Prelims Reviewer - Lecture (MM5728)

Introduction to E-Commerce

E-commerce refers to the buying and selling of goods and services over the internet. The internet is a vast network of interconnected networks, and within this global structure, there are localized networks as well, such as Local Area Networks (LAN). An example of a local network is UST's ID Validation System. The widespread use of the internet has integrated it into daily life, facilitating consumer activities from shopping to business transactions.

Internet Usage and SEO

Businesses often utilize Search Engine Optimization (SEO) to improve their visibility on search engines by modifying their websites. This practice can lead to a segmented target market, allowing businesses to eliminate competition. However, it can also result in fewer hits initially and a longer time to establish a business presence online.

Categories of E-Commerce

1. Business-to-Consumer (B2C): This category involves consumer shopping on the web, where businesses sell directly to consumers.

2. Business-to-Business (B2B): These are transactions conducted between businesses on the web.

3. Business-to-Government (B2G): This category involves transactions and processes where companies and governments use internet technologies for purchasing activities.

The DOT-COM Boom, Bust, and Rebirth

The late 1990s saw a massive boom in internet-related businesses, with over 12,000 startups attracting $100 billion in investments. However, this was followed by a downturn starting in 2000, which wiped out over 5,000 companies but led to a more stable growth in the long run. Today, many established businesses have their own websites, and the applicability of AI in business management presents both challenges and opportunities.

Trust Issues and Broad Understanding of E-Commerce

E-commerce is often met with trust issues tied to security concerns such as hacking. It encompasses all activities that utdetilize internet technology in commercial transactions, extending beyond mere buying and selling to internal business processes.

International Nature of E-Commerce

Despite the advantages of the internet for trade, challenges such as language and cultural barriers, governmental regulations, and infrastructure concerns remain pressing issues for the international community engaging in e-commerce.

Evolution and Characteristics of the Internet

The concept of web evolution highlights the transition from Web 1.0 to Web 2.0 and beyond, which has transformed how users interact with content online. This evolution includes:

Characteristics of Web 2.0

• Services, Not Packaged Software: Emphasizes software that operates online rather than traditional packaged software.

• Scalability and User Engagement: Projects that allow users to contribute actively, generating unique behavioral data.

• Leveraging Long Tail: As Chris Anderson discusses, this allows companies to thrive in niche markets.

• Device Agnostic Interfaces: Software catering to various devices, enhancing accessibility.

Characteristics of Web 3.0

Web 3.0 introduces advancements including real-time communication, semantic data interpretation, and open data transfer, with an increasing emphasis on mobile technology and location-based services.

Internet of Things (IoT)

The Internet of Things refers to the interconnected network of devices that communicate without direct human interaction. This network includes everything from computing devices to mechanical machines, which can be uniquely identified and monitored.

Cloud Computing Benefits

Cloud computing offers convenience with web-based email services, online storage for photos and files, and access to apps like Google Docs, which enhance collaboration and file management without the need for physical storage.

Internet Infrastructure and Marketing

To establish a presence online, users must navigate internet protocols, secure domain names, and manage technical aspects such as bandwidth, disk space, and security to reach their audience effectively.

Trends in Internet Usage

Demographics indicate that older populations have lower internet access rates while individuals with higher educational attainment frequently use the internet. Social media platforms, particularly Facebook, dominate news consumption, showing a significant reliance on digital sources for information. Filipino users spend a substantial amount of time online, reflecting a growing trend in digital engagement, with e-commerce adoption rates increasing significantly.

Future Projections

The 2024 digital landscape may demonstrate shifts in global social media usage, an uptick in online engagement across various platforms, and a restructuring of how users consume media, with implications for advertising and marketing strategies.

Understanding User Interaction with Websites

Research indicates that users typically scan website content in an F-shaped pattern, prioritizing information that appears in visually prominent areas. Engagement strategies must consider the user’s eye path, ensuring key information is accessible and captivating.

Strategic E-Commerce Practices

Effective e-commerce strategies hinge on several principles:

• Providing value-added information to consumers.

• Recognizing that distance is less a barrier due to online commerce.

• Speed and responsiveness are crucial for effective transactions.

• Building strong customer relationships through personalized marketing and efficient communication.

Business Models in E-Commerce

Different models like brokerage, advertising, merchant, and community models play significant roles in framing online business strategies, highlighting approaches such as marketplace facilitation, advertising-based revenue, and subscription models that cater to community engagement.

Conclusion

Overall, e-commerce represents a dynamic and continuously evolving field that encompasses numerous opportunities and challenges, from technological advancements to shifts in consumer behavior and expectations.