Electronic Commerce
CSC1720 – Introduction to Internet
Essential Materials
Outline
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Introduction
e-Business models
How to
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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)
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Questions?
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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?
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Introduction
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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?
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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)
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The importance
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Terminology
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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).
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e-Business solutions
Customers
ERP, CRM, Database
Internet / WWW
Mobile Users
Web EDI
Intranet
Internal Users
Suppliers, public
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e-Business Models
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Storefront model
Auction model
Portal Model
Dynamic Pricing Models
B2B Exchanges
B2B Service Providers
e-Learning
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Storefront Model
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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
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Health and beauty products
– www.ticketmaster.com
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Sell tickets
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Storefront Model
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Allow companies to conduct business 24-by7 (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
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Shopping Cart Example
Shopping cart
Go shopping
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Shopping Cart Sotware
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http://www.poorrichard.com/freeinfo/shop.htm
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Storefront Model
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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
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Shopping Mall Example
Different
shops
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Auction Model
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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/
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Reverse Auction model
– Allow buyer to set the price, www.epurchasingagent.com
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http://hk.auctions.yahoo.com/
Auction Model Example
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Portal Model
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Allow visitors to find everything within
the website.
– Horizontal Portal
Wide-ranged of topics
 E.g. www.google.com, www.yahoo.com
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– Vertical Portal
Offer specific information on a single area of
interest.
 E.g. www.webmd.com (medical information)
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Dynamic Pricing Model
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Name-your-price Business Model
– Customers choose their price for the products or
services (www.priceline.com).
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Comparison Pricing Model
– Customers poll some merchants and find the
lowest prices (www.bottomdollar.com)
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Demand-Sensitive Pricing Model
– Enables customers to get better services and
prices. (www.mobshop.com)
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Bartering Model
– Exchange items (www.ubarter.com)
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Pricing model example
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B2B Exchanges
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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:
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www.ework.com (Exchange employee)
www.itoi.com (Industry to Industry)
www.biz2biz.com (Business to Business)
www.icgcommerce.com, www.tradeaccess.com
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B2B examples
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B2B Service Providers
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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
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Chat online?
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Why? To solve your E-business
problem via the Internet.
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Loan Online
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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
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Loan direct – www.loansdirect.com
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Recruitment on the Web
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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
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Online News Services
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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)
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Recruitment / News
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Online Travel Services
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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
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Online Entertainment
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Multimedia rich websites provide Audio
and Video, popular music and videos
are available online for free.
Internet Movie Database
– www.imdb.com
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www.icast.com
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e-Learning
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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
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M-Commerce
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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.
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MasterCard & M-Commerce
Reference : demo
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Break Time – 15 minutes
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Build an e-Commerce site
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Register a Domain name
– Search for domain names (InterNIC)
– What is the criteria of selecting a good name?
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Find a Web Host
– Select the suitable ISP
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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.
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Web Hosting
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It is a very important step in eCommerce.
– Good uptime?
– Good technical support?
– Fast connection to the Net?
– Staffs are knowledgeable about eCommerce?
– Compatibility with other e-Commerce
providers?
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Attract and keep customers
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e-Business Advertising
– Banner Advertising
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Recently, losing their effectiveness
– Buying and Selling advertising
You can become a host, or an advertiser
 www.valueclick.com
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– Webcasting and Interactive Advertising
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Use streaming media to broadcast
information on the web.
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Enterprise Resources
Planning (ERP)
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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.
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Integrated with database (such as Oracle)
to provide other features, business process
analysis, employee training, …
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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.
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Customer Relationship
Management (CRM)
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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
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Electronic Data
Interchange (EDI)
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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.
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http://www.disa.org/
Electronic Data
Interchange (EDI)
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Get Paid
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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
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www.ecash.com
– More complex: B2B Transactions.
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Manage the E-commerce
business
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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.
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Secure the site
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Customers fear for their online privacy.
Make sure all transactions on your ecommerce 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!
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Online shopping risks
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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.
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HK Government Support
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http://www.info.gov.hk/digital21/chi/ecommerce/ecom_supp.html
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Application Service
Provider
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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-forprofit organization or government related.
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ASP in HK
CSC1720 – Introduction to Internet
Reference
http://hk.dir.yahoo.com/Regional/Countries_and_Regions/Hong_
Kong/Business_and_Economy/Companies/Electronic_Commerce/
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Using ASP Benefits
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Speed to market
– ASP has the latest equipment, applications, ready to
provide market access.
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Operational freedom
– The customer can focus on their core business.
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Improved performance
– ASP provides vast experience on different issues.
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Financial flexibility
– Reduced fixed cost and overall expenditures.
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Reduced risk
– Customers can test a new technology with minimal impact
to their existing system.
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ASP Advantages
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What kind of application
can be delivered?
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Citrix, GraphOn and SCO
– The applications run on a central server
managed by the ASP, but not the
applications on the end-user desktop or
company’s server.
– Portal means a gateway (starting point),
for a WWW site, it is the starting site for
user to browse.
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Portal Software
Video show
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Choosing ASP
Shared
Server
Shared Server with
Application Isolation
Systems
Server Farm (Each
company with its
own server)
Customer Cost
Low
Low
High
Initial
Customer
Investment
Low
Low
High
Maintainance
cost
Low
Moderate
Moderate
Server
Architecture
Compl
ex
Moderate
Simple
Security Risk
High
Low
Moderate
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Summary
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e-Commerce is defined as a company
has an online presence.
We have discussed different types of
e-Commerce models.
Discuss the important issues on
developing e-Business.
ASP provides very good supports to
the e-Commerce development.
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Reference: HK Gov.
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References
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www.ecommercetimes.com
ecommerce.internet.com
Microsoft TechNet
The End.
Thank you for your patience!
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