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e-Commerce Reality and myth

e-Commerce Reality and myth. T.N.C.Venkata Rangan CMD, Vishwak Solutions Pvt. Ltd. www.venkatarangan.com/blog. Agenda. Competitive advantage of going online e-Commerce myths Security & Payments aspects. Darwinism on the web. Every invention of man has gone through phases of: Fear

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e-Commerce Reality and myth

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  1. e-Commerce Reality and myth T.N.C.Venkata RanganCMD, Vishwak Solutions Pvt. Ltd.www.venkatarangan.com/blog

  2. Agenda • Competitive advantage of going online • e-Commerce myths • Security & Payments aspects

  3. Darwinism on the web Every invention of man has gone through phases of: • Fear • Experimentation • Confidence and Trust • Innovation

  4. Trust • Trust is the current step as ecommerce is booming. • Innovations will decide the future of the web.

  5. Innovation • In the old corporate scenario, innovations were coming from all corners, but only those with good financial backup survived. • In this digital era, good innovations are capable of surviving on their own with little or no corporate back up

  6. Advantages of going Online • Lowers Entry Costs • Reduces Transaction Costs • Provides Access to Global Market • Provides for Online Distribution • Secures Market Share

  7. Challenges of going Online • Unmatched Scale Issues • A large enterprise application has thousands of concurrent users • A Large commerce site might have 10s of thousands of global, concurrent users • Rapidly Evolving Technologies • New Applications of Technology • Major Security and Privacy Issues

  8. Internet Myths - 1 • Users are sold when they see a video on your site • Reality: Online Travel Shoppers Don't Want to See Your Video

  9. No Video please!

  10. Internet Myths - 2 • Modem is dying • Reality : majority of Internet usage is through dial-up modems

  11. Internet Myths - 3 • Established e-commerce players are invincible • Reality: Ubid is under tremendous pressure to improve their support and fulfillment processes. Egghead has been sold to Amazon

  12. E-Commerce Myth – 1 • Its cheap, Easy and Lucrative • Reality: • It will become lucrative, but it isn’t now • Many organizations simply “Webify” their bad manual business process • Very difficult to integrate front end website with back end processes

  13. E-Commerce Myth – 2 • Everyone’s Doing it • Reality: • Giga Groups’ Bartel says that 90 percent of large companies websites are just more than “Brochure Ware”. • Only 5% are using it to automate their supply chains.

  14. E-Commerce Myth – 3 • Middlemen Are Eliminated • Reality: • Infomediaries who provide information about products and who locate the best choice or price replace intermediaries

  15. E-Commerce Myth – 4 • All Products Become Commodities and the playing field is leveled • Reality: • This is true to a point • But don’t expect “If you build it, they will come” • Consumers are still quaeasy enough about giving information over the web

  16. E-Commerce Myth – 5 • Brand Building Is Easy on the web • Reality: • Organisations that have brand strength and are well known are unlikely to go away • Products that can be delivered and described completely digitally can succeed faster over the Internet

  17. Payment Aspects

  18. Globalization and Growth • Projections from the Boston Consulting Group predicted that U.S. shoppers have spent $61 billion on online shopping last year.(June 2003) • Banking and financial services are forecast to grow from $3.6 billion in 1999 to $12.3 billion in 2004. • The computer hardware/software, consumer electronics segment will lead the market with revenue projected to grow from $7.5 billion in 1999 to $59.7 billion in 2004. • E-commerce grew to $600 billion in 2001, a 68 percent increase over 2000.

  19. Globalization and Growth cont’d • By 2005 75+% of internet users will be outside the U.S. and Canada. • Today 43% of internet users are non-English speakers: Japanese, Spanish, German. • By 2005, China should be the 2nd largest internet user. • Note: Currently only 7% of adults in Germany own a credit card.

  20. Indian Examples • IRCTC.CO.IN • Sold nearly 7.3 lakh tickets in 2003-04 • Logged a sales volume of Rs.102 crore • Rs.30 Lakhs everyday, nearly 1 Lakh tickets everyday

  21. Indian Buying patterns • Baazee.com records following pattern: • Products priced up to Rs 3,000 - Credit Cards • Between Rs 3,000 and Rs 6,000 – DD/Cheque/CC • Above Rs 10,000 – DD/Cheque • Less than Rs 1,000 attract cash-on-delivery payments

  22. Internet Payment methods - 1 • Three different types of payment systems can be established on the Internet • Post-Paid Payment solutions • Credit card solutions • Invoice • Internet Cheques • Cash on Delivery

  23. Internet Payment methods - 2 2. Instant-paid payment systems • Direct Debit • Uses Bank account numbers and the bank code. • Requires proof either by physical signature or digital signature (which has to be approved by approved laws)

  24. Internet Payment methods - 3 3. Pre-paid payment systems • Electronic cash • Smart cards

  25. Threats on the Internet • Loss of Data Integrity • Information is created, modified or deleted by an intruder • Loss of Data Privacy • Information is made available to unauthorized persons • Loss of Service • A service breaks down due to the action of a hacker • Loss of Control • Services are used by Authorized persons in an uncontrolled way

  26. Security • Cryptography • Secret key cryptography • Public key cryptography • Digital signatures • Based on Public Key • SSL (Secure Socket Layer)

  27. Privacy • Footprints on the Net • IP Number • Browser information • Cookies • Profile • TRUSTe • An independent, non-profit organization, to build customers’ trust and confidence on the Internet • Website owners agree for third-party checks • Anonymizer

  28. Digital Payment Requirements –1 • Acceptability • In order to be successful, the payment infrastructure needs to be widely accepted • Anonymity • If desired by customers, their identity should be protected • Convertibility • The digital money should be able to be converted into other types of funds • Efficiency • The cost per transaction should be near zero • Flexibility • Several methods of payment should be supported

  29. Digital Payment Requirements-2 • Integration • Support with existing applications via interfaces • Reliability • Needs to be highly available and should avoid single point of failure • Scalability • Allowing lot of news customers and merchants shouldn’t break the system • Security • Should support financial transactions over open networks • Usability • Payment should be as easy as in the real world

  30. Summary • Competitive advantages • E-commerce - Reality • Threats • Privacy • Payment categories • Payment models

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