aiou-ass1 5576 autumn2014

Course: E Commerce (5576)Semester: Autumn, 2014

ASSIGNMENT No. 1

by

FAISAL SAFDAR KHAN

ROLL NO. AW565146

ALLAMA IQBAL OPEN UNIVERSITY, ISLAMABAD

(Commonwealth MBA/MPA Programme)

Assignment #1 Faisal Safdar KhanCode 5576 (AW565146)

E Commerce Page 1 of 22

Q.1 What is E-Commerce? Discuss its role in business in Pakistan. Describe and discussthe framework for E-Commerce and its major components.

E-COMMERCE

Commonly people use the terms e-commerce and e-business interchangeably. Mostly

the term E-commerce is referred to the online shopping (on internet), and sometimes

people use the term e-business while they are talking about e-commerce activities.

However, e-commerce

E-Commerce is technique to use electronic means of communication to generate

economic values / activities including management, facilitation and execution of

business and in trade.

Electronic communication is used as the medium through which economic values are

designed, produced, advertise, catalogued, inventoried, purchase and settlement of

accounts for business. E-commerce is dependent upon the technology

Hardware

Software

Benefits of E-commerce

E-commerce enables and facilitates

Entry of SMEs in global markets

Reduction in cost of doing business

Development of new services and goods

Negotiation and completion of the terms of sale

Customizing the products

Inventory and supply chain management

Implementation of E-commerce

Telecommunication technology plays fundamental and vital role in all aspects of e-

commerce. E-commerce implements through the following infrastructures.

Well-developed communication system

Well-developed web portal

Development of internet

Development of new hardware (Pc, modem, phone)

Modes of delivery for telecommunications services

Via wire



Via radio (wireless)

Telecommunications via wire or wireless

Land lines for standard telephony

Broadband landlines not from telephone companies (cable modem)

Wireless telecommunications deal with national policy of radio spectrum etc

Cell phones

Televisions

Radio

Development of national internet infrastructure:

E-commerce is internet based communication service. Internet disseminate the

information (messages) via packet switching into discrete packets, those can travel to

ultimate destination via different routes for reassembly at the final destination with the

speed of light.

Alongside packet switching, the growth of internet switching was accelerated by the

enabling of software development

Easy to use Internet Browser Software

Search Engines

Secure payment software

E-commerce services:

Modern telecommunications allow services delivered globally. Areas where services

have global competition are:

Call Centers and Help desks

Accounting

Translation and Editing

Entertainment deliverance

Medical diagnostic services

Customer ordered merchandise or service on line online payments

Banking Sector

A well-developed financial service/ banking sector is essential for the growth of e-

commerce. Solutions for the two fundamental issues affecting e-commerce will

determine its worldwide growth:

How customer will make payment



Ensuring that Goods or Service provider receives payment

Payment mode in E-Commerce

Credit Cards

Debit Cards

Payment to an account owned by the service provider at bank

The use of credit and debit cards to make payment over the internet has raised security

concerns.

The need for security has led to new e-commerce services such as secure payment

services i.e. pay, Pal etc, which make use of encryption and other security features.

ROLE OF E-COMMERCE IN PAKISTAN

When the government started an information technology and e-commerce initiative in

early 2000, the banks were expected to lead the way into e-commerce. Although, the

banking sector is the leading spender on information communications technology, the

most progress in e-commerce has been in e-government. Almost all branches of

commercial banks in urban areas are now computerized. Many banks offer online funds

transfers from overseas and within country, buying mobile phone and internet cards

through your online wallet and other small scale online transactions. Almost all banks

now offer mobile-phone banking, where customers can pay utility bills using their mobile

phones. Further, money can be transferred to any city within minutes now. This is all the

progression of Ecommerce in Pakistan.

From local shops to online buying of books, laptops, gadgets, cars, and now clothing,

grocery, and other daily use items, Pakistan has undergone a considerable

development in Ecommerce industry. Pakwheels.com, Beliscity.com, Shophive.com,

and now Groupin.pk are serving users with what actually need. Although the

progression of ecommerce cannot be compared to that of developed countries or even

Indian e-commerce, there has been a significant development in terms of number of

online shops and transactions. The development is on quite slower pace like Internet

merchant accounts were permitted by the State Bank of Pakistan in February 2001 but

due to inadequate infrastructure and security concerns only Citibank offered these

accounts in 2006. These merchant accounts are used by airlines and chain of hotels

and a very few medium scale businesses.

Pakistan is still an under developing country and is in a process of making its way

towards the world of technology. The internet is prevailing like dark cloud on Pakistan

and it will hit the Pakistan economy positively in the near future. People are getting

aware of the importance of business on the internet rapidly and this will prove good in



the favor of Pakistan. Banks are playing an important role in increasing the awareness

of e-Commerce in Pakistan, like introducing Debit Cards for internet usage, recharging

cell phone and paying bills directly from bank account while sitting at home and so on.

But what Pakistan need at the moment is sped up growth in the sector.

There is good scope of e-commerce in Pakistan not only for buyers and sellers, but too

many employment opportunities are there in web business which can stimulate the

economic growth of the country. A strong surveillance from Government on Cyber

Crime can make the environment much better and fruitful. Besides that we need social

entrepreneurs to bring a change in status quo.

FRAMEWORK & MAJOR COMPONENTS

A framework can be defined as a structure for supporting or attaching something else,

particularly a support that is used as the foundation for something being created.

Hence, an e-commerce framework comprises the set of infrastructure required for

carrying out the e-commerce business. This set of infrastructure typically includes the

network requirements and the different software applications that are for e-commerce.

The e-commerce vision summarized above assumes a series of essential infrastructure

services and values steady with a broad architectural framework. This framework must

allow flexibility, interoperability and directness necessary for the successful

development of electronic commerce. The e-commerce framework offers a set of

options to the customers. Most of the electronic commerce plans have different

strategies for security and privacy, their skill to deal with the payments, and their

usability to different transactions. They also vary in their business models. Such

variations promote innovation and allows for supplier and customer options. But yet, you

need a broad framework to gain wide acceptance. This includes the following

requirements and peculiarities of carrying out various business forms in this upcoming

electronic environment.

Deciding on the best e-commerce framework is one of the major challenges for any

organisation. The framework should be selected based on the three evaluation points:

Features.

Requirements.

Luxuries.

Features are those elements of the framework that make it more prominent and clearfrom other offerings.



Requirements are the basic requirements of the framework that allow it to do its work.If one among these is lost, then it becomes difficult to use a particular framework, even

with the presence of any other features.

Luxuries are the components whose presence is not so important, but they arerequired to make the case for a framework that comes at a bonus price. The luxury

components add something extra to the system to make it worthy of the premium price.

The three important factors to look for in any e-commerce framework are:

Template management.

Core framework functionality.

Search engine features.

The framework should be adaptable in order to be able to cope with future evolution of

the site and market. At the same time, it should be able to support the existing business

and make it as easy as possible.

COMPONENTS OF E-COMMERCE FRAMEWORK

The important components of this framework are:

1. Network Infrastructure

2. Multimedia Contents And Network Publishing

3. Messaging And Information Distribution Infrastructure

4. Common Business Services Infrastructure

5. Public Policy And Technical Standards

1. Network Infrastructure

Network Infrastructure, called as INFORMATION SUPERHIGHWAY, is the path

through which actual information flows and moves between sender and receiver.

Information Superhighway consists of:

Telecommunication companies that provide telephone lines.

Cable TV systems that provide coaxial cables and direct broadcast satellite

networks.

Wireless companies that provide mobile radio and satellite networks.

Computer networks include private networks and public data networks like the

Internet.

All these modes of communication are interconnected. They are connected with

routers, switches, bridges, gateways etc which are devices to connect similar and

different network. All the information flow on these lines and through these devices

and reach the desired destinations.



2. Multimedia Contents And Network Publishing

The Information Superhighway is the transportation foundation that enables the

transmission of content. The most prevalent architecture that enables networking

publishing is the World Wide Web. The web allows small businesses and individuals

to develop content in the form of Hypertext Markup Language (HTML) and publish it

on a web server. Web provides a means to create product information (content) and

a means to publish it in a distribution center. ( network server).

3. Messaging And Information Distribution InfrastructureThe information content transferred over the network consists of text, numbers,

pictures, audio and video. But the network does not differentiate among content as

everything is digital, that is, combinations of zeros and ones. Once contents has

been created and stored on a server, messaging and information distribution

methods carry that content across the network. Messaging vehicle is called

middleware software. Messaging and information distribution include translators that

interpret and transforms data formats.

4. Common Business Services InfrastructureThis infrastructure includes the different methods for facilitating online buying and

selling processes. In online commerce, the buyers sends an electronic payment as

well as some remittance information to the seller. Settlement occurs when the

payment and remittance information are authenticated by the seller and accepted as

valid. In order to enable online payment for information and ensure its safe delivery,

the payment services infrastructure needs to develop encryption (making contents

indecipherable except for the intended recipient) and authentication (making sure

that customers are who they say they are) methods that ensure security of contents

traveling on the network.

5. Public Policy and Technical StandardsPublic Policy and Technical Standards are two support pillars for all e-commerce

applications and infrastructure. Public policy related to e-commerce encompasses

such issues as universal access, privacy and information pricing. Technical

Standards dictate the specifics of information publishing tools, user interfaces and

transport. Standards are essential to ensure compatibility across the entire network

of world. These are the main components of framework of e-commerce. By following

all these trade can be done efficiently on the network.



Q.2 Compare the two and three tier Web Client server architectures, and indicatethe role of each tier in each architecture. Which architecture is the most likelycandidate for an electronic commerce site.

TWO TIER WEB CLIENT SERVER ARCHITECTURE

The term TIER refers to the relationship between the logical division of the application

components, i.e. presentation, application logic and data management, and the physical

architecture in which these components are divided.

Two-tier client server architecture uses only two sets of computers, one set of clients

and one set of servers. The two-tier architecture is like client server application. The

direct communication takes place between client and server. There is no intermediate

between client and server. The two-tier client server architecture delivers the

presentation component on the client and the database management on the server.

The figure shows the architecture of two-tier. Here the communication is one to one. Let

us see the concept of two tier with real time application. For example now we have a

need to save the employee details in database. The two tiers of two-tier architecture is

1. Client Application (Client tier)

2. Database (Data tier)

1. Client Application (Client Tier)

The client writes the program for saving the record in SQL Server and thereby

saving the data in the database.

2. Data Tier

Its the database and has data in it.

Advantages:

Understanding and maintenance is easier.



Disadvantages:

Performance will be reduced when there are more users.

THREE TIER WEB CLIENT SERVER ARCHITECTURE

Three-tier architecture uses three sets of computers. In this case, the software on the

client computer is responsible for presentation logic, an application server is responsible

for the application logic, and a separate database server is responsible for the data

access logic and data storage.

Three tier architecture has three layers.

1. Client layer

2. Business layer

3. Data layer

1. Client layer:

Here we design the form using textbox, label etc.

2. Business layer:

It is the intermediate layer which has the functions for client layer and it is used to

make communication faster between client and data layer. It provides the business

processes logic and the data access.

3. Data layer:

It has the database. Here information is stored and retrieved from a database.

Advantages

Easy to modify without affecting other modules

Fast communication

Performance will be good in three tier architecture.



CONCLUSION

Three-Tier web server architecture is most appropriate for electronic commerce, as it

provides fast communication, better performance and also provides the business

processes logic and the data access.



Q.3 Why are programs such as CGI scripts and java programmes that run on clientmachines or on a web server considered security threats? Explain how programscould breach security. Do Java script programs pose an equally serious securityrisk?

CGI SCRIPTS

Common Gateway Interface (CGI) is a bit of software that translates what has

happened in one piece of software, into something that a different piece of software can

understand. In other words, CGI is a method for creating programmes that allow

external applications to interface with web servers in a standard way.

SECURITY THREATS & RISKS

The problem with CGI scripts is that each one presents yet another opportunity for

exploitable bugs. CGI scripts should be written with the same care and attention given

to Internet servers themselves, because, in fact, they are miniature servers.

Unfortunately, for many Web authors, CGI scripts are their first encounter with network

programming.

CGI scripts can present security holes in two ways:

1. They may intentionally or unintentionally leak information about the host system

that will help hackers break in.

2. Scripts that process remote user input, such as the contents of a form or a

"searchable index" command, may be vulnerable to attacks in which the remote

user tricks them into executing commands.

CGI scripts are potential security holes even though you run your server as "nobody". A

subverted CGI script running as "nobody" still has enough privileges to mail out the

system password file, examine the network information maps, or launch a log-in session

on a high numbered port (it just needs to execute a few commands in Perl to

accomplish this). Even if your server runs in a chroot directory, a buggy CGI script can

leak sufficient system information to compromise the host.

There are two ways in which CGI script vulnerabilities tend to manifest. The first is by

leaking system information that should be kept confidential, and the second by allowing

remote users to execute inappropriate commands.

The first case is less immediately dangerous, but harder to protect against. Practically

any piece of system information can be useful to a sufficiently wily attacker, and many

useful functions require the system to provide some data about itself. Some kinds of



information that should not be disclosed without excellent justification include physical

paths to users' home directories, such as is returned by the finger daemon, information

about what programs users are running, such as is given by the w command, and

information on which daemons are running on the system, such as is returned by ps.

The second case represents a much more direct threat to the integrity of the system.

CGI scripts will generally be executed with the privilege of the web server; so if that

server is properly set up as an unprivileged user then damage will usually be

constrained to those parts of the system to which the server has access. Common

effects of such vulnerabilities include defacement of the web site and denial of web

service.

Finally, it is important to note that all of the general programming security concerns

apply to CGI programs like they do to any others.

JAVA PROGRAMMES

Java is a programming language and computing platform first released by Sun

Microsystems in 1995. Java is a software platform that is owned and supported by

Oracle. The Java platform consists of the Java Virtual Machine (JVM), which is installed

on the host computer, and user applications that are written using the Java

programming language.

The JVM is powerful, flexible and easily deployed to a wide range of devices. The JVM

software runs like any other program on the host. The JVM provides a bridge between

Java applications and the host computer.

Java can be used to create complete applications that may run on a single computer or

be distributed among servers and clients in a network.

Java applications are used widely to perform necessary business functions. Like most

available software, there have been security vulnerabilities found in Java. Combined

with its popularity, Java is particularly attractive to cyber adversaries seeking

unauthorized access into corporate networks.

SECURITY ISSUES

Java is heavily scrutinized by the IT community for new security flaws because it is

widely used and has a history of exploitable security vulnerabilities. The two categories

of Java intrusion are:

exploits that target security vulnerabilities in the JVM, via drive-by browser

exploitation



malicious Java applications that run outside the sandbox as privileged applications,

which may be found on websites or as email attachments.

Once an adversary executes malicious code using either method, the compromised

system could be used to conduct activities such as stealing valuable information or

gaining access to other computers on the network.

Exploitation of the JVM is mostly associated with browsing to a malicious or

compromised website, but can also occur when opening an email or attachment. This

type of exploitation allows an adversary to run malicious non-Java code outside of the

JVM that compromises the native system. The adversary will gain the same level of

access as the user, or possibly even higher.

Java exploits are valued because they can grant access to a system without the

knowledge or authorization of the user.

The discovery of a new vulnerability by cyber adversaries could lead to exploitation

before a security patch is available.

Exploits targeting those vulnerabilities that have not been publically disclosed are

known as zero-day attacks. Once the vulnerability is publicly known, it is no longer

considered to be a zero-day.

Security vulnerabilities are exploitable up until the time that the patch has been applied.

This is a highly attractive window of opportunity for adversaries. In the time between a

patch becoming available and being applied, both the number and quality of exploits will

increase. For those agencies that are unable to patch quickly (usually for support of

legacy applications), known vulnerabilities remain exploitable.

Malicious Java applications

Malicious Java applets are presented as trustworthy or legitimate. Adversaries may try

to use targeted emails, known as spear phishing, to deliver a malicious website link or

email attachment that is relevant or interesting to the user. This type of social

engineering can entice a user to unknowingly permit the malicious application to run

with high privileges.

Malicious Java applets will request permission from the user with a pop-up dialogue

box. If the user trusts that the applet is safe and accepts the certificate, the malicious

applet can run in privileged mode. Once running with privilege, an adversary can access

parts of the system that were previously protected by the sandbox, such as files and

network connections.



By default, Java applets running in the browser that request privileged mode will

request permission with a pop-up dialogue box. This setting can be changed in the

Java security control panel. Changing this setting to be more permissive will leave

computers at greater risk, and should not be done.

If the user declines the certificate, a Java applet can still run in sandbox mode. A

sandboxed application can still gather information that may be useful to the

adversary, but will not have as much freedom to cause harm as a privileged

application.

Java applications are run inside the JVM, and not the native operating system. Most

application whitelisting implementations cannot control Java applications. Generally, the

JVM is allowed to run, but there is no discrete control of Java applications that are run

by the JVM, even those that are known to be good.



Q.4(a) Discuss some of the interactive web technologies that enable the interactivefunctions of internet, which is essential for E-Commerce websites.

INTERACTIVE WEB TECHNOLOGIES

In computer science, interactive refers to software which accepts and responds to input

from humans. Initially the only way to interact with the web servers was to click on the

hyperlinks to surf between the documents. On the other hand, e-commerce needs much

more than this. For example, buying online an item from website like E-bay requires to

input personal data and the item required. Now, E-bay has to store some of the

personal information after processing, for future use. Then it has to process the order to

ensure delivery of correct item(s). Moreover, the displayed information has to be

updated in case of any change in prices, stock and / or specifications. To carry out all

these tasks, E-bay requires some application(s) / software(s) that can access the

dynamic data stored on external resources. These applications / software enabled the

web servers to be more interactive client / server medium.

Web page authors can integrate Java Script coding to create interactive web pages.

Sliders, date pickers, drag and dropping are just some of the many enhancements that

can be provided. There are variety of technologies that create various kinds of

interactivities, some of them are given below:

Interactive Forms

Common Gateway Interface (CGI)

Java

1. INTERACTIVE FORMS

An interactive form is a data-gathering window containing multiple questions thatinteractively change based on user input. In other words, a user's response to one

question may cause one or more additional questions to be added to the window.

Forms are HTML (Hyper Text Markup Language) features that allow embedding

document features like buttons, check-boxes, selection lists, text-entry fields and

radio boxes that gather information from the users for a server application. Forms

can be used for almost every type of web transaction including surveys, data entry,

database queries, placing and tracking orders etc.

HTML defines tags for creating interface elements that can be placed within a form,

to interact with a user. There are three types of interface elements:

Input Fields used to enter and capture data

Text Areas, and



Select Fields provide to create a dropdown list, from which a user can choose

one or more item.

2. COMMON GATEWAY INTERFACE (CGI)

CGI is a standard protocol for interfacing external application software with an

information server, commonly a web server. This allows the server to pass requests

from a client web browser to the external application. The web server can then

return the output from the application to the web browser.

Advantages of CGI

Language independence can be written in almost any language

Architecture independence not tied to any particular server architecture

Simplicity easy to understand

Open Standard some form of CGI has been implemented on virtually every

type of web server

Process isolation these applications run in separate processes, therefore bug-

ridden applications cannot crash the web server or access the servers private

internal state

Disadvantages of CGI

Transient CGI programs are only active in the server while they are executing

a single request from a single client

Non-shareable CGI requires the server to create and execute a separate

program every time a request is made. The creation and execution of each copy

of a CGI program uses server resources like memory and process cycles. Since

CGI cannot be shared, when several simultaneous requests are mad, several

copies of the same CGI program must be created, thus putting heavy load on

the server.

3. JAVA

JavaScript is the programming language that runs in the browser, which is used to

build advanced user interactive Web sites and applications.

Java is a programming language and computing platform first released by Sun

Microsystems in 1995. Java is a software platform that is owned and supported by

Oracle. The Java platform consists of the Java Virtual Machine (JVM), which is installed



on the host computer, and user applications that are written using the Java

programming language.

The JVM is powerful, flexible and easily deployed to a wide range of devices. The JVM

software runs like any other program on the host. The JVM provides a bridge between

Java applications and the host computer.

Java can be used to create complete applications that may run on a single computer or

be distributed among servers and clients in a network.

Java applications are used widely to perform necessary business functions. Like most

available software, there have been security vulnerabilities found in Java. Combined

with its popularity, Java is particularly attractive to cyber adversaries seeking

unauthorized access into corporate networks.



Q.4(b) The commercial viability of e-mail model has been questioned in its currentimplementation and in the current state-of-the-art market and many malls haveeven gone out of business. Discuss possible reasons leading to the downfall ofthe e-mall model.

E-MALL (ELECTRONIC MALL)

An electronic mall, also known as a cybermall or e-mall, is a collection of individual

shops under one Internet address. The basic idea of an electronic mall is the same as

that of a regular shopping mallto provide a one-stop shopping place that offers many

products and services. Representative cybermalls are Downtown Anywhere

(da.awa.com), Hand Crafters Mall (rocksworld.com), Americas Choice Mall

(mall.choicemall.com), and Shopping 2000 (shopping2000.com). As is true for vendors

that locate in a physical shopping mall, a vendor that locates in an e-mall gives up a

certain amount of independence. Its success depends on the popularity of the mall, as

well as on its own marketing efforts. On the other hand, malls generate streams of

prospective customers who otherwise might never have stopped by the store. Each

cybermall may include thousands of vendors. For example, shopping.yahoo.com and

eshop.msn.com include tens of thousands of products from thousands of vendors.

Electronic retailing (e-tailing) is the direct sale of products through electronic

storefronts or electronic malls, usually designed around an electronic catalog format

and/or auctions.

ISSUES IN E-MALL MODEL

The commercial viability of the e-mall model has been questioned in its current

implementation and in the current state-of-the-market. For example IBM World Avenue,

has folded. One of the reasons may be that the neighbour concept does not translate

into physical distance in cyberspace, where each location is only one click away.

Therefore, not much additional convenience in finding shops is delivered. The following

are the major issues faced by e-tailers.

Channel conflict - If the seller is a click-and-mortar company, it may face a conflictwith its regular distributors when it sells directly online. Known as channel conflict,

this situation can alienate the regular distributors and has forced some companies

(e.g., lego.com) to limit their B2C efforts; others (e.g., automotive companies) have

decided not to sell direct online. However, a better approach is to try to collaborate

in some way with the existing distributors whose services may be restructured.



Order fulfillment - E-tailers face a difficult problem of shipping very small quantitiesto a large number of buyers. This can be expensive, especially when returned items

need to be handled.

Viability of online e-tailers - Most of the purely online e-tailers (excluding serviceindustries) were unable to survive and folded in 20002002. Companies had

problems Section 9.2 Business-To-Consumer Applications 279with customer

acquisition, order fulfillment, and forecasting demand. Online competition, especially

in commodity-type products such as CDs, toys, books, or groceries, became very

fierce, due to the ease of entry to the marketplace.

Conflicts within click-and-mortar organizations - When an established companydecides to sell direct online, on a large scale, it may create a conflict within its

existing operation. Conflict may arise in areas such as pricing of products and

services, allocation of resources (e.g., advertising budget) and logistics services

provided to the online activities by the offline activities (e.g., handling of returned

items purchased online). As a result of these conflicts, some companies have

completely separated the clicks (the online portion of the organization) from the

mortars (the traditional brick-and-mortar part of the organization). This may

increase expenses and reduce the synergy between the two.

Lack of funding - The so-called dot-com companies enjoyed almost unlimitedfunding between 1995 and 1998. After burning lots of money and being unable to

generate profits quickly, the sources of funding dried up, resulting in many

bankruptcies.

Incorrect revenue models - Many dot-com companies were selling at or below costwith the objective of attracting many customers as well as advertisers to their sites.

The idea was to generate enough revenue from advertising. This model did not

work. Too many dot-com companies were competing on too few advertising dollars,

which went mainly to a small number of well-known sites such as AOL and Yahoo!.



Q.5 What are the pitfalls of the pure-play mode of B2C e-commerce? Discuss howB2C e-commerce strategy can be repositioned to combine the strength of bothphysical and virtual business channels in the click and mortar mode ofoperations.

PURE-PLAY MODE OF B2C E-COMMERCE

In e-business terms, a pure play is an organization that originated and does businesspurely through the Internet; they have no physical store (brick and mortar) where

customers can shop. Examples of large pure play companies include Amazon.com (in

its initial business when it was only involved in retail products) and Netflix.com (in

content). With a much lower barrier to entry, the Internet affords smaller companies the

ability to compete with much larger brands due to typically lower overhead and

marketing costs.

DRAWBACKS OF PURE-PLAY MODE OF B2C E-COMMERCE

Though the web-based selling has captured good position in the markets, yet the

financial performance of most of them has not turned out as well as expected.

According to a research in 1999, in US there were 3.2 million new online banking

customers. However, 3.1 million other customers gave up on it, showing that how

quickly customers abandon websites. According to a survey, for every completed online

transaction, almost four times as many are abandoned. The main reasons are:

Slow processing of purchase orders

Links to out-of-stock products,

High shipping costs,

Security concerns,

After-sales support,

Cases of fraud (non-delivery etc)

Difficulty in returning damaged or wrong products,

Most e-tailers lose money on each transaction.

Pure plays usually dont have the advantage of established brand names, customer

bases and inventory system; they have to start from ground zero, and must devote their

resources and time to building a brand name and customer base.

Pure plays are occasionally beset with costly email viruses, and must be evervigilant

against spammers. Security and technical problems sometimes have to be dealt with;



they must retrain for the Internet sales format, must learn how to use an email dialogue

with customers, starting slowly and, because customer trust of the pure play retailer is

often lacking, they must gradually build the customers trust.

Some retailers consider the Internet technology to be too expensive, too difficult to use,

of little value, or intrusive. Many consumers believe that ads and cookies invade their

privacy. Many consumers hesitate to shop from a pure play retailer because they

cannot try or feel an item before purchasing nor, in the case of clothing, try it on. Many

find it inconvenient to return purchased goods if they are not satisfactory and large

percentage are not comfortable using a credit card online and disclosing their personal

information. Customer service is often lacking, as well as proper delivery of goods.

CLICK AND MORTAR MODE B2C E-COMMERCE

Click & mortar business models combine a physical presence with online selling or

marketing. Click & mortar businesses may operate a website that sells products or

advertises those it sells on the high street. The difference between the two business

models is reflected in running costs, marketing strategies and customer perceptions.

Internet business have fewer overheads but businesses that have a strong street

presence inspire more customer confidence.

SUCCESSFUL B2C E-COMMERCE THROUGH CLICKS & MORTAR OPERATIONS

We can have success in B2C business models in E-Commerce through some of the

following key elements of Clicks and Mortar strategy:

Marketing

Pure-play companies have to invest more money, time and effort in marketing than

a hybrid businesses. Businesses that have a physical presence, particularly on a

national or international scale, are already known to potential customers, whereas

Internet business have to advertise their presence more aggressively. According to

CRM magazine, the average Pure-play company spends $82 dollars to acquire a

new customer, whereas a traditional retailer spends $12 dollars.

Perception

Business that combine a presence on the street with online retailing may inspire

more customer confidence than those that only operate online, according to the

Internet Marketing Center. Customers believe that a business is less likely to vanish

overnight if it has a customer presence, the website explains. However, online

businesses that have built up an excellent reputation for customer service and



respond to telephone calls and emails quickly and professionally also inspire

customer confidence.

Customer Retention Customer Loyalty

In cyber-world, competitors are only a click away and customer loyalty is much lower

than any other mode of business. Online customers are more sophisticated and

demanding. A good online customer must be supported by other traditional

(physical) customer services like call centres, return spots etc.

Transactions across Multiple Channels

It is important for retailers (e-tailers) to integrate online channels with the various

traditional channels, by providing an integrated order management mechanism. A

customer may have to go through the various order processes like he may look at a

product in store, research its details and place the order, contact the retailers call

centre to modify the order if required and may return the product for any reason.

Fulfilling and Delivering

In past, there were a number of instances that during holiday seasons, internet

retailers were unable to fulfill the orders. Therefore, it is really important for e-tailers

that they must have a robust e-fulfillment infrastructure, which will drive customer

satisfaction and increase the growth. Moreover, information such as item availability,

confirmation of delivery date, order completion, order tracking, notice of late delivery

etc should be available online.



REFERENCES

E-Commerce by Gary Schneider - 9th Ed

E-Commerce Code 5576 COL MBA AIOU

http://peoi.org/Courses/Coursesen/emarket/Resources/Business Models for

Electronic Markets

http://en.wikipedia.org/wiki/Pure_play

http://www.programmingsimplified.com/java-source-codes

http://searchsoa.techtarget.com/definition/Java

http://krebsonsecurity.com/tag/java/

http://www.zdnet.com/article/how-big-a-security-risk-is-java-can-you-really-quit-

using-it/

http://en.wikipedia.org/wiki/Web_2.0#Technologies

http://seclab.cs.ucdavis.edu/projects/testing/papers/cgi.html

http://www.w3.org/Security/Faq/wwwsf4.html

http://www.slideshare.net/abidi512/e-commerce-12919436

http://blog.digitalstruct.com/2007/08/02/e-commerce-framework-part-2/

http://happening.pk/meetup/e-commerce-and-its-role-in-fostering-economic-

development-in-pakistan/

aiou-ass1 5576 autumn2014

Documents

growth of ecommerce

terms ecommerce

ecommerce activities

aspects of ecommerce

term ebusiness

mostlythe term ecommerce

aw565146e commerce page

growth of internet switching