E-commerce (electronic commerce) is the buying and selling of goods and services, or the transmission of funds or data, over an electronic network, primarily the internet.
E-Commerce or Electronics Commerce is a methodology of modern business, which addresses the need of business organizations, vendors and customers to reduce cost and improve the quality of goods and services while increasing the speed of delivery. Ecommerce refers to the paperless exchange of business information using the following ways: –
i. Electronic Data Interchange (EDI)
ii. Electronic Mail (e-mail)
iii. Electronic Bulletin Boards
iv. Electronic Fund Transfer (EFT)
v. Other Network-based technologies
Key Technologies
i. Electronic Data Interchange (EDI) − EDI is an inter-organizational exchange of business documents in a structured and machine process able format.
ii. Internet − Internet represents the World Wide Web or the network of networks connecting computers across the world.
iii. Intranet − Intranet represents a dedicated network of computers within a single organization.
iv. Extranet − Extranet represents a network where the outside business partners, suppliers, or customers can have a limited access to a portion of enterprise intranet/network.
v. Back-End Information System Integration − Back-end information systems are database management systems used to manage the business data.
E-Commerce provides the following features −
• Non-Cash Payment − E-Commerce enables the use of credit cards, debit cards, smart cards, electronic fund transfer via bank’s website, and other modes of electronics payment.
• 24×7 Service availability − E-commerce automates the business of enterprises and the way they provide services to their customers. It is available anytime, anywhere.
• Advertising / Marketing − E-commerce increases the reach of advertising of products and services of businesses. It helps in better marketing management of products/services.

• Improved Sales − Using e-commerce, orders for the products can be generated anytime, anywhere without any human intervention. It gives a big boost to existing sales volumes.
• Support − E-commerce provides various ways to provide pre-sales and post-sales assistance to provide better services to customers.
• Inventory Management − E-commerce automates inventory management. Reports get generated instantly when required. Product inventory management becomes very efficient and easy to maintain.
• Communication improvement − E-commerce provides ways for faster, efficient, reliable communication with customers and partners.

E-Commerce advantages can be broadly classified in three major categories −
• Advantages to Organizations
• Advantages to Consumers
• Advantages to Society
Advantages to Organizations
• Using e-commerce, organizations can expand their market to national and international markets with minimum capital investment. An organization can easily locate more customers, best suppliers, and suitable business partners across the globe.
• E-commerce helps organizations to reduce the cost to create process, distribute, retrieve and manage the paper-based information by digitizing the information.
• E-commerce improves the brand image of the company.
• E-commerce helps organization to provide better customer services.
• E-commerce helps to simplify the business processes and makes them faster and efficient.
• E-commerce reduces the paper work.
• E-commerce increases the productivity of organizations. It supports “pull” type supply management. In “pull” type supply management, a business process starts when a request comes from a customer and it uses just-in-time manufacturing way.

Advantages to Customers
• It provides 24×7 support. Customers can enquire about a product or service and place orders anytime, anywhere from any location.
• E-commerce application provides users with more options and quicker delivery of products.
• E-commerce application provides users with more options to compare and select the cheaper and better options.
• A customer can put review comments about a product and can see what others are buying, or see the review comments of other customers before making a final purchase.
• E-commerce provides options of virtual auctions.
• It provides readily available information. A customer can see the relevant detailed information within seconds, rather than waiting for days or weeks.
• E-Commerce increases the competition among organizations and as a result, organizations provides substantial discounts to customers.
Advantages to Society
• Customers need not travel to shop a product, thus less traffic on road and low air pollution.
• E-commerce helps in reducing the cost of products, so less affluent people can also afford the products.
• E-commerce has enabled rural areas to access services and products, which are otherwise not available to them.
• E-commerce helps the government to deliver public services such as healthcare, education, social services at a reduced cost and in an improved manner.


Technical Disadvantages

i. There can be shortage of system security, dependability or standards owing to poor implementation of e-Commerce.

ii. Software development industry is still changing and keeps changing rapidly. iii. In many countries, network bandwidth might cause an issue as there is inadequate telecommunication bandwidth available.

iv. Special types of web server or other software might be requisite by the vendor setting the e-commerce setting apart from network servers.

v. Sometimes, it becomes difficult to integrate E-Commerce software or website with existing application or database.

vi. There could be software/hardware compatibility issue as some E-Commerce software may be incompatible with some operating system or any other factor.

Non-technical Disadvantages

i. Initial cost: The cost of creating/building E-Commerce application in-house may be very high. There could be deferral in launching the E-Commerce application due to mistakes, lack of experience.

ii. User resistance: User may not trust the site being unknown faceless seller. Such mistrust makes it problematic to make user shift from physical stores to online/virtual stores.

iii. Lack of touch or feel of products during online shopping. iv. Security/ Privacy: Difficult to guarantee security or privacy online transactions. v. E-Commerce applications are still evolving and changing rapidly.

vi. Internet access is still not cheaper and inconvenient to use for many potential customers liking one living in remote areas.

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