ch9

• 1. commerce


  Use of the internet and web to transact business; digitally enabled transactions
• 1. commerce examples


  • Amazon
  • Souq
  • E-bay
• 1. commerce began in 1995 and grew exponentially, still growing even in a recession
• 1. commerce consumer sales topped one trillion USD in 2012
• Around 79 million internet users by 2011, approximately 36 % of the population in the Arab region
• Internet penetration around 35% in the Arab region
• Device becoming the most common internet access device

  Why does it matter?
• Business transformation due to e-commerce

  • Not all industries transformed at once
  • Demographics
  • Technology foundations
  • New business models emerge
• Technology that supported the growth of e-commerce

  • Example: Social networks, online advertising
• Unique features of e-commerce

  • Ubiquity
  • Global reach
  • Universal standards
  • Richness
  • Interactivity
  • Information density
  • Personalization/Customization
  • Social technology
• 1. commerce in the Arab world lags behind the West due to slower development of internet infrastructure, consumer trust issues, payment systems, and logistics
• In the Arab world, most digital marketing expenditure goes on advertising, including banner ads, online brand awareness, and methods to drive traffic towards a website
• Successful e-commerce companies in the West spend a much higher proportion of digital marketing budgets on analytics, data-driven decision making, and on optimizing conversion rates
• Digital markets


  • Reduce information asymmetry, search costs, transaction costs, and menu costs
  • Enable price discrimination, dynamic pricing, and disintermediation
• Digital goods

  • Goods that can be delivered over a digital network
  • Cost of producing first unit almost entire cost of product, marginal cost of 2nd unit is about zero
  • Costs of delivery over the internet very low
  • Marketing costs remain the same; pricing highly variable
  • Industries with digital goods are undergoing revolutionary changes
• Types of e-commerce


  • Business-to-consumer (B2C)
  • Business-to-business (B2B)
  • Consumer-to-consumer (C2C)
  • Mobile commerce (m-commerce)
• 1. commerce business models


  • Portal
  • Regional E-commerce portals
  • E-tailer
  • Content Provider
  • Transaction Broker
  • Market Creator
  • Service Provider
  • Community Provider
• 1. commerce revenue models


  • Advertising
  • Sales
  • Subscription
  • Free/Freemium
  • Transaction fees
• Types of e-commerce


  • Business-to-consumer (B2C)
  • Business-to-business (B2B)
  • Consumer-to-consumer (C2C)
  • Mobile commerce (m-commerce)
• 1. commerce business models


  • Portal
  • Regional E-commerce portals
  • E-tailer
  • Content Provider
  • Transaction Broker
  • Market Creator
  • Service Provider
  • Community Provider
• 1. commerce revenue models


  • Advertising
  • Sales
  • Subscription
  • Free/Freemium
  • Transaction Fee
  • Affiliate
• Portal


  Provides initial entry point to the web
• Portals


  • Yahoo
  • Google
• 1. tailer


  Sells physical products directly to consumers or to individual businesses
• 1. tailer


  • souq.com
• Content Provider


  Creates revenue by providing digital content
• Content Provider


  • iTunes.com
• Transaction Broker


  Saves users money and time by processing online sales transactions and generating a fee each time a transaction occurs
• Transaction Broker


  • Booking.com
• Market Creator


  Provides a digital environment where buyers and sellers can meet, search for products, display products, and establish prices for these products
• Market Creator


  • e-bay
• Service Provider


  Provides Web 2.0 applications such as photo sharing
• Service Provider


  • Canvas
• Community Provider


  Provides an online meeting place where people with similar interests can communicate and find useful information
• Community Provider


  • Facebook
• 1. Business Model


  Value Proposition: How a company's products/services fulfill customers needs
• Value Proposition


  • Minimize search cost (Google), price discovery cost (bizRate)
• 1. Revenue Model


  How a company generates revenue
• Business Model


  • Portal: Bing.com

  Service Provider: Dropbox.com

  Transaction Broker: Expedia.com

  Market Creator: Etsy.com

  Community Provider: Instagram

  1. tailer: https://seoudisupermarket.com/en/

  Portal: Bizrate.com
• Wisdom of crowds/crowdsourcing: the concept that large numbers of people can make better decisions about topics and products than a single person