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E-Commerce and E-Commerce

Technologies

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Sl. No TOPIC Page

No.

1. Introduction 5

2. Architectural Framework of E-Commerce 6-8

3. Types of E-Commerce 8-9

5. Current Trends in E-Commerce Technology 9-11

6. Future of E-Commerce Technology 11-12

7. Conclusion 13

8. Bibliography 14

TABLE OF CONTENTS

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1. INTRODUCTION

1.1 What is E-Commerce?

Electronic commerce is most commonly known as e-commerce. It may be defined as the


buying and selling of products and services through the internet and other computer
networks. E-commerce depicts technologies such as supply chain management; automated
data collection systems; mobile commerce; electronic data interchange (EDI); online
transaction processing; inventory management systems and internet marketing. The World
Wide Web is typically used at least once in a transaction life cycle.

The sales aspect of ‘e-business’ is by and large depicted by e-commerce. Furthermore, it


comprises of financial aspects and exchange of data in every business transaction. It is the
most important marketing strategy, especially for a business which is yet to have a physical
presence in the market. E-commerce has emerged as an efficient and effective method of
running a business organization.

1.2 What is E-Business?

E-business is defined as the applications and information systems which use web
technologies in order to steer and sustain business functions and processes. It allows every
business organization to construct a bridge between their external and internal processes and
thus effectively and efficiently satisfy the demands of it partners, suppliers and customers
which in turn leads to a significant and wholesome development of the organization.

E-business must be understood as much more than a mere website. There is a whole range of
technologies which allow the business to not only work effectively but also efficiently, such
as Customer Relationship Management (CRM), collaboration tools, social media, wireless
technologies etc.

1.3 What is the relationship between E-Commerce and E-Business?

It is often observed that the terms E-Commerce and E-Business are used interchangeably.
However, each of these terms have a distinct meaning as defined above, and are
complementary to each other.

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While E-commerce refers to the process of buying and selling of goods and services by way
of online transactions, E-Business on the other hand, covers for such business transactions.
Furthermore, E-Business extends online interactions with customers, business partners and
suppliers. Thus, E-Commerce and E-Business go hand in hand, and the interrelationship
between the two ensures continuous development, improvement and up gradation of every
internet based business transaction.

2. ARCHITECTURAL FRAMEWORK OF E-COMMERECE

Architectural framework of E-Commerce may be understood as a method of amalgamating


various resources such as data repository, software agent-based transactions, DBMS,
communication protocols, computer languages, and transaction monitors etc. in order
smoothen the process of synthesizing software and data for applications.

The architectural framework of e-commerce consists of the following six layers of services:

2.1 Application Services:

The application services layer of any e-commerce decides the type of e-commerce application
to implemented in the business. The choice is made amongst the following e-commerce
applications:

 Business to Business Application;


 Consumer to Business Application; and
 Intra-Organizational Application.

2.2 Information Brokerage and Management Layer

The importance of the Information Brokerage and Management Layer is gaining significance
rapidly since it is becoming more and more necessary to effectively deal with capacious
quantities of information and data on networks. This service layer, with respect to certain
constraints such as profit maximization, low price or quick services, integrates or bridges the
gap between information providers and customers.

We may take the example of Trivago which serves as an information broker. It compiles the
information from various websites and shows the customer a consolidated view of all
available hotels at a particular destination and the same is arranged according to the tariffs

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offered for the same room by different websites. This reduces the time and effort invested by
a customer and makes it much easier for the customer to make a selection. This is merely one
example of how information brokerage and management layer.

2.3 Interface and Support Services

The nomenclature of the present layer is self explanatory i.e. this layer provides for the user
interface (front end) for every e-commerce application. A few examples of this layer are
directory support services and interactive catalogues.

Directive services facilitate functions for access and information search. These services make
an attempt to categorize and organize the humongous amount of transactions and information
generated out of such e-commerce transactions. Directory services, thus, directly interacts
with software applications.

Interactive catalogues, unlike directory services, directly interact with people. They are
customized user interfaces of applications. These are quite similar to tangible paper
catalogues; however the software based catalogues are customizable in terms of advertising,
graphics etc.

2.4 Secure Messaging Layer

Electronic messaging is a serious issue in every business. Electronic messaging services like
enhanced fax, EDI, e-mail, successfully eliminates difficulties faced whiles using non-
electronic modes of communication such as phones, fax, courier services etc. It ensures
instant delivery of urgent messages unlike non-electronic modes which are subject to
constraints such as distance between destination and source. The most important advantage of
any electronic messaging service is the facility to be able to access right information at the
right time.

However, the limitations of such electronic messaging are data privacy, confidentiality and
security. In order to eliminate these limitations the Secure Messaging layer is adopted by
every e-business organization.

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2.5 Middleware services

The rapid growth of forms of communication, networks and client serves has emerged with
the need of middleware services layer. This layer is majorly used for the purpose of
assimilating these diversified software programmes.

2.6 Network Infrastructure

An effective and efficient linkage between the supplier and the customer can be achieved
only through a Network Infrastructure. Former models of network infrastructure were the
long distance telephone companies, since the lines of such telephone companies were made
use of for establishing a single path connection between computers. This single connection,
centrally controlled model wherein a single path is created between the receiver and the
caller, is called Circuit Switching.

3. TYPES OF E-COMMERCE

There are five broadly recognised types of e-commerce:

3.1 Business to Business (B2B):

Business to Business as a type of e commerce deals with e-commerce activities between


businesses. The transactions of a company which are dealing with suppliers or agents are
carried out through EDI (Electronic Data Interchange). Companies with the help of B2B
businesses such as wholesalers and manufacturers improve business functions such as
payment management, inventory management etc. As the payments by the companies are
made electronically, it reduces errors and transaction fees as the invoices are processed
efficiently. Purchase Order (PO) costs are reduced and hence the supplier costs are controlled
in B2B transactions. There is a scope of improvement of any company’s inventory auditing
capabilities by tracking the order shipments through electronic medium. This process
improves the punctuality of the orders by reducing the levels of inventory.

3.2 Business to Consumer (B2C):

Business to Consumer (B2C) as opposed to Business to Business (B2B) deals with activities
which are focused on consumers. A retailer in any business is the perfect example of

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Business to Consumer model. Websites such as Flipkart.com follow B2C models wherein a
‘merchant model’ is followed.

3.3 Consumer to Business (C2B):

Consumer to Business (C2B) as opposed to B2C deals with e-commerce activities where the
focus of the business shifts from selling to buying as the customer in this model determines
the price of the product/service. This model focuses specifically on ‘customer
empowerment’. The individuals in this model create value and the business consumes it. An
example of this model is when an artiste/photographer or a designer offers the stock images
to companies through various social media platforms.

3.4 Consumer to Consumer (C2C):

Consumer to Consumer (C2C) business model is different from the existing business models
which does not involve ‘Business’ end of the transaction. Customers here are the ones
directly selling the product to the consumer. The example of this model is an ‘Auction’.
Olx.com is a website which follows this business model.

3.5 Business to Government (B2G):

Business to Government (B2G) business model is when any business sells their
products/services/information to Government and their agencies. These businesses follow
government policies, rules and regulations. This platform provides an opening for businesses
to bid on Government opportunities. Government agencies follow negotiated standing
contracts which can be local or national. This ensures that the time of the employees and
citizens are saved. ‘Smart City’ is an example of B2G business.

4. CURRENT TRENDS IN E-COMMERCE TECHNOLOGY

In the present times, a product in isolation cannot aid a business organisation to survive cut-
throat competition in the market; it is the formation of a ‘customer-centric’ shopping
experience which can do the needful. In order to create a customer-centric shopping
experience, intangible services such as fast delivery, intuitive order process and varied
payment options are absolutely essential and the same can be achieved only through e-
commerce technologies (Anastasiia Lastovetska, 2018).

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The following are few of the current trends which are shaping the e-commerce industry:

4.1 Social Commerce

As the name suggests, social commerce takes the aid of social media for promoting and
enabling online transactions. Social commerce has greatly affected the buyer-seller landscape
since the various brands now have created an interpersonal relationship with its consumers by
connecting with them through various social media platforms.

The social e-commerce growth rate is on track to increase by 25% over the next 5 years, to
make up more than a quarter of the total e-commerce market. (Anastasiia Lastovetska,
2018)

4.2 Digital Supply Chain:

One of the key selling points of a brand when it comes to e-commerce is speedy delivery or
on-time delivery. There the focus has greatly shifted to the management of the digital supply
chain in order to ensure speedy and efficient delivery. A few examples of technological
advancements in the area of digital supply chain are-

 Use of hack proof RFID chips for Inventory Management;


 Use of Autonomous Freight Shuttle Debuts for Post Management;
 Use of Invisible Digital Markers for Brand Protection

Start-ups which specialize in logistics and warehousing solution are gaining huge investments
as a consequence of the e-commerce development. According to 2015 estimates, warehouse-
focused companies increased investments by 8%, crossing $1 billion in total investments
(Netscribes, 2018).

4.3 Payment Integrations:

The relatively new concepts of e-wallets have greatly simplified the payment processes.
Applications like Google Pay, Paytm, Amazon Pay, Apple Pay etc. are the most frequently
modes of payment when it comes to online transactions. These applications not only ensure
safety of data but are also extremely convenient.

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4.4 M-Commerce:

M-commerce stands for Mobile Commerce. In the present day scenario majority of
consumers use their mobile phones for the purpose of online shopping and therefore it has
become pertinent for e-commerce brands to create applications and websites to fit the mobile
screen.

However, only adapting to the smaller screen does not suffice since the consumers are now
extremely particular about the smallest of details when it comes to online shopping, therefore
the e-commerce brands have to also incorporate certain features such as Dash Buttons and
Beacons which make the use experience smooth and swift. A good user experience helps in
retaining and gaining customers.

5. FUTURE OF E-COMMERCE TECHNOLOGY

With such rapid and continuous development in technology, technology is bound to bring
about certain drastic changes to e-commerce and the way consumers perceive online
shopping.

The following are a few technologies which come across as the most feasible future of the e-
commerce industry:

5.1 Augmented & Virtual Reality:

The introduction of Virtual Reality (VR) and Augmented Reality (AR) into e-commerce can
dramatically change the way customers view online retail. VR and AR can allow customers
to virtually touch and interact with products before they make a purchase.

For example: While purchasing apparels online, the customer will have the option of virtually
feeling the material and trying on the clothing and see how well it suits their need. This will
enable e-commerce to reach new heights in terms of convenience.

It is not only the fashion industry which will benefit from such technology but other
industries such as furnishing, beauty and auto industries will also highly benefit from such
technology. Enormous amount of investment has already been made by certain e-commerce
giants in order to introduce such technology.

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5.2 Blockchain Technology:

The Blockchain technology has brought in revolutionary change to the e-commerce industry,
i.e. the industry which deals with data privacy issues the most. However, with further growth
of the industry, certain side effects seem inevitable. Certain issues with regards to slow
transactions, digital data ownership, high fees, policies and trust have already started
emerging.

With its future concept of genuine and distributed ledger of transactions, the Blockchain
technology will help restore trust in electronic payments since it will also be taking care of
frauds by providing new payment methods through the aid of cryptocurrencies such as
Ripple, Ethereum and Bitcoin. The future e-commerce might be known as e-Coinmerce
which will completely be Blockchain driven.

Additionally, the future Blockchain technology will eliminate third parties from transactions
through faster and cheaper methods of buying and selling. The development of Blockchain
technology can boost transparency and eliminate fraud which will go a long way in the e-
commerce industry.

5.3 Drone & Droid Delivery:

The futures of delivery systems lie in droids on the ground and drones in the sky. These will
not only ensure quick, efficient and errorless delivery, but will also slash the logistical
expenses of the e-commerce industry. Online purchases are sure to ain a boost if drone
airports become a reality since this will reduce the shipping time to just a few hours.

Moreover, the future of the delivery system will not be customer address oriented but
location oriented i.e. the product delivery will not necessarily have to be at a particular
address, the customer may even choose to get a product delivered according to his location at
a particular time.

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6. CONCLUSION

The E-commerce industry has gained great popularity and market base across demographics.
It has paved the way for online shopping to become a part of people’s daily lives. With
continuous developments in the field of technology brands will be able to find technological
solutions to create a superior and unique online shopping experience for its customers. This
will not only create a more comfortable and convenient environment for electronic shopping
but will also the businesses to expand drastically.

Virtual reality, crypto-payments and drone deliveries are the future of the e-commerce
industry which will be possible through advancements in e-commerce technologies. Although
it will increase the competition in the market, it will make life swift and smooth for the
customers without an exorbitant price hike.

As technological developments continue to reach new heights, the e-commerce industry is


expected to reach unmatched levels of escalation and intensification by the year 2025.

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REFERENCES

 Lastovetska, Anastasiia (2018). Future of E-Commerce: Innovations to Watch Out

For.

 Ifeanyi, Adigwe (2012). The Impact of Information Technology on Commerce.

 Purohit, Ankita (2017). Latest E-commerce Technologies and Trends for Future.

 Jehangir, Muhammed (2011). Technology Resources and E-commerce Impact on

Business Performance.

 Netscribes (2018). 5 Emerging Technology Trends in E-commerce. Available at

https://www.netscribes.com/ecommerce-technology-trends/

 Rahman, Saimunur (2014). Introduction to E-commerce Technology in Business.

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