Growth of E-Commerce

E commerce in India

The low cost of the PC and the growing use of the Internet has shown the tremendous growth of E commerce in India, in the recent years. According to the Indian E commerce Report released by Internet and Mobile Association of India (IAMAI) and IMRB International, “ The total online transactions in India was Rs. 7080 corers (approx $1.75 billion) in the year 2006-2007 and expected to grow by 30% to touch 9210 corers (approx $2.15 billion) by the year 2007-2008. According to a McKinsey-Nasscom report the e-commerce transactions in India are expected to reach $100 billion by the 2008. Although, as compared to the western countries, India is still in is its initial stage of development.

US eCommerce Forecast: 2008 To 2012

According to Forrester Research, US online retail reached $175 billion in 2007 and is projected to grow to $335 billion by 2012. Business-to-consumer (B2C) eCommerce continues its double-digit year-over-year growth rate, in part because sales are shifting away from stores and in part because online shoppers are less sensitive to adverse economic conditions than the average US consumer. Despite the continued growth of the channel, online retailers face several challenges to growth: Online stores are broadly perceived as a second choice for shoppers, online retail is becoming increasingly seasonal, and online shoppers rarely admit to browsing, which can drive valuable incremental dollars during their Web shopping experiences.

Ecommerce Opportunities for Industries and Some Examples

Global Reach: The net being inherently global, reaching global customers is relatively easy on the net compared to the world of bricks.

Cost of acquiring, serving and retaining customers. It is relatively cheaper to acquire new customers over the net; thanks to 24 x 7 operations and its global reach.

An extended enterprise is easy to build. In today’s world every enterprise is a part of the ‘connected economy’; as such, you need to extend your enterprise all the way to your suppliers and business partners like distributors, retailers and ultimately your end-customers.

Disinter mediation: Using the internet, one can directly approach the customers and suppliers, cutting down on the number of levels an in the process, cutting down the costs.

Improved customer service to your clients: It results in higher satisfaction and more sales.

Power to provide the ‘best of both the worlds’: It benefits the traditional business side-by-side with the internet tools.

A technology-based customer interface: In a brick-and-mortar business, customers conduct transactions either face-to-face or over the phone with store clerks, account managers, or other individual.

The customer controls the interaction: At most websites, the customer is in control during screen-to-face interaction, in what the web largely employs a ‘self service’ model for managing commerce or community-based interaction. The customer controls the search process, the time spent on various sites; the degree of price/product comparison, the people with whom he or she comes in control can rest with either the buyer/seller or the community member.

Knowledge of customer behavior: While the customer controls the interaction, the firm has unprecedented access to observe and track individual consumer behavior. Companies, through a third-party measurement firm such Vividness and Accrue; can track a host of behaviors on web sites visited, length of stays on a site, page views on a site.

Difference between traditional commerce and e- commerce

Differences between traditional and e-commerce

 

In the following table you can see in table form the differences in media used for traditional and e-commerce. Please notice that as far as e-commerce is concerned everything can be done through a server:

Action	Traditional commerce	E-commerce
Acquire product information	Magazines, flyers, online catalogs	Web pages
Request item	Printed forms, letters	E-mail
Check catalogs, prices	Catalogs	On-line catalogs
Check product availability and confirm price	Phone, fax	E-mail
Generate order	Printed form	E-mail, web pages
Send /Receive Order	Fax, mail	E-mail, EDI
Prioritize order		On-line database
Check inventory at warehouse	phone,fax	On-line database, web pages
Schedule delivery	Printed form	E-mail, On-line database
Generate invoice	Printed form	On-line database
Receive product	Shipper	Shipper (unless it is electronic)
Confirm receipt	Printed form	E-mail
Send/Receive Invoice	Mail	E-mail, EDI
Schedule payment	Printed form	EDI, On-line database
Send /Receive Payment	Mail	EDI

 

 

1. Direct interaction is present in traditional commerce.
2. E-commerce proves to be feasible for the standard products,low-value products , intangible products and digital products.
3. In traditional commerce customer can verify the identity of the seller and their physical location, whereas in e-commerce customers feel insecure because they cannot identify the seller and are unaware about many things
4. Traditional commerce is the best when it comes to convincing the customers on certain products.
5. E-commerce uses e-cash, credit cards , debit cards and etc,.
6. E-commerce is developing a highway system called the information super highway as we have the interstate highway system for traditional e-commerce.
 

Driving forces behind e-commerce

Internet Acceptance is the Driving Force Behind eCommerce

An April 1998 report by the U.S.Department of Commerce called The Emerging Digital Economy revealed that 10 million people in the U.S.and Canada had used the Internet to make a purchase in 1997.A recent Ernst and Young study finds that 64% of Internet users research products online first and then buy them at stores or over the phone.The Commerce Department report also finds that 40% of the transactions made with retailers on America Online are made during the hours when traditional malls are closed.Consumers said that convenience was the primary reason why they made purchases over the Internet, with ease of research and good prices ranking a distant second and third, respectively, the report notes.

The commerce report also quotes a J.D.Powers study that says that in 1996, 10% of all new car buyers used the Internet as part of their purchase process and that by the year 2000, fully 21% will use the Internet to purchase a car.This report estimates that dealers with Web sites currently sell an average of 5 cars per month over the Internet.Therefore, buyers can shop the virtual showroom and then head for a final test drive at the dealership.For car dealers, some difficult decisions loom as the need for a great location and a grandiose storefront diminishes.

Advantages and Disadvantages of Ecommerce

Advantages And Disadvantages Of E-commerce

Advantages Of E-commerce

Lower Cost

Doing e-business is cost effective; it reduces logistical problems and puts a small business on a par with giants such as Amazon.com or General Motors. In a commercial bank, for example. a basic over-the-counter transaction costs £0.50 to process; over the Internet, the same transaction costs about £0.01. Every financial transaction eventually turns into an electronic process. The sooner it makes the conversion, the more cost-effective the transaction becomes.

Economy

Unlike the brick–and–mortar environment, in e–commerce there is no physical store space, insurance, or infrastructure investment. All you need is an idea, a unique product, and a well–designed web storefront to reach your customers, plus a partner to do fulfillment. This makes e–commerce a lot more economical.

Higher Margins

E–commerce means higher margins. For example, the cost of processing an airline ticket is £5. According to one travel agency, processing the same ticket online costs £1. Along with higher margins, businesses can gain more control and flexibility and are able to save time when manual transactions are done electronically.

Better Customer Service

E–commerce means better and quicker customer service. Online customer service makes customers happier. Instead of calling your company on the phone, the web merchant gives customers direct to their personal account online. This saves time and money. For companies that do business with other companies, adding customer service online is a competitive advantage. The overnight package delivery service, where tracking numbers allow customers to check the whereabouts of a package online, is one good example.

Quick Comparison Shopping

E–commerce helps consumers to comparison shop. Automated online shopping assistants called hop bots scour online stores and find deals on everything from apples to printer ribbons.

Productivity Gains

Weaving the web throughout an organization means improved productivity. For example IBM incorporated the web into every corner of the firm – products, marketing, and practices. The company figured it would save $750 million by letting customers find answers to technical questions via its website. The total cost savings in 1999 alone was close to $1 billion.

Teamwork

E–mail is one example of how people collaborate to exchange information and work on solutions. It has transformed the way organisations interact with suppliers, vendors, business partners, and customers. More interactions means better results.

Knowledge Markets

E–commerce helps create knowledge markets. Small groups inside big firms can be funded with seed money to develop new ideas. For example, Daimler Chrysler has created small teams to look for new trends and products. A Silicon Valley team is doing consumer research on electric cars and advising car designers.

Information Sharing, Convenience, And Control

Electronic marketplaces improve information sharing between merchants and customers and promote quick, just–in–time deliveries. Convenience for the consumer is a major driver for changes in various industries. Customers and merchants save money; are online 24 hours a day, 7 days a week; experience no traffic jams, no crowds, and do not have to carry heavy shopping bags.

Disadvantages Of E–commerce

Security

Security continues to be a problem for online businesses. Customers have to feel confident about the integrity of the payment process before they commit to the purchase.

System And Data Integrity

Data protection and the integrity of the system that handles the data are serious concerns. Computer viruses are rampant, with new viruses discovered every day. Viruses cause unnecessary delays, file backups, storage problems, and other similar difficulties. The danger of hackers accessing files and corrupting accounts adds more stress to an already complex operation.

System Scalability

A business develops an interactive interface with customers via a website. After a while, statistical analysis determines whether visitors to the site are one–time or recurring customers. If the company expects 2 million customers and 6 million show up, website performance is bound to experience degradation, slowdown, and eventually loss of customers. To stop this problem from happening, a website must be scalable, or upgradable on a regular basis.

E–commerce Is Not Free

So far, success stories in e–commerce have forced large business with deep pockets and good funding. According to a report, small retailers that go head–to–head with e–commerce giants are fighting losing battle. As in the brick–and–mortar environment, they simply cannot compete on price or product offering. Brand loyalty is related to this issue, which is supposed to be less important for online firms. Brands are expected to lower search costs, build trust, and communicate quality. A search engine can come up with the best music deals, for example, yet consumers continue to flock to trusted entities such as HMV.

Consumer Search Is Not Efficient or Cost–effective

On the surface, the electronic marketplace seems to be a perfect market, where worldwide sellers and buyers share and trade without intermediaries. However, a closer look indicates that new types of intermediaries are essential to e–commerce. They include electronic malls that guarantee legitimacy of transactions. All these intermediaries add to transaction costs.

Customer Relations Problems

Not many businesses realize that even e–business cannot survive over the long term without loyal customers.

Products People won't buy online

Imagine a website called furniture.com or living.com, where venture capitalists are investing millions in selling home furnishings online. In the case of a sofa, you would want to sit on it, feel the texture of the fabric etc. Beside the sofa test, online furniture stores face costly returns which makes the product harder to sell online.

Corporate Vulnerability

The availability of product details, catalogs, and other information about a business through its website makes it vulnerable to access by the competition. The idea of extracting business intelligence from the website is called web framing.

High Risk Of Internet Start–up

Many stories unfolded in 1999 about successful executives in established firms leaving for Internet start–ups, only to find out that their get–rich dream with a dot.com was just that – a dream.

Advantages and Disadvantages of E commerce

The invention of faster internet connectivity and powerful online tools has resulted in a new commerce arena – E commerce. E commerce offered many advantages to companies and customers but it also caused many problems.
Advantages of E commerce

    Faster buying/selling procedure, as well as easy to find products.
    Buying/selling 24/7.
    More reach to customers, there is no theoretical geographic limitations.
    Low operational costs and better quality of services.
    No need of physical company set-ups.
    Easy to start and manage a business.
    Customers can easily select products from different providers without moving around physically.

Disadvantages of E commerce

    Any one, good or bad, can easily start a business. And there are many bad sites which eat up customers’ money.
    There is no guarantee of product quality.
    Mechanical failures can cause unpredictable effects on the total processes.
    As there is minimum chance of direct customer to company interactions, customer loyalty is always on a check.
    There are many hackers who look for opportunities, and thus an e commerce site, service, payment gateways, all are always prone to attack.

Definition of E-Commerce

Electronic commerce, commonly known as e-commerce, e commerce, eCommerce or e-comm, refers to the buying and selling of products or services over electronic systems such as the Internet and other computer networks. Electronic commerce draws on such technologies as electronic funds transfer, supply chain management, Internet marketing, online transaction processing, electronic data interchange (EDI), inventory management systems, and automated data collection systems. Modern electronic commerce typically uses the World Wide Web at least at one point in the transaction's life-cycle, although it may encompass a wider range of technologies such as e-mail, mobile devices and telephones as well.

• Electronic commerce is generally considered to be the sales aspect of e-business. It also consists of the exchange of data to facilitate the financing and payment aspects of business transactions.

E-commerce can be divided into:

• E-tailing or "virtual storefronts" on Web sites with online catalogs, sometimes gathered into a "virtual mall"
• The gathering and use of demographic data through Web contacts
• Electronic Data Interchange (EDI), the business-to-business exchange of data
• E-mail and fax and their use as media for reaching prospects and established customers (for example, with newsletters)
• Business-to-business buying and selling
• The security of business transactions

Definition of E-Commerce


To understand what is e commerce you first need to understand all of its parts. First off, there is e commerce hosting or e commerce web hosting which is where your business website “is” on the internet so to speak. A web hosting provider is an online company that runs big servers that can hold many different websites files. E-commerce hosting is hosting that specializes in websites that specifically require e commerce related software and are geared towards commercial enterprise of some kind. These servers usually host an array of e commerce solutions incorporated into their packages.

When you are likely to put together any E commerce website on the web, there are a number of E commerce solutions you need to have in place to help make every thing easier to control particularly if things are not working properly.  These types of E commerce solutions once executed may help almost everything work simpler providing you with the sort of outcomes that you will be looking for.  Find out just what a couple of these could possibly be.

First of all, you are going to have to be utilizing a top quality internet site builder as your initial solution for your web site.  Without a tool which you can use to create all the webpages of your website, you will not get very far within this process.  This tool must be automatic otherwise you’ll have difficulties as a result of time.  Some people make use of a software they set up on their very own personal computer while others will make use of one that is set up to the host to manage the entire site.  Either solution is appropriate.  The majority of men and women prefer picking the one that has got the greatest plugins for more features for the internet site.

Another one of the most important E commerce solutions is really a dependable shopping cart software set up.  The shopping cart application enables users to search the website including items directly into the cart to ultimately buy something.  A trustworthy shopping cart software will help you make product sales without losing clients since it is no longer working.  This shopping cart application also needs to perform well with your merchant account else you could encounter troubles.

There is eCommerce software which is a software that incorporates some form of business operation usually relating to the transactions of goods, services and monetary values. These are more commonly know as online shopping carts and as mentioned above these carts are often available from the hosting company, although there are many third parties that offer these e-commerce solutions as well.

There is e commerce website design or e commerce web design which is how the business website is actually designed which is slightly different from e commerce website development which is more geared towards how the site functions rather than how it appears.

And of course there are the e commerce websites themselves. So to know the answer to what is e commerce? You need to look at each of these sub-categories individually. The common ingredient here is the word “commerce”. So to put it another way, a simpler way, e commerce is any commerce that is done electronically as “e” stands for “electronic”.

Have a good look through this site to find out about all of the above contents in more detail. Explore into this site even more deeply and you will discover all sorts of valuable information that will enable you to make a successful online business.

As well as general good practice functionality for running your e-commerce business you will find tricks, tips and guidelines for making the most of your new systems with a nice healthy focus on good white hat internet marketing. Things to avoid and why, how and what of all things e-commerce.

Firstly though I recommend you read each of the e commerce subjects above to get a good overview and understanding of each part. Doing this will give you a solid overall grounding of what is e commerce and prepare you for more complex industry components within a particular e commerce solution.

Software Characteristics

(1). Software is developed or engineered, it is not manufactured:-- Unlike hardware,software is logical rather than physical.It has to be designed well before producing it. In spite of availability of many automated software development tools, it is the skill of the individual, creativity of the developers and proper management by the project manager that counts for a good software product.

(2). Software does not "wear out":--As time progresses, the hardware components start deteriorating-they are subjected to environmental maladies such as dust, vibration, temperature etc. and at some point of time they tend to breakdown. The defected components can then be traced and replaced.But, software is not susceptible to the environmental changes. SDo, it does not wear out. The software works exactly the same way even after years it was first developed unless any charges are inttoduced to it.The changes in the software may occur due to the changes in the requirements.And these changes may introduce some defects in it thus, deteriorating the quality of software,So, software need to maintained properly.

(3). Most software is custom-built,rather than being assembled from existing components:--Most of the engineered products are first designed before they are manufactured, Designing includes identifying various components for the product before they are actually assembled. Here several people can work independently on these components thus making the manufacturing system highly flexible. In software, breading a program into modules is difficult task , since each module is highly interlinked with other modules. Further, it requires lot of skill to integrate different modules into one.Now a days the term component is widely used in software industry where object oriented system is in use.

What is Software

Computer software or just software, is a collection of computer programs and related data that provides the instructions for telling a computer what to do and how to do it. Software refers to one or more computer programs and data held in the storage of the computer for some purposes. In other words, software is a set of programs, procedures, algorithms and its documentation concerned with the operation of a data processing system. Program software performs the function of the program it implements, either by directly providing instructions to the computer hardware or by serving as input to another piece of software. The term was coined to contrast to the old term hardware (meaning physical devices). In contrast to hardware, software "cannot be touched". Software is also sometimes used in a more narrow sense, meaning application software only. Sometimes the term includes data that has not traditionally been associated with computers, such as film, tapes, and records.