Electronic Commerce

1. Electronic Commerce อังสนา อัชชะกุลวิสุทธิ์ ภาควิชาระบบสารสนเทศเพื่อการจัดการ คณะพาณิชยศาสตร์และการบัญชี มหาวิทยาลัยธรรมศาสตร์

2. Agenda • What is Electronic commerce ? • Who involve in Electronic commerce ? • Potential processes on Electronic commerce • Paper discussion

3. What is Electronic commerce ? • All aspects of business and market processes that can be done through communications network • Currently, the main infrastructure of electronic commerce is INTERNET esp. World Wide Web technology

4. Government Financial institution Business Business partner Customer Who involves in electronic commerce ?

5. Business and Customer • Provide company, product and service information • Provide on-line sales/reservation • Distribute products • Provide after-sales service • Conduct market research • Test new products

6. Business and Financial institution • Verify and authorize customer payment • Transfer money between business’s accounts and others e.g. customers, suppliers, infrastructure providers

7. Business and Government • Authenticate customer records • File taxes • View monthly bill on electricity, water, phone, etc. • Update company information at government agencies e.g. ministry of commerce • Collect economic, social and political news and statistics

8. Business and Business partner • Conduct on-line transactions • Negotiate on business transactions • Allow business partners e.g. supply chain to view company private information • Create on-line affiliate network

9. E-COMM: a mainstream marketplace in the future ? • Number of Internet users as of Aug. 1998 World total 147 million Africa 800,000 Asia Pacific 22 million Thailand (Jan’98) 131,000 (0.2%) Europe 33.25 million Middle East 0.75 million Canada & USA 87 million South America 4.5 million Source : NUA Internet surveys

10. Estimated sales generated by WWW 1993-1998

11. E-Commerce on WEB • Market value : 1996 $2.6 billion 2002 $220 billion • Percentage of US companies engaged in E-Commerce 1997 40% 1998 63%

12. 10 Predictions for 1998 1) Information overload will become a central issue for the Internet in 1998, as basic search engines begin to lose their value. 2) E-commerce will flourish in America and will show strong growth in Europe, with business-to-business transactions leading the way. 3) The Web will stay simple in 1998: lots of content, driven by databases, with small graphics, no gee whiz, and thus fast downloads.

13. 10 Predictions for 1998 (Cont.) 4) By the end of 1998, the PC will have well and truly become a mass market product, with quality PCs selling for well under USD1,000. 5) Microsoft will find that there are limits to how large and powerful it is allowed to get 6) There will be at least 150 million Internet users worldwide by the end of 1998. 7) The Internet will force many middlemen/distributors to transform their business models or face decline/liquidation.

14. 10 Predictions for 1998 (Cont.) 8) Small pockets of high-bandwidth will exist but for the average consumer bandwidth will remain scarce. 9) Driven by child abuse, hate abuse, spam abuse and taxation issues, Governments will pay a lot more attention to the Internet in 1998, and a wide range of legislation will either be prepared or enacted. 10) 1999 will be the year when the Internet becomes truly mass market.

15. Paper Discussion • Yannis, Bakos, The Emerging Role of Electronic Marketplaces on the Internet, Communications of the ACM, August 1998, p. 35- 42 • Frederick J. Riggins, A Framework for identifying web-based electronic commerce opportunities • Albert A. Angehrn, Jens F. Meyers, Developing Mature Internet Strategies: Insights from the Banking Sector, Information Systems Management, Summer 1997, p. 37-43

16. The Emerging role of electronic marketplaces on the Internet • In short, what is the focus of this paper? • Functions of a market • Matching buyers and sellers • Determination of product offerings • Search • Price discovery • Facilitation of transactions • Institutional infrastructure

17. How the Internet affects markets • Product Offerings: • Increased Personalization/Customization • Customer tracking technology • Information-rich products • Aggregation of product components • The Case of Information Goods • Search: Lower buyer’s search cost • Price discovery: New types of price discovery

18. How the Internet affects markets (Cont.) • Facilitation: • Logistics: • Physical --> Digital distribution Expert delivery providers • Payment: • Lower transaction cost • Certificate authorities

19. Internet marketplace and Competition • Impact of Lower Search Cost • Promote price competition • Increasing differentiation and Lowering cost of product information

20. A Framework for Identifying Web-Based Electronic Commerce Opportunities • In short, what is the focus of this paper? • What is EC Value Grid? • EC Value Grid can be used to • Identify EC Opportunity • Measure the impact of Web-based applications • Determine factors that lead to success/failure • Analyze web strategic sophistication of company web site

21. Five Dimensions of Commerce • Time • Distance • Relationships • Interaction • Products/Services

22. Accelerate User Tasks Eliminate Infor. Float Establish 24X7 Service Improve Scale to look large Present single gateway access Achieve global presence Alter role of intermediaries Engage in micro mktg. to look small Create dependency to lock-in user Make use of User feedback User controls detail of infor. accessed Users interact via on-line community Automate tasks Using software agent Provide on-line decision support tools Bundle infor., products and services Electronic Commerce Value Grid Efficiency Effectiveness Strategic Time Distance Relationships Interaction Product

23. Framework to classify Internet strategies • ICDT model • Virtual Information Space (VIS) • Virtual Communication Space (VCS) • Virtual Distribution Space (VDS) • Virtual Transaction Space (VTS)

24. Framework to classify Internet strategies • Level of Sophistication : Multimedia-rich, Interactive, Freedom to browse • Level of Customization : Personalized, Individualized Product/Service

25. Commercial banks listed in SET • Bank of Ayudhaya (BAY) www.bay.co.th • Bangkok Bank (BBL) www.bbl.co.th • Bangkok Metro. Bank (BMB) www.bmb.co.th • Bank of Asia www.boa.co.th • First Bangkok City Bank (FBCB) www.fbcb.co.th • IFCT - • Krung Thai Bank (KTB) www.ktb.co.th • Laem Thong Bank (LTB) www.laemthong-bank.co.th • Nakornthon Bank (NTB) www.ntb.co.th

26. Commercial banks listed in SET (Cont.) • Siam Commercial Bank (SCB) www.scb.co.th • Siam City Bank (SCIB) www.scib.co.th • Thai Danu Bank (TDB) www.tdbmc.loxinfo.co.th • Thai Farmers Bank (TFB) www.tfb.co.th • Thai Military Bank (TMB) - • Union Bank of Bangkok (UB) - 11 out of 15 banks (73%) have web sites* * exclude Bank of Asia

27. High Macromedia Sophistication 100% Dresdner Bank FedEx Low Low High Customization VIS strategies

28. High BAY, BMB, KTB, LTB, SCB, SCIB, TFB Sophistication BBL, FCBC, NTB, TDB Low Low High Customization VIS strategies : Local commercial banks

29. High INSEAD Sophistication 89% FireFly Low Low High Customization VCS strategies Credit Lyonnais

30. High Sophistication All banks except BBL Low Low High Customization VCS strategies : Local commercial banks

31. High Netscape La Tribune Sophistication Wall Street Journal Infoseek Low Low High Customization VDS strategies PointCast 12% Deutsche Bank Bank of America

32. High Sophistication BAY, BBL Low Low High Customization VDS strategies : Local commercial banks

33. VTS strategies High IBM SFNB Sophistication CDnow 7% ABN Amro Bank Low Low High Customization

34. High Sophistication KTB Low Low High Customization VTS strategies : Local commercial banks