichsoonbecomesIndia’slargeste-revenueearner;India’sfirst cybercrime police station opens in Bangalore; Dotcom bubble bursts -- many sites close,some go into hibernation; C-DAC announced the launch of its Multilingual Advanced NewsAutomation System: MANAS; GAIL India launched; Andhra Pradesh state government launchese- procurementportalandextendspublicinternetkioskfacilitytoeverymandaloffice. 2002: Malayalam Varikha.com, the website of weekly Malayalam magazine, launches paid site;NPTEL (NationalProgrammeonTechnology EnhancedLearning)initiativelaunched;India’sfirst teleradiology company Teleradiology Solutions launched; Indian ISPs allowed to set upsubmarineinternationalgateways;Wikipedia.orgaddsAssamese,Punjabi,Nepali,Oriya,Malay alam content 2003:AirDeccanlaunchesIndia’sfirstonlineairticketingsite;NIXI(NationalInternetExchangeofI ndia)setup;Wi-Fi(2.4GHz)deregulatedby GoI;officialrepresentationfromIndia’s DoT and DIT at WSIS 2003 in Geneva; AirTel launches broadband internet access;Wikipedia.orgaddsBhojpuri,Marathi,Kannada,Hindi,Kashmiri,Tamil,Telugu,Gujarati, Sanskrit, Sindhicontent. 2004: DoT declares its Broadband Policy; BSNL introduces broadband; eBay buys Bazee.com;Monster.com buys Jobsahead.com; NIXI takes over management of the .IN Registry; ITC e-Choupal demonstrates rural internet adoption; Google starts India office; 9 CU IDOL SELF LEARNING MATERIAL (SLM)

Wikipedia.org addsBengali, Urdu content; Sulekha starts Hindi operations; Ebay India CEO arrested for alleged saleof pornonline,but laterreleased-- the arrestiscriticisedbyindustry 2005: Social networking sites like Orkut make their presence felt; online registration of .INdomains begins;Indic languageuser interfaceappearson basiccellphones 2006: Facebook makes India debut; OneIndia.in portal launched; national E-Governance Planlaunched; Naukri.comIPO inIndia. 2007:Majormedia websitesswitchtotab-baseddesign;Arzoo.comre-launchedasa travelportalbySabeerBhatia;TwittermakesitsIndiadebut;GoogleNewslaunchesHindiservice 2008:India setsaworld record by sending 10satellites into orbit ina single launch; AppleiPhone debut in India; Internet Governance Forum (IGF) held in India; Google News launches inTamil, Malayalam, and Telugu. 2009:GoIputsforththedraftpolicyonIndianlanguageIDNs. 2010: 3G spectrum auctioned by telecom players after two-year-long process; WiMax licensesauctioned; GoI announces National IPv6 Roadmap; TRAI releases National Broadband Plan;MakeMyTriplistsonNASDAQatoverUS$1billion;FacebookovertakesOrkutinIndia 2011: Mobile number portability launched; ICANN approves 7 Indian language InternationalizedDomain Names (IDNs) for India; iPad enters India market after its Dell and Samsung rivals;PearsonGrouptakescontrollingstakeine-educationstartupTutorVista;Indian government launches National Knowledge Network (NKN); India internet start-ups Komli Media, LetsBuy.com bag $21 million venture capital deals; India’s 2011 census uses social media; IIT courses, lectures made available online. 1.3 MAIN ACTIVITIES OF E-COMMERCE Categories of E-commerce There are three categories of e-commerce depending on who is involved in the process. These are:  B2B – Business to Business: When both the buyer and the seller are business entities, then their transaction is called business to business commerce. Entities such as manufacturers, traders, retailers come within this category.  B2C – Business to Consumer: As in any traditional retail situation, a B2C model involves a business selling to an end user through an electronic medium.  C2C – Consumer to Consumer: E-commerce has helped revived a version of the barter system where consumers are able to sell each other item that they own. Online auction sites and advertising portals are examples of this type of e-commerce. 10 CU IDOL SELF LEARNING MATERIAL (SLM)

Types of E-commerce Activities Under the e-commerce umbrella there exist a variety of activities. These include: Figure 1.1 E-Commerce Activities Online Shopping: A prevalent example of e-commerce is shopping via the internet. Virtual stores are created online, often boasting more variety of choices than are available at physical stores. There are also stores that exist only online, and benefit from the lack of investment into physical infrastructure. You can use Shopify or Shopify alternatives to launch your ecommerce business. And you should read our Shopify vs. Amazon FBA guide. Electronic Payments: Payment systems for utility bills, phone, cable and internet bills, as well as online shopping are an important aspect of e-commerce. Here, security needs to be ensured regarding credit card and personal information. Virtual Auctions: One version of e-commerce is the online auction popularized by eBay. These websites offer customers the benefit of selling to others at the best possible price. Internet Banking: E-commerce has allowed many people to forego frequent visits to the bank and instead perform their regular banking activities online via secure banking services. Online Ticketing: Ticketing for almost all types of activities is now done online. This includes travel ticketing such as air travel, bus and trains, as well as tickets for entertainment and sports events. This allows people to avoid queues and just go on the day of the event. 11 CU IDOL SELF LEARNING MATERIAL (SLM)

Distribution Modes There are different ways in which e-commerce retailers offer their services. These can be defined as the pure-click, bricks-and-clicks and click-to-brick retailers. Pure-Click: These are retailers which only sell through an online location and have no physical storefronts. Bricks-and-Clicks: These are retailers that have both physical and virtual store locations. Click-to-Brick: These are retailers who began as online stores but eventually expanded to a physical location as a supplement to their online enterprise. 1.4SCOPE OF E-COMMERCE Today, online shopping is a reality in India. The market place is flooded with several e- commerce options for shoppers to choose from. In the recent past, the growth of e- commerceindustry in India has been phenomenal as more shoppers have started discovering the benefits ofusing this platform. There is enough scope for online businesses in the future if they understandthe Indian shopper’s psyche and cater to their needs. Listed below are the reasons that guaranteethe futureprospect ofE-commerceinIndia.  Enhancingdomainregistrations  Risinginternetusers  Easyaccesstointernet  Awarenessaboutinterneteveninruralareas  Risingnumberofcybercafes  GrowingneedforE-commerce Cashondelivery(COD) Indian e-commerce industry has evolved over a period of time with innovations that havechanged the rules of the game globally. COD is one such example. In a country where credit cardpenetration is much lower than other developed markets and where e-commerce companies arestillworkinghardtobuildtrustamongshoppers,introducingcashondeliveryhasbeenoneofthe key factorsfor the successof the segment. At present, COD isthe preferred paymentmodefor close to 55-60% of all online transactions in the fashion and lifestyle segment in India.Executing COD efficiently and painlessly for the customer is critical to the success of any e-commerceplayerinthecountry. Deliveringexperiences 12 CU IDOL SELF LEARNING MATERIAL (SLM)

E-commerceneedstofocusoncustomerexperiencetobuildtrustandconfidence.Customer experience encompasses every interactionof a customer from placing an order tointeractingwithcustomer serviceteam,totheactualdelivery experience.Providingagreatdelivery experience is one of the core aspects to delighting customers. This not only mean fasterdeliveries but also consistency and reliability. The more faith the customer has in your deliveryservice, the more likely he is to buy again. Besides, it builds a good brand image and word-of-mouth publicity. Growingthebase India has more than 130 million online users at present, out of which as many as 10% areengaginginonlinetransactions.Theonlineuserbaseisexpectedtocross300millioninthenext2 – 3 years and a larger percentage of people are expected to transact online by the end of 2015.Thislargebasewillprovidevastscopefore- commercebusinessestoestablishthemselvesinIndia. Growingopportunities The e-commerce industry is growing at a rapid pace and changing the dynamics of theretail industry. In the coming years, e-commerce is expected to contribute close to 8-10% of thetotal retail segment in India. This growth is bound to continue provided e-commerce companiesfocus on innovating, building strong technology infrastructure and delivering the best customerexperience. OnlineTravelSegment The online travel segment has seen a CAGR of 55.5% from 2007-2012. The is due to riseof disposable income, surge in demand for domestic travel and the boom of the tourism industry.Domestic travel contributed to as much as 50% of the total market, followed by railways tickets,international air tickets,hotel bookingsand bustickets. E-Tailing E-tailing encompasses buying consumer items like apparels, electronic devices, home andkitchen appliances, jewellery, online. Competition is intense due to low entry barrier of thissegment. However, Amazon.com, flipkart, snapdeal.com,jabong.com, andmyntra.com are someofthemajorplayers.Thissegmentisexpectedtogrowfurtheraspeoplebecomemorepressedfor time.Alsothechoicethate-tailingsitesoffertocustomerswilldrivedemandforthis segment. However, there will be intense price based competition in this sector and consolidationsareintheorder. OnlineFinancialServices The financial services segment includes applying for insurance, paying online bills, 13 CU IDOL SELF LEARNING MATERIAL (SLM)

andpremiums and online transactions for financial services. The costs of these insurance policies arelesser with premiums being 40%-60% cheaper. This is a win-win situation for both the insuranceprovider and the customers. Also the convenience provided by online portals has led to morecustomers choosingthe onlineroutefor billpayment. Classifieds It is in a very promising stage and has lot of scope for growth. Online advertising is lotcheaper than conventional methods and unlike the latter; it is not constrained to a geographiclocation. The growth is mainly fuelled by services like online job (60% of the segment), onlinematrimony,B2CclassifiedsandB2Bclassifieds.Naukri.com,timesjob.com,monster.comar ethe major players in the job market while jeevansathi.com, shaadi.com are the major matrimonialsites. OtheronlineServices These include sites offering online services like buying entertainment tickets, food andgrocery. 1.5E-COMMERCE FEATURES Electronic commerce, or e-Commerce, refers to the purchasing and selling of goods orservices via electronic means, such as the Internet or mobile phone applications. It may also referto the process of creating, marketing, servicing and paying for services and goods. Businesses,governmentsandthepubliccanparticipateine- Commercetransactions.Thefollowingdiscussion will elicit the unique features of e-commerce. The unique features of e-commercetechnologyinclude: Ubiquity: E-Commerce is ubiquitous, It is available just about everywhere and at all times by usinginternet and Wi-Fi hotspot such as airport, coffee cafeand hill station places.. Consumer canconnect it to the Internet at any time, including at their homes, their offices, on their video gamesystems withanInternetconnectionandmobilephonedevices.E-Commerceis ubiquitoustechnology which is available everywhere Moreover, individuals who have cell phones with datacapabilities canaccess theInternet withouta Wi-Ficonnection. Globalreach: Thepotentialmarket sizeisroughly equalto the size ofthe onlinepopulationoftheworld.E- 14 CU IDOL SELF LEARNING MATERIAL (SLM)

Commerce Technologyseamlesslystretches across traditional cultural andnationalboundariesandenablesworldwideaccesstotheclient.E- Commercewebsitehasabilityto translate the multilingual websites as well as allow the access to visitors all over the world,purchaseproductsandmakebusinessinteractions. Universalstandards: The technical standards of the Internet are shared by all of the nations in the world. Thewholeonlinetraditionaregrowingandexpandingtheirfeaturesintheworld.Todevelopmentany kind ofbusinessneedInternetandcommunicationapplicationwhichmakethe businessrelationshipmorelovinglyandattractiveforsecure businessandsuccessfulbusiness. Richness: Users can access and utilize text messages and visual and audio components to send andreceive information. An individual may see information richness on a company's blog if a postcontains a video related to a product and hyperlinks that allow him to look at or purchase theproduct andsendinformationabout thepostvia text message oremail. Interactivity: E-commerce technologies allow two-way communication between the merchant and theconsumer. As a result, e-Commerce technologies can adjust to each individual’s experience. Forexample, while shopping online, an individual is able to view different angles of some items, addproducts into a virtual shopping cart, checkout by inputting his payment information and thensubmit theorder. Personalization: Technologieswithine-Commerceallow forthepersonalizationandcustomizationofmarketing messages that groups or individuals receive. An example of personalization includesproductrecommendationsbasedonauser'ssearchhistoryonaWebsitethatallowsindividua lstocreateanaccount. Informationdensity: The use of e-Commerce reduces the cost to store, process and communicate information,Atthesametime,accuracyandtimelinessincrease;thus,makinginformationaccurate,i nexpensive and plentiful. For example, the online shopping process allows a company to receivepersonal, shipping, billing and payment information from a customer all at once and sends thecustomer'sinformationtotheappropriatedepartmentsin amatter ofseconds. Socialtechnology: E-Commerce technology has tie upthe social media networking applicationtoprovidethe best source of content sharing technology and e-Marketingsystems. You can share yourcontent or 15 CU IDOL SELF LEARNING MATERIAL (SLM)

dataeasilyinjust oneclick. User-GeneratedContent: Social networks use e-Commerce technologies to allow members, the general public, toshare content with the worldwide community. Consumers with accounts can share personal andcommercial information to promote a product or service. When a company has a professionalsocial networking account, a member of the same social network has the option of associatinghimself with the company or a product by saying he likes or recommends it. When an individualupdates his status on a social networking account, he may also mention a product or company byname,which createsword-of-mouthadvertising. FutureScopeandGrowth: The growth of e commerce will be on two accounts: One is due to the changes in themacro- economic parameters like disposable income, internet penetration, inflow of investments,and theotherdue tosegment specific factors. Macro-Economic Factors i. PersonalDisposableIncomewillcontinuetorise According to theInternational Monetary Fund (IMF), personal disposable income willrise; it signals that the purchasing power of the people and their standard of living has increased.Asaresult,demandforgoodsandservicesareexpectedtorise.Withmoredisposableincom e,the benefitsoftime savingofferedbye-commercewillleadtogrowthinthesector. ii. NumberofactiveInternetusersinIndiaispoisedtorise Internet penetration has increased by a CAGR of 30% from 2007. There has been anincrease in internet user base and such trend is expected to continue. This will led to moreadvertisement on the digital media. As advertisements increase, the trialrate and the repeat ratefor online retailing is likely to increase. This will trigger growth in both the travel and non-travelsegment duetomore customeracquisition. iii. Demandfordebitandcreditcardswillseearise The demand for debit and credit cards has also seen a steady rise over the last few years.Most of the banks now provide online banking and debit card facility with every new account.With the financial inclusiondrive by the RBI,the number of bank accounts (and hence thenumber of debit cards) will definitely see a rise. This coupled with rising disposable income willinvariablylead to more onlinetransactions. SegmentSpecificfactors Inthe online travelsegment,growthof the tourismindustry anddemandof domestictravelwillhavepositiveexternalitiesonthee- 16 CU IDOL SELF LEARNING MATERIAL (SLM)

commerceindustry.Withtravelwebsitesprovidingadditionalfeatureslikehotelbookingandpackag etours,theconveniencefactoroffered by these websites will lead to growth. Additionally, internet gives users the choicewherethey canevaluate anoffer,compare thepricesanddecide on the onethat suit theirdemand.Intheonlineretailspace,absenceofshowroomsandhighcostoftransportationprevents thoseintier2citiestoaccessglobalbrandsthusincreasingdemandforonlineshopping. 1.6SUMMARY  There is no one commonly agreed definition of e-commerce. E-commerce has an impacton three major stakeholders, namely society, organizations and customers.  There are a number ofadvantages,whichincludecostsavings,increasedefficiency,customizationandglobalmar ketplaces.  There are also limitations arising from e-commerce which apply to each of thestakeholders. These include information overload, reliability and security issues, and cost of access,social divisionsanddifficulties inpolicingtheinternet.  In order to aid general understanding of e-commerce a number of frameworks have been introduced to explore it from different perspectives.  These frameworks help identify the elements of e-commerce and how businesses can better understand e-commerce and its practical applicability  The concept of e-commerce is all about using the internet to do business better and faster. Lack of technical and management skills in Information and Communications Technology is a barrier  E-commerce has allowed firms to establish a market presence or enhance an existing market position. It provides a cheaper and more efficient distribution chain for their products or services.  There are three main types of e-commerce activities - B2B, C2C and D2C. E-commerce has helped revive a version of the barter system where consumers are able to sell each other items.  The growth is mainly fueled by services like online job (60% of the segment), online matrimony, B2C classifieds and B2B classifieds. E-Commerce is ubiquitous technology which is available everywhere. Consumer can connect it to the Internet at any time, including at their homes, offices, on their video game systems and mobile phones. E- commerce websites have ability to translate multilingual websites as well as allow access to visitors all over the world. 17 CU IDOL SELF LEARNING MATERIAL (SLM)

1.7 KEYWORD  E- Commerce:ElectronicCommerceiswherebusinesstransactionstakeplaceviatelecommu nicationsnetworks,especiallytheInternet  E-Business:E- businessisthetransformationofkeybusinessprocessesthroughtheuseofInternet technologies.  EducationalResearchNetwork(ERNET):InternetinIndiawasestablishedasERNET.It wasajointundertakingoftheDepartmentofElectronics(DOE)oftheGovernmentofIndia,an dthe UnitedNationsDevelopmentProgram(UNDP)  GatewayInternetAccessService(GIAS):OnAugust15th1995,VideshSancharNigam Limited (VSNL) -- the Indian international trunk telephone carrier company -- launched theGatewayInternetAccess Service (GIAS).  E-tailing:E- tailingencompassesbuyingconsumeritemslikeapparels,electronicdevices,homeandkitch enappliances,jewellery,online.Amazon.com,flipkart,snapdeal.com, jabong.com,andmyntra.comaresome ofthemajorplayers. 1.8LEARNING ACTIVITY 1. Define E-Commerce? ___________________________________________________________________________ ___________________________________________________________________________ 2. State the Features of E-Commerce? ___________________________________________________________________________ ___________________________________________________________________________ 1.9 UNIT END QUESTIONS A. Descriptive Questions Short Questions 1. DefinethetermE-Commerce. 2. WhataretheelementsofE-Commerce? 3. WhatisInternet? 18 CU IDOL SELF LEARNING MATERIAL (SLM)

4. WhatisEDI? 5. WhatisE-Tailing? Long Questions 1. SketchoutthehistoricaldevelopmentofE-Commerce. 2. StatetheimpactofE-Commerceonbusinessworld. 3. Whataretheactivities ofE-Commerce? 4. BringouttheFeatures ofE-Commerce. 5. DiscusstheScopeofE-Commerce. B. Multiple Choice Questions 1. ………………..Is Concerned With The Buying And Selling Information, Products And Services Over Computer Communication Networks a. Commerce b. E-Commerce c. E-Business d. SCM 2. ……………….Is An Early Form Of E-Commerce a. SCM b. Customer c. E-Commerce d. EDI 3. World Wide Web (Www) Was Introduced In the Year …………………… a. 1994 b. 1996 c. 1992 d. 1990 4. …………………Is basically a concept of online marketing and distributing of products and services over the internet a. B2B b. B2G c. B2C 19 CU IDOL SELF LEARNING MATERIAL (SLM)

d. C2C 5. The dimension of e-commerce that enables commerce across national boundaries is called ………………….. a. Interactivity b. Global reach c. Richness d. Ubiquity Answers 1-b, 2-d, 3-a. 4-c, 5-b 1.10 REFERENCES Reference books • JaiswalS.,E-Commerce • MohammadMahmoudiMaymand,E-Commerce • MurthyC.S.V.,E-Commerce-Concepts,ModelsandStrategies • Schneider, E-Commerce, Cengage Learning, New Delhi. • PeeLosuin&AMurphy,ElectronicCommerceJaicoPub Textbook references • JosephP.T.,E-Commerce–AnIndianPerspective • RaviKalkotaFrontiersofE-Commerce,AddisonWesley • K.Bajaj & D.Nag E-Commerce, The Cutting Edge of Business, TataMcGraw • Green Stein ElectronicCommerceTata McGraw. Website • https://www.cleverism.com/e-commerce-complete-guide • https://www.economicsdiscussion.net/business/e-commerce/31868 20 CU IDOL SELF LEARNING MATERIAL (SLM)

21 CU IDOL SELF LEARNING MATERIAL (SLM)

UNIT - 2: COMPONENTSOFE-COMMERCE STRUCTURE 2.0 Learning Objectives 2.1 Introduction 2.2 GoalsofE-Commerce 2.3 TechnicalComponentsofEcommerce 2.4 Summary 2.5 Keywords 2.6 Learning Activity 2.7 Unit End Questions 2.8 References 2.0LEARNING OBJECTIVES After studying this unit, you will be able to:  Describe the E-Commerce goals  Identify Components of E-Commerce  State the Advantages and disadvantages of EDI  List the technical aspects of E-Commerce. 2.1INTRODUCTION WhatisE-Commerce? Electronic commerce, commonly known as E-commerce or E-Commerce, istradinginproductsorservicesconductedviacomputernetworkssuchastheInternet. Electronic commerce draws on technologies such as mobilecommerce, electronic funds transfer, supply chain management, Internetmarketing,onlinetransaction processing, electronic datainterchange (EDI), inventory management systems, and automated datacollectionsystems. ModernelectroniccommercetypicallyusestheWorldWideWebatleastatonepointinthetransaction 'slife-cycle,althoughitmayencompassa wider range of technologies such as e-mail, mobile devices, social media, andtelephones as well. Electronic commerce is generally considered to be the salesaspect of e-business. It also consists of the exchange of data to facilitate thefinancing and payment aspects of business transactions. This is an effective andefficient way of communicating within an organization and one of the mosteffective and useful ways of conducting business.While discussing aboutElectronic Data Exchange Technology, we 22 CU IDOL SELF LEARNING MATERIAL (SLM)

have seen that, these emergingnetworks of firms are more flexible and can respond to changes in the economicenvironment much more quickly than hierarchically structured businesses evercould. Electronic Data Interchange (EDI) EDI is a computer-to-computer transferofbusinessinformation between twobusinessesthatusesastandardformat. Framework of E-Commerce Technology: Introduction The basic framework of e-commerce enables doing business online. The framework consists of a comprehensive structure beginning with the based technology layer to the general service layer. E-commerce has, to a certain extent, changed markets structure. Traditionally, market ties were created through the exchange of goods, services, and money. E-commerce has brought in an essential element: information. Market ties are now based on information services, information goods and electronic money. Although the nature of exchanging products remains unchanged, the channel and the format of doing business have changed. To better understand the basic framework of e-commerce, the following paragraphs explain the features of the major layers in the environment of e-commerce. Basic Framework 1. The First layer: Network Infrastructure The “Information Superhighway”, network infrastructure is the foundation layer of hardware infrastructure. It is a mixture of many forms of information transport systems, which include telecom, cable TV, wireless and the Internet. These systems, in particular the Internet, provide various types of telecommunication channels for transmission of contents used in ecommerce. 2. The Second Layer: Multimedia Content and Network Publishing While the Information Superhighway is the transportation basis that allows content such as text, sounds and images to be transmitted, 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 Messaging transmission is usually done by the following technologies: (a) Communicating non-formatted data: by using facsimile, electronic mail, which mainly directs to individuals? (b) Communicating formatted data: by using Electronic Data Interchange (EDI) without 23 CU IDOL SELF LEARNING MATERIAL (SLM)

human intervention. It is mainly used for business documents such as purchase orders, invoices and packing lists. Messaging transmission technology has encouraged business process automation. (c) Hyper Text Transfer Protocol (HTTP): HTTP is an information dissemination tool generally used on the Internet. It uses a common display format to publish non-formatted multimedia messages in various environments. 4. The Fourth layer: Security Protection in Business Services This layer is regarded as the essential facilities for doing business because it is required by both business corporations and individuals in business transactions. The facilities include standardized product catalogues, price lists, electronic payment methods, secured transmission of business information, and the authentication of identity of both trading parties. The ultimate goal of e-commerce is that the seller gets the payment and the buyer obtains the product. To ensure transaction security, e-commerce needs to ensure content reliability, integrity, nonrepudiation, and to provide the relevant evidence in case of disputes. Therefore, payment security on the web is crucial to ensure smooth completion of a transaction. The prevailing method of security measure is by electronic certification which provides „end-to-end‟ security protection. 5. The Fifth layer: Practical Application of E-commerce E-commerce is widely employed in supply chain management, electronic marketing, electronic advertising, online shopping, online entertainment, pay-information service and network banking. 2.2GOALSOFE-COMMERCE GOALSOFE-COMMERCE Quantity When offline stores calculate transaction costs, they have tofactor in countless business expenditures along with the actualnumber of transactions. When there are fewer transactions, thecost of per transaction is higher. On the flipside, transactionsarriving in high quantity can overwhelm your personnel anddistributors. In an E-Commerce business, the transaction cost isthesameacrosstheboard,whetheroneorderorthousandscomein. Accuracy Electronic selling nearly eliminates processing errors that runrampantwithhumanprocessors.Thistranslatesintolesswastedtimesolvingorderandinvoicepro 24 CU IDOL SELF LEARNING MATERIAL (SLM)

blems.Althoughinaccuraciesdo not incur fees or penalties, they do take up considerableemployee time and energy. E-Commerce frees up staff membersto focus on profit-generating activities. Inventory With a brick and mortar store, we will have to maintain aninventory. This will entail purchasing, receiving, unpacking,displaying, storing extras and selling as quickly as possible. Inthe E-Commerce world, you can opt to own or rent warehousespace to store inventory, or you can create a workingrelationship with wholesalers or manufacturers that ship directlyfrom their facility, which is often called drop shipping. Ifpurchasing in bulk, your cost per item will be lower, but youwill nothavetoprocessand housetheinventory. OtherReducedCosts An E-Commerce business is able to reduce labor and other costsinmanyareas,including:documentpreparation,reconciliation,mail preparation, telephone calling, data entry, and overtime andsupervision expenses. E-Business can help manage operatingcosts in many areas, thereby reducing the cost of individualtransactions. The use of email and electronic invoicing are atremendoussavings overthetraditionalmethods. Servicequality Servicequalityisacomparisonofexpectationswithperformance. A business with high service quality will meet customer needswhile remainingeconomically competitive. Improved servicequality may increase economic competitiveness and result incustomersatisfaction. Productlifecyclemanagement Product Life Cycle (PLC) management are to reduce time to market,improveproductquality,reduceprototypingcosts,identifypotentialsalesopportunities and revenue contributions, and reduce environmentalimpacts at end-of-life. To create successful new products the companymust understandits customers,markets andcompetitors. Goodcustomerresponse Improved service quality and reduced costs and the best management ofthe product will result in better customer response and their satisfactionwill resultin recurring business opportunities. Achievingwebpresencegoals Onthewebbusinessesandorganizationshavetheadvantageofcreatingaspace of their own choice their designs, choices good enough to makecertaingoodimpressionsandthuscustomerfeel andenjoyitspresence? Goodwebsitesattractalargenoofcustomersandfrequentpurchasesaremadethrough them. 25 CU IDOL SELF LEARNING MATERIAL (SLM)

Just-in-Time(JIT)Manufacturing It is viewed as an integrated management system consisting of a number of differentmanagementpracticesdependentonthecharacteristicsofspecificplants. Thefirstprincipleiselimination of all waste (time,materials,labor & equipment) the following managementpractices arefocusedfactory,reducedset-uptimes,grouptechnology,totalproductive maintenance,multifunctionemployees,uniformworkloads,ITpurchasing,kanbantotalqualitycon trol&qualitycircles. QuickResponseRetailing(QR) It is a version of JIT purchasing tailored for retailing. To reduce the risk of being of out ofstock, retailers are implementing QR systems. It provides for a flexible response to productordering and lowers costly inventory levels QR retailing focuses on market responsivenesswhilemaintaininglowlevelsofstocksitcreatesaclosedloopconsistingofretailer,ve ndor,& consumer chain, & as consumers make purchases the vendor orders new deliveries fromthe retailerthrough its computenetwork. SupplyChainManagement Supply Chain Management (SCM) is also called “extending”, which means integratingtheinternaland externalpartnersonthesupplyandprocesschainstogetrawmaterialstothemanufacturerandfinished products totheconsumer. Itincludesfollowingfunctions. Suppliermanagement:Thegoalistoreducethenumber ofsuppliersandget themtoPartners. Inventorymanagement:Thegoalistoshortentheorder-ship-billcycle.Whenamajorityofpartners areelectronicallylinked, information faxed or mailed. Distributionmanagement:Thegoalistomovedocuments(accuratedata)relatedtoShipping. Channelmanagement:Thegoalistoquicklydisseminateinformationaboutchangingoperationalco nditions(technical,product,andpricinginformation)totradingpartners. Paymentmanagement:ThegoalistoLink Companyandthesuppliersanddistributorssothatpayments canbesentandreceivedelectronically. Financialmanagement:Thegoal istoenableglobal companiestomanagetheirmoneyinvariousforeign exchangeaccounts. Insum,thesupplychainmanagement processincreasinglydependsonelectronicmarkets. WorkgroupCollaborationApplications: A internetwork that enables easy and inexpensive connection of various organizationSegments.Itistoimprovecommunicationsandinformationsharingandtogatherandan alyzecompetitive data in real-time .Videoconferencing, document sharing and multimedia e- 26 CU IDOL SELF LEARNING MATERIAL (SLM)

mail,are expected to reduce travel and encourage telecommuting improvingthe distributionchannelfordocumentsandrecordstosuppliers,collaboratorsanddistributors. Electronic Data Interchange EDI stands for Electronic Data Interchange. EDI is an electronic way of transferring business documents in an organization internally, between its various departments or externally with suppliers, customers, or any subsidiaries. In EDI, paper documents are replaced with electronic documents such as word documents, spreadsheets, etc. Figure 2.1 Electronic Data Interchange 27 EDI Documents Following are the few important documents used in EDI − 1. Invoices 2. Purchase orders 3. Shipping Requests 4. Acknowledgement 5. Business Correspondence letters 6. Financial information letters Steps in an EDI System Following are the steps in an EDI System. 1. A program generates a file that contains the processed document. CU IDOL SELF LEARNING MATERIAL (SLM)

2. The document is converted into an agreed standard format. 3. The file containing the document is sent electronically on the network. 4. The trading partner receives the file. 5. An acknowledgement document is generated and sent to the originating organization. Advantages of an EDI System Following are the advantages of having an EDI system. 1. Reduction in data entry errors. − Chances of errors are much less while using a computer for data entry. 2. Shorter processing life cycle − Orders can be processed as soon as they are entered into the system. It reduces the processing time of the transfer documents. 3. Electronic form of data − It is quite easy to transfer or share the data, as it is present in electronic format. 4. Reduction in paperwork − as a lot of paper documents are replaced with electronic documents, there is a huge reduction in paperwork. 5. Cost Effective − as time is saved and orders are processed very effectively, EDI proves to be highly cost effective. 6. Standard Means of communication − EDI enforces standards on the content of data and its format which leads to clearer communication. 2.3 COMPONENTSOFECOMMERCE Components of E-Commerce 1. Hardware: A Web server hardware platform is one of the major components of the Ecommerce infrastructure on which the performance of the whole E-commerce application depends. While selecting Web server hardware, the software that will run on the server of the E- commerce transactions to be processed must be considered. The amount of the storage capacity and the computing power required depend on the volume of the E-commerce transaction to be processed. If the exact requirements are not known in advance, then the hardware configuration should be highly scalable so that they can be upgraded to meet the requirements. 2. E - Commerce Software’s Software is the main component that implements the E-commerce services and functionality. Software for E-commerce can be categorized in the following two types Web server software: Web server software is required in addition to the Web server operating system software. It is used to implement some extra functionality such as security and identification and retrieval 28 CU IDOL SELF LEARNING MATERIAL (SLM)

and sending of Web pages. Web server software creates a Web log file that identifies things such as the URL of the visitor, the length of the visit and the search engine and the key words used to find the site. Web server software includes website development tools such as HTML editor and Web page upload support. E-commerce software’s: With the growth of E-commerce, many applications have emerged— for example, the electronic shopping cart that tracks the items selected for purchase and their costs. Typical E- commerce software must support the following processes: Catalog management It is required to deliver the customized content to the screen or the GUI used by the customer. The software used for catalog management combines the different product data formats into a standard format for viewing, aggregating and interacting catalog data into a central store. Product configuration The Web-based product configuration software allows the user to build the product to their specifications without the intervention of the salespeople. For example, Dell Computers and CISCO systems use configuration software to sell build-to-order and network processes to their customers over the Internet. Shopping cart A model known as shopping cart is used by Ecommerce sites to track the items that are selected for purchase; the shopping cart allows customers to view all the items selected by them. The customers can add new items and remove the previously selected items from the shopping cart. Transaction processing: E-commerce transaction processing is used to process the data received from the. Shopping cart and to calculate the total cost of the purchase. TechnicalAspectsofE-Commerce Scalability The ability of a product to work well as it or its environment is changedinsizeorpower.AnE- CommerceWebsiteisonlyasgoodasitsabilitytohandle its peak traffic. As your Websitepopularity increases, it needs toscale with minimal effort so you can avoid incurring disproportionateinfrastructure managementcosts Business User Control Business users like to take control, and every task that they can safely dothemselves means one less task that IT will have to do. When evaluatinge- 29 CU IDOL SELF LEARNING MATERIAL (SLM)

commerceapplications,itshouldbemadesurethattheapplicationyouchoose will be technically and architecturally sound with provencapabilities. Agility Howeasilycanapersonimplementbusinessrequeststomonitorandrespondto anindividualWeb visitor’sbehavior? Integration Thee-commerceWebsite isahighlyintegratedapplicationthattouchesmanyothersystemsandprocesses.Theteamthatdevelo psandsupportsit contains a mix of technical and business professionals who drive animportant partof thecorporatestrategy. Search Howeasilycan customersfind whattheywant,andhoweasilycanIpromotethe productsIwantto pushbasedoncustomersearches. Standards E-commerce is no longer a renegade outpost of IT. It’s a fundamental,mission-critical organization within a business’ systems portfolio. It mustrun on a standards-based platform that can be supported by standard skillsetsacrosstheorganizationandinthewidermarketplace.You’llwanttheflexibility to go to a broad selection of agencies and systems integratorsfor development. In today’s enterprise applications, the technologyplaying field has narrowed to either a Java/J2EE or Microsoft .NETarchitecture. TheProductCatalog Theproductcatalog istheonlinerepositoryforeveryitemyou sell.It hasto effectively promote the items you most want to push, andsimultaneouslyhelpyourcustomersfindthe items theyare lookingfor. But poorly constructed product catalogs can be rigid anduncompromising,especiallyiftheproductattributesyouwanttostoredon’t naturally align with the definitions set in there e-commerceapplication Manageability-Theeasewithwhichaproductcanbemaintained.Also,the degreeof control allowed bythevendor. UserFriendliness -Theeasewithwhichanuntrainedpersoncanuseaproduct. ChoosinganInternetServiceProvider(ISP) The most common way to launch an online business is to signup with a business Internet Service Provider (ISP). These willprovide people with a business connection to the Internet 30 CU IDOL SELF LEARNING MATERIAL (SLM)

andwillusuallyhostyourwebsiteontheir serverforpublicaccess.TheISPpeoplechoosewilldepend onthe natureofthe site. Downtime Thetimeduringwhichthewebsitecannot beaccessed-resultsin loss of sales or advertising revenue and can deter potentialcustomers. Downtime could be due to net congestion, perhapsduring a promotion at an e-commerce site, or server shutdown.When choosing your ISP, ensure that they have the facilities tocope with a large number of users at once and that they have areliableserver. Designingaparticularsite Perhaps the most important aspect of a website design isusability - can users find information quickly and easily?Beware of \"attractive\" extras such as Java Applets, multimediavideo or fanciful graphics as these increase the time it takes forthe site to download. In addition, video and audio may requireseparate programs to run which many people may not have. Anexample of a simple yet effective e-commerce site iswww.amazon.co.uk Transactions Most sales between company and consumer over the Internettakeplacebycreditcardtransactions.However,bankshavebeen unwilling to grant dot- coms the merchant status needed tohandle credit cards without two years of trading records - simplyunrealisticfor anE-Commercestart-up. Instead, you can sign up with Payment Service Providers(PSPs), such as Secpay, NetBanx or Secure Trading, whichoperateoncommission.Whenacustomerchoosesto\"Proceedto Check Out\", they are redirected to the PSP's secure server.The transactions are processed by the PSP using high levels ofencryption. A recent trend has been the availability of e-commercepackages. Some ISPs, such as ClaraNet combine websitehostingwithinternetconnectionandasecureserverforsales.Webdesignersmayalsoofferho stingandmaintenance. Security Even the world's largest sites, such as Amazon and E-Bay, havefallen victim to concerted hacking attacks. However, hacking isnot usually a major issue for lower profile companies; a study bythe Department of Trade and Industry found that most securityproblemswerecausedbyemployeeerrorrather thanhacking. In general, youshould ensurethatinformationis never stored in an unprotected 31 CU IDOL SELF LEARNING MATERIAL (SLM)

directoryaccessiblefromtheweb.Encryptionsoftwareiswidelyavailableon theinternet. 2.4 SUMMARY  ModernelectroniccommercetypicallyusestheWorldWideWebatleastatonepointinthetra nsaction'slife-cycle,althoughitmayencompasses wider range of technologies such as e- mail, mobile devices, social media, andtelephones as well.  Electronic commerce is generally considered to be the salesaspect of e-business.  It also consists of the exchange of data to facilitate thefinancing and payment aspects of business transactions.  This is an effective andefficient way of communicating within an organization and one of the mosteffective and useful ways of conducting business.  A business with high service quality will meet customer needs while remaining economically competitive.  It is to improve communications and information sharing and to gather and analyze competitive data in real-time .Videoconferencing, document sharing and multimedia e-mail, are expected to reduce travel and encourage telecommuting improving the distribution channel for documents and records to suppliers, collaborators and distributors.  EDI is an electronic way of transferring business documents in an organization internally, between its various departments or externally with suppliers, customers, or any subsidiaries.  While selecting Web server hardware, the software that will run on the server of the E-commerce transactions to be processed must be considered.  The most common way to launch an online business is to sign up with a business Internet Service Provider (ISP). 2.5 KEYWORDS  EDI:Electronic Data Interchange (EDI) is the electronic interchange of business information using a standardized format  Hyper Text Transfer Protocol (HTTP):HTTP is an information dissemination tool generally used on the Internet.  JUST IN TIME:An integrated management system consisting of a number of differentmanagementpracticesdependentonthecharacteristicsofspecificplants 32 CU IDOL SELF LEARNING MATERIAL (SLM)

 SCM:Which means integratingtheinternaland externalpartnersonthesupplyandprocess?  QuickResponseRetailing:It is a version of JIT purchasing tailored for retailing. 2.6 LEARNING ACTIVITY 1. What you mean by Just in Time? ___________________________________________________________________________ ___________________________________________________________________________ 2. Write the short note on SCM? ___________________________________________________________________________ ___________________________________________________________________________ 2.7 UNIT END QUESTIONS A. Descriptive Questions Short Questions 1. Write short note on EDI? 2. Explain the steps in EDI System? 3. What you mean by quick responding? 4. Explain the features of EDI? 5. Write short note ISP? Long Questions 1. Briefly explain the framework of E-Commerce. 2. Explain the components of E-Commerce? 3. Discuss the technical aspects e-commerce? 4. State the advantages of EDI system? 5. Describe the goals of E-Commerce? B. Multiple Choice Questions 1. ______describes e-commerce. a. Doing business offline b. Doing business electronically c. Surfing online d. Tele marketing 33 CU IDOL SELF LEARNING MATERIAL (SLM)

2. _______is a system of interconnected electronic components or circuits. a. Marketplaces b. Metamarkets c. Electronic Markets d. Electronic Network 3. EDI standard a. is not easily available b. defines several hundred transaction sets for various business forms c. defines only a transmission protocol d. interconnected electronic protocol 4. The best products to sell in B2C e-commerce are a. Small products b. Digital products c. Specialty products d. Fresh products 5. A (n) ………. connects many private networks from different companies for communication through a private inter-organizational information system. a. Intranet b. Extranet c. Internet d. WAN Answers 34 1-b, 2-b, 3-b, 4-b, 5-b 2.8 REFERENCES Reference books • JaiswalS.,E-Commerce • MohammadMahmoudiMaymand,E-Commerce CU IDOL SELF LEARNING MATERIAL (SLM)

• MurthyC.S.V.,E-Commerce-Concepts,ModelsandStrategies • Schneider, E-Commerce, Cengage Learning, New Delhi. • PeeLosuin&AMurphy,ElectronicCommerceJaicoPub Textbook references • JosephP.T.,E-Commerce–AnIndianPerspective • RaviKalkotaFrontiersofE-Commerce,AddisonWesley • K.Bajaj & D.Nag E-Commerce, The Cutting Edge of Business, Tata McGraw • Green Stein ElectronicCommerceTata McGraw. Website • https://www.cleverism.com/e-commerce-complete-guide • https://www.economicsdiscussion.net/business/e-commerce/31868 35 CU IDOL SELF LEARNING MATERIAL (SLM)

UNIT - 3: FUNCTIONS STRUCTURE 3.0 Learning Objectives 3.1 Introduction 3.2 Functions of E-Commerce 3.3 Advantages of E-Commerce 3.4 Disadvantages of E-Commerce 3.5 Summary 3.6 Keywords 3.7 Learning Activity 3.8 Unit End Questions 3.9 References 3.0LEARNING OBJECTIVES After studying this unit, you will be able to:  Describe n functions of E-Commerce  Identify the advantages and disadvantages  State the common features of E-Commerce 3.1 INTRODUCTION The term e-commerce was coined back in the 1960s, with the rise of electronic commerce the buying and selling of goods through the transmission of data – which was made possible by the introduction of the electronic data interchange. Fast forward fifty years and e-commerce has changed the way in which society sells goods and services.E-commerce has become one of the most popular methods of making money online and an attractive opportunity for investors. For those interested in buying an e-commerce business, this article serves to provide an introduction to e-commerce, covering the reasons for its popularity, the main distribution models and a comparison of the major e-commerce platforms available. 3.2 FUNCTIONS OF E-COMMERCE FunctionsofE-Commerce Thefollowingarefivefunctionsyoushouldbedoingdailyinyoure-commercebusiness. SearchEngineOptimization(SEO) 36 CU IDOL SELF LEARNING MATERIAL (SLM)

 Generateuniquerelevantcontent.Googlelovesuniquecontentthatisrelatedtowhatyoursiteisall about.Ensureyouareusing goodkeywordsyouwantto focuson.  Every page should have an H1 tag aroundwhat is the focus of the page, such as a productname, category name, or static content title. Use H2 tags as well for other important pagesections.  Keywordsinoptimizedpagetitles.  Internal linking. Link keywordsinyour uniquecontent to pagesrelated to that keyword. Thisishuge!!!  FriendlyURLswithrelatedphrases.E.g.WhentalkingaboutZobrist’sE- Commercesolution,the URLlookslikethis:http://www.zobristinc.com/our_solutions/E- Commerce/ SelectingNewProducts  Sell what the customer wants to buy, not what you want to sell! This is a common mistake,especially when merchandisers are given a great price to sell a particular product. If nobodywantsto buythatproduct,it doesn’tmatterwhat priceyouset it at.  Findoutwhatcustomerswant.Whatisyourvaluepropositiononproductsyousell?Capitalizeon yourniche! Merchandising New Productions  Pictures,pictures,pictures!Itisveryimportanttohavehighqualityimagesoftheproducts.  Herophotos:ifyouhaveabigseller,featureitonacategorypagewithaheroimageoftheproduct.  Promotelatestreleasesinyournewslettersandfeaturethemincategoriesoronyourhomepage.  Markettocustomerswhohavepurchasedrelateditemsinthepast. CustomerService  Makeyourcustomershappy.  Delivery ordersontime.  Ensureorderaccuracy.  Reshippromptlyifapackagewasfailedtobedeliveredtothecustomer,ifitcamedamaged,orifitw asmissing parts.  Don’t try to save every penny on an order. You may need to take a loss to make a customerhappy in order to retain their loyalty to you, and therefore be very valuable for many orders tocome. MonitoringyourKPIs/Analytics  Monitor your analytics reports. View what items are selling and bubble them to the top ofproduct listings so customers can find them easier. A great tool for this, if you are on IBMWeb SphereCommerce,isour SmartMerchandiser product.Withit,youcanseeanalyticoverlaysoneachproductineachcategorytohelpyoumakes martmerchandisingdecisions. 37 CU IDOL SELF LEARNING MATERIAL (SLM)

 Tackle cart abandonment. Remarket those products to the customers if you have their emailaddresses. IncentivizethemtocompletetheircheckoutwithinXdays. Common Featuresof E-Commerce E-Commerce provides the following features: Non-Cash Payment − E-Commerce enables the use of credit cards, debit cards, smart cards, electronic fund transfer via bank's website, and other modes of electronics payment. 24x7 Service availability − E-commerce automates the business of enterprises and the way they provide services to their customers. It is available anytime, anywhere. Advertising / Marketing − E-commerce increases the reach of advertising of products and services of businesses. It helps in better marketing management of products/services. Improved Sales − Using e-commerce, orders for the products can be generated anytime, anywhere without any human intervention. It gives a big boost to existing sales volumes. Support − E-commerce provides various ways to provide pre-sales and post-sales assistance to provide better services to customers. Inventory Management − E-commerce automates inventory management. Reports get generated instantly when required. Product inventory management becomes very efficient and easy to maintain. Communication improvement − E-commerce provides ways for faster, efficient, reliable communication with customers and partners. E-Commerce – Channels: These are of following two types: (i) Commercial Channels: Various companies have set up on-line information and marketing services that can be accessed by those who have signed up for the service and pay a monthly fee. These channels provide information, news, libraries, education, travel, sports and reference, entertainment, shopping services, dialogues opportunities and e-mail etc. (ii) The Internet: The Internet is a global web of computer networks that has made instantaneous and decentralised global communication possible. Internet usage has spread with recent development of the user-friendly World Wide Web (www) browser software such as Netscape Navigator and Microsoft Internet Explorer. 38 CU IDOL SELF LEARNING MATERIAL (SLM)

Users can surf the Internet and experience fully integrated text, graphics, images and sound. Users can send e-mail, exchange views, shop for products, and access news and business information. The users need to pay an Internet provider-to be hooked up to it through their computers. Internet Strategies for Business and Key Success Factors in E-Commerce: Internet users are better educated, better informed. As more and more people find their way onto the internet, the cyberspace population is becoming more mainstream and diverse. Younger users of Internet in general place a greater value in information, entertainment, socialising etc. Old users are more likely to use Internet for investment and more serious matters. In general, Internet users respond to messages aimed at selling, and receive information about products and services. In on-line marketing through internet, the consumers, and not the marketer, gives permission and controls the interaction. Internet ‘search engines’ such as “Yahoo” and “Google” give consumers access to varied information sources, making them better informed and more discerning shoppers. Consumers gain the following capabilities in the E-commerce providing information-rich regime: 1. They can get objective information for multiple brands, including costs, prices, features and quality without relying on the manufacturer or retailers. 2 They can initiate requests for advertising and information from manufacturers. 3. They can use software agents to search for and invite offers from multiple sellers. These new buyer capabilities mean that the exchange process in the age of information has become customer initiated and customer controlled. Marketers and their representatives are held at bay till customers invite them to participate in the exchange process, customers define the rules of engagement, and insulate themselves with the help of agents and intermediaries. Customers define what information they need, what products or services they are interested in and what prices they are willing to pay. E-Commerce – Essentials and Procedures: 39 CU IDOL SELF LEARNING MATERIAL (SLM)

E-commerce operates digitally. It has some unique ways to put a business transaction in place. Let’s see how this happens: 1. Product/Service: For E-commerce to happen there should be a product or service that has value and for which someone is willing to pay a price. If this criterion is met, then you can sell anything on ecommerce websites—gadgets, books, automobiles, grocery, toys, apparel, vegetables and digital goods such as music, e-books, software, air tickets, magazine subscriptions and the like. 2. Processing Mechanism: The ecommerce website of a company should put an easy process in place so that the customer browsing through the site can place an order. The software that makes this happen is called a shopping cart. 3. Payment Gateway: Once the customer fills the cart with items that he or she has shopped, the site should take the customer towards the payment gateway, which collects money electronically. If the product is downloadable such as music, e-book etc., the website must also provide for that after accepting payment from customer. 4. Delivery of Product: Once customers make the payment, the e-commerce site must ensure the delivery of product in good condition on time. Logistics is a specialized function, so most sellers outsource it to third party logistics providers. Like Amazon using the services of FedEx. 5. after Sale Service: Customers need to be serviced pre-sales as well as post sales. Before the sale, customers might have queries about product features that are not mentioned on the website. They might have questions about customization and accessories. After the sale, customers might have queries related to the usage, repair or enhancement of the products or services that they have already purchased. 6. Reverse Logistics: 40 CU IDOL SELF LEARNING MATERIAL (SLM)

There is no guarantee of supplying an error-free product. If products get damaged or stop functioning after a while, or a wrong product is delivered—the ecommerce seller must ensure the flow of products in the reverse direction—known as reverse logistics—where goods flow from customer to the seller. 3.3 ADVANTAGES OF E-COMMERCE Advantages of E-Commerce Electronic commerce can increase sales and decrease costs. Advertising done well on thewebcangetevenasmallfirm’spromotionalmessageouttopotentialconsumersineverycountry in the world. A firm can use electronic commerce to reach narrow market segments thatare geographically scattered. The web is particularly useful in creating virtual communities thatbecome ideal target markets for specific types of products or services. A virtual community is agathering of people who share a common interest, but instead of this gathering occurring in thephysicalworld; it takes place on theinternet. Somekey benefitsofe-commercearesummarizedbelow:  By becoming e-commerce enabled, businesses now have access to people all around theworld.Ineffectalle- commercebusinesseshavebecomevirtualmultinationalcorporations.  Thecostofcreating,processing,distributing,storingandretrievingpaper- basedinformationhas decreased.  Thepull-typeprocessingallowsforproductsandservicestobecustomizedtothecustomer’s requirements.  Enablesreducedinventoriesandoverheadsbyfacilitating‘pull’- typesupplychainmanagement – this is based on collecting the customer order and then delivering throughJIT(just-in-time)manufacturing.  The Internet is much cheaper than value added networks (VANs) which were based onleasingtelephonelinesforthesoleuseoftheorganizationanditsauthorizedpartners.Itis alsocheaper tosendafaxore-mailvia theInternetthandirectdialing.  Software and music/video products can be downloaded or e-mailed directly to customersviatheInternet indigitalor electronicformat.  Businessescanbecontactedbyorcontactcustomersorsuppliersatanytime.  24/7 accessEnables customers to shop or conduct other transactions 24 hours a day, allyearroundfromalmostanylocation. 41 CU IDOL SELF LEARNING MATERIAL (SLM)

 Customersnotonly haveawholerangeofproductsthattheycanchoosefromandcustomize, butalso aninternational selectionofsuppliers.  Customerscan‘shop’aroundtheworldandconductcomparisonseitherdirectlybyvisiting different sites, or by visiting a single site where prices are aggregated from anumber of providers and compared (for example www.moneyextra.co.uk for financialproducts and services).  This can range from the immediate delivery of digitized or electronic goods such assoftware or audio-visualfiles by downloading via the Internet,to the on-line tracking oftheprogressof packagesbeing delivered bymailorcourier.  An environment of competition where substantial discounts can be found or value added,as different retailers view for customers. It also allows many individual customers toaggregatetheirorderstogetherintoasingleorderpresentedtowholesalersormanufacturer s andobtain amorecompetitive price.  Enables more flexible working practices, which enhances the quality of life for a wholehost of people in society,enabling them to work from home. Not only is this moreconvenientandprovideshappierandlessstressfulworkingenvironments,italso potentiallyreducesenvironmentalpollutionasfewerpeoplehavetotraveltoworkregularly.  Enables people in developing countries and rural areas to enjoy and access products,services, information and other people whichotherwisewould not beso easily availableto them.  Facilitates delivery of public services like health services available over the Internet (on-line consultation with doctors or nurses), filing taxes over the Internet through the InlandRevenue website.  A business can reduce the costs of handling sales inquiries, providing price quotes, anddetermining product availability by using electronic commerce in its sales support andorder-takingprocesses.  Electroniccommerceprovidesbuyerswithawiderrangeofchoicesthantraditionalcommerc e.  Electronic commerce provides buyers with an easy way to customize the level of detail intheinformationtheyobtainabouta prospectivepurchase.  Electronic payments of tax refunds, public retirement, and welfare support cost less toissueandarrive securelyandquicklywhentransmittedoverthe internet. 42 CU IDOL SELF LEARNING MATERIAL (SLM)

 Electronic payments can be easier to audit and monitor than payments made by cheque,providingprotection againstfraud andtheft losses.  Electroniccommercecanalsomakeproductsandservicesavailableinremoteareas. Areas of Advantages of E-Commerce E-Commerce advantages can be broadly classified in three major categories −  Advantages to Organizations  Advantages to Consumers  Advantages to Society Advantages to Organizations 1. Using e-commerce, organizations can expand their market to national and international markets with minimum capital investment. An organization can easily locate more customers, best suppliers, and suitable business partners across the globe. 2. E-commerce helps organizations to reduce the cost to create process, distribute, retrieve and manage the paper based information by digitizing the information. 3. E-commerce improves the brand image of the company. 4. E-commerce helps organization to provide better customer services. 5. E-commerce helps to simplify the business processes and makes them faster and efficient. 6. E-commerce reduces the paper work. 7. E-commerce increases the productivity of organizations. It supports \"pull\" type supply management. In \"pull\" type supply management, a business process starts when a request comes from a customer, and it uses just-in-time manufacturing way. Advantages to Customers 1. It provides 24x7 supports. Customers can enquire about a product or service and place orders anytime, anywhere from any location. 2. E-commerce application provides users with more options and quicker delivery of products. 3. E-commerce application provides users with more options to compare and select the cheaper and better options. 4. A customer can put review comments about a product and can see what others are buying or see the review comments of other customers before making a final purchase. 5. E-commerce provides options of virtual auctions. 6. It provides readily available information. A customer can see the relevant detailed information within seconds, rather than waiting for days or weeks. 43 CU IDOL SELF LEARNING MATERIAL (SLM)

7. E-Commerce increases the competition among organizations and as a result, organizations provide substantial discounts to customers. Advantages to Society 1. Customers need not travel to shop a product, thus less traffic on road and low air pollution. 2. E-commerce helps in reducing the cost of products, so less affluent people can also afford the products. 3. E-commerce has enabled rural areas to access services and products, which are otherwise not available to them. 4. E-commerce helps the government to deliver public services such as healthcare, education, social services at a reduced cost and in an improved manner. 3.4 DISADVANTGESOFE-COMMERCE Disadvantages ofE-Commerce Most of the disadvantages of e-commerce stem from the newness and rapidly developingpace oftheunderlying technologies.Someofthekeydisadvantagesofaregivenbelow:  Return-on-investmentisdifficulttocalculate.  Many firms have had trouble recruiting and retaining employees with the technological,design, and business process skills needed to create an effective electronic commercepresence.  Difficulty of integrating existing databases and transaction-processing software designedfortraditionalcommerceintothesoftware thatenableselectroniccommerce.  Many businessesfaceculturalandlegalobstaclestoconductingelectroniccommerce  Lackofsufficientsystemsecurity,reliability,standardsandcommunicationprotocols.  Rapidly evolving and changing technology, so there is always a feeling of trying to ‘catchup’ and notbe left behind.  Under pressure to innovate and develop business models to exploit the new opportunitieswhich sometimes leads to strategies detrimental to the organization. The ease with whichbusiness models can be copied and emulated over the Internet increases that pressure andcurtails longer-term competitiveadvantage.  Facingincreasedcompetitionfrombothnationalandinternationalcompetitorsoftenleadsto price warsandsubsequentunsustainablelossesfortheorganization.  Problems with compatibility of older and ‘newer’ technology. There are problems whereolder business systems cannot communicate with web-based and Internet infrastructures,leadingtosomeorganizationsrunningalmosttwoindependentsystemswhe redatacannot be shared. This often leads to having to invest in new systems or an infrastructure,which bridges the different systems. In both cases this is both financially costly as well asdisruptive to theefficientrunning of organisations. 44 CU IDOL SELF LEARNING MATERIAL (SLM)

 Computingequipmentisneededforindividualstoparticipateinthenew‘digital’economy, whichmeans aninitialcapital costto customers.  A basic technical knowledge is required of both computing equipment and navigation oftheInternetand the World WideWeb.  CostofaccesstotheInternet,whetherdial-uporbroadbandtariffs.  Cost of computing equipment. Not just the initial cost of buying equipment but makingsurethatthetechnologyisupdatedregularlytobecompatiblewiththechangingrequi rement of theInternet, websitesand applications.  Lack of security and privacy of personal data. There is no real control of data that iscollected over the Web or Internet. Data protection laws are not universal and so websiteshosted in different countries may or may not have laws which protect privacy of personaldata.  Physical contact and relationships are replaced by electronic processes. Customers areunable to touch and feel goods being sold on-line or gauge voices and reactions of humanbeings.  Alackoftrustbecausetheyareinteractingwithfacelesscomputers.  As people become more used to interacting electronically there could be an erosion ofpersonal and social skills which might eventually be detrimental to the world we live inwhere people aremorecomfortableinteractingwithascreenthanfacetoface.  There is a potential danger that there will be an increase in the social divide betweentechnicalhavesandhave-nots–sopeople whodonothavetechnicalskillsbecomeunable to secure better-paid jobs and could form an underclass with potentially dangerousimplicationsforsocial stability.  Reliance on telecommunications infrastructure, power and IT skills, which in developingcountries nullifies the benefits when power, advanced telecommunications infrastructuresandITskills are unavailableorscarceor underdeveloped.  Asnewtechnologystateshowyou dodisposeofalltheoldcomputers,keyboards,monitors, speakersand other hardwareorsoftware? FacilitatesJust-In-Timemanufacturing.Thiscouldpotentially crippleaneconomy intimes of crisis as stocks are kept to a minimum and delivery patterns are based on pre-setlevels of stockwhich lastfordays rather thanweeks. Other Areas of Disadvantages of E-Commerce The disadvantages of e-commerce can be broadly classified into two major categories  Technical disadvantages  Non-Technical disadvantages Technical Disadvantages 1. There can be lack of system security, reliability or standards owing to poor implementation of e-commerce. 45 CU IDOL SELF LEARNING MATERIAL (SLM)

2. The software development industry is still evolving and keeps changing rapidly. 3. In many countries, network bandwidth might cause an issue. 4. Special types of web servers or other software might be required by the vendor, setting the e-commerce environment apart from network servers. 5. Sometimes, it becomes difficult to integrate an e-commerce software or website with existing applications or databases. 6. There could be software/hardware compatibility issues, as some e-commerce software may be incompatible with some operating system or any other component. Non-Technical Disadvantages 1. Initial cost − the cost of creating/building an e-commerce application in-house may be very high. There could be delays in launching an e-Commerce application due to mistakes, and lack of experience. 2. User resistance − Users may not trust the site being an unknown faceless seller. Such mistrust makes it difficult to convince traditional users to switch from physical stores to online/virtual stores. 3. Security/ Privacy − It is difficult to ensure the security or privacy on online transactions. 4. Lack of touch or feel of products during online shopping is a drawback. 5. E-commerce applications are still evolving and changing rapidly. 6. Internet access is still not cheaper and is inconvenient to use for many potential customers, for example, those living in remote villages. 3.5 SUMMARY  E-commerce has become one of the most popular methods of making money online and an attractive opportunity for investors.  For those interested in buying an e-commerce business, this article serves to provide an introduction to e-commerce, covering the reasons for its popularity, the main distribution models and a comparison of the major e-commerce platforms available.  E-commerce has become one of the most popular ways of making money online. Here are five things you should be doing daily to succeed in the industry. E- commerce enables the use of credit cards, debit cards, smart cards, electronic fund transfer via bank's website, and other modes of electronics payment.  E-commerce automates the business of enterprises and the way they provide services to their customers. It also helps in better marketing management of products/services. Internet 'search engines' such as \"Yahoo\" and \"Google\" give consumers access to varied information sources. 46 CU IDOL SELF LEARNING MATERIAL (SLM)

 The ecommerce website of a company should put an easy process in place so that the customer browsing through the site can place an order. Advantages of e- commerce include increasing sales and decreasing costs. The web is particularly useful in creating virtual communities that become ideal target markets for specific products or services. Enables reduced inventories and overheads by facilitating 'pull'-type supply chain management. This is based on collecting the customer order and then delivering through JIT (just-in-time) manufacturing.  Most of the disadvantages of e-commerce stem from the newness and rapidly developing pace of the underlying technologies. Some of the key disadvantages of are given below. Lack of security and privacy of personal data. Customers are unable to touch and feel goods being sold on-line or gauge voices and reactions of human beings. The erosion of personal and social skills could eventually be detrimental to a world where people are more comfortable interacting with a screen than face to face.  The disadvantages of e-commerce can be broadly classified into two major categories - technical and non-technical. Technical Disadvantages include lack of system security, reliability or standards owing to poor implementation. Lack of touch or feel of products during online shopping is also a drawback. 3.6 KEYWORDS  SEO: Search Engine Optimization will generate unique relevant content.  URL: Uniform Resource locator contains the name of the protocol needed to access a resource, as well as a resource name.  JUST IN TIME: An integrated management system consisting of a number of different management practices dependent on the characteristics of specific plants  VALUE-ADDED NETWORK: VAN is a private, hosted service that provides companies with a secure way to send and share data with its counterparties. 3.7 LEARNING ACTIVITY 1. Short notes any two functions of E-Commerce? ___________________________________________________________________________ ___________________________________________________________________________ 2. Explain advantages to customers? ___________________________________________________________________________ ___________________________________________________________________________ 47 CU IDOL SELF LEARNING MATERIAL (SLM)

3.8 UNIT END QUESTIONS A. Descriptive Questions Short Questions 1. Write the short on SEO? 2. Discuss the common features of E-Commerce? 3. State advantages of society in E-Commerce? 4. Describe the technical disadvantages of E-Commerce? 5. Explain benefits of organizations? Long Questions 1. Explain the functions of E-Commerce? 2. Discuss the common features of E-Commerce? 3. Explain areas of advantages of E-Commerce? 4. Discuss areas of disadvantages of E-Commerce? 5. Illustrate the customer service in Hotel industry? B. Multiple Choice Questions 1. Which is not a function of E‐commerce a.marketing b.advertising c. warehousing d. online marketing 2. Which of the following are advantages normally associated with B2B e‐commerce? a. Shorter cycle times b. Reduction in costs c. Reaches wider audiences d. Cost of goods 3. Which form of e‐commerce currently accounts for about 97% of all e‐commerce revenues? a. B2B 48 CU IDOL SELF LEARNING MATERIAL (SLM)

b. B2C c. C2B d. C2C 4. The solution for all business needs is a. EDI b. ERP c. SCM d. CRM 5. Expand VANs a. Value Addition Networks b. Value Added Networks c. Value Access Networks d. Value Added Net way Answers 1-c, 2-b, 3-a, 4-b, 5-b 3.9 REFERENCES Reference books 49 • JaiswalS.,E-Commerce • MohammadMahmoudiMaymand,E-Commerce • MurthyC.S.V.,E-Commerce-Concepts,ModelsandStrategies • Schneider, E-Commerce, Cengage Learning, New Delhi. • PeeLosuin&AMurphy,ElectronicCommerceJaicoPub Textbook references • JosephP.T.,E-Commerce–AnIndianPerspective • RaviKalkotaFrontiersofE-Commerce,AddisonWesley • K.Bajaj & D.Nag E-Commerce, The Cutting Edge of Business, Tata McGraw • Green Stein ElectronicCommerceTata McGraw. CU IDOL SELF LEARNING MATERIAL (SLM)

Website • https://www.cleverism.com/e-commerce-complete-guide • https://www.economicsdiscussion.net/business/e-commerce/31868 50 CU IDOL SELF LEARNING MATERIAL (SLM)