1. Scope and Definition of Electronic Commerce

Electronic Commerce (E-Commerce) refers to the buying and selling of goods and services using electronic networks, primarily the internet. It covers online transactions, digital marketing, logistics, and customer services.

Scope: E-commerce includes B2B (business to business), B2C (business to consumer), C2C (consumer to consumer), and C2B (consumer to business) models.

Example:
- B2C: Amazon selling books to a customer
- B2B: A manufacturer ordering supplies from another company online
- C2C: OLX where users sell products to other users
        

2. Electronic Commerce and the Trade Cycle

The trade cycle in e-commerce involves stages like product discovery, negotiation, order placement, delivery, and after-sales support. E-commerce speeds up and automates this process.

Example:
A customer visits Flipkart → adds a laptop to cart → places an order → payment → product delivered → post-purchase support
        

3. Electronic Markets (E-Marketplaces)

Electronic Markets are digital platforms where buyers and sellers interact and exchange goods/services. These platforms improve market efficiency by offering wider reach and faster transactions.

Example:
Amazon, Alibaba, eBay – platforms where multiple sellers offer products to customers.
        

4. Electronic Data Interchange (EDI)

EDI is the computer-to-computer exchange of business documents like invoices, purchase orders, and shipping notices, without human intervention. It increases speed and accuracy.

Example:
A retail chain automatically sends purchase orders to suppliers using EDI when stock levels fall below a threshold.
        

5. Internet Commerce

Internet Commerce is a form of e-commerce that uses the Internet to conduct business activities, including online marketing, order processing, secure payments, and customer support.

Example:
Using Google Ads to attract users to an online store → users browse and make a purchase via payment gateways like Razorpay.
        

6. E-Commerce in Perspective

E-commerce has changed how businesses operate by making transactions faster, reducing costs, and expanding to a global market. It integrates technology, business processes, and customer interaction.

Example:
Traditional store limited to local customers.
Online store (like Nykaa) can serve across India with lower overhead.
        

7. Supply Chains and Value Chain Model

Supply Chain: The sequence of processes involved in the production and distribution of a product.

Porter’s Value Chain: Describes internal company activities that create value, categorized into primary and support activities.

Example:
Raw Material → Manufacturing → Packaging → Online Sales → Delivery
E-commerce reduces intermediaries, improving supply chain efficiency.
        

8. Inter-Organizational Value Chains

These involve the coordination of value-adding activities between different companies, such as suppliers and retailers, using digital communication tools.

Example:
BigBasket uses vendor networks to source groceries directly from farms and deliver to customers via its app.
        

9. Competitive Strategy & Porter’s Five Forces

Porter’s Five Forces: Analyze industry competition:

• Threat of New Entrants
• Threat of Substitutes
• Bargaining Power of Suppliers
• Bargaining Power of Customers
• Industry Rivalry

Example:
Flipkart uses deep discounts (competitive strategy) to retain customers against rivals like Amazon.
        

10. First Mover Advantage & Sustainable Competitive Advantage

First Mover Advantage: Gaining market share by entering the market early.

Sustainable Competitive Advantage: Long-term edge over competitors through innovation, customer service, or cost efficiency.

Example:
- First mover: Amazon in online retail
- Sustainable: Google maintains advantage through continuous AI innovation
        

11. Business Strategy & Strategic IT Implications

Business Strategy is a long-term plan to achieve goals. E-commerce affects strategy by enabling faster reach, automation, and cost-cutting.

Strategic Implications of IT: IT influences market positioning, customer engagement, and operational excellence.

Example:
Zomato's strategy involves rapid delivery and customer loyalty via tech-enabled logistics and apps.
        

12. Technology, Environment, and Business Capability

Technology: Drives innovation and efficiency in business processes.

Environment: Includes market trends, competitors, and regulations.

Business Capability: Refers to an organization’s ability to deliver value using resources and strategy.

Example:
Tech: Cloud computing for scalable websites  
Environment: Changing online shopping habits during festivals  
Capability: Ability to serve 10,000 users/day without downtime
        

13. Strategy Formulation & Implementation

Formulating a strategy involves defining vision, goals, and actions. Implementation is putting that plan into motion using people, tech, and processes.

Example:
Goal: Expand e-commerce to rural India  
Plan: Build mobile-friendly app + low-bandwidth site + local delivery partners  
Implementation: Train agents, deploy tech, launch campaign
        

14. E-Commerce Implementation and Evaluation

Implementation: Involves building e-commerce platforms, integrating payment gateways, logistics, and CRM systems.

Evaluation: Measures success using KPIs like customer traffic, conversion rate, delivery speed, and profit margins.

Example:
Post-launch of a food delivery app:
- Evaluate: 5000+ downloads, 4.7★ rating, 10% increase in sales
- Feedback used for next feature update
        

1. Characteristics of B2B E-Commerce

B2B (Business-to-Business) E-Commerce involves online transactions between businesses. It is typically high in volume, recurring, and deals with wholesale or raw materials.

• Long-term relationships
• Negotiated pricing and bulk orders
• Automated order processing

Example:
A textile company buys raw cotton in bulk from an online supplier platform monthly.
        

2. Models of B2B E-Commerce

There are several models through which B2B transactions occur:

• Supplier-Oriented: One supplier sells to many businesses (e.g., Amazon Business).
• Buyer-Oriented: One buyer sets up a marketplace to invite suppliers.
• Intermediary-Oriented: A third-party platform connects multiple buyers and sellers (e.g., Alibaba).

Example:
An automobile company creates a portal where multiple parts suppliers bid for contracts (Buyer-Oriented Model).
        

3. Procurement Management Using Buyer’s Internal Marketplace

This refers to businesses managing purchasing internally using dedicated software portals where departments can request items.

Example:
An IT company uses SAP to allow each department to request hardware and track procurement internally.
        

4. Just in Time (JIT) Delivery

JIT Delivery ensures that products or materials are delivered exactly when needed, minimizing inventory and storage costs.

Example:
A car manufacturer receives tires daily, timed perfectly with its assembly line schedule to avoid warehouse costs.
        

5. Other B2B Models, Auctions, and Services

Besides standard marketplaces, B2B E-Commerce can include:

• Reverse Auctions: Buyers post needs and suppliers bid lowest.
• Group Purchasing: Multiple buyers form a group for bulk discounts.
• Service Platforms: Legal, logistics, or consulting services offered B2B online.

Example:
Government tenders operate as reverse auctions where companies bid to offer the lowest quote.
        

6. From Traditional to Internet-Based EDI

Traditional EDI: Used private networks, costly setup, limited access.

Internet-based EDI: Uses secure internet protocols, cheaper and accessible for small businesses.

Example:
Earlier, EDI was done over VANs (Value Added Networks). Now businesses use APIs and XML over HTTPS for fast and low-cost data exchange.
        

7. Integration with Back-End Information Systems

Modern B2B platforms integrate with systems like ERP, CRM, and inventory management for seamless operations and real-time updates.

Example:
When a buyer places an order on a supplier's portal, it directly updates the inventory and accounting system.
        

8. Role of Software Agents in B2B E-Commerce

Software Agents are intelligent programs that assist in tasks like searching products, negotiating prices, or monitoring inventory.

Example:
A software bot monitors raw material prices across vendors and auto-suggests the lowest-price option to the purchase manager.
        

9. Electronic Marketing in B2B

B2B electronic marketing uses emails, webinars, content marketing, and SEO to attract business clients rather than individual consumers.

Example:
A cloud services company publishes whitepapers and hosts webinars for IT managers to generate leads.
        

10. Solutions of B2B E-Commerce

B2B platforms offer solutions such as:

• Automated order management
• Bulk pricing and credit terms
• Vendor portals and dashboards

Example:
Zoho Commerce and Shopify Plus provide integrated B2B features like reseller pricing, customer-specific catalogs.
        

11. Managerial Issues in B2B EC

Key challenges include:

• Ensuring data security and compliance
• Integration with legacy systems
• Vendor relationship and performance management

Example:
A firm must ensure that supplier systems comply with GDPR and support integration with its own ERP.
        

12. Electronic Data Interchange (EDI)

EDI allows companies to exchange standard business documents electronically. It improves speed, accuracy, and reduces paperwork.

Documents shared: Purchase Orders, Invoices, Shipping Notices, etc.

Example:
A wholesaler receives an EDI purchase order from a retail chain and responds with an EDI shipping confirmation.
        

13. EDI: The Nuts and Bolts

How EDI works:

• Documents are created in a standard format (e.g., ANSI X12, EDIFACT)
• Sent over secure channels like HTTPS, SFTP, or VAN
• Integrated into business applications automatically

Example:
- Step 1: Buyer creates order (EDI 850 format)  
- Step 2: Supplier sends back invoice (EDI 810 format)
- Step 3: Inventory and accounts updated automatically
        

14. EDI and Business

EDI plays a major role in making B2B transactions faster and less error-prone. It improves business relationships by automating routine tasks.

Example:
A chain of pharmacies uses EDI to reorder medicines from suppliers automatically, ensuring zero stockouts.
        

1. Automotive Network Exchange (ANX) – The Largest Extranet

Automotive Network Exchange (ANX) is a secure, private extranet created to connect automobile companies and their suppliers. It allows for secure data sharing, order tracking, and real-time communication across different organizations.

Example:
General Motors (GM) uses ANX to securely share inventory and logistics data with suppliers like Bosch and Goodyear.
        

2. Architecture of the Internet

The Internet architecture is a layered model consisting of:

• Application Layer: Email, web, FTP, etc.
• Transport Layer: TCP/UDP
• Network Layer: IP addresses, routing
• Data Link & Physical Layer: Ethernet, Wi-Fi, hardware

Example:
User opens a website → HTTP (Application) → TCP (Transport) → IP (Network) → Ethernet (Physical)
        

3. Intranet and Extranet

Intranet: A private network used within an organization to share internal resources securely.

Extranet: An extended intranet that allows controlled access to outsiders like partners or suppliers.

Example:
- Intranet: TCS employees accessing internal HR portal  
- Extranet: Vendors accessing TCS’s procurement system
        

4. Intranet Software and Applications

Intranet software includes content management systems, collaboration tools, communication apps, and workflow automation systems.

• Document sharing
• Employee directory
• Training resources

Example:
Companies use SharePoint or Google Workspace for intranet collaboration.
        

5. Intranet Application Case Studies

Case Study: Infosys Intranet

Infosys uses a custom-built intranet to manage project documents, leave applications, IT support, and employee engagement. It improves productivity and internal communication.

Impact:
- Reduced email overload
- Faster approvals
- Easy access to company policies
        

6. Considerations in Intranet Deployment

Key factors to consider when deploying an intranet:

• Security and access control
• User-friendly interface
• Integration with existing systems
• Mobile accessibility

Example:
A company ensures that only HR team has access to payroll data while general policies are accessible to all.
        

7. The Extranets: Structure, Products, and Applications

Structure: Typically includes web servers, firewalls, user authentication systems, and VPNs to ensure security between businesses.

Products & Services: Include SAP Supplier Portal, Oracle NetSuite, etc.

Applications: Collaborative product design, inventory tracking, order status checking.

Example:
Ford allows part suppliers to log into its extranet to view production schedules and shipping notices.
        

8. Business Models of Extranet Applications

• Supplier Collaboration: Real-time data exchange to manage inventory.
• Customer Support: Access to manuals, ticketing, order tracking.
• Joint Ventures: Sharing secure platforms between business partners.

Example:
Dell partners with logistics companies via extranet to track laptop deliveries across regions.
        

9. Managerial Issues in Intranet & Extranet Use

• Data security and privacy
• Training and user adoption
• Cost of deployment and maintenance
• Scalability and integration

Example:
Managers must ensure that third-party partners only access specific data—not full internal systems.
        

10. Is SET a Failure?

SET (Secure Electronic Transaction) was designed for secure card payments but failed due to complexity, cost, and lack of merchant support. Simpler methods like SSL took over.

Example:
SET required digital certificates from banks, which slowed down checkout. Users preferred faster options like credit cards over HTTPS.
        

11. Electronic Payments and Protocols

Protocols ensure safe and smooth financial transactions online. Key protocols include:

• SSL/TLS – encrypts web data
• 3D Secure – OTP-based card verification
• UPI – Real-time bank transfers

Example:
A user pays on Myntra → Payment via UPI → Verified with mobile app → Order confirmed in seconds
        

12. Security Schemes in Electronic Payment Systems

Common schemes include:

• Encryption (AES, RSA)
• Two-factor authentication (2FA)
• Tokenization (temporary payment tokens)

Example:
Paytm uses OTP verification, encrypted storage, and device binding to secure payments.
        

13. Electronic Credit Card System

Customers enter card details on secure websites. Payments are processed via a payment gateway and authorization network (e.g., Visa, MasterCard).

Example:
User enters card on Flipkart → Payment gateway encrypts info → Bank approves → Flipkart gets confirmation
        

14. Electronic Funds Transfer (EFT) and Debit Cards

EFT: Transfers money directly between bank accounts without paper documents.

Debit Cards: Linked to user’s bank; real-time deduction on use.

Example:
NEFT, RTGS, and IMPS are EFT services in India. Debit card swipes are also EFTs.
        

15. Stored-Value Cards and E-Cash

Stored-value cards: Prepaid cards with a fixed balance (e.g., metro card).

E-Cash: Digital representation of physical cash; used anonymously.

Example:
PayPal balance acts like e-cash; Paytm Wallet is a stored-value system for digital purchases.
        

16. Electronic Check Systems

Electronic checks mimic traditional checks but are processed digitally. They are secure, faster, and can be integrated into e-commerce systems.

Example:
In B2B payments, companies authorize e-checks via bank portals instead of issuing paper checks.
        

17. Prospects of Electronic Payment Systems

Future trends:

• Contactless payments via NFC
• Cryptocurrency-based transactions
• Voice-activated payments
• Cross-border real-time payments

Example:
Google Pay adds voice payments and facial recognition for UPI verification.
        

18. Managerial Issues in E-Payment Systems

• Fraud detection and risk management
• Compliance with regulations (e.g., RBI, PCI-DSS)
• User trust and experience
• Transaction failure handling

Example:
E-commerce companies must implement refund workflows and handle failed payments instantly to retain customer trust.
        

1. EC-Related Legal Incidents

As e-commerce grows, legal challenges also arise. Some major legal incidents include:

• Trademark disputes
• Fake product listings
• Data breaches and privacy violations

Example:
Snapdeal was sued by brands for allowing counterfeit products to be sold under their name.
        

2. Legal Incidents in E-Commerce

Legal incidents also include cyber fraud, phishing, breach of consumer rights, copyright violations, and improper handling of user data.

Example:
A data breach at Zomato exposed user credentials, raising legal concerns under IT Act, 2000.
        

3. Ethical & Other Public Policy Issues

Ethical issues in e-commerce include:

• Truthful advertising
• Fair pricing and reviews
• Respecting user consent and data usage

Example:
Listing fake “limited-time” sales to manipulate customers is unethical, even if not always illegal.
        

4. Protecting Privacy

Online businesses must protect users’ personal information, including names, addresses, card details, and browsing behavior.

• Use of secure HTTPS connections
• Data encryption and anonymization
• GDPR and other privacy laws

Example:
Google gives users control over what data is collected and how it's used, following privacy laws.
        

5. Protecting Intellectual Property

IP protection ensures that creators are credited and compensated for their digital products, logos, images, music, software, etc.

Example:
An e-commerce seller copying another’s product images or brand name can face IP lawsuits under Copyright Act or Trademarks Act.
        

6. Free Speech, Internet Indecency & Censorship

Free speech allows users to express opinions online. However, content must follow legal boundaries such as:

• Avoiding hate speech
• Protecting minors from indecent content
• Compliance with national censorship laws

Example:
Content platforms must follow government rules to block adult or violent content in certain countries.
        

7. Taxation & Encryption Policies

Taxation: E-commerce businesses must comply with GST (India), sales tax (US), and cross-border tax rules.

Encryption: Governments may regulate the strength and use of encryption to ensure national security while balancing user privacy.

Example:
E-commerce sites in India must register under GST and provide invoices with applicable tax rates.  
Encryption policies may require companies to store decryption keys with the government (as per draft Indian policy).
        

8. Other Legal Issues: Contracts, Gambling & More

Other concerns include:

• Digital Contracts: Agreements signed electronically (e.g., T&Cs)
• Online Gambling: Banned in many regions due to fraud risk
• Jurisdiction Conflicts: Which country’s laws apply?

Example:
A user agrees to an app’s Terms & Conditions (T&C) by clicking “I Agree” — legally binding under Contract Act.
        

9. Consumer & Seller Protection in EC

Consumer Protection: Ensures buyers are not misled or cheated. Includes refund policies, return rights, and accurate listings.

Seller Protection: Prevents fake reviews, payment frauds, and enforces fair dispute resolution.

Example:
Amazon’s A-to-Z Guarantee protects buyers, while also giving sellers a chance to defend against false claims.
        

1. It Takes More Than Technology

Technology is just one part of a successful e-commerce setup. Other critical factors include:

• Business strategy
• Reliable logistics and supply chain
• Customer service
• Legal and compliance framework

Example:
Amazon's success is not just because of its website—it also relies on fast delivery, customer support, and vendor management.
        

2. A Network of Networks

The Internet is a global network made by connecting smaller networks through routers, switches, and gateways.

Each device connects to this network using unique IP addresses and standardized protocols.

Example:
A local ISP connects users in one city → their traffic routes through larger national/international ISPs → destination server (e.g., Amazon.in).
        

3. Internet Protocols

Protocols are rules that allow computers to communicate. Some key protocols in EC:

• HTTP/HTTPS – for web communication
• TCP/IP – for reliable data transmission
• FTP – for file transfers
• SMTP/POP3 – for emails

Example:
When you access a shopping site, HTTPS ensures data is encrypted while TCP/IP handles data delivery.
        

4. Web-Based Client/Server Model

This model separates the user's browser (client) from the backend (server), where the application logic and database are stored.

Example:
Client: User’s browser → sends request to server  
Server: Hosts website (e.g., Flipkart) → processes request and sends product data back to client
        

5. Internet Security

Ensuring the security of online transactions is essential. This involves:

• Encryption (SSL/TLS)
• Firewalls
• Authentication and digital certificates
• Regular audits and compliance

Example:
During online payments, HTTPS with SSL encrypts card details to prevent hackers from stealing them.
        

6. Selling on the Web

Selling products or services online involves setting up e-commerce platforms, listing products, processing orders, and managing customer feedback.

Example:
Using platforms like Shopify, sellers can list products, accept online payments, and manage orders from one dashboard.
        

7. Chatting on the Web

Web chat tools are used for customer service and engagement. These include:

• Live chat support (Zendesk, Tawk.to)
• Chatbots (powered by AI)
• Instant messaging (WhatsApp, Messenger)

Example:
Swiggy uses in-app chat to let customers ask about delivery or report issues instantly.
        

8. Multimedia Delivery

Multimedia like images, audio, and video enhance the shopping experience. E-commerce platforms must optimize delivery for speed and quality.

• Content Delivery Networks (CDNs)
• Adaptive streaming (for videos)
• Image optimization techniques

Example:
YouTube uses adaptive streaming to change video quality based on internet speed. Amazon uses thumbnails to load images faster.
        

9. Analyzing Web Visits

Web analytics help businesses track user behavior, traffic sources, and conversions.

• Tools: Google Analytics, Hotjar, etc.
• Metrics: Bounce rate, page views, click-through rate

Example:
An online clothing store sees most users drop off at the payment page → fixes checkout process → increases sales.
        

10. Managerial Issues

Managers must address challenges related to:

• Scalability and performance
• Cybersecurity
• Integration with ERP/CRM
• Technology upgrades

Example:
A manager must decide whether to invest in a new cloud server for faster page loading as traffic grows during festive seasons.