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The eCommerce stands for electronic commerce i.e., the process of buying and selling products online is called eCommerce. eCommerce allows consumers to buy, sell or expand business without geographical barriers. Over past decade, the eCommerce has developed exponentially.
In early 1960s, IBM has introduced the process called OLTP (Online Transaction Processing), that facilitates and manages application for transaction processing. Semi-Automatic Business Research Environment (SABRE) was one of the major applications, then, which was developed for American Airlines for online ticket reservation. However, the first ever generic eCommerce transaction was registered on 11th August, 1994, where a man named Don Kohn sold a music CD to his friend on his website NetMarket. From then, officially, the term eCommerce took pace and has been extended over every possible point in making business.
In order to provide these online services, a platform is needed, which is nothing but an eCommerce website. There are many eCommerce websites available. Examples are Amazon, Alibaba, JingDong, Zalando, Flipkart, Jabon, Myntra etc. These are colloquially called online eCommerce stores. eCommerce has become a business model as soon as online transactions over past two and half decade increased.
The eCommerce business models can be classified usually into 5 types, as follows.
A transaction is assessed as Business-to-Business model when both the seller and buyer are business entities. Usually, there are three cases in the B2B model.
A transaction is assessed as Business-to-Consumer model, when the buyer is the end user. As mentioned in the third case of B2B model, a supermarket buys products from manufacturers. These product are sold directly to the customer, which is nothing but B2C model. If this buyer also maintains an online eCommerce store, then it is the B2C eCommerce model. Usually, B2B is followed by B2C model. The transactions made by an end user in a shop fall under the B2C model.
A transaction is assessed as Consumer-to-Consumer model, when both the seller and buyer are end consumers. For example, you want to sell your bike. So, you choose to sell it on an online platform like OLX or Craigslist i.e., as a consumer of an end product, you are able to sell the product online. Typically, when a user wants to sell an already owned product, the business model is defined as C2C model.
A transaction is assessed as Business-to-Administration model, when the transaction is between a business and a public administrative body; anyone of them can be a buyer or seller. This is also called Business-to-Government (B2G) model. E-procurement is the most common example that falls under B2A model. The procurement process has three elements, which are usually denoted as RFx. RFx stands for Request For x, where x can be information, proposal or quotation - RFI, RFP or RFQ. When all the transactions made for these elements are online, then this is denoted as eRFx - electronic-RFx.
A transaction is assessed as Consumer-to-Administration (C2A) model, when one of the seller and buyer is the end user and the other is public administrative body. Whenever we pay bill to the service provided by the government, the business model is classified as C2A model. Paying the current bill, telephone bill, tax filing etc are the examples of C2A model, where the government is the seller and the end user is the consumer. On the other hand, in the contexts like road expansion, the government acquires land from the end user, where the end consumer is seller and the government is the buyer. If all of these transactions are made online, then they fall under the C2A eCommerce model.
When you own an online eCommerce store, there are certain requirements to be met, in order to run the store smoothly. These are usually written as elements of online eCommerce store. With the inspiration drawn from the online eCommerce websites like Amazon and Alibaba, many online stores came up. But, they couldn’t continue their services for a long time. Here are the list of elements to establish a good online eCommerce store.
Product management involves in a series of steps that allows a store to deliver a complete product to the customer. It also involves in understanding the reception of the product in the market and taking necessary actions when the product is not well received by the consumers. All of these activities are taken care by the Product Manager (PM). A PM works for the amplification of the sales revenue and profit margins of the company. The PM also analyzes the market trend, requirements if the consumer and the effect of the product over the market. The PM is also responsible for shutting down the supply of a product if it is not performing well in the market.
In an online environment, the PM is responsible for several other factors. Online store can be made available to the consumers in different forms - through an online website or mobile app. The PM takes care of both of these platforms, the payment gateways and other problems involved in online transaction.
Shopping cart should be simple for the user to checkout easily, may be within very few clicks. It should provided necessary checkout options. It should provide the options adding and removing multiple products at the same time. On the other hand, it should also provide the options like wishlist and save for later, as the consumer may not be completely up to buying the product at the instant. In simple words, the online shopping cart should be as flexible as the offline cart we carry in a supermarket.
Payment gateway is the service provided by the merchant, that facilitates, accepts and approves payment via different means - credit card, debit card, wallet payments, internet banking, PayPal payments etc. All of these monetary transactions should be secure. Hence, the payment gateway provides security using different encryption algorithms like SSL (Secure Socket Layer) encryption. CC Avenue, PayU Money, EBS and Instamojo are the most common payment gateways available in India.
Logistics is the management of product that facilitate delivery of the product from the source to the destination. When a consumer orders a product online, it is to be delivered on time, to the location mentioned. Logistics involves in packaging the product, transporting and collecting at warehouse. Delivery is the extended part of Logistics. There are two types of logistics - Inbound and outbound.
Inbound logistics involves in movement of raw material and inventory, that are helpful in manufacturing a product whereas outbound logistics involves in the movement of a complete product to the end user. For example, the logistics of movement of iron from the iron suppliers to the bike manufacturing units fall under inbound logistics whereas a delivery agent delivering the product, which was ordered online, to the customer falls under outbound logistics.
Supply Chain (SC) is the flow of manufacturing an end product out of the very raw materials. Managing the flow of Supply Chain is called Supply Chain Management (SCM). It involves in several steps. Following are the generic steps of SCM.
Once the customers start using the product, the sales of the product decide the success factor of the product. As mentioned earlier, the Product Manager follows up the product trend in the market.
As eCommerce has become the most common mode of purchasing commodities, the Govt. of India has imposed certain regulations in order to provide a transparent and stainfree electronic payments. These eCommerce regulations are applied to the business on-top-of general business regulations.
The Payment and Settlement Systems Act 2007 nominates the Reserve Bank of India (RBI) to enable online payments. There are three terms defined in this act - ‘Payment System’, ‘System Provider’ and ‘System Participant’, where these terms are defined in the sections 2(i), 2(q) and 2(p), respectively, as follows:
If a firm wants to set up a payment system, then it has to comply with the Payment and Settlement System Regulations, 2008, after which an “authorization certificate” is issued. It takes a maximum of six months in order to complete the process of acquiring the authorization certificate, where RBI reserves the rights to commission an inquiry in order to verify the authenticity of the information provided in the application. If the verification results are negative, RBI reserves the right to cancel the application.
There are other RBI guidelines to be followed, under Section 38 of Payment and Settlement Systems Regulations Act 2007. The norms like Know Your Customer (KYC), Anti Money Laundering (AML) and Combating of Financing of Terrorism (CFT) were also introduced to provide secure online payments.
These are just the basics of the eCommerce government regulations. There are many sections and subsections that provide different aspects of eCommerce regulations in India.
There are many advantages in building and maintaining an eCommerce website, here they are listed.
Expanded reach - Internet has no barriers do does eCommerce i.e., the products sold on the eCommerce website can be across the globe. This helps to reach more potential customers when compared to offline business. When more customers are coming in for purchase, the business can be expanded easily.
Ease of targeting customers - With the help of tools available on the internet, a product can reach the target customers, which results in effective and more possibly potential business. For example, men are the target customers for a shaving cream, so women are for lipsticks. With the help of internet, it can be made sure that the shaving cream advertisement reaches only men and lipstick advertisement does women.
Acquire goods on order - In real-time we never know the requirement. For an offline business, if a customer needs high volumes of delivery of a quantity, then it’s not possible to accommodate those goods before hand. For an online business, there is hardly a need to maintain a product in stock. The goods can be acquired as soon as and as many as the customer orders.
Eliminate need of cash - As the world is evolving digital, online stores eliminate the need of maintaining in-hand cash, when you want to shop. No more bulky wallets or cards to carry.
Low financial cost - The cost of starting up an online business is very less when compared to that of an offline business. All the cost need to setup the physical infrastructure can be invested into advertising the business. All it takes is an eCommerce website, a payment gateway and maintenance of the website. In the modern day, building and maintaining an eCommerce website has become so easy that they are available as readymade services, at pretty affordable prices.
24/7 income - When it is an offline business, at least a day off is needed for any reason. But in an online eCommerce business, there is no need to take an off, as the online store or website will be available 24/7, which is becomes a potential income and business.
Option to display best sellers - In an offline business, it becomes hard to display the best seller, though it is not guaranteed that the product is really suitable to a customer. But in online stores, the target customer and their interests can be identified. This helps display the best sellers to the customers based upon their purchase history.
Personalised shopping experience - For example, a customer is visiting your eCommerce store just for buying a specific category of products, then it becomes easy to personalise the products based upon the category of the customer choice.
Lesser man power - For an offline business, the maintenance is a big deal. But, in the online eCommerce business, the maintenance is only in terms of software i.e., maintaining the web servers and the website can suffice. This ultimately results in lesser man power requirements, when compared to that of the offline stores.
Lesser advertisement effort - With online eCommerce stores, there is no need to advertise on physical medium like newspapers and on streets. Digital advertisement is enough, where the advertisement can reach maximum of the target customers within a stipulated time.
With all these advantages of online eCommerce website, the next land is on architecting and eCommerce website development. There are nine generic steps to follow in creating a successful eCommerce website. Most of the modern day eCommerce websites follow these steps to start their business with an eCommerce website.
Apart from these generic steps, there are other specific steps that add value to you online eCommerce website. For example, you can add the facility of coupons for promotions. You can add referral points for maximum mouth publicity. You can add discounts or cashback when you tie up with particular payment gateway or with a particular banking medium. It all depends upon how dynamic you run your eCommerce website.
Though there are different applications for creating eCommerce website on-the-go, not every time it is possible. So, depending upon the requirement, you may wish to develop the website from scratch. The next section deals with the most popular eCommerce website development technologies. PHP, Python and Ruby are the technologies being discussed.
PHP is one of the mostly used platform independent server-side scripting language. The major advantage of PHP is that it is compatible with most of the web applications. PHP provides standard templates and plugins that are extremely helpful in the development of an eCommerce website with ease. It uses a Model-view-controller architecture, which helps it to develop effective user interfaces and helps in speeding up the development process.
PHP provides a wide range of frameworks that support online eCommerce website development. OpenCart, Shopify, X cart, osCommerce and Magento are the most commonly used PHP frameworks for the development of an online eCommerce websites.
Shopify is also a PHP framework that allows the developers to create customized eCommerce websites. It is a completely cloud-based framework, which make the merchants relieve from the hectic maintenance and upgradations. Following are the features of Shopify.
X cart is an open source template engine, developed from PHP. It is distributed as an SaaS model i.e., Software-as-a-Service model. Following are the features of X cart.
osCommerce is the PHP framework for eCommerce, distributed with GNU General Public License. It can function on any web server that is installed with PHP and MySQL. Following are the features of osCommerce.
Magento is one of the most commonly used PHP frameworks for eCommerce, with more than 30k merchants using it. It offers flexibility and control over each of the functionalities of an online eCommerce store. Following are the features of Magento:
Python is the most commonly used general purpose programming language, as it is easily readable. Python supports wide range of frameworks. Django, Shuup and Cartridge are the most commonly used Python frameworks.
Django is an open source Python framework, which is very well used for eCommerce website development. Following are the features of Django framework.
Shuup is a community driven open source PHP framework designed especially for eCommerce websites. Following are the features of Shuup.
Cartridge is a shopping cart application developed from Django. In order to provide simple mechanism for developing an eCommerce website, it does not support every possible feature. It supports the most commonly used features for eCommerce website. Following are the features of Cartridge.
Ruby on Rails (ROR) is the framework developed from Ruby, which uses the MVC pattern. Convention over Configuration (CoC) and Don’t Repeat Yourself (DRY) are the principles of Ruby.
Ruby on Rails, Padrino, Sinatra, NYNY, Nancy, Cuba and Grape are the most commonly used frameworks developed from Ruby. All of these frameworks provide wide range of business utilities in order to create a good website.
The term Content Management System is pretty explanatory itself i.e., it the method used for managing the digital content available in a website. A CMS should allows the user to publish the content, modify it, maintain content modification history and index the website for search engines. The web content may contain different types of data along with text data - images, videos, maps, cliparts, audio etc. A CMS should enable the user to integrate different kinds of content into the website, in order to provide a complete information to the end-user. A CMS has two components.
Content Management Application (CMA) - A CMA allows a user to work on the content of the website, even with least possible technical skills.
Content Delivery Application (CDA) - As CMA provides an interface to input content to the website, the CDA updates the content to the website in real-time.
There are different CMS platforms that allows user to develop, manage and deliver content effectively. Following are the most commonly used CMS platforms.
Magento is a partially open source CMS platform that offers increased control over the content to the user. Pages, staging, design, content blocks, banners and widgets are the building blocks of Magento as a CMS. Following are the advantages of using Magento as a CMS.
Prestashop is an eCommerce solution developed under Open Software License (OSL). Being developed in PHP, it uses MySQL as the database management system. The features like its support for themes and modules help it to become one of the most used eCommerce solutions. More than 2,50,000 shops powered by Prestashop are available across the globe, varying over 60 languages. Following are the advantage of Prestashop.
OpenCart, developed with MySQL database and HTML components, allows the merchants to provide cart system to the users, with a minimal cost possible. Following are the advantages of OpenCart.
Zencart is a PHP based eCommerce CMS, with MySQL as the database management system. Following are the advantages of Zencart.
WooCommerce is a Wordpress plugin that allows the merchants and developers a complete control over the data available in the website. Following are the advantages of WooCommerce.
Just like many other CMSs, VirtueMart was also developed in PHP with MySQL as the backend. It is the extension of Joomla! It supports unlimited categories of products with unlimited products. It also supports virtual products like music and books. Following are the advantages of VirtueMart.
Drupal is an open-source eCommerce software that can be used along with the Drupal CMS. Drupal commerce comes with all the features that are required by a modern day eCommerce website. Following are the advantages of Drupal commerce.