1. Lecture 02
Types of E-Commerce
Ecommerce can be broken into four main categories: B2B, B2C, C2B, and C2C.
B2B is a transaction that occurs between two companies, as opposed to a transaction involving a
consumer. The term may also describe a company that provides goods or services for another
company. In such type of business companies are doing business with each other such as
manufacturers selling to distributors and wholesalers selling to retailers. Pricing is based on
quantity of order and is often negotiable.
E-commerce has been in use for quite a few years and is more commonly known as EDI (electronic
data interchange). In the past EDI was conducted on a direct link of some form between the two
businesses where as today the most popular connection is the internet. The two businesses pass
information electronically to each other. B2B e-commerce currently makes up about 94% of all e-
Intel selling microprocessors to Dell
Heinz selling ketchup to MacDonald
2. B2C (Business-to-Consumer)
B2C is type of commerce between companies and consumers involve customers gathering
information; purchasing physical goods or receiving products over an electronic network. Or this
is a type of businesses selling to the general public typically through catalogs utilizing shopping
Business to Consumer e-commerce is relatively new. This is where the consumer accesses the
system of the supplier. It is still a two way function but is usually done solely through the Internet.
B2C can also relate to receiving information such as share prices, insurance quotes, on-line
newspapers, or weather forecasts. The supplier may be an existing retail outlet such as a high street
store; it has been this type of business that has been successful in using E-Commerce to deliver
services to customers.
Having a hard time finding a book? Need to purchase a custom, high-end computer system? How
about a first class, all-inclusive trip to a tropical island? With the advent ecommerce, all three
things can be purchased literally in minutes without human interaction.
Dell selling laptops
McDonalds selling burgers with ketchup
B2E - Business to Employee
Business to Employee e-commerce is growing in use. Business to Employee (B2E) refers to using
an intra-business network (commonly known as an ‘Intranet’) which allows companies to provide
products and/or services to their employees. An intranet is a web site developed to provide
employees of an organization with information. The intranet is usually access through the
organizations network, it can and is often extended to an Entrant which uses the Internet but
restricts uses by sign on and password. B2E networks are usually used to automate employee-
related corporate processes. It focuses on the employee, rather than the consumer.
The examples of B2E are: online insurance policy management, corporate announcement
dissemination, online supply requests, special employee offers, employee benefits reporting, and
B2G – Business to Government
Business-to-government e-commerce or B2G is generally defined as commerce between
companies and the public sector. It refers to the use of the Internet for public procurement,
licensing procedures, and other government-related operations. This kind of e-commerce has two
features: first, the public sector assumes a pilot/leading role in establishing e-commerce; and
second, it is assumed that the public sector has the greatest need for making its procurement system
Business pay taxes, file reports, or sell goods and services to Government.
C2B - Consumer-to-Business
C2B or Consumer to Business is growing trend where consumers demand specific products or
services from respective businesses by presenting themselves as a buyer group. A consumer posts
his project with a set budget online and within hours companies review the consumer's
requirements and bid on the project. The consumer reviews the bids and selects the company that
will complete the project.
Contacting a tour and travel operator via their website for purchasing a holiday package
Getting an online project
C2C - Consumer-to-Consumer
Consumer to Consumer ecommerce is commerce between private individuals or consumers. It also
refers to online dealing of good and services between people. This type of transaction is fulfilled
due to online market dealer like auction sites, becoming more and more popular nowadays (for
There are many sites offering free classifieds, auctions, and forums where individuals can buy and
sell thanks to online payment systems like PayPal where people can send and receive money online
with ease. eBay's auction service is a great example of where person-to-person transactions take
place every day since 1995.
Mobile Commerce (M-Commerce)
The phrase mobile commerce was originally coined in 1997 to mean "the delivery of electronic
commerce capabilities directly into the consumer’s hand, anywhere, via wireless technology.
Mobile Commerce, or m-Commerce, is about the explosion of applications and services that are
becoming accessible from Internet-enabled mobile devices. It involves new technologies, services
and business models. It is quite different from traditional e-Commerce. Mobile phones impose
very different constraints than desktop computers. But they also open the door to a slew of new
applications and services. They follow you wherever you go, making it possible to look for a
nearby restaurant, stay in touch with colleagues, or pay for items at a store.
M-commerce (mobile commerce) is the buying and selling of goods and services through wireless
technology-i.e., handheld devices such as cellular telephones and personal digital assistants
(PDAs). Japan is seen as a global leader in m-commerce. As content delivery over wireless devices
becomes faster, more secure, and scalable, some believe that m-commerce will surpass wire-line
e-commerce as the method of choice for digital commerce transactions. This may well be true for
the Asia-Pacific where there are more mobile phone users than there are Internet users.
Mobile Money Transfer (e.g; easy paisa, time pay)
Fueling Forces and Factors to E-Commerce
E-Commerce is becoming popular, it is worthwhile to examine today’s business environment so
let us understand the pressures it creates on organizations and the responses used by organizations.
Environmental factors that create Business Pressures
Market, economical, societal and technological factors are creating a highly competitive business
environment in which consumers are the focal point. These factors change quickly, sometimes in
an unpredictable manner and therefore companies need to react frequently not only in the
traditional actions such as lowering cost and closing unprofitable facilities but also innovative
activities such as customizing products, creating new products or providing superb customer
One of the most evident benefits of e-commerce is economic efficiency resulting from the
reduction in communications costs, low-cost technological infrastructure, speedier and more
economic electronic transactions with suppliers, lower global information sharing and advertising
costs, and cheaper customer service alternatives.
Categories of Economic Forces
Lower marketing costs: marketing on the Internet maybe cheaper and can reach a wider
crowd than the normal marketing medium.
Lower sales costs: increase in the customer volume do not need an increase in staff as the
sales function is housed in the computer and has virtually unlimited accessibility
Lower ordering processing cost: online ordering can be automated with checks to ensure
that orders are correct before accepting, thus reducing errors and the cost of correcting
New sales opportunities: the website is accessible all the time and reaches the global
audience which is not possible with traditional storefront.
Economic integration is either external or internal. External integration refers to the electronic
networking of corporations, suppliers, customers/clients, and independent contractors into one
community communicating in a virtual environment (with the Internet as medium). Internal
integration, on the other hand, is the networking of the various departments within a corporation,
and of business operations and processes. This allows critical business information to be stored in
5. a digital form that can be retrieved instantly and transmitted electronically. Internal integration is
best exemplified by corporate intranets.
Among the companies with efficient corporate intranets are Procter and Gamble, IBM, Nestle and
Intel. EG. SESAMi.NET: Linking Asian Markets through B2B Hubs SESAMi.NET is Asia’s
largest B2B e-hub, a virtual exchange integrating and connecting businesses (small, medium or
large) to trading partners, e-marketplaces and internal enterprise systems for the purpose of
sourcing out supplies, buying and selling goods and services online in real time. The e-hub serves
as the centre for management of content and the processing of business transactions with support
services such as financial clearance and information services.
It is strategically and dynamically linked to the Global Trading Web (GTW), the world’s largest
network of trading communities on the Internet. Because of this very important link, SESAMi
reaches an extensive network of regional, vertical and industry-specific interoperable B2B e-
markets across the globe.
Corporations are encouraged to use e-commerce in marketing and promotion to capture
international markets, both big and small. The Internet is likewise used as a medium for enhanced
customer service and support. It is a lot easier for companies to provide their target consumers
with more detailed product and service information using the Internet.
Strong competition between organizations, extremely low labor cost in some countries, frequent
and significant changes in markets and increased power of consumers are the reasons to create
The development of information and communications technology (ICT) is a key factor in the
growth of ecommerce. For instance, technological advances in digitizing content, compression and
the promotion of open systems technology have paved the way for the convergence of
communication services into one single platform. This in turn has made communication more
efficient, faster, easier, and more economical as the need to set up separate networks for telephone
services, television broadcast, cable television, and Internet access is eliminated. From the
standpoint of firms/ businesses and consumers, having only one information provider means lower
Moreover, the principle of universal access can be made more achievable with convergence. At
present the high costs of installing landlines in sparsely populated rural areas is incentive to
telecommunications companies to install telephones in these areas. Installing landlines in rural
areas can become more attractive to the private sector if revenues from these landlines are not
limited to local and long distance telephone charges, but also include cable TV and Internet
charges. This development will ensure affordable access to information even by those in rural areas
and will spare the government the trouble and cost of installing expensive landlines
6. Societal and environmental forces
To understand the role of E-commerce in today’s organizations, it becomes necessary to review
the factors that create societal and environmental forces.
Changing nature of workforce
Shrinking government subsidies
Increased importance of ethical and legal issues
Increased social responsibility of organizations
Rapid political changes