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E-commerce: Digital markets, Digital goods

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Maitha Al-Suwaidi

on 26 May 2014

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Transcript of E-commerce: Digital markets, Digital goods

E-commerce

Digital Markets, Digital Goods
E-commerce refers to the use of the Internet and the Web to transact business.
Commercial transactions involve the exchange of value (e.g., money) across organizational or individual in return for products and services.

E-commerce began in 1995 when one of the first Internet portals, Netscape.com, accepted the first ads.

E-Commerce Today
Digital Markets compared to Traditional Markets
How the Internet changes the markets for digital goods

Types of E-Commerce


Business-to-customer (B2C): Retailing of products and services directly to individual customers (Chapters.Indigo.ca)
Business-to-business (B2B): Sales of goods and services to other businesses (ChemConnect)
Consumer-to-consumer (C2C): Individuals using the Web for private sales or exchange (eBay.ca )
M-Commerce services and applications

Location-based Services

Banking and Financial Services

Wireless Advertising and Retailing

Games and Entertainment

E-Commerce Business Models

Portal
E-tailer
Content Provider
Transaction Broker
Market Creator
Service Provider
Community Provider
E-Commerce Revenue Models

Advertising

Sales

Subscription

Free/Fremium

Transaction Fee

Affiliate

Activity
Why E-commerce is Different
Ubiquity
Market place
Market space
Global reach
Traditional commerce:
National audience

E - commerce:
Global audience
Universal standards
lower market entry costs
reduce search and transaction costs

Richness
The Web makes it possible to deliver rich messages with text, audio,
and video to large numbers of people.
Interactivity
Interactivity allows an online merchant to engage a consumer in ways similar to a
face-to-face experience
but on a massive, global scale.
Information density
Price transparency
Cost transparency
Price discrimination

E-commerce technologies
reduce
information collection, storage, processing, and communication costs.
while E-commerce
increase
the currency, accuracy, and timeliness of information.
Information density also helps merchants differentiate their products in terms of cost, brand, and quality.

Personalization/Customization
Personalization:
adjusting the message to a person’s name, interests, and past purchases.
Customization:
changing the delivered product or service based on a user’s preferences or prior behavior.

Social technology
Allowing users to create and share with their personal friends (and a larger worldwide community) content in the form of text, videos, music, or photos.
Information asymmetry
exists when one party in a transaction has more information that is important for the transaction than the other party.
Disintermediation
Digital Goods
Digital goods
are goods that can be delivered over a digital network. Music tracks, video, Hollywood movies, software, newspapers, magazines, and books can all be expressed, stored, delivered, and sold as purely digital products.
B 2 C
B 2 B
C 2 C
Example:
Google, Bing, Yahoo, MSN

Value:
provides a destination site

Revenue:
attracting very large audiences,
charging advertisers for ad placement
collecting referral fees for steering customers to other sites
Charging for premium services.
In 2010, portals generated an estimated $13.5 billion in revenues.

Example:
“bricks-and-clicks,” - operate only in the virtual world,

Value:
to provide convenient
low-cost shopping 24/7, o
Offering large selections and consumer choice.

Revenue:
Online retail generated about $152 billion in revenues for 2010.

Example:
distribute information content, such as digital video, music, photos, text, and artwork, over the Web.

Value:
consumers can find a wide range of content online, conveniently, and purchase this content cheaply, to be played, or viewed, on multiple computer devices or smartphones.

Revenues:
for 2010 the total download and subscription media are between $8 billion and $10 billion annually.

Example:
financial services and travel services.

Value:
propositions are savings of money and time, providing an extraordinary inventory of financial products and travel packages, in a single location- charge fees that are considerably less than traditional versions of these services.

Example:
eBay – amazon and Priceline

Value:
provide a platform where sellers can easily display their wares and where purchasers can buy directly from sellers.

Revenue:
generate about $12 billion for 2010.
 

Example:
Google Apps, Gmail, and online data storage services.
 

Example:
Facebook, MySpace, and Twitter.
 

M-commerce has taken off. In
2010
M-commerce represented less than
10
percent of all e-commerce

M-commerce is the fastest growing form of e-commerce, with some areas expanding at a rate of
50
percent or more per year, and is estimated to grow to
$19
billion in 2014

In 2010, there were an estimated
5
billion cell phone subscribers worldwide, with over
855
million in China and
300
million in the United States

The main areas of growth in mobile e-commerce are


Location-based services:
$215 million in revenue in 2010
Software application sales at stores:
such as iTunes: $1.8 billion
Entertainment downloads
of ring tones, music, video, and TV: $1 billion
Mobile display advertising:
$784 million
Direct shopping services:
such as Slifter: $200 million
E-booksales:
$338 million

Annual Earning for 2014:
80 Billion
Annual Earning for 2014:
17.2 Billion
Annual Earning for 2014:
61.6 Billion
Annual Earning for 2014:
4.36 Billion
Annual Earning for 2014:
10 Billion
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Outline
E-commerce today
5 big companies - Growth
Why E-commerce is different
key concepts in E-commerce
Types of E-commerce
E-commerce business model
E-commerce revenue
Paypal
Activity
Full transcript