"Internet Retailing"--Chapter III e-commerce and network retailing

Chapter III e-commerce and network retailing

Section I the emergence and development of electronic commerce

Since the 1990s, mankind has gradually created a new and powerful productivity-electronic commerce. It is changing people for thousands of years to form the traditional concept of business activities and operating methods, it directly affects business activities, indirect role in all aspects of the economy, triggering the human society after the Agricultural Revolution, the Industrial Revolution after the third revolution.

I. The emergence and development of electronic commerce

E-commerce is a growing concept, the pioneer of E-commerce in 1996, IBM introduced the concept of Electronic Commerce (commerce), by the year 1997, the company also proposed electronic The concept of Business (e-business). However, in the introduction of these concepts in China are translated into E-commerce, many people on the concept of the two have been confused. In fact, the two concepts and content are different, commerce should be translated into electronic commerce, some people will commerce called the narrow sense of E-commerce, will e-business known as the broad sense of e-commerce. Commerce refers to the realization of the entire trade process in all stages of the electronic trade activities. E-business is to use the network to achieve all business activities business process electronic. Commerce focuses on electronic transactions, emphasizing business and external transactions and cooperation, while e-business expands the scope of coverage. In a broad sense, the use of various electronic tools for business or activity. The narrow sense refers to the use of the Internet to engage in business or activity.

E-commerce covers a wide range, generally can be divided into business-to-business, consumer, Consumer-to-consumer, b2m four types of e-commerce models. Among them the enterprise to the Enterprise (business-to-business), and the Enterprise to the consumer (Business-to-consumer) two kind of development earliest, moreover also has the consumer to the consumer (Consumer-to-consumer) This big step growth pattern. Business-to-marketing is a marketing-oriented E-commerce Enterprise (E-commerce Company or E-commerce is its important marketing channel company). B2M E-commerce company based on customer demand for the core of the establishment of the marketing site, and through the line and the line of a variety of channels to the site to carry out a wide range of promotional and standardized shopping guide management, thus making the site as an important marketing channel for enterprises.

Take Europe and the United States as an example, can say e-commerce business development in full swing. In France, Germany and other European countries, e-commerce generated by the turnover accounted for 1/4 of the total business, in the United States has reached more than 1/3, and the European and American countries to carry out E-commerce is only more than 10 years of time. In the United States, AOL, Yahoo, Electronic harbor and other well-known e-commerce companies began to make money around 1995, by 2000 to create 780 million of dollars, IBM, the Amazon Bookstore, Dell Computers, Wal-Mart and other E-commerce companies in their respective areas have made incredible huge profits.

Because of the business model of consumer and consumer to consumers and consumers, the main research object of this book is the Consumer-to-consumer and Consumer-to-consumer mode in electronic commerce.

Ii. introduction of e-commerce and development in China

(i) Introduction of e-business Systems

E-commerce in China began in 1997. The business model is the first E-commerce model produced in China, which is marked by the official operation of 8848 Online mall.

If the U.S. E-commerce is "business-driven", then China's e-commerce is more "technology-driven", which is the development model of E-commerce in China and the United States the biggest difference in E-commerce. In the United States, E-commerce practice earlier than the concept of e-commerce, business needs "to promote" the network and E-commerce technology progress, and promote the formation of e-commerce concepts. When the internet age comes, the United States has a more advanced and developed E-commerce Foundation. In China, E-commerce concept first in the application and development of E-commerce, "enlightenment" is IBM and other IT vendors, network and E-commerce technology needs to constantly "pull" the business needs of enterprises, and thus lead to the application and development of E-commerce in China. To understand this difference is very important, this is a major feature of China's E-commerce development, but also understand the application and development of E-commerce in China a key.

In the 1997 and 1998, the main body of E-commerce in China is some it manufacturers and media, they are in various ways of E-commerce "enlightenment education" to inspire and guide people to e-commerce awareness, interest and demand. Through this stage, in 1999 and 2000, the electronic Commerce service provider with the main features of the website became the earliest application of e-commerce in China, and became the main body of E-commerce in China at this stage. With the deepening of the application and development of electronic commerce, with the bursting of the capital market bubble, the website E-commerce began to fall into the trough, and enterprises, especially the traditional enterprises began to enter the field of E-commerce, China's E-commerce from 2001 into the third stage, the Enterprise E-commerce has become the new subject of E-commerce in China.

Compared with traditional commerce, all the transaction process of electronic commerce is completed in the virtual environment, the space span between enterprises and consumers, so that the traditional face-to-face hand-handed delivery of the transaction method can not be achieved. During this period, on how to effectively use E-commerce system, enterprises and consumers are in the process of groping and learning, the relevant management agencies on how to effectively manage E-commerce system also exists a learning process, and as an e-business system, another major participant is the bank has not established a secure and convenient online payment system.

The operation of e-commerce system is maintained mainly by the integrity of the participants at present, our country lacks the effective appraisal mechanism to the various behavior subject's trustworthiness degree which participates in the economic activity, many successful on-line transaction even is establishes on the participant's Personal Ethics Morals Foundation, therefore the participant's legitimate rights and interests are not guaranteed, the online fake commodity overflow, Fraud occurs and consumers are insecure about online transactions. All kinds of unfavorable factors greatly reduce the use of E-commerce in the Enterprise utility and consumer utility, so that the development of business E-commerce in China is at a standstill, coupled with the lack of effective institutional arrangements, leading to the rapid development of the Internet in China, and e-commerce systems in the marginalization of the evolution.

(ii) The growth period of electronic commerce

After entering the 20th century, our country's electronic commerce entered a brand-new period. During this period, the regulatory body of electronic commerce of our country also experienced the process of management change led by Ministry of Information Industry, MOFTEC, PBC, state Economic and Trade Commission, State Planning Bureau, National Administration of Industry and commerce. 2004, the Ministry of Commerce started the "China e-Commerce Report", established the Ministry of Commerce in the development of E-commerce guidance role.

Since 2004, the State has promulgated and implemented a series of laws and policies conducive to the development of electronic commerce, and provided a healthy development platform for E-commerce system: The "People's Republic of China Electronic Signature Act", promulgated in August 2004, began in April 2005. November 2004 China Electronic Commerce Integrity Alliance was established in Beijing, December 2004 China Security Electronic Seal management system was opened; in January 2005, the State Council announced several opinions on speeding up the development of Electronic Commerce (2nd).

China's E-commerce development is rapid, 2007 total E-commerce transactions amounted to 2.17 trillion yuan, a year-on-year increase of 90%. China's online shopping has developed rapidly, at the end of June 2008, the number of online shopping users reached 63.29 million, increased by 36.4% in half a year. As of December 2008, the total user coverage of E-commerce sites has been upgraded from 90 million to 98 million households.

I. E-commerce

The computer network developed at the beginning of the 9O 20th century (the complex of information technology, microelectronic technology, communication technology and computer technology) laid the basic tools for human business activities in the 21st century. On this basis, people use information technology to the business activities of the object of the qualitative transformation, transform it from the physical form to the virtual form, at the same time, with the change of tools and objects counterproductive to the workers, the traditional business workers also from mastering a single business technology into information, business complex technology master and operator.

The broad sense of electronic commerce refers to the use of electronic tools in the field of commerce. By this definition, e-commerce should be based on the invention of Telegraph and the use of commercial activities, but today's social electronic tools more modern. The narrow sense of electronic high means that in the information society, people with information technology and business technology systematically use electronic tools, high efficiency, low cost, across time and space, to engage in various economic activities with the exchange of commodities as the center.

The main differences between E-commerce and traditional commerce are shown in the following table:

Table 3-1 main differences between electronic commerce and traditional commerce

Compare items

Traditional business

Commerce

Tool conditions

Traditional transport tools, paper and pen data processing tools

Electronic transmission and processing tools based on communication network and computer network

Worker Skills

Business Skills

Information technology use skills and modern business skills

Object

The purchase, transportation, storage and sale of materialized commodities

The informatization of commodity, the collection, storage, processing and transmission of information goods

Activity speed

decided mainly by means of transport

Mainly determined by electronic transmission tools

Place of activity

Tangible finite space

There is a vast space invisible

Activity time

Segmented discontinuous time

Unified Complete Continuous time

Major cost components

Manpower, transportation, physical, commodity turnover and capital occupancy, etc.

Manpower, commodity informatization, informatization Commodity Service

Ii. the great promotion of network to commercial trade

The internet is the world's largest international computer internet, known as the "network of networks." For a particular commercial enterprise, it is made up of satellite communication network, national communication Network, national special Network (such as foreign Trade network, Customs network, financial network, Gold Enterprise network, Commercial Wholesale network, retail network, etc.), regional network, regional special Network (foreign trade, finance, commercial sales network, etc.), enterprise network (including various commercial enterprises within the LAN, Sales network and so on) many kinds, multi-level computer network sinks into the internet into the world.

(i) providing a huge global business electronic market

In the Internet electronic Network market, each company will sell the product variety, the specification, the quantity, the price, the transaction condition and so on all data in the proper format to lose the network, anyone in any country may obtain the various information (including the sale advertisement, the product image, the picture information and so on). Once the user wants to buy, as long as the buyer to buy the goods, the requirements and the price is willing to pay the Internet, through the Internet trading software and rules, buyers and sellers can be set up.

(b) Expansion of commercial wholesale and retail business

With the help of Internet technology, commercial wholesale and retail business is expanded to within and between countries. For example, in the Internet, publishers directly carry out book sales, ordering activities and wholesale and retail business. Currently in the United States to enter the Internet tens of thousands of companies, engaged in commercial activities, goods and services about 100,000 kinds of projects. People through the commercial sales (wholesale or Retail) system, providing shopping services, users can get more than hundreds of thousands of kinds of merchandise information, the price is generally the lowest market price, buyers and sellers can also bargain on wholesale prices.

(iii) Engaging in marketing and promotion of various business activities

Enterprises use the Internet to provide file transfer (FTP) services, remote logins (telnet) services, electronic forum (List Serve) services, IRC (Internet real Chat) services such as international public relations, marketing, promotion of various business activities, such as the use of online chat services, To find common interests and business partners, by talking with friends and business partners around the world, to get some of the latest news and market information, to find all the favorable opportunity to carry out a variety of business activities such as merchandising, promotion and so on.

(iv) EDI transactions in international trade

EDI (Tepco Data Interchange) is a passport to international trade. According to the U.S. International Trade Documents Commission survey, an international trade business needs 46 different documents, together with a total of 360 copies, so many documents to be circulated in more than 2O relevant parties, 70% of the information repeat, more than 30 information to repeat the occurrence of more than 2O times. After the EDI system is established, the information is transmitted directly to different parties in different countries in a few seconds via the Internet. EDI computer automatically make electronic documents, transmission through the Internet is fast and accurate, so that an enterprise in various industries, national departments or between countries will be the entire order, production, sales process complete automatically. This will greatly reduce transaction costs, improve efficiency and increase the economic benefits of international trade.

(v) Increased number of business linkages in commercial trade

In the commercial trade, in addition to the Internet as an important sales channel and EDI to the countries to transfer commercial documents, trade contracts, national laws and other documents, in the Internet into commercial applications, many of the world's commercial and trade enterprises use the Internet to deliver a large number of mail, television images, photos, Music and voice signals, such as a variety of information, to carry out a variety of business contacts and management.

(vi) A strong increase in the ability of enterprises to find markets

The electronic news of the Internet enables enterprises to find their own business market and improve their ability to find the market, from the current news and business news to the opportunity to obtain economic benefits and trade activities.

Section II Electronic Commerce technology and mode

I. Electronic Business and technology architecture

As far as electronic commerce is concerned, it is generally believed that from the perspective of application and related support technology, the overall structure of e-commerce is shown in Figure 7-1, including five "layers" and two "pillars". Five "levels", from top to bottom, respectively, E-commerce application layer, E-commerce application platform layer, e-commerce payment system layer, E-commerce security infrastructure layer, network infrastructure layer. Two "pillars" are the electronic commerce laws and regulations and the standard of electronic commerce respectively, and some scholars have summed up two "pillars" as the sixth level of the overall structure of e-commerce-the human environment layer.

Fig. 3-1 The overall architecture of e-commerce technology

Layer 1th: E-Commerce application layer, including b2b,b2c,b2g and other forms of e-commerce applications, such as virtual shopping malls, virtual banks, virtual enterprises, virtual exchanges, online entertainment, online booking, online advertising, online shopping, online auctions, networking, trading before, transaction, transaction, settlement and so on. The application layer completes specific business transactions by invoking the technical services and data access provided by the application platform layer.

Layer 2nd: E-Commerce application platform layer, for various types of e-commerce applications to provide support and operating environment.

Layer 3rd: E-commerce payment system layer. Related to the payment-oriented business in electronic commerce, it is based on the security infrastructure of e-commerce, under the premise of guaranteeing security, it provides various online payment means for Payment type e-commerce, mainly including the payment method of secure electronic transactions based on various electronic money forms.

Layer 4th: E-Commerce security infrastructure layer, is the whole e-commerce application of the security base, to provide e-commerce security needs of various services to ensure that the entire E-commerce system has sufficient security and reliability. It includes basic cipher algorithm, digital Signature algorithm, digital certificate, CA Security authentication system, security application protocol, etc.

The 5th Layer: Network infrastructure layer, provide the necessary network basic environment for the Electronic Commerce application, form the reliable and effective information transmission service channel. It is the final bearer of E-commerce information, located at the bottom of the entire business/technical structure. From the technical point of view, mainly including the Internet (Internet), intranet (intranet) and extranet (extranet) and so on.

Both sides of the electronic commerce laws and regulations and standards of electronic commerce, from two different angles for the main and object of E-commerce to provide legal and standardized social and technical environment. Among them, the standard of electronic commerce runs through the 1th to 5th layer, it provides the standard support and guarantee for each level of electronic commerce.

Table 3-2: Classification of electronic commerce by Texas State University, USA

Network Level

function

Application

Network infrastructure Layer

Companies that provide products and services for network infrastructure

such as the provision of backbone services, Internet services, Internet Routing and switching equipment, PCs and servers, online security equipment, optical cables and cables, modems products manufacturers.

Network application software Layer

A provider of technical support for online transactions

such as network sites and E-commerce consulting companies, E-commerce software companies, multimedia software companies, Internet application software companies, the development of search engine software companies, online training companies, web database interface software companies.

Network Business Intermediary Layer

Provide an intermediary for the seller and the buyer for the virtual premises

such as online travel agents, securities intermediaries, content centers, portals, content providers, advertising brokers and so on.

Online Trading Layer

Manufacturers and individuals sell products and services directly online

such as network retail, online sales, using the network for retail.

Ii. e-commerce model and its composition

(i) Overview of e-business Models

E-commerce model is often referred to as the Internet business model or business model, which is a useful exploration for many scholars. Some people think that business model is a series of questions to open up the manager's thinking, involving the methods of production and distribution, company capability, and product price structure. Others argue that the effective business model pursued by companies is a sharp decline in costs, a corresponding decline in prices, and a sharp rise in sales. The early research angle of e-commerce mode is mainly classification. Paul Times Paul timmers,1998 that business models are the building of products, services, and information flows that describe business participants and their roles, possible benefits, and sources of revenue. He divides the business model into 10 categories: electronic stores, electronic procurement, electronic auctions, e-mail, third-party markets, virtual communities, value chain services, value chain integration, cooperative platforms, and information agents.

Business-to-business and Business-to-consumer mode perspectives discuss business models from the perspective of major market participants. To expand it, you can get the mode of trading between consumers and consumers (Consumer-to-consumer) and the mode of government participation, as shown in Figure 7-2.

Figure 3-2 E-commerce model based on market participants

(ii) Composition of electronic commerce patterns

The importance of e-commerce mode is that it emphasizes to provide value for the market and bring profit for the enterprise; determine and describe the way or process of enterprise profitability, identify the specific position of the enterprise in the market value chain system, and define the products, customers, suppliers and other major market participants, information Network technology environment (the market space of Informatization) Decide on the characteristics of information flow, capital flow and logistics around basic business activities. In the discussion of e-commerce mode, it involves some basic important factors regardless of the angle of definition or explanation, these factors play a key role in the structure and characteristics of the business model.

Based on the analysis of these factors and their interrelation, the following conceptual model is established, which is used as an analysis framework to analyze the business mode of the enterprise. There are six elements of the business model, namely market environment, customer relationship, product innovation, financial elements, enterprise resources and business processes (see Figure 7~3).

Fig. 3-3 model of e-commerce pattern formation

In this model, the market environment content is extensive, mainly from the product and the factor market two aspects decided the enterprise in the market position, the product market directly and the customer relation factor occurrence relations; The research and technology market in the factor markets directly influence product innovation; Financial and capital markets have a direct or indirect impact on financial elements. The customer relationship function provides market information to the product innovation function and provides the value created to the target market. In its business activities need the support of enterprise resources and capital investment, and finally through to the target market to provide products and services to obtain income, thus affecting the financial elements of enterprises. The product innovation function is supported by the enterprise resources, obtains the market information through the customer relationship, completes the product innovation and the production on this foundation, its innovation ability is in the enterprise resources and with the research and the technology market mutual relation formation. Enterprise resources consume the capital of the enterprise, provide the infrastructure and manpower support to product innovation and customer relationship function, and affect the cost structure. Financial factors reflect the income model of the enterprise and the consumption of the capital injected into the customer relationship and enterprise resources, and the relationship between the enterprise and the capital market.

Business process distribution in the business model of the various elements, the enterprise's business and production activities optimized integration, to ensure the flow of information, logistics and capital flow smoothly. Business process can not be visually observed, but it is ubiquitous in the enterprise, affecting the enterprise how to transform resources into value. The application of IT technology in e-commerce plays a key role in the process reengineering and process innovation of traditional business model.

Section III Development of network retailing

Network Retail is the most typical representative of the online electronics store (e-shop), it is on the interne to provide online purchase site, this site is the virtual location of online stores, buyers simply enter the site Web site to access its homepage can start to choose and buy. Buyers can browse through the Web page any information about the product, the performance and price of the product in-depth understanding, in the decision to purchase only to select the product and the number of people and payment can be home waiting for door-to-door, the successful completion of the entire purchase process.

Because the Internet is a global network of interconnected information, any Internet user can visit any site at any time, and so the online store can do 24 hours of continuous service without closing the door. Internet-based online stores, as emerging business models show a strong vitality, it creates a new business legend. Walton has spent 12 years to boost Wal-Mart's sales to $150 million, and Bezos (Jeff Bezos) has brought billions of dollars of sales to Amazon's online bookstore in just 3 years, and is still growing at a robust pace, with customers all over the world.

The type of network retail

1, electronic retail type

This online store directly on the Internet to set up a Web site, the site provides a category or a number of products for the choice of information to buy, at the time of purchase to provide a more favorable discount than the general store, this part of the discount is the online store compared to the traditional store cost savings. such as Amazon Online bookstore, Dangdang.

2. Online Shopping Center

Online shopping centers are like shopping malls in traditional retailers, but buildings cannot hold many stores, while online shopping centers can accommodate thousands of retail outlets. Online shopping centers can usually be set up by the shopping service provider, and then the distribution network is changed.

3. Electronic Commercial Street Type

Similar to commercial, but not directly involved in the transaction, only to provide business activities and related services. Electronic Commercial Street is only to attract relevant businesses and enterprises to participate in their online transactions to provide ancillary services, and a small amount of service charge. The online Commercial Street, like the traditional retail commercial Street, is made up of a number of individual shops or shopping malls, which can be used for sightseeing and shopping. From the actual operation of the Internet, the difference between online commercial street and online shopping center is not very big. Electronic Commercial Street Many for the same kind of commodity clustering or management of similar goods store agglomeration, professional strong.

4, Electronic Auction type

This online store provides commodity information, but uncertainty about the price of the commodity, the price of the commodity through the auction form by members on the Internet to determine each other, the high bidder can buy the goods, such as the famous U.S. auction site ebay in the second year began to profit.

5, Electronic direct-type

This kind of site is opened by production-oriented enterprises online Direct marketing site, it bypasses the traditional middleman link, direct let the end consumer from the Internet to choose to buy, purchase can be their hobby and choice to inform the producer, let it according to their own needs customized production, so online purchase can enjoy reduce intermediate links bring the price benefits, And you can meet your specific needs to the fullest. Such sites develop extremely quickly and challenge traditional middlemen.

6. Online Market (center)

The online marketplace (the center) is built around a network of outlets that provide a wide range of shopping and information services. When some outlets focus on a lot of products and services that people need in their daily lives, people will patronize them, which will stimulate more enterprises to set up in the corresponding locations to increase their sales. So there is this state, the Web page is getting longer, more and more content, including more and more services, the number of visitors more and more. The online market (center) can include individual shops, shopping malls and commercial streets.

7. Individual Customer Sale

Individual customer sales refers to those who are relatively independent online users, using such as personal web pages, blogs, private e-mail, organize private parties and other forms of the sale of merchandise activities, the sale of goods for small pieces of handicrafts, collectibles and so on.

8. Virtual Society

Virtual community is essentially an online customer group. Web sites and stores that are usually built online will gather together to exchange information or purchase items and often patronize the same ideas and interests. They form a circle, a virtual society. Online, these virtual communities can give the participants a good shopping guide, and they themselves are a basic customer base. Therefore, the existence of virtual community on the online store sales have a great impact and promote the role.

The characteristics of the online store

The formation of the internet does not come from global system planning, it can be today's scale mainly thanks to the original design features: openness, sharing, cheap and interactive. These characteristics have a great impact on its commercialization and the development of the online retail business system. The impact is as follows: first, it can be used as a new multimedia interactive media, and second, as a cheap and efficient trading channel. With the help of software technology, on the one hand, the network can accommodate the sound, image, animation and other multimedia information, all-round, lifelike to any kind of product or service appearance, quality characteristics, internal construction and other information stored, to the user release, part of the people through the traditional retail store to understand the function of products or services. On the other hand, because the Internet provides an almost timely and interactive channel of communication, the contract between the user and the retailer who needs such a product or service becomes as convenient as the interactive communication with the salesperson when shopping in a traditional retail store. This makes it possible for the Internet to become a new sales channel.

1. Virtualization

The virtual nature of the online store is an essential distinguishing feature from the traditional business. Online stores only exist in the Internet site, do not need to choose location everywhere, without consuming a lot of human, material and financial resources to build shops. The operation of the online store does not have to worry about selling because of bad location, nor does it require hiring a large number of people to manage and sell.

2. New Time and Space advantage

Online stores break the traditional time limit, which can