What is e-commerce?

2011-05-21T08:31:00.000-07:00

What is e-commerce?

Electronic commerce or e-commerce refers to a wide range of online business activities for products and services.
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It also pertains to “any form of business transaction in
which the parties interact electronically rather than by physical exchanges or direct
physical contact.”
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E-commerce is usually associated with buying and selling over the Internet, or conducting any transaction involving the transfer of ownership or rights to use goods or
services through a computer-mediated network.
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Though popular, this definition is
not comprehensive enough to capture recent developments in this new and revolutionary business phenomenon. A more complete definition is: E-commerce is the
use of electronic communications and digital information processing technology in
business transactions to create, transform, and redefine relationships for value creation between or among organizations, and between organizations and individuals.
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International Data Corp (IDC) estimates the value of global e-commerce in 2000 at
US$350.38 billion. This is projected to climb to as high as US$3.14 trillion by 2004.
IDC also predicts an increase in Asia’s percentage share in worldwide e-commerce
revenue from 5% in 2000 to 10% in 2004

Asia-Pacific e-commerce revenues are projected to increase from $76.8 billion at
year-end of 2001 to $338.5 billion by the end of 2004.

Is e-commerce the same as e-business?

While some use e-commerce and e-business interchangeably, they are distinct concepts. In e-commerce, information and communications technology (ICT) is used in
inter-business or inter-organizational transactions (transactions between and among
firms/organizations) and in business-to-consumer transactions (transactions between
firms/organizations and individuals).
In e-business, on the other hand, ICT is used to enhance one’s business. It includes any process that a business organization (either a for-profit, governmental
or non-profit entity) conducts over a computer-mediated network. A more comprehensive definition of e-business is: “The transformation of an organization’s processes to
deliver additional customer value through the application of technologies, philosophies and computing paradigm of the new economy.”
Three primary processes are enhanced in e-business:
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1. Production processes, which include procurement, ordering and replenishment of stocks; processing of payments; electronic links with suppliers; and
production control processes, among others;
2. Customer-focused processes, which include promotional and marketing efforts, selling over the Internet, processing of customers’ purchase orders and
payments, and customer support, among others; and
3. Internal management processes, which include employee services, training, internal information-sharing, video-conferencing, and recruiting. Electronic
applications enhance information flow between production and sales forces
to improve sales force productivity. Workgroup communications and electronic publishing of internal business information are likewise made more
efficient.