Electronic Commerce

1. Electronic Commerce CSC1720 – Introduction to Internet Essential Materials

2. Outline • Introduction • e-Business models • How to • Build an e-Commerce site • Attract and keep customers • Get Paid • Manage the e-commerce business • Secure the site • e-Business Implementations • Application Service Provider (ASP) All copyrights reserved by C.C. Cheung 2003.

3. Questions? • What exactly is e-Commerce? • What is B2B e-Commerce? • Can I start my own e-Commerce site? • How do I accept payments by credit card? • How do I get customers to visit my site? • Do I have to accept credit cards? • How to succeed in e-Commerce? • Any more questions about e-Commerce? All copyrights reserved by C.C. Cheung 2003.

4. Introduction • What is e-Commerce? • Electronic Commerce (EC) or “e-Business” • Buying and Selling goods or services on the Internet (WWW) • What is the latest development? M-Commerce? • What is ASP? • Application Service Provider • Also means Active Server Page (HTML) • A company offers individuals or enterprises to host their applications or services on this ASP company. (low budgets for small companies, outsourcing for large companies) All copyrights reserved by C.C. Cheung 2003.

5. The importance All copyrights reserved by C.C. Cheung 2003.

6. Terminology • Dedicated line– A point-to-point, hard wire connection between two service locations. • Leased line– A telecommunications line dedicated to a particular customer along predetermined routers. • Outsourcing– The transfer of components or large segments of an internal IT infrastructure, staff, processes or applications to an external resource such as Application service provider (ASP). All copyrights reserved by C.C. Cheung 2003.

7. e-Business solutions Customers ERP, CRM, Database Internet / WWW Mobile Users Web EDI Intranet Internal Users Suppliers, public All copyrights reserved by C.C. Cheung 2003.

8. e-Business Models • Storefront model • Auction model • Portal Model • Dynamic Pricing Models • B2B Exchanges • B2B Service Providers • e-Learning All copyrights reserved by C.C. Cheung 2003.

9. Storefront Model • The storefront model combines transaction processing, security, online payment which allows merchants to sell their products to the customers on the Web. • Many famous storefront model companies are Business-to-Consumer (B2C) companies. • www.more.com • Health and beauty products • www.ticketmaster.com • Sell tickets All copyrights reserved by C.C. Cheung 2003.

10. Storefront Model • Allow companies to conduct business 24-by-7 (all-day, everyday). • One of the most commonly used model is “shopping cart” • An order-processing technology that allows user to accumulate the shopping list and continue shopping. • Supported by product catalog, merchant server and database technology. • www.amazon.com • www.icare.com.hk All copyrights reserved by C.C. Cheung 2003.

11. Shopping Cart Example Shopping cart Go shopping All copyrights reserved by C.C. Cheung 2003.

12. Shopping Cart Sotware • http://www.poorrichard.com/freeinfo/shop.htm All copyrights reserved by C.C. Cheung 2003.

13. Storefront Model • Another model is “online shopping mall” which provides a wide selection of products and services. • Customers can purchase items from many stores in a single transaction. • Offer speed and add convenience • www.mall.com • www.shopnow.com • www.e-buy.com.hk All copyrights reserved by C.C. Cheung 2003.

14. Shopping Mall Example Different shops All copyrights reserved by C.C. Cheung 2003.

15. Auction Model • Internet User can login to the online auction sites, either bidder or seller. • Sellers post their items and wait for the buyers to bid. • Auction sites get commission on every successful auction. • E.g. most profitable: www.ebay.com • HK: auction.timway.com • http://hk.auctions.yahoo.com/ • Reverse Auction model • Allow buyer to set the price, www.epurchasingagent.com All copyrights reserved by C.C. Cheung 2003.

16. http://hk.auctions.yahoo.com/ Auction Model Example All copyrights reserved by C.C. Cheung 2003.

17. Portal Model • Allow visitors to find everything within the website. • Horizontal Portal • Wide-ranged of topics • E.g. www.google.com, www.yahoo.com • Vertical Portal • Offer specific information on a single area of interest. • E.g. www.webmd.com (medical information) All copyrights reserved by C.C. Cheung 2003.

18. Dynamic Pricing Model • Name-your-price Business Model • Customers choose their price for the products or services (www.priceline.com). • Comparison Pricing Model • Customers poll some merchants and find the lowest prices (www.bottomdollar.com) • Demand-Sensitive Pricing Model • Enables customers to get better services and prices. (www.mobshop.com) • Bartering Model • Exchange items (www.ubarter.com) All copyrights reserved by C.C. Cheung 2003.

19. Pricing model example All copyrights reserved by C.C. Cheung 2003.

20. B2B Exchanges • Define as buying, selling, partnering, bartering or trading conducted between two or more business (B2B). • Goldman Sachs has estimated that B2B will generate $1.5 trillion in revenues by 2004. • Allow Business to buy, sell, auction, barter and distribute products and services. • Examples: • www.ework.com (Exchange employee) • www.itoi.com (Industry to Industry) • www.biz2biz.com (Business to Business) • www.icgcommerce.com, www.tradeaccess.com All copyrights reserved by C.C. Cheung 2003.

21. B2B examples All copyrights reserved by C.C. Cheung 2003.

22. B2B Service Providers • B2B service providers make the B2B transactions easier. • These e-Businesses help other businesses improve their policies, procedures, services and general operations. • Solutions include supply chain management, logistics, procurement. • www.ariba.com • www.freemarkets.com • www.liveperson.com All copyrights reserved by C.C. Cheung 2003.

23. Chat online? • Why? To solve your E-business problem via the Internet. All copyrights reserved by C.C. Cheung 2003.

24. Loan Online • A growing segment of E-commerce. • Loan online at a lower rate than other traditional channels. • E-loan –www.eloan.com • E-credit –www.ecredit.com • Clients – HP, Intel, other businesses • Loan direct –www.loansdirect.com All copyrights reserved by C.C. Cheung 2003.

25. Recruitment on the Web • Effectively job searching on the Web. • Improve the recruitment for both employer and seeker. • Search International Jobs (www.monster.com) • Focus on computer industry (www.dice.com) • www.guru.com • www.jobdb.com All copyrights reserved by C.C. Cheung 2003.

26. Online News Services • Web is playing an important role in the publishing and news industries. • The Wall Street Journal (www.wsj.com) • Articles by leading investment analysts (www.barrons.com) • Latest sports news (www.espn.com) • Comprehensive news site (www.drudgereport.com) All copyrights reserved by C.C. Cheung 2003.

27. Recruitment / News All copyrights reserved by C.C. Cheung 2003.

28. Online Travel Services • Customers can bypass the travel agents. • Allow discount and low fare rate online. • air-tickets, hostel, and car-rentals. • “Last minutes” tickets offer low price. • www.cheaptickets.com • www.travelocity.com All copyrights reserved by C.C. Cheung 2003.

29. Online Entertainment • Multimedia rich websites provide Audio and Video, popular music and videos are available online for free. • Internet Movie Database • www.imdb.com • www.icast.com All copyrights reserved by C.C. Cheung 2003.

30. e-Learning • e-Learning is growing rapidly as the number of Internet users increases. • Universities and other training companies offer HQ distance education over the Web. • www.click2learn.com • www.saba.com • www.online.uillinois.edu • wwwtools.cityu.edu.hk • www.polyu.edu.hk/elearning • E-books –www.xlibris.com All copyrights reserved by C.C. Cheung 2003.

31. M-Commerce • What is Mobile Commerce? • Mobile commerce is the term applied to online financial transactions - shopping or the electronic transfer of funds - using a mobile device. • Mobile commerce transactions are being enhanced by developments in the world of mobile communication. All copyrights reserved by C.C. Cheung 2003.

32. MasterCard & M-Commerce Reference : demo All copyrights reserved by C.C. Cheung 2003.

33. Break Time – 15 minutes All copyrights reserved by C.C. Cheung 2003.

34. Build an e-Commerce site • Register a Domain name • Search for domain names (InterNIC) • What is the criteria of selecting a good name? • Find a Web Host • Select the suitable ISP • Web Developers • Hire a web designer • Cut cost and work with the designer • If your site is easy to use, the customers will stay longer and come more frequent. All copyrights reserved by C.C. Cheung 2003.

35. Web Hosting • It is a very important step in e-Commerce. • Good uptime? • Good technical support? • Fast connection to the Net? • Staffs are knowledgeable about e-Commerce? • Compatibility with other e-Commerce providers? All copyrights reserved by C.C. Cheung 2003.

36. Attract and keep customers • e-Business Advertising • Banner Advertising • Recently, losing their effectiveness • Buying and Selling advertising • You can become a host, or an advertiser • www.valueclick.com • Webcasting and Interactive Advertising • Use streaming media to broadcast information on the web. All copyrights reserved by C.C. Cheung 2003.

37. Enterprise Resources Planning (ERP) • An industrial term defines as the activities supported by application software that helps company to manage the important parts of the business. • Product planning, parts purchasing, maintaining inventories, contacting suppliers, customer servicing. • Integrated with database (such as Oracle) to provide other features, business process analysis, employee training, … All copyrights reserved by C.C. Cheung 2003.

38. ERP example I have questions about billing, product availability, shipping and customer service. Finance: How can I help you? Fulfillment: Yes, Sir? Inventory: Which item? Customer Service: We’re ready to help. All copyrights reserved by C.C. Cheung 2003.

39. Customer Relationship Management (CRM) • All the customer services provided by the company form the CRM. • CRM includes • Call handling (in/out calls from customers and service representatives) • Sales tracking (tracing and recording the sales made) • Transaction support (the technology used for transactions) • Improve customer satisfaction and maximize the profits All copyrights reserved by C.C. Cheung 2003.

40. Electronic Data Interchange (EDI) • Standard format to exchange business data. • EDI message is a string of data that represents “price”, “product number”, “product name”, etc. • EDI message can be encrypted. • EDI is one form of E-commerce, also include email, fax. All copyrights reserved by C.C. Cheung 2003.

41. Electronic Data Interchange (EDI) • http://www.disa.org/ All copyrights reserved by C.C. Cheung 2003.

42. Get Paid • How to you pay on the website? • Credit card transactions • Cybercash: www.cybercash.com • E-Wallets allows you to keep track your transactions, www.visa.com/pd/ewallet/main.html • Digital Cash: store your money electrically • www.ecash.com • More complex: B2B Transactions. All copyrights reserved by C.C. Cheung 2003.

43. Manage the E-commerce business • Have a good communication between the business production line (including the customer services team), and the IT development line. • “Online transaction history log” and “Historical investment performance reports” also helps to decide and plan for the product and service trend. • Migration of the traditional trading client to the new e-business. All copyrights reserved by C.C. Cheung 2003.

44. Secure the site • Customers fear for their online privacy. • Make sure all transactions on your e-commerce site are protected. • Security is provided by different kind of cryptography (encryption, digital signatures, digital certificates) • Sometimes, you may provide your personal information for: member-only discounts, giveaway, sweepstakes, coupons. Beware! All copyrights reserved by C.C. Cheung 2003.

45. Online shopping risks • A list of safeguards to keep in mind. • Shop with trusted merchants. • Read the site’s delivery, return, and privacy policies. • Only enter your details with the URL that begins with https:// and either a locked padlock or an unbroken key icon. • Be careful not to hit the ORDER NOW button more than once. • Never send credit card information via e-mail. • Keep a record of your transactions until shipped. All copyrights reserved by C.C. Cheung 2003.

46. HK Government Support • http://www.info.gov.hk/digital21/chi/ecommerce/ecom_supp.html All copyrights reserved by C.C. Cheung 2003.

47. Application Service Provider • What is an Application Service Provider? • Deliver and manage applications or computer services via the Internet. • Provide a cost-effective solution from an outside supplier. (maintenance, upgrades and customization) • It can be a commercial entity, a not-for-profit organization or government related. All copyrights reserved by C.C. Cheung 2003.

48. ASP in HK Reference http://hk.dir.yahoo.com/Regional/Countries_and_Regions/Hong_Kong/Business_and_Economy/Companies/Electronic_Commerce/ All copyrights reserved by C.C. Cheung 2003.

49. Using ASP Benefits • Speed to market • ASP has the latest equipment, applications, ready to provide market access. • Operational freedom • The customer can focus on their core business. • Improved performance • ASP provides vast experience on different issues. • Financial flexibility • Reduced fixed cost and overall expenditures. • Reduced risk • Customers can test a new technology with minimal impact to their existing system. All copyrights reserved by C.C. Cheung 2003.

50. ASP Advantages All copyrights reserved by C.C. Cheung 2003.