Page 31 - Introduction to Electronic Commerce and Social Commerce

8 1 Overview of Electronic Commerce and Social Commerce

are made online between businesses, such as when Dell elec-
tronically buys parts from its suppliers. Dell also collaborates 5. Business partnerships. Joint ventures, exchanges,
electronically with its partners and provides customer service and business partnerships of various types are
online e-CRM (see Online Tutorial T1). Several other types common in EC. These occur frequently throughout
of EC will be described later in this chapter. the supply chain (i.e., the interactions between a
According to the U.S. Census Bureau (2013), the total EC company and its suppliers, customers, and other
shipments grew 16.5% in a year; ComScore reported that U.S. partners).
retail commerce online increased 17% in QI 2012 as com-
pared to a year earlier. EC is growing in all areas. For example,
Leggatt (2012) reported that in the UK Domino’s Pizza online The infrastructure for EC is shown at the bottom of the figure.
sales grew about 1000% between 2000 and 2012. Similar Infrastructure describes the hardware, software, and networks
results can be found in many industries, companies, and coun- used in EC. All of these components require good management
tries (e.g., see periodic reports at ComScore and BizReport) practices. This means that companies need to plan, organize,
and Ahmad (2014, an Infographic). E-commerce is exploding motivate, devise strategy, and restructure processes, as needed,
globally. According to a press release of ecommerce- europe. to optimize the business use of EC models and strategies.
eu/press of May 23, 2013, European e-commerce grew by
19% in 2012 reaching €312 billion. According to Stanley and
Ritacca (2014), e-commerce in China is exploding, reaching Classification of EC by the Nature of the
$600 billion by the end of 2013. Finally, in several developing Transactions and the Relationships
countries EC is becoming a major economic asset (e.g., see Among Participants
Maitra 2013 for information on India).
A common classification of EC is by the type of the transac-
tions and the transacting members. The major types of EC
An EC Framework transactions are listed below.

The EC field is diverse, involving many activities, organiza- Business-to-Business (B2B)
tional units, and technologies. Therefore, a framework that
describes its contents can be useful. Figure 1.2 introduces Business-to-business (B2B) EC refers to transactions between
one such framework. and among organizations. Today, about 85% of EC volume is
As shown in the figure, there are many EC applications (top B2B. For Dell, the entire wholesale transaction is B2B. Dell
of figure), which will be illustrated throughout the book. To buys most of its parts through e-commerce, and sells its
perform these applications, companies need the right informa- products to businesses (B2B) and individuals (B2C) using
tion, infrastructure, and support services. Figure 1.2 shows e-commerce.
that EC applications are supported by infrastructure and by the
following five support areas (shown as pillars in the figure): Business-to-Consumer (B2C)

Business-to-consumer (B2C) EC includes retail transactions
of products or services from businesses to individual shoppers.
1. People. Sellers, buyers, intermediaries, information The typical shopper at Amazon.com is of this type. Since the
systems and technology specialists, other employ- sellers are usually retailers, we also call this type e-tailing.
ees, and any other participants.
2. Public policy. Legal and other policy and regula- Consumer-to-Business (C2B)
tory issues, such as privacy protection and taxation,
which are determined by governments. Included In consumer-to-business (C2B), people use the Internet to
are technical standards and compliance. sell products or services to individuals and organizations.
3. Marketing and advertising. Like any other busi- Alternatively, individuals use C2B to bid on products or ser-
ness, EC usually requires the support of marketing vices. Priceline.com is a well-known organizer of C2B travel
and advertising. This is especially important in B2C service transactions.
online transactions, in which the buyers and sellers
usually do not know each other. Intrabusiness EC
4. Support services. Many services are needed to
support EC. These range from content creation to The intrabusiness EC category refers to EC transactions
payments to order delivery. among various organizational departments and individuals in
one company.