Module 8: E-Commerce
Learning Objectives
After studying this module, you should be able to:
1. Define e-commerce and its advantages, disadvantages, and business models.
2. Explain the major categories of e-commerce.
3. Describe the five major activities of the business-to-consumer (B2C) e-commerce cycle.
4. Summarize the four major models of business-to-business (B2B) e-commerce.
5. Describe mobile-based and voice-based e-commerce.
6. Explain supporting technologies for e-commerce, including electronic payment systems, digital
marketing, mobile marketing, and search engine optimization (SEO).
7. Discuss social commerce and its growing popularity.
8. Explain hypersocial organizations and their increasing adoption.
9. Understand social media information systems (SMIS).
Section 8-1: Defining E-Commerce
Key Concepts
• E-commerce vs. E-business :
• E-commerce : Buying and selling goods and services over the Internet.
• E-business : Encompasses all activities a company performs using computers and
communication technologies, including e-commerce.
• Advantages of E-commerce :
• Creates better relationships with suppliers, customers, and business partners.
• Enables "price transparency," where all market participants trade at the same price.
• Operates around the clock and globally.
• Gathers more information about potential customers.
• Improves customer service and increases flexibility in shopping.
• Increases the number of customers and opportunities for collaboration.
• Reduces administrative and transaction costs.
• Disadvantages of E-commerce :
• Bandwidth capacity issues in certain regions.
• Security and privacy concerns.
• Accessibility issues (not everyone is connected to the Internet yet).
• Resistance to adoption by some individuals or businesses.
Section 8-2: Major Categories of E-Commerce
Categories :
1. Consumer-to-Consumer (C2C) : Transactions between users, such as online auctions (e.g.,
eBay).
2. Consumer-to-Business (C2B) : Consumers sell products or services to businesses (e.g.,
creating surveys for companies).
3. Consumer-to-Government (C2G) : Consumers interact with government agencies (e.g., paying
taxes online).
4. Business-to-Consumer (B2C) : Businesses sell directly to consumers (e.g., Amazon, Walmart).
5. Business-to-Business (B2B) : Electronic transactions between businesses (e.g., supply chain
management).
6. Business-to-Government (B2G) : Businesses provide goods and services to government entities.
7. Government-to-Citizen (G2C) : Government services provided to citizens (e.g., tax filing, voter
registration).
8. Government-to-Business (G2B) : Government sales of assets or licenses to businesses.
9. Government-to-Government (G2G) : Disaster assistance and crisis response among
government agencies.
Section 8-3: B2C E-Commerce Cycle
Five Major Activities :
1. Information Sharing : Companies share product information via websites, catalogs, emails, ads,
video conferencing, etc.
2. Ordering : Customers place orders through electronic forms or emails.
3. Payment : Payment methods include credit cards, e-checks, and digital wallets.
4. Fulfillment : Delivery of physical or digital products. Physical delivery involves logistics, while
digital delivery often uses downloads with digital signatures.
5. Service and Support : Includes email confirmations, product updates, chatbots, help desks, and
secure transactions.
Section 8-4: B2B E-Commerce Models
Four Major Models :
1. Seller-Side Marketplace :
• Sellers create a common marketplace for buyers.
• Example: E-procurement systems that streamline purchasing processes.
• Benefits: Reduces costs, improves supplier relationships, and simplifies procurement.
2. Buyer-Side Marketplace :
• Buyers invite sellers to bid on announced products.
• Used by large corporations or consortia.
• Benefits: Efficient procurement, lower administrative costs, and uniform pricing.
3. Third-Party Exchange Marketplace :
• Controlled by a third party, not buyers or sellers.
• Generates revenue from fees charged for matching buyers and sellers.
• Examples: Vertical markets (specific industries) and horizontal markets (specific functions
across industries).
4. Trading Partner Agreements :
• Automates negotiation processes and enforces contracts.
• Facilitates electronic transactions like bids, contracts, and purchase orders.
Section 8-5: Mobile-Based and Voice-Based E-Commerce
Mobile Commerce (M-Commerce) :
• Uses handheld devices like smartphones to conduct business transactions.
• Supporting technologies include Wireless Application Protocol (WAP), WWANs, 4G/5G networks,
Wi-Fi, Bluetooth, and RFID.
Voice-Based E-Commerce :
• Relies on voice recognition and text-to-speech technologies.
• Platforms like Amazon Alexa, Apple Siri, and Google Assistant allow users to order products using
voice commands.
• Security features include call recognition, voice pattern matching, and fixed shipping addresses.
Section 8-6: Supporting Technologies for E-Commerce
1. Electronic Payment Systems :
• Types :
• Credit/debit cards
• Smart cards: Embedded microprocessor chips store financial data.
• E-cash: Digital alternative to physical currency.
• E-checks: Electronic versions of paper checks.
• Digital wallets: Store personal and financial information securely (e.g., PayPal, Venmo).
2. Digital Marketing :
• Terms :
• Ad impression: A single user viewing an ad.
• Banner ads: Small animated ads on frequently visited websites.
• Click-through rate (CTR): Ratio of clicks to impressions.
• Cookies: Track user preferences and browsing habits.
• Cost per click (CPC): Advertiser pays for each click on an ad.
• Cost per thousand (CPM): Pricing based on 1,000 ad impressions.
3. Mobile Marketing :
• Strategies:
• App-based marketing: Use apps for promotions (e.g., Starbucks app).
• In-game mobile marketing: Ads within mobile games.
• Location-based marketing: Target users based on their geographic location.
• QR codes: Scannable codes linking to marketing content.
• Mobile search ads: Search engine ads optimized for mobile devices.
4. Search Engine Optimization (SEO) :
• Aims to improve website visibility in search results.
• Techniques:
• Use relevant keywords consistently.
• Optimize page titles and meta tags.
• Build inbound links and update content regularly.
Section 8-7: Social Commerce
Definition :
• Social commerce is a subset of e-commerce influenced by social networks and enhanced by
smartphones.
• Platforms like Facebook, Instagram, Twitter, Pinterest, and TikTok influence purchasing
decisions.
Categories :
1. Social Networking Sites : Direct links for shopping (e.g., Facebook Shop tab, Instagram
Checkout).
2. Group Buying Platforms : Offer discounts if a minimum number of buyers agree to purchase
(e.g., Groupon, LivingSocial).
3. Peer-to-Peer E-Commerce Platforms : Community-based marketplaces (e.g., Etsy, Amazon
Marketplace).
4. Recommendation Websites : Aggregate customer opinions and recommend products (e.g.,
TripAdvisor, Yelp).
5. Participatory E-Commerce : Users participate in the production process (e.g., Kickstarter,
CutOnYourBias).
6. Social Advice : Provide shopping advice through chats and forums (e.g., GoTryItOn, eBags).
7. User-Curated Shopping : Allow users to create and share product lists (e.g., Lyst, Farfetch).
Section 8-8: Hypersocial Organizations
Key Concepts :
• Hypersocial organizations leverage social media to connect with customers and enhance sales.
• Four Pillars of Hypersociality:
1. Tribe vs. Market Segment : Focus on communities ("tribes") rather than individual
consumer traits.
2. Human-Centric vs. Company-Centric : Prioritize providing value to customers,
employees, and partners.
3. Information Channels vs. Knowledge Channels : Share knowledge and build trust
through social media.
4. Social Messiness vs. Process Hierarchy : Embrace less rigid interactions to foster
human-level engagement.
Examples :
• Spotify: Uses social media to personalize music recommendations and engage users.
• Airbnb: Builds trust through peer reviews and shared experiences.
• Glamour Magazine: Engages readers through social platforms and interactive content.
Section 8-9: Social Media Information Systems (SMIS)
Components :
• Hardware, Software, People, Procedures : Like traditional information systems but focused on
content sharing.
• Additional Components:
• App Providers : Platforms like Facebook, Twitter, LinkedIn, and Snapchat.
• User Communities : People who use the apps.
• Sponsors : Businesses that advertise on these platforms.
Benefits :
• Provides insights into customer demographics, preferences, and behaviors.
• Increases brand awareness and loyalty.
• Facilitates targeted advertising and real-time customer engagement.
• Helps monitor competitors and make strategic decisions.
Case Studies
Case Study 8-1: Widespread Applications of Mobile Ads
• PlaceIQ : Collects data from mobile devices to track customer movements and optimize ad
campaigns.
• Applications :
• Retailers send coupons when customers enter specific aisles.
• Sports teams customize fan experiences at events.
• Privacy Concerns : Potential tracking of users without consent.
Case Study 8-2: Bridging the Gap Between E-Commerce and Traditional Commerce
• Tools like iBeacon (Apple) and Gimbal (Qualcomm) track customers inside stores.
• Benefits :
• Merges online and offline shopping experiences ("clicks to bricks").
• Sends personalized notifications and offers.
• Concerns :
• Privacy risks due to tracking.
• Ethical considerations in data usage.
Key Terms
• Advertising Model : Extends traditional advertising to digital platforms.
• Brokerage Model : Brings buyers and sellers together on the Web.
• Click-and-Brick E-Commerce : Combines traditional and online commerce.
• Conversational Commerce : Uses tools like chatbots and voice assistants for seamless
customer interaction.
• Cross-Channel : Allows customers to use multiple channels for purchasing.
• Digital Wallet : Stores financial and personal information for secure transactions.
• E-Cash : Digital equivalent of physical cash.
• E-Check : Electronic version of a paper check.
• E-Government (E-Gov) : Government services delivered electronically.
• Hypersocial Organizations : Companies leveraging social media to enhance customer
relationships.
• Micropayments : Small transactions facilitated digitally.
• Omnichannel : Integrates all channels (online, offline, mobile) for a seamless customer
experience.
• Search Engine Optimization (SEO) : Improves website ranking in search results.
• Social Commerce (S-Commerce) : Subset of e-commerce influenced by social networks.
• Value Chain : Series of activities adding value to products or services.
Summary
This module explores the fundamentals of e-commerce, including its definitions, categories, and
supporting technologies. It highlights the importance of mobile and voice-based commerce, social
commerce, and hypersocial organizations in shaping modern business practices. Additionally, it
discusses how social media information systems (SMIS) can be used to gain valuable insights into
customer behavior and drive business growth.
By understanding these concepts, businesses can effectively integrate e-commerce strategies to
enhance customer engagement, reduce costs, and increase profitability.
Central Node: E-Commerce
Branch 1: Definition and Concepts
• Sub Branch 1.1: E-commerce vs E-business
• Buying and selling goods/services over the Internet
• Encompasses all activities using computers and communication technologies
• Sub Branch 1.2: Advantages
• Better relationships with suppliers, customers, and partners
• Price transparency
• Global operations
• Increased customer involvement and service
• Sub Branch 1.3: Disadvantages
• Bandwidth capacity issues
• Security and privacy concerns
• Accessibility limitations
Branch 2: Major Categories
• Sub Branch 2.1: B2C (Business-to-Consumer)
• Direct sales to consumers
• Examples: Amazon, Barnesandnoble.com
• Sub Branch 2.2: B2B (Business-to-Business)
• Electronic transactions between businesses
• Models: Seller-side, Buyer-side, Third-party exchange, Trading partner agreements
• Sub Branch 2.3: C2C (Consumer-to-Consumer)
• Transactions between users via the Internet
• Example: eBay, Facebook Marketplace
• Sub Branch 2.4: C2B (Consumer-to-Business)
• Consumers selling products or services to businesses
Branch 3: Business-to-Consumer Cycle
• Sub Branch 3.1: Information Sharing
• Company websites, online catalogs, emails
• Sub Branch 3.2: Ordering
• Electronic forms, email orders
• Sub Branch 3.3: Payment
• Credit cards, e-checks, digital wallets
• Sub Branch 3.4: Fulfillment
• Delivery of physical/digital products
• Sub Branch 3.5: Service and Support
• Customer service, product updates, chatbots
Branch 4: Supporting Technologies
• Sub Branch 4.1: Electronic Payment Systems
• Credit/debit cards, e-cash, e-checks, digital wallets
• Sub Branch 4.2: Digital Marketing
• Web marketing, social media, SMS, text ads
• Sub Branch 4.3: Mobile Marketing
• App-based, in-game, location-based strategies
• Sub Branch 4.4: Search Engine Optimization (SEO)
• Improving website traffic and rankings
Branch 5: Advanced Concepts
• Sub Branch 5.1: Social Commerce
• Influenced by social networks and online media
• Examples: Pinterest Buyable Pins, Instagram Checkout
• Sub Branch 5.2: Hypersocial Organizations
• Leveraging social media for business processes
• Pillars: Tribe vs market segment, human-centric vs company-centric
• Sub Branch 5.3: Social Media Information Systems (SMIS)
• Components: Apps, user communities, sponsors
INF1505 – Module 8
What is e-commerce?
E-commerce is buying and selling goods and
services over the Internet.
E-business encompasses all activities a company
Define e-business.
performs in buying and selling products and
services using computers and communication
technologies.
What is the value chain? A value chain is a series of activities designed to
meet business needs by adding value (or cost) in
each phase of the process.
1. Creates better relationships with
suppliers, customers, and business
Name four advantages of e-commerce. partners.
2. Enables price transparency.
3. Operates around the clock and globally.
4. Improves customer service.
1. Security and privacy issues.
What are two disadvantages of e-commerce?
2. Accessibility challenges (not everyone is
connected to the web).
What are the major categories of e-commerce?
C2C, C2B, C2G, B2C, B2B, B2G, G2C, G2B, G2G.
Describe the merchant model. The merchant model transfers the old retail
model to e-commerce by using the Internet to sell
goods and services.
Explain the brokerage model. The brokerage model brings sellers and buyers
together on the Web and enables commissions
on transactions.
What is the advertising model? The advertising model generates revenue by
providing free content and charging companies
for placing ads or leasing spots on websites.
What is the subscription model? The subscription model sells digital products or
services to customers, such as online
subscriptions or software updates.
1. Information sharing.
List the five major activities in the B2C e- 2. Ordering.
commerce cycle. 3. Payment.
4. Fulfillment.
5. Service and support.
Multichannel e-commerce involves using multiple
What is multichannel e-commerce?
channels (e.g., physical stores, websites, social
media) to reach customers, but these channels
are not integrated.
Define cross-channel e-commerce. Cross-channel e-commerce allows customers to
use multiple channels (e.g., order online and pick
up in-store) seamlessly.
Omnichannel e-commerce integrates physical
What is omnichannel e-commerce?
stores, the Internet, and mobile technologies to
create a seamless experience across all
channels.
1. Seller-side marketplace.
What are the four major models of B2B e-
2. Buyer-side marketplace.
commerce?
3. Third-party exchange marketplace.
4. Trading partner agreements.
M-commerce is the use of handheld devices,
What is m-commerce?
such as smartphones, to conduct business
transactions.
What is voice-based e-commerce? Voice-based e-commerce relies on voice
recognition and text-to-speech technologies to
facilitate transactions.
What is search engine optimization (SEO)? SEO is a method for improving the volume or
quality of traffic to a website by increasing its
ranking in search results.
Define social commerce. Social commerce is a subset of e-commerce
influenced by social networks and other online
media.
What are hypersocial organizations? Hypersocial organizations leverage social media
to connect with customers and turn their
businesses into social processes.
1. Tribe vs. market segment.
2. Human-centric vs. company-centric.
What are the four pillars of hypersociality?
3. Information channels vs. knowledge
channels.
4. Social messiness vs. process hierarchy.
Multiple-Choice Questions (20)
1. What is e-commerce?
a) Buying and selling goods and services over the Internet
b) Only buying goods online
c) Only selling services online
d) None of the above
2. Which model transfers the old retail model to the e-commerce world by using the medium of
the Internet?
a) Merchant model
b) Brokerage model
c) Advertising model
d) Subscription model
3. What is one advantage of e-commerce?
a) Increasing the number of customers
b) Reducing administrative and transaction costs
c) Both A and B
d) None of the above
4. What does C2C stand for?
a) Consumer-to-consumer
b) Company-to-company
c) Consumer-to-business
d) Business-to-consumer
5. Which of the following is NOT a major category of e-commerce?
a) B2B
b) C2G
c) G2E
d) M2M
6. Which activity is NOT part of the business-to-consumer (B2C) e-commerce cycle?
a) Information sharing
b) Manufacturing
c) Payment
d) Service and support
7. Which model of B2B e-commerce involves sellers coming together to create a common
marketplace?
a) Seller-side marketplace
b) Buyer-side marketplace
c) Third-party exchange marketplace
d) Trading partner agreements
8. What is m-commerce?
a) Mobile commerce
b) Merchant commerce
c) Marketing commerce
d) Management commerce
9. Which payment method uses an embedded microprocessor chip to store financial
information?
a) Credit card
b) Debit card
c) Smart card
d) E-check
10. What is SEO?
a) Search engine optimization
b) Social enterprise organization
c) Systematic electronic operation
d) Secure electronic order
11. Which of the following is NOT a form of digital marketing?
a) SMS
b) Email
c) Print ads
d) Video marketing
12. What is social commerce?
a) A subset of e-commerce influenced by social networks
b) Traditional commerce enhanced by social media
c) A type of mobile commerce
d) A government initiative
13. What are hypersocial organizations?
a) Companies that leverage social media to connect with customers
b) Organizations that focus solely on physical stores
c) Businesses that avoid online interactions
d) None of the above
14. Which of the following is NOT a pillar of hypersociality?
a) Tribe vs market segment
b) Human-centric vs company-centric
c) Process hierarchy vs social messiness
d) Information channels vs knowledge channels
15. What is an SMIS?
a) Social media information system
b) Social marketing integration strategy
c) Secure management infrastructure system
d) Strategic management implementation solution
16. Which platform allows users to share playlists and follow friends’ activities?
a) Instagram
b) Spotify
c) LinkedIn
d) Twitter
17. What is Alexa used for in Amazon's ecosystem?
a) Ordering products via voice commands
b) Managing social media profiles
c) Creating physical storefronts
d) Designing advertisements
18. Which technology enables Apple’s iBeacon?
a) Wi-Fi
b) Bluetooth
c) NFC
d) GPS
19. What is showrooming?
a) Consumers buy online after inspecting in-store
b) Consumers inspect in-store after seeing online
c) Consumers only shop online
d) None of the above
20. Which of the following is NOT a challenge of mobile payment systems?
a) Security concerns
b) International transactions
c) Improved user adoption
d) Multicurrency issues
True or False Questions (20)
1. E-commerce encompasses all activities involving computers and communication technologies.
True / False
2. The value chain concept was introduced by Michael Porter.
True / False
3. Multichannel strategies allow customers to choose one channel and stick to it.
True / False
4. Omnichannel strategies aim to integrate physical stores, the Internet, and mobile technologies.
True / False
5. E-procurement reduces costs and improves relationships between suppliers and buyers.
True / False
6. Social commerce is a subset of traditional commerce.
True / False
7. Voice-based e-commerce relies on voice recognition and text-to-speech technologies.
True / False
8. Digital wallets can store personal and financial information.
True / False
9. Micropayments involve very small amounts of money.
True / False
10. Click-and-brick refers to businesses that combine physical stores with online presence.
True / False
11. Search engine optimization aims to increase a website's ranking on search engines naturally.
True / False
12. Banner ads are large images placed on frequently visited websites.
True / False
13. Conversational commerce enables communication throughout the buying process.
True / False
14. Hypersocial organizations prioritize human-centric approaches over company-centric ones.
True / False
15. SMIS includes hardware, software, people, and procedures.
True / False
16. Mobile commerce is growing faster than traditional e-commerce.
True / False
17. Showrooming benefits brick-and-mortar stores more than online stores.
True / False
18. Third-party exchange marketplaces generate revenue from fees charged for matching buyers and
sellers.
True / False
19. E-government applications include tax filing and disaster assistance.
True / False
20. PlaceIQ collects data to track potential customers' movements between retail locations.
True / False
Fill in the Missing Word Questions (20)
1. E-commerce builds on traditional commerce by adding the flexibility that ________ offer.
2. The ________ model brings sellers and buyers together on the Web and enables commissions on
transactions.
3. A ________ is an example of a consumer-to-business (C2B) transaction.
4. In the ________ marketplace model, buyers open an electronic marketplace and invite sellers to
bid.
5. ________ commerce relies on voice recognition and text-to-speech technologies.
6. An ________ is a secure and convenient alternative to bills and coins.
7. ________ are transactions involving very small amounts of money.
8. Digital marketing includes ________, social media, and video marketing.
9. Push technology sends information to users based on their ________ inquiries or interests.
10. ________ is a method for improving the volume or quality of traffic to a website.
11. Social commerce is influenced by ________ and other online media.
12. Hypersocial organizations leverage the power of ________ communities.
13. A ________ is a person who creates features and functions for a social media app.
14. User communities consist of all the people who use any of the social media ________.
15. Sponsors pay money to social media sites to advertise their ________.
16. Amazon's Alexa allows users to order products directly through their ________.
17. The four pillars of hypersociality include tribe vs ________.
18. A ________ is a series of activities designed to meet business needs by adding value in each
phase.
19. E-procurement streamlines the traditional ________ process.
20. ________ allows customers to seamlessly share tracks or playlists on social media.
Answers
Multiple-Choice:
1. a
2. a
3. c
4. a
5. d
6. b
7. a
8. a
9. c
10. a
11. c
12. a
13. a
14. c
15. a
16. b
17. a
18. b
19. a
20. c
True or False:
1. False
2. True
3. True
4. True
5. True
6. False
7. True
8. True
9. True
10. True
11. True
12. False
13. True
14. True
15. True
16. True
17. False
18. True
19. True
20. True
Fill in the Missing Word:
1. networks
2. brokerage
3. survey
4. buyer-side
5. voice-based
6. e-cash
7. micropayments
8. email
9. previous
10. SEO
11. social networks
12. online
13. developer
14. apps
15. products
16. devices
17. market segment
18. value chain
19. procurement
20. Spotify
