A New Way of Shop and Pay

The progress in technological innovations has totally changed the way business is done in the industry. Traditionally, shopping or buying has been a personalized behavior of the consumer. From the days of trading and bartering till recently, the buying and selling activities were typically performed within the limitations of time and space boundaries. However, the progress in infor­mation and communication technologies has created new waves and redefined business frontiers. The development of the Internet and World Wide Web led to the birth of electronic commerce (e-commerce) or commercial transaction over the electronic media. In short, e-commerce is the process of transacting business via computer using the electronic network.

The development of the Internet has shrunk the world into a global village. Hence, business transactions (Figure 13.1) can be carried out at and from any corner of the world on a real-time basis. The scope of e-commerce application is very wide. It not only covers the buying and selling of goods electronically, but also various processes internal to the organization. E-commerce involves using network and communication technology for all internal and external activities in the value delivery chain of a business process.

E-commerce has changed the way products and services are sold, redefining the relationship between the buyer and the seller. There are three general classes of e-commerce applications:

Business-to-Business (B2B) Commerce. This involves the application of e-commerce in busi­ness transactions between organizations. The management areas covered include material procure­ment, manufacturing, distribution, inventory and payment. The chief advantage of e-commerce application here is the speed with which business activities can be performed in real time.

Business-to-Customer (B2C) Commerce. B2C application covers the interactions between an organization and the end consumer. The organization will publish the products electronically. The consumers will then place their orders through the electronic media. After the material is ordered, it is physically delivered to the customer, and the company will secure the money electronically as advance or on delivery as per the terms of the business. The e-commerce business process covers the interactions between the organization and the consumer, through the buying and selling transaction and the money transfer. Transactions, of products and services for individual consump­tion are covered in B2C commerce.

Intra-Business Commerce. This involves the application of e-commerce for organizing resources and coordination of activities within the organization to deliver superior value to the customer. The major advantage of intra-business commerce is that it facilitates real-time communication within the working group. The major application areas within the business include product development, HR productivity and performance monitoring. Information on such application areas is collected, processed and disseminated within the working group.

The two main enablers of e-commerce are the Internet and Electronic Data Interchange (EDI) technologies. The World Wide Web, a recent addition to the Internet, has given a real boost to the widespread use of e-commerce in business and further led to bridging the gap between buyer and seller, thus making the world a global village in the real sense.

Source: Sople V.V (2013), Logistics Management, Pearson Education India; Third edition.