3. Objectives
Introduction to The e-Business Model
E-commerce: definition, benefits, and limitations.
Describe and discuss the content and framework
3
4. Digital business statistics – Pakistan, 2024
E-commerce: The Total e-commerce volume in
Pakistan is projected to be US $ 7.7 billion in 2024.
(PCMI)
Mobile app usage: AI chatbot apps saw an increase
of over 112% in downloads year-over-year in 2024.
(Statista)
ICT exports: ICT export remittances increased to US $
2.283 billion during the first half of 2024, compared
to US $ 1.944 billion in the same period in
2023. (MOF)
5. Cont…
Mobile connections: In January 2025, mobile
connections in Pakistan were 75.2% of the
total population. (Data Reportal)
Online shopping: 91% of consumers in
Pakistan shop online using smartphones.
(PCMI)
Online purchase ticket: The average purchase
ticket (Average Order Value (AOV)) in
Pakistan is US $122. (PCMI)
8. A Definition
Electronic Commerce (EC) is where business
transactions occur via telecommunications
networks, especially the Internet.
Electronic commerce describes the buying and selling of
products, services, and information via computer networks
including the Internet.
The infrastructure for EC is a networked computing
environment in business, home, and government.
8
10. the relationship between the concepts of e-
commerce and e-business.
E-commerce is generally understood to be a sub-set of e-
business. E-commerce refers to financial and non-financial
transactions between organizations. These transactions are often
considered in the context of a supplier organization distributing
and selling its product to consumers.
E-business includes transactions from a buy-side and sell-side e-
commerce perspective and also the use of communications
technology to improve internal process efficiencies.
11. the relationship between the concepts of e-commerce and e-
business (cont).
Sell-side : Sell-side e-commerce concerns transactions related to the sale and distribution of
goods such as a supermarket selling direct to its customers
buy-side: Buy-side e-commerce refers to electronic transactions concerned with the purchase
and inbound logistics of goods such as a supermarket coordinating purchases from its suppliers
internal use of electronic communications to support business
processes.
E-business is generally understood to include all three elements. E-
commerce is commonly used to refer to either the first one or the
first two of these elements, but less commonly the third.
E-business is broader in scope than e-commerce.
14. Examples
14
Sites Description
Amazon.com Provides access to several million books electronically. It
also sells music CDs, electronics, software, toys, video
games, prescription drugs, and much more.
Drugstore.com Refills and sells new drugs and vitamins and other health
products online.
Apple Computer
(apple.com).
sells computers online
Peapod.com sells groceries over the Web
15. E-Commerce Framework
Five support areas for applications
People
Public policy
Marketing and advertising
Support services
Business partnerships
16. The three dimensions of e-business
The Product (Service) Sold – What is being sold?
Physical – Tangible goods (e.g., clothes, electronics, furniture).
Digital – Intangible goods (e.g., e-books, software, online courses, streaming services).
The Process – How is the transaction conducted?
Physical – Traditional, manual processes (e.g., in-store purchases, paper-based orders).
Digital – Automated, electronic processes (e.g., online payments, digital order processing).
The Delivery Agent (or Intermediary) – Who/what is involved in delivering
the product?
Physical – Traditional delivery (e.g., courier services for physical goods).
Digital – Electronic delivery (e.g., instant downloads, cloud-based services, streaming).
This framework helps classify different business models. For example:
Amazon (Physical/Digital/Physical) – Sells physical & digital products, processes orders digitally,
and delivers physical goods via logistics.
Netflix (Digital/Digital/Digital) – Sells digital streaming services, processes transactions online,
and delivers content digitally.
16
17. OTHER CONCEPTS
1. Traditional Commerce (Brick & Mortar)
Product: Physical
Process: Physical
Delivery: Physical
✅ Example: A local retail store where customers visit in person, buy products physically, and take them home.
2. Pure E-Commerce (Virtual/Online Business)
Product: Digital
Process: Digital
Delivery: Digital
✅ Example: Netflix (Streaming services), Spotify (Music streaming), or e-books (Amazon Kindle).
3. Partial E-Commerce (Click & Mortar)
A mix of digital and physical elements in any of the three dimensions
✅ Examples:
Amazon (Physical/Digital/Physical) → Sells both physical & digital goods, processes transactions online, and
delivers via courier.
UberEats (Digital/Digital/Physical) → Food ordering via an app, payments online, but physical delivery by
drivers.
Best Buy (Physical/Digital/Physical) → Customers can order online and pick up in-store.
17
18. The Dimensions of Electronic Business
18
Physical
agent
Digital
agent
Digital
Product
Physical
Product Physical process
Digital process
Virtual process
Virtual delivery agent
Virtual
product
Figure 1.4:The Dimensions of Electronic Commerce
20. Cont…
This is a 3D classification model that categorizes different types of businesses based on three
dimensions:
Product (Service) Sold – Whether the product is physical or virtual (digital).
Process – Whether the business transactions are physical or virtual (digital).
Delivery Agent – Whether the method of delivering the product/service is physical or virtual
(digital).
Understanding the Axes
The X-axis represents the delivery agent (physical ↔ virtual).
The Y-axis represents the product/service (physical ↔ virtual).
The Z-axis represents the process (physical ↔ virtual).
Interpretation of the Marked Points
The three labels in red represent cases where all three dimensions are virtual:
Virtual Product: The business offers digital products (e.g., e-books, streaming services).
Virtual Process: The entire transaction process is digital (e.g., online payments, automated
processing).
Virtual Delivery Agent: The product is delivered digitally (e.g., downloads, cloud access,
streaming).
This represents Pure E-Commerce, where everything is conducted online. Examples include Netflix, Spotify, and Kindle e-
books.
20
21. Amazon.com
21
physical flow
electronic flow
Book
wholesaler
inventory
order
book
Parcel service
delivery
tracking
service
request
Customer
editorial
sales
book
editorial
sale
Affinity group
sales
sale
check
credit card statement
credit card
account details
credit
authorization
order
Amazon.com
sales
marketing
IS development
server operations
editorial
Bank
payment
Author
marketing
link to Web site
24. The Benefits
Expands the marketplace to national and international
markets
Decreases the cost of creating, processing, distributing,
storing and retrieving paper-based information
Allows reduced inventories and overhead by facilitating
“pull” type supply chain management
The pull type processing allows for customization of
products and services which provides competitive
advantage to its implementers
24
Benefits to Organizations
25. Benefits to Organizations (cont.)
Reduces the time between the outlay of capital
and the receipt of products and services
Supports business processes reengineering
(BPR) efforts
Lowers telecommunications cost - the Internet
is much cheaper than value added networks
(VANs)
25
26. Benefits to Customers
Enables customers to shop or do other transactions
24 hours a day, all year round from almost any
location
Provides customers with more choices
Provides customers with less expensive products
and services by allowing them to shop in many
places and conduct quick comparisons
Allows quick delivery of products and services in
some cases, especially with digitized products
26
27. Benefits to Customers (cont.)
Customers can receive relevant and detailed
information in seconds, rather than in days or
weeks
Makes it possible to participate in virtual auctions
Allows customers to interact with other customers
in electronic communities and exchange ideas as
well as compare experiences
Electronic commerce facilitates competition,
which results in substantial discounts.
27
28. Benefits to Society
Enables more individuals to work at home, and to
do less traveling for shopping, resulting in less
traffic on the roads, and lower air pollution
Allows some merchandise to be sold at lower prices
Enables people in third world countries and rural
areas to enjoy products and services which
otherwise are not available to them
Facilitates delivery of public services at a reduced
cost, increases effectiveness, and/or improves
quality
28
30. Classification of EC by the
Nature of the Transaction
Business-to-business (B2B) : EC model in which all
of the participants are businesses or other
organizations
Business-to-consumer (B2C): EC model in which
businesses sell to individual shoppers
Consumer-to-consumer (C2C) : consumers sell
directly to other consumers
Customer-to-business: Consumers sell to businesses
Government-to-consumer: Where government
offers to consumers
30
31. B2B (Business to
Business)
Definition: Transactions between
businesses, such as manufacturers and
wholesalers, or wholesalers and retailers.
Examples: Alibaba, SAP, and IBM.
Benefits: Larger order volumes, long-
term contracts, and supply chain
efficiency.
Key Points: Emphasizes bulk purchases,
streamlined logistics, and collaborative
partnerships..
32. B2C (Business to
Customer)
Definition: Direct transactions
between businesses and
consumers.
Examples: Amazon, Netflix, and
Apple, Daraz.
Benefits: Convenience,
personalized experiences, and
global reach.
Key Points: Focuses on
customer experience, online
marketing, and easy access to
products and services.
33. C2C (Customer to
Consumer)
Definition: Transactions between
consumers, often facilitated by a third-
party platform.
Examples: eBay, Daraz, but mostly OLX,
PakWheels
Benefits: Wide access to buyers and
sellers, a variety of products, and
competitive prices.
Key Points: Peer-to-peer selling, often
involves auctions or direct negotiations.
34. C2B (Customer to
Business)
Definition: Individuals sell
products or services to
businesses.
Examples: Influencers offering
sponsored content, freelance
platforms like Upwork.
Benefits: Flexibility for
consumers, access to diverse
talent for businesses.
Key Points: Individual-driven,
competitive marketplace, often
project-based..
35. G2C (Government to
Citizen)
Definition: Online transactions between
government entities and citizens.
Examples: Online tax filing, utility
payments, and license applications.
Benefits: Convenient access to services,
transparency, and efficiency.
Key Points: E-governance focus,
promotes citizen engagement, digital
public services..
36. Summary of
Characteristics
B2B: Efficiency and
integration.
B2C: Customer experience
focus.
C2C: Peer-to-peer with trust
systems.
C2B: Gig economy, flexible
offerings.
G2C: Digital public services
and accessibility.
• C2B: Gig economy, flexible offerings.
37. 37
Models of Electronic Commerce:
• Business-to-customer (B2C)
• Business-to-business (B2B)
• Others: B2G, G2C, G2B, C2C
• Cyber-Services
• Intra business transactions (Intranets and Extranets)
Classification of EC by the Nature of the
Transactions Business Consumer
B C
To
• Organization site
(Dell)
• Consumer marketplace
(shopsmart.com)
• Auctions
(E-Bay)
• Consumer Reviews
(Bizrate.com)
• Organization site
(Dell)
• Business Marketplace
(CommerceOne)
• Customer bids
(Priceline.com)
From
Consumer
C
Business
B
HW: Visit all these
sites and study
them. Give a
detailed report on
these sites
38. Summary and examples of transaction alternatives between businesses,
consumers and governmental organizations
38
39. Classification of EC by the
Nature of the Transaction (cont.)
Intrabusiness (organizational) EC:
EC category that includes all
internal organizational activities
that involve the exchange of goods,
services, or information among
various units and individuals in an
organization
39
40. Classification of EC by the
Nature of the Transaction (cont.)
Business-to-employee (B2E): EC model in
which an organization delivers services,
information, or products to its individual
employees
Collaborative commerce (c-commerce): EC
model in which individuals or groups
communicate or collaborate online
40
41. Classification of EC by the
Nature of the Transaction (cont.)
E-government: Government-to-citizens
(G2C): EC model in which a government
entity buys or provides good, services, or
information to businesses or individual
citizens
E-Learning: educational institutions-to-
students/trainees: The online delivery of
information for purposes of training or education
41
42. Classification of EC by the
Nature of the Transaction (cont.)
Exchange (electronic): a public e-market with
many buyers and sellers
Used in B2B
Exchange-to-exchange (E2E): EC model in
which electronic exchanges formally connect to
one another for the purpose of exchanging
information
42
43. Classification of EC by the
Nature of the Transaction (cont.)
Mobile commerce (M-commerce)—EC
transactions and activities conducted
in a wireless environment
Location-commerce—(L-commerce)
m-commerce transactions targeted to
individuals in specific locations, at
specific times
43
45. Electronic Commerce
Topologies
Types of Networks
A global networked environment is known as
the Internet
A counterpart within organizations, is called an
intranet
An extranet extends intranets so that they can
be accessed by business partners.
45
46. Electronic Commerce Topologies
46
Topology Internet Intranet Extranet
Extent Global Organizational Business
partnership
Focus Stakeholder
relationships
Employee
information and
communication
Distribution channel
communication
47. Figure 1.4 The relationship between intranets, extranets and the Internet
47
48. The Limitations of Electronic Commerce
Cost and justification:
The cost of developing an EC in house can be
very high, and mistakes due to lack of
experience, may result in delays. There are many
opportunities for outsourcing, but where and how
to do it is not a simple issue. Furthermore, to
justify the system one needs to deal with some
intangible benefits which are difficult to quantify.
48
Non-Technical Limitations of Electronic Commerce
49. Security and Privacy:
These issues are especially important in the B2C area, and security
concerns are not truly so serious from a technical standpoint.
Privacy measures are constantly improving too. Yet, the customers
perceive these issues as very important and therefore the EC
industry has a very long and difficult task of convincing customers
that online transactions and privacy are, in fact, fairly secure.
Lack of trust and user resistance:
Customers do not trust an unknown faceless seller, paperless
transactions, and electronic money. So switching from a physical
to a virtual store may be difficult.
49
Non-Technical Limitations (cont.)
50. Other non-technical limiting factors are:
Lack of touch and feel online
Many unresolved legal issues
Rapidly evolving and changing EC Technology
Insufficiently large enough number of sellers and
buyers
Breakdown of human relationships
Expensive and/or inconvenient accessibility to the
internet
50
Non-Technical Limitations (cont.)
51. The Limitations of Electronic Commerce
Lack of sufficient system’s security, reliability,
standards, and communication protocols
Insufficient telecommunication bandwidth
The software development tools are still evolving
and changing rapidly
Difficulties in integrating the internet and electronic
commerce software with some existing applications
and databases
51
Technical Limitations of Electronic Commerce
52. Technical Limitations of Electronic Commerce
(cont.)
The need for special Web servers and other
infrastructures, in addition to the network servers
(additional cost)
Possible problems of interoperability, meaning
that some EC software does not fit with some
hardware, or is incompatible with some operating
systems or other components
52
53. Eight Unique Features of E-commerce
Technology
1. Ubiquity
2. Global reach
3. Universal standards
4. Information richness
5. Interactivity
6. Information density
7. Personalization/customization
8. Social technology
Slide 1-53
54. UBIQUITY
It is available just about everywhere and
at all times.
- Market Place vs Market Space
- Reduce Cognitive Energy (Advantage)
Examples:-
Accessing a bank account (24/7) | https://www.abl.com
Purchasing from Internet. | http://www.shophive.com/
Online Tracking | http://www.cargoserv.com/tracking.asp?Carrier=PK&Pfx=214
Online Ticket Reservation | www.piac.com.pk
Paying Utility Bills | https://epayment.ptcl.net.pk
Slide 1-54
55. GLOBAL REACH
Reach: the number of user or customers
an e-commerce business can obtain.
- Traditional Commerce base on Television , Radio, Newspaper and Sales
force.
- Using Internet Commercial transactions to cross cultural and national
boundaries
Examples:-
100 million customers | http://www.amazon.com/
1,310,000,000 Active Users | http://www.facebook.com/
Growing Mobile Social Network |smsall.pk (A messaging App) [National]
The Designers Mall | http://www.fashionsouk.com/ [Global Presence]
Slide 1-55
56. UNIVERSAL STANDARDS
Standards (i.e. INTERNET) shared by all
nations around the world
- Traditional commerce technologies differ from one nation to the next
( Radio, Newspaper, TV ) etc.
- Using Internet Commercial transactions to cross cultural and national
boundaries
Benefits of Universal Standards
Reduced search costs for consumers| http://www.google.com/
simpler, faster, with more accurate price discovery | https://pricenoia.com/
Lower market entry costs for merchants
find many of the suppliers, prices, and delivery terms of a specific product
| https://www.mysupermarket.co.uk/
Slide 1-56
57. RICHNESS
The complexity and content of a message
- Traditional commerce national sales forces, and small retail stores
have great richness face-to-face service using aural and visual cues when
making a sale.
- But there is Trade-off between richness and reach
- Richness in e-commerce refers to the depth and quality of information
—such as visuals, text, and interactivity—delivered to consumers to
enhance understanding and engagement.
Benefits of Richness
more information richness than traditional media
chatting with an online customer support person
sell ‘complex’ goods and services
Compare All (Prices, attributes, Services etc)
Examples:
http://tcsconnect.com/nokia-lumia-1520.html | Product description, Vendor info, Compare Prices etc.
http://www.daraz.pk/ | Product Detail, Size, Color etc. ; Online Chat
Slide 1-57
58. INTERACTIVITY
Communication between the merchant
and the consumer.
Interactivity refers to the user's ability to engage with and manipulate
elements in real time, creating a dynamic and immersive experience.
- Interactivity in E-Commerce
Customer Support | http://www.beliscity.com/support/index.php?a=add
Customer Reviews| http://www.tcsconnect.com
Feedback, FAQ’s, Newsletter Option | http://www.Dell.com/
E-mail Support | http://www.amazon.com
Live Help with customer representative | http://tcsconnect.com
Slide 1-58
59. INFORMATION DENSITY
Total amount and quality of information
available to all market participants
Internet and the web vastly increase information density.
Ecommerce technologies reduce information collection, storage, processing, and
communication costs.
Due to E-commerce Technologies information becomes more plentiful, less
expensive and of higher quality.
Go to Amazon, Ebay or wallmart website you can find verity of products and
prices.
Growth in information density could result in
Greater price transparency- for customers
Greater Cost transparency- for customers
Marketers to practice price discrimination (Segmentation)
http://www.statisticbrain.com/facebook-statistics/ | Data use for Segmentation
Slide 1-59
60. PERSONALIZATION & CUSTOMIZATION
PERSONALIZATION: refers to the system-driven adaptation of content
or experiences based on user data, preferences, or behavior, often done
automatically.
by adjusting the message to a person’s name, interest, and past
purchases.
Examples:- 1. Product search history on amazon.com
2. Welcome message by name on Gmail.
CUSTOMZATION: involves user-driven changes where individuals
manually select or modify features to suit their needs or preferences.
Examples:- 1. Add Text or Images not included in the original design
2. Customize a laptop on Dell.com.
3. http://www.customink.com | Add Text , Color to customize Shirts.
Slide 1-60
61. SOCIAL TECHNOLOGY
User content generation and social
networking technologies.
- socializing traditional e-commerce sites by integrating social elements
into existing retail websites.
- Social technologies are increasingly being used to connect with
customers to build strong and lasting relationships, through ratings and
reviews, blogs, Wiki’s, micro-blogging, forums and communities like
Facebook.
Social Media Examples
Facebook | plugins integration
Twitter | plugins integration
Pinterest | plugins integration
Google+ | plugins integration
Slide 1-61
62. Impact of E-Business on Traditional
Business Models
• Shift from Physical to Digital Processes.
• Traditional business relied on in-store transactions, manual operations, and
face-to-face services.
• E-Business enables digital sales, online customer support, and digital product
delivery.
• Examples: Physical banks shifting to online banking, retail moving to e-
commerce.
63. Enhanced Customer Reach
• Traditional Model: Limited to local or regional markets
• E-Business Model: Provides global accessibility, 24/7 customer service,
and online marketing reach.
• Case Study: Walmart’s global reach compared to traditional brick-and-
mortar stores.
64. New Revenue Streams and Business
Models
• Traditional businesses are creating digital-only products and
subscription models.
• E-Business enables monetization of digital content, memberships, and
online courses.
• Example: Gyms offering online fitness classes as new revenue streams.
65. Cost Efficiency and Operational
Streamlining
• E- Business reduces overhead costs associated with physical stores,
staffing, and logistics.
• Allows streamlined inventory and supply chain management through
real-time tracking
• Example: Walmart’s transition to online retail to reduce in-store
operational costs.
66. Personalized Marketing and Data
Analytics
• E- Business collects vast customer data, enabling targeted marketing and
tailored customer experiences.
• Traditional models relied on general ads; e-business uses digital ads, AI,
and data for personalized marketing.
• Example: Netflix’s recommendation engine based on user data versus
traditional cable TV.
67. Flexibility and Agility
• E-Businesses can adapt quickly to market demands and
customer feedback.
• Traditional businesses may struggle with rapid adaptation due
to physical constraints
• Case Study: ZARA’s digital-first approach to respond to
fashion trends faster than other traditional brand.
68. Current Trends in E-Business
• Rise of Mobile Commerce (M-Commerce)
• Trend: Surge in smartphone and tablet usage is driving M-commerce growth.
• Impact: Increased convenience for on-the-go purchases, personalized
experiences via apps.
• Example: Retailers like Starbucks and Amazon optimize their apps for
mobile purchasing
69. Artificial Intelligence (AI) and
Machine Learning (ML) Integration
• Trend: E-businesses increasingly utilize AI/ML for automation, data
analytics, and customer service.
• Impact: Enhanced customer personalization, predictive analytics for
inventory, and AI-powered chatbots for 24/7 support.
• Example: Netflix and Amazon Prime using AI for recommendations.
70. Omni-Channel Experience
• Trend: Integrating online and offline channels to provide a seamless
customer experience.
• Impact: Enhances customer satisfaction by blending physical stores, online
shops, and mobile apps..
• Example: IKEA’s AR app, allowing customers to preview furniture in their
space.
71. Subscription-Based Business Models
• Trend: Rise in e-businesses adopting subscription models for recurring
revenue and customer loyalty..
• Impact: Enables stable revenue streams and builds stronger customer
relationships.
• Example: Platforms like Spotify, Netflix, and Amazon Prime
72. Social Commerce
• Trend: Using social media platforms for direct selling.
• Impact: Provides businesses access to a large audience, especially through
influencers and shoppable posts.
• Example: Instagram Shopping and TikTok collaborations with brands..
73. Enhanced Cybersecurity Measures
• Trend: Stronger security protocols in e-business to prevent data breaches.
• Impact: Builds trust and maintains compliance with regulations, protecting
customer data.
• Example: Use of two-factor authentication (2FA), encryption, and blockchain
for secure transactions.
74. Augmented Reality (AR) and Virtual
Reality (VR) in E-Commerce
• Trend: AR and VR technologies are enhancing the online shopping
experience.
• Impact: Provides a virtual ‘try-before-you-buy’ option, which helps reduce
return rates.
• Example: Sephora’s AR app allows users to test makeup virtually.
Editor's Notes
#57:A trade-off (or tradeoff) is a situation that involves losing one quality or aspect of something in return for gaining another quality or aspect.
#61:Engaging customers based on their social behavior with your brand
Providing customers with a reason to return to your website
Giving clients a reason to talk about your brand on your website
Providing all the necessary information on your website for your clients to research, compare, make a decision and purchase from you and not your competitor
![GLOBAL REACH
Reach: the number of user or customers
an e-commerce business can obtain.
- Traditional Commerce base on Television , Radio, Newspaper and Sales
force.
- Using Internet Commercial transactions to cross cultural and national
boundaries
Examples:-
100 million customers | http://www.amazon.com/
1,310,000,000 Active Users | http://www.facebook.com/
Growing Mobile Social Network |smsall.pk (A messaging App) [National]
The Designers Mall | http://www.fashionsouk.com/ [Global Presence]
Slide 1-55](https://image.slidesharecdn.com/lec1-250531104933-dc6b1529/85/Lecture-No-1-presentation-E-Business-55-320.jpg)
