INTRODUCTION TO ELECTRONIC COMMERCE STUDY NOTES
Contents
1. Meaning of e commerce
2. Types of e commerce
3. E commerce applications
4. Market segments in E - commerce
Introduction
E-commerce (electronic commerce) is the buying and selling of goods and services, or the
transmitting of funds or data, over an electronic network, primarily the internet. These business
transactions occur either as business-to-business (B2B), business-to-consumer (B2C), consumer-
to-consumer or consumer-to-business.
E-commerce shifts business transactions and corresponding data from the physical
interactions of the people (buyers) to person (merchandise seller), were this physical contact
moves to information technology applications which facilitate the traditional business
practices to the digital cyber space electronic communication links.
How does e-commerce work?
E-commerce is powered by the internet, where customers can access an online store to browse
through, and place orders for products or services via their own electronic smart devices.
As the order is placed, the customer's web browser will communicate back and forth with
the server hosting the online store website. Data pertaining to the order will then be relayed to a
central computer known as the order manager then forwarded to databases that manage inventory
levels, a merchant system that manages payment information (using applications such
as PayPal), and a bank computer, before circling back to the order manager. This is to make sure
that store inventory and customer funds are sufficient for the order to be processed. After the
order is validated, the order manager will notify the store's web server, which will then display a
message notifying the customer that their order has been successfully processed. The order
manager will then send order data to the warehouse or fulfillment department, in order for the
product or service to be successfully dispatched to the customer. At this point tangible and/or
digital products may be shipped to a customer, or access to a service may be granted.
Platforms that host e-commerce transactions may include online marketplaces that sellers simply
sign up for, such as Amazon.com; software as a service (SaaS) tools that allow customers to
'rent' online store infrastructures; or open source tools for companies to use in-house
development to manage.
Objectives of E commerce
The various objectives of the e-commerce can be laid down as follows:
1. Development of Business-Relationship:
The business development can be done through the e-commerce being the primary and the basic
object. As their direct contact in between the company and the consumer, their business
relationship will be enhanced. Hence the area of the market can be increased.
2. Better-Customer Service:
Introduction to e-commerce notes prepared by Mr. Antony Ambia Page 1
, As it is done round the clock, the customer will always have online help regarding the products.
As all the information is furnished to the customer, it becomes easy to him to choose the best
product among all other alternatives. As even the service can also be done through the net
immediately, the customer service will be ballooned. By highlighting the customer service, the
companies are trying to subjugate a lion-share in the market.
3. Getting more Customers:
In these days it becomes the mandate of the companies to double its customers, and this can be
done by rendering the value add service and maintaining the quality. Hence, it is also one of the
primary objectives of the companies which supply impetus for the robust growth in sales and
overall profit.
Important features of E commerce
E-Commerce has pertain key features which are explained as follows:
1. E-Commerce is Technology-Enabled:
Traditional commerce is taking place since times immemorial but E-commerce is result of
integration of digital technology with business processes and commercial transactions. The
technological foundations of E-commerce are internet, WWW and various protocols.
2. Technology Mediated:
In E-commerce buyers and sellers meet in cyber space rather than physical place. Hence E-
commerce does not involve face to face contact.
3. Universality:
Buying and selling take place through websites in E-Commerce. The websites can be accessed
from anywhere around the globe at any time therefore it possess the feature of universality.
4. Intercommunication:
E-commerce technology ensures two way communications between buyer and seller. On one
hand by using E- commerce firms can communicate with customers through E-commerce
enabled websites. On the other end, customers can also fill order forms, feedback forms and can
communicate with business operating firms.
5. Delivery of Information:
E-commerce serves as the best channel of communication. E-commerce technologies ensure
speedy delivery of information at very low cost and considerably increase information density as
well.
6. Electronic Completion of Business Processes:
By using E- commerce we can perform business transactions like accounting and inventory
through computers at global level.
7. Virtual Communities:
Virtual Communities are online communities created by means such as chat rooms and
specifically designed sites like, where people can interact with each other having common
interest using the internet.
8. Inter-Disciplinary in Nature:
Implementation of E-Commerce needs a lot of knowledge of managerial, technological, social
and legal issues. Besides this, understanding of consumer behaviour, marketing tools and
financial aspects is as crucial as designing interactive E- Commerce websites.
9. Customization:
Introduction to e-commerce notes prepared by Mr. Antony Ambia Page 2
Contents
1. Meaning of e commerce
2. Types of e commerce
3. E commerce applications
4. Market segments in E - commerce
Introduction
E-commerce (electronic commerce) is the buying and selling of goods and services, or the
transmitting of funds or data, over an electronic network, primarily the internet. These business
transactions occur either as business-to-business (B2B), business-to-consumer (B2C), consumer-
to-consumer or consumer-to-business.
E-commerce shifts business transactions and corresponding data from the physical
interactions of the people (buyers) to person (merchandise seller), were this physical contact
moves to information technology applications which facilitate the traditional business
practices to the digital cyber space electronic communication links.
How does e-commerce work?
E-commerce is powered by the internet, where customers can access an online store to browse
through, and place orders for products or services via their own electronic smart devices.
As the order is placed, the customer's web browser will communicate back and forth with
the server hosting the online store website. Data pertaining to the order will then be relayed to a
central computer known as the order manager then forwarded to databases that manage inventory
levels, a merchant system that manages payment information (using applications such
as PayPal), and a bank computer, before circling back to the order manager. This is to make sure
that store inventory and customer funds are sufficient for the order to be processed. After the
order is validated, the order manager will notify the store's web server, which will then display a
message notifying the customer that their order has been successfully processed. The order
manager will then send order data to the warehouse or fulfillment department, in order for the
product or service to be successfully dispatched to the customer. At this point tangible and/or
digital products may be shipped to a customer, or access to a service may be granted.
Platforms that host e-commerce transactions may include online marketplaces that sellers simply
sign up for, such as Amazon.com; software as a service (SaaS) tools that allow customers to
'rent' online store infrastructures; or open source tools for companies to use in-house
development to manage.
Objectives of E commerce
The various objectives of the e-commerce can be laid down as follows:
1. Development of Business-Relationship:
The business development can be done through the e-commerce being the primary and the basic
object. As their direct contact in between the company and the consumer, their business
relationship will be enhanced. Hence the area of the market can be increased.
2. Better-Customer Service:
Introduction to e-commerce notes prepared by Mr. Antony Ambia Page 1
, As it is done round the clock, the customer will always have online help regarding the products.
As all the information is furnished to the customer, it becomes easy to him to choose the best
product among all other alternatives. As even the service can also be done through the net
immediately, the customer service will be ballooned. By highlighting the customer service, the
companies are trying to subjugate a lion-share in the market.
3. Getting more Customers:
In these days it becomes the mandate of the companies to double its customers, and this can be
done by rendering the value add service and maintaining the quality. Hence, it is also one of the
primary objectives of the companies which supply impetus for the robust growth in sales and
overall profit.
Important features of E commerce
E-Commerce has pertain key features which are explained as follows:
1. E-Commerce is Technology-Enabled:
Traditional commerce is taking place since times immemorial but E-commerce is result of
integration of digital technology with business processes and commercial transactions. The
technological foundations of E-commerce are internet, WWW and various protocols.
2. Technology Mediated:
In E-commerce buyers and sellers meet in cyber space rather than physical place. Hence E-
commerce does not involve face to face contact.
3. Universality:
Buying and selling take place through websites in E-Commerce. The websites can be accessed
from anywhere around the globe at any time therefore it possess the feature of universality.
4. Intercommunication:
E-commerce technology ensures two way communications between buyer and seller. On one
hand by using E- commerce firms can communicate with customers through E-commerce
enabled websites. On the other end, customers can also fill order forms, feedback forms and can
communicate with business operating firms.
5. Delivery of Information:
E-commerce serves as the best channel of communication. E-commerce technologies ensure
speedy delivery of information at very low cost and considerably increase information density as
well.
6. Electronic Completion of Business Processes:
By using E- commerce we can perform business transactions like accounting and inventory
through computers at global level.
7. Virtual Communities:
Virtual Communities are online communities created by means such as chat rooms and
specifically designed sites like, where people can interact with each other having common
interest using the internet.
8. Inter-Disciplinary in Nature:
Implementation of E-Commerce needs a lot of knowledge of managerial, technological, social
and legal issues. Besides this, understanding of consumer behaviour, marketing tools and
financial aspects is as crucial as designing interactive E- Commerce websites.
9. Customization:
Introduction to e-commerce notes prepared by Mr. Antony Ambia Page 2
