Electronic Commerce

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Agenda• What is Electronic commerce ?

• Who involve in Electronic commerce ?

• Potential processes on Electronic commerce

• Paper discussion

What is Electronic commerce ?

• All aspects of business and market processes that can be done throu

gh communications network

• Currently, the main infrastructure of electronic commerce is INTERN ET esp. World Wide Web technolo

gy

Who involves in electronic commerce ?

Business

Government

Financialinstitution

Businesspartner

Customer

Business and Customer

• Provide company, product and serviceinformation

• - Provide on line sales/reservation• Distribute products• - Provide after sales service• Conduct market research• Test new products

Business and Financial institution

• Verify and authorize customerpayment

• Transfer money between business’s ac counts and others e.g. customers, sup

pliers, infrastructure providers

Business and Government

• Authenticate customer records• File taxes• View monthly bill on electricity, water,

phone, etc.• Update company information at

government agencies e.g. ministry of commerce

• Collect economic, social and political n ews and statistics

Business and Business partner

• - Conduct on line transactions• Negotiate on business transactions• Allow business partners e.g. supply ch

ain to view company private information

• - Create on line affiliate network

E-COMM: a mainstream marketplace in

the future ? • 1998Number of Internet users as of Aug. World total 147 million

Africa 800000, Asia Pacific 22million

98Thailand (Jan’ ) 131,000 (0.2%)EEEEEE EEEEEEE33.25

Middle East 075. million Canada & USA 87million

South America 45. million Source : NUA Internet surveys

Estimated sales generated by WWW 1993-1998

E-Commerce on WEB

• Market value : 1996 $2.6 billion 2002 EEEEEEE220

• Percentage of US companies engaged -in E Commerce

1997 40% 1998 63%

10 Predictions for 1998 1) Information overload will become a central is

sue for the Internet in 1998, as basic search engines begin to lose their value.

2) E-commerce will flourish in America and will show strong growth in Europe, with business-to-business transactions leading the way.

3) The Web will stay simple in 1998: lots of content, driven by databases, with small graphics, no gee whiz, and thus fast downloads.

10 Predictions for 1998 (Cont.)

4) By the end of 1998, the PC will have well and truly become a mass market product, with quality PCs selling for well under USD1,000.

5) Microsoft will find that there are limits to how large and powerful it is allowed to get

6) There will be at least 150 million Internet users worldwide by the end of 1998.

7) The Internet will force many middlemen/distributors to transform their business models or face decline/liquidation.

10 Predictions for 1998 (Cont.)

8) Small pockets of high-bandwidth will exist but for the average consumer bandwidth will remain scarce.

9) Driven by child abuse, hate abuse, spam abuse and taxation issues, Governments will pay a lot more attention to the Internet in 1998, and a wide range of legislation will either be prepared or enacted.

10) 1999 will be the year when the Internet becomes truly mass market.

Paper Discussion

• Yannis, Bakos, The Emerging Role of Electronic Marketplaces on the Internet, Communications of the ACM, August 1998, p. 35- 42

• Frederick J. Riggins, A Framework for identifying web-based electronic commerce opportunities

• Albert A. Angehrn, Jens F. Meyers, Developing Mature Internet Strategies: Insights from the Banking Sector, Information Systems Management, Summer 1997, p. 37-43

The Emerging role of electronic marketplaces on the Internet

• In short, what is the focus of this paper?• Functions of a market

– Matching buyers and sellers• Determination of product offerings• Search

• Price discovery

– Facilitation of transactions

– Institutional infrastructure

How the Internet affects markets

• Product Offerings:– Increased Personalization/Customization

• Customer tracking technology• Information-rich products

– Aggregation of product components

• The Case of Information Goods• Search: Lower buyer’s search cost• Price discovery: New types of price discovery

How the Internet affects markets (Cont.)

• Facilitation: – Logistics:

• Physical --> Digital distribution

Expert delivery providers

– Payment: • Lower transaction cost• Certificate authorities

Internet marketplace and Competition

• Impact of Lower Search Cost– Promote price competition

• Increasing differentiation and Lowering cost of product information

A Framework for Identifying Web-Based Electronic Commerce

Opportunities

• In short, what is the focus of this paper?• What is EC Value Grid?• EC Value Grid can be used to

– Identify EC Opportunity– Measure the impact of Web-based applications– Determine factors that lead to success/failure– Analyze web strategic sophistication of company web si

te

•

Five Dimensions of Commerce

• Time

• Distance

• Relationships

• Interaction

• Products/Services

Electronic Commerce Value Grid

Accelerate User Tasks

Improve Scaleto look large

Alter roleof

intermediaries

Make use of User feedback

Automate tasksUsing software

agent

EliminateInfor. Float

Present singlegateway access

Engage in micromktg. to look

small

User controls detail of infor.

accessedProvide on-line

decisionsupport tools

Establish 24X7 Service

Achieve globalpresence

Create dependency to

lock-in user

Users interact via on-linecommunity

Bundle infor.,products and

services

Time

Distance

Relationships

Interaction

Product

Efficiency Effectiveness Strategic

Framework to classify Internet strategies

• ICDT model

–Virtual Information Space (VIS)

–Virtual Communication Space (VCS)

–Virtual Distribution Space (VDS)

–Virtual Transaction Space (VTS)

Framework to classify Internet strategies

• Level of Sophistication : Multimedia-rich, Interactive, Freedom to browse

• Level of Customization : Personalized, Individualized Product/Service

Commercial banks listed in SET

• Bank of Ayudhaya (BAY) www.bay.co.th• Bangkok Bank (BBL) www.bbl.co.th• Bangkok Metro. Bank (BMB) www.bmb.co.th• Bank of Asia www.boa.co.th• First Bangkok City Bank (FBCB) www.fbcb.co.th• IFCT -• Krung Thai Bank (KTB) www.ktb.co.th• Laem Thong Bank (LTB) www.laemthong-bank.co.th• Nakornthon Bank (NTB) www.ntb.co.th

Commercial banks listed in SET (Cont.)

• Siam Commercial Bank (SCB) www.scb.co.th• Siam City Bank (SCIB) www.scib.co.th• Thai Danu Bank (TDB) www.tdbmc.loxinfo.co.th• Thai Farmers Bank (TFB) www.tfb.co.th• Thai Military Bank (TMB) -• Union Bank of Bangkok (UB)-

11 out of 15 banks (73%) have web sites*

* exclude Bank of Asia

VIS strategies

Customization

Sophistication

Low High

Low

High

Macromedia

100%Dresdner Bank

FedEx

VIS strategies : Local commercial banks

Customization

Sophistication

Low High

Low

High

BBL, FCBC, NTB, TDB

BAY, BMB, KTB, LTB, SCB, SCIB, TFB

VCS strategies

Customization

Sophistication

Low High

Low

High

INSEAD

89% FireFly

Credit Lyonnais

VCS strategies : Local commercial banks

Customization

Sophistication

Low High

Low

High

All banks except BBL

VDS strategies

Customization

Sophistication

Low High

Low

High

NetscapeLa Tribune

Wall Street JournalInfoseek

PointCast

Deutsche BankBank of America

12%

VDS strategies : Local commercial banks

Customization

Sophistication

Low High

Low

High

BAY, BBL

VTS strategies

Customization

Sophistication

Low High

Low

High

IBM SFNB

CDnowABN Amro Bank7%

VTS strategies : Local commercial banks

Customization

Sophistication

Low High

Low

High

KTB