Реферат: What is E-Commerce?


There exists no exact definition ofe-commerce. Generally it is described as any kind of business transaction whereinformation is exchanged electronically.

To some people it means shopping at a websiteand buying products online, to other people it means just designing a web pagein a way to increase the customers' interest. It does not necessarily describea process of ordering and paying online.

Electronic trading, in which a supplierprovides goods or services to a customer in return for payment is just onespecial case of electronic commerce.

Other equally valid examples include internaltransactions within a single company

or provision of information to an externalorganisation without any charge.

E-commerce is concerned with attracting newcustomers and therefore it involves advertising, public relations and collectinginformation for and about customers.

It's not enough to get an online order for aproduct, it's also necessary to have this product and to deliver it to thecustomer. So e-commerce includes, besides of interacting with customerselectronically, all the things a «normal» business would also need.

Categories of E-Commerce

There are 3 categories of e-commerce:

-     business-to-business (B2B)

-     business-to-consumer (B2C)

-     business-to-administration

-     consumer-to-administration

An example in the business-to-business categorywould be a company that

uses an electronic way for ordering from itssuppliers, receiving invoices and

making payments.

The business-to-consumer category meansselling things to consumers via Internet. It is the most well-known form of e-commerce.

The business-to-administration categorycovers all transactions between companies and government organisations.

The same category exists for consumers and administration,though it is rather seldom.

As the B2C category is the most popular one, wewill talk about it.


Advantages of E-Commerce

The following list describes of what may bethe main advantages of e-commerce:

-     lower transaction costs (if an e-commerce site isorganised well, you won't even need any office equipment  – however, it israther seldom)

-     availability (people from everywhere and at anytime of the day can visit your site, get information and put orders)

-     large quantity of information (a company can builda very large catalogue with a lot of information on the web – just think ofAmazon with it's 3 Mio. articles)

-     providing «up-to-date» information (youcan update your site quickly and make important information available in time)

-     comparing prices and products

-     quickness (the customers' orders and enquiries canbe handled immediately)

Disadvantages of E-Commerce

There are a lot of hard aspects aboute-commerce as the recent failures in this branche show:

-     making people to visit your site (getting trafficto come to your web site)

-     how do you make yourself different from a (large)competition

-     getting people to buy something at your site (peopleusually feel VERY uneasy about buying via Internet)

-     you still need money (capital) to maintain yoursystem and provide an effective customer support

So e-commerce does not mean that you can makeprofits easier than in a «normal» business. You have to manage all theactivities concerned with marketing, finance, distribution, purchase and publicrelations.

These problems are the most relevat ones ascompetition grows all the time and people still try to avoid buying online.Stories about hackers using your credit card number or even large companies makinglosses in trying themselves in e-commerce – all this makes people even moresceptical about buying anything online.

However, this problems are also common in theold economy. So there are a few other hard aspects about e-commerce:

-     legality (concerning international e-commercecompanies; business contracts are defined differently by law in every country)

-     ownership (the copyright problem is a very big one)

-     privacy and security

What is Popular With E-Commerce?

Here you can see a list of products mostpopular with B2C e-commerce in Austria.

There were about 700.000 people who boughtsomething via Internet in Austria in the year 2000.

Regardless of the rather bad development ofthe technology stock markets during the past few months, the number of peopleusing internet to purchase products is likely to rise even more this year.

If we turn to the practical side of the wholething, what are the most relevant details about

Building an E-Commerce Site

First of all, you need what your:

-     suppliers (this is not different from a normalcompany – without good suppliers and efficient ways of purchasing goods youcannot offer products)

-     prices (as price comparisons are very easy on theinternet, you must have more competitive prices than the competition)

-     customer relations (it means communicating withyour (potential) customers efficiently – via e-mail, forums, chat-rooms,FAQ-pages,… – try to provide as much information as possible)

-     fulfillment and service (as for every other companyin the «real» world you must provide quick and correct handling ofthe customers orders as well as an effective online-service)

will be.

Implementing an E-Commerce Site

Now you can step on to creating your site.

Generally there are 3 possibilities how youcan do this:

-     enterprise computing (EC means that you have to purchase your own software and hardware and hire yourown team of developers and supporters just to create and maintain your site –big firms which are very frequently visited by customers would usually do this).

-     virtual hosting services (VHS means that all the facilieties required (such as the necessary hard-and software, security, ...) is provided and maintaned by another firm, forpayment, of course. Usually it is a company specialised in providing VHS).

-     simplified e-commerce (Hereyou just pay a company specialised in developing e-commerce systems to create asimple site for you. You must already have the necessary hard- and software. Thebasic functions of a simplified e-commerce system include displaying a productcatalogue, allowing users to browse through it and allowing them to buy items fromit).

Most of the B2C e-commerce companies use oneof these systems. And there are too many who just implement the simplifiedsolution and forget about offering online customer support and help and evenkeeping the site up-to-date.

A lack of customer support is only one of thereasons why e-commerce is in a crisis now.

Trends for the future

As you can see on the graph the purchase ratesare rising steadily. A recent study found out that most e-commerce websiteowners are generally optimistic. Three-quarters say their online market isexpanding, while two-thirds say their ability to attract new customers isimproving. Half of those polled say they are also seeing increased loyalty frompast customers. So, as the customers get used to e-commerce, it becomes morepopular. It may not replace the common way to buy and sell products but formost companies it offers new ways to reach their customers.


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Categories ofE-Commerce


Benefitsof E-Commerce

v lower transaction costs

v availability

v large quantity of information

v providing «up-to-date»information

v comparison of prices and products

v quickness

Disadvantagesof E-Commerce


v hard to make yourself «visible»

v hard to differ from competition

v hard to make people buy something

v money

v legality

v ownership

v privacy and security


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Products People Buy viaInternet
Consumer Spending at European Sites 1997-2002


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