E-Commerce Definition

E-Commerce(electronic commerce) is the process of buying and selling of information, products and services using electronic mediums usually over a computer network. It is the transfer of traditional commerce to the computer network or internet. In e-commerce we use electronic medium to perform commercial activities such as order, payment and delivery. Examples of E-Commerce are online retailers like daraz, sastodeal,amazon, flipkart, Myntra, paytm mall, seller of digital goods like ebooks, online service etc. 

E-Business

Basically,  ECommerce and EBusiness are similar concepts.E-commerce is a narrow concept which includes only buying and selling of products and services by using electronic medium.E-Business refers to performing all types of business activities through the internet. It includes activities like procurement of raw materials/goods, customer education, supply activities buying and selling products, making monetary transactions etc over the internet. E-Business involves:

• Customer Service
• Collaboration
• Internal processes to support buying, selling,planning,etc.

Components of E-Commerce

1. People: They are the direct or indirect users of e-commerce. They play the role of  a merchant, a customer or an intermediary. System specialists and employees also belong to this component.
2. Public Policy: This includes the legal issues of the government and regulating strategy for e-commerce. Government legal issues include taxation laws, privacy act, etc. and the merchant issues like terms and conditions, copyrights, trademarks, etc.
3. Marketing and Advertising: In the present time, marketing and advertising is done primarily through social media using customized advertisements. This is supported by market research, promotions, content marketing, digital advertising, etc.
4. Support Services: It is the additional service that keeps the e-commerce running. This may include after sales support, payment gateway services, content services, etc.
5. Collaboration: The Web is a vast nexus, or network, of relationships among firms and individuals. This network enables them to collaborate their ideas and knowledge without the constraints of space, time, national boundaries and organizational affiliation.

Types of E-Commerce

The major types of e-commerce are:

1. Business to Consumer(B2C) e-commerce: It is the most commonly discussed type of e-commerce, in which online businesses attempt to reach individual consumers. In this type of e-commerce, consumers buy goods and services from businesses.Services like cell phone plans, cable, internet access, and video/music streaming services that individuals pay for online also fall into this category. Anything that consumers can buy from a business online is considered B2C ecommerce. 

2. Business to Business(B2B) e-commerce:Business-to-business (B2B) transactions are when one business sells some type of good or service to another business. Some common examples include businesses that sell software or hardware to other companies (think of HR software, Microsoft Office, or any other tech you use at work), physical hardware like computers, and office supplies and furniture. Another common type of B2B sales happens when the producer of a consumer product (e.g. apparel, shoes, furniture, etc..) is sold to a wholesaler—aka another business that will then sell the product to consumers, typically for a healthy markup. 

3. Consumer to Consumer(C2C) e-commerce: In this type of e-commerce, both parties are consumers.These transactions are generally conducted through a third party that provides an online platform on which the transactions are carried out. For example, there are many auction websites where consumers can sell products to another consumer.

4. Consumer to Business(C2B) e-commerce: It is a type of e-commerce in which consumers make their products and services available online for companies to bid on and purchase. This is the opposite of the traditional commerce model of B2C.A popular example of a C2B platform is a market that sells royalty-free photographs, images, media and design elements, such as iStock

5. Business to Administration(B2A) e-commerce:This part of e-commerce encompasses all transactions conducted online between companies and public administration. This is an area that involves a large amount and a variety of services, particularly in areas such as fiscal, social security, employment, legal documents and registers, etc. These types of services have increased considerably in recent years with investments made in e-government.

6. Consumer to Administration(C2A) e-commerce: This type of e-commerce encompasses all electronic transactions conducted between individuals and public administration. Examples of applications include:

• Education – disseminating information, distance learning, etc.
• Social Security – through the distribution of information, making payments, etc.
• Taxes – filing tax returns, payments, etc.
• Health – appointments, information about illnesses, payment of health services, etc.

Other Types of E-Commerce:

1. Mobile e-commerce: It refers to online sales transactions using mobile devices, such as smartphones and tablets. It includes mobile shopping, banking and payments. Mobile chatbots facilitate m-commerce, letting consumers complete transactions via voice or text conversations

2. Social E-Commerce: Social E-commerce is enabled by social networks and online social relationships.It is also sometimes referred to as Facebook commerce, but in actual it is much larger and extends beyond facebook.

Applications of E-commerce:

1. Retail and Wholesale: Ecommerce has numerous applications in this sector. E-retailing is basically a B2C, and in some cases, a B2B sale of goods and services through online stores designed using virtual shopping carts and electronic catalogs. A subset of retail ecommerce is m-commerce, or mobile commerce, wherein a consumer purchases goods and services using their mobile device through the mobile optimized site of the retailer. These retailers use the E-payment method: they accept payment through credit or debit cards, online wallets or internet banking, without printing paper invoices or receipts.

2. Online Marketing:This refers to the gathering of data about consumer behaviors, preferences, needs, buying patterns and so on. It helps marketing activities like fixing price, negotiating, enhancing product features, and building strong customer relationships as this data can be leveraged to provide customers a tailored and enhanced purchase experience.

3. Finance:Banks and other financial institutions are using e-commerce to a significant extent. Customers can check account balances, transfer money to other accounts held by them or others, pay bills through internet banking, pay insurance premiums, and so on. Individuals can also carry out trading in stocks online, and get information about stocks to trade in from websites that display news, charts, performance reports and analyst ratings of companies.

4. Manufacturing: Supply chain operations also use e-commerce; usually, a few companies form a group and create an electronic exchange and facilitate purchase and sale of goods, exchange of market information, back office information like inventory control, and so on. This enables the smooth flow of raw materials and finished products among the member companies and also with other businesses.

5. Online Booking:This is something almost every one of us has done at some time – book hotels, holidays, airline tickets, travel insurance, etc. These bookings and reservations are made possible through an internet booking engine . It is used the most by aviation, tour operations and hotel industry.

6. Digital Advertising: Online advertising uses the internet to deliver promotional material to consumers; it involves a publisher, and an advertiser. The advertiser provides the ads, and the publisher integrates ads into online content. Often there are creative agencies which create the ad and even help in the placement. Different types of ads include banner ads, social media ads, search engine marketing, retargeting, pop-up ads, and so on.

7. Auctions: Online auctions bring together numerous people from various geographical locations and enable trading of items at negotiated prices, implemented with e-commerce technologies. It enables more people to participate in auctions.

Advantages of E-commerce:

Benefits of e-commerce include its around-the-clock availability, the speed of access, the wide availability of goods and services, easy accessibility and international reach.

1. Availability. Aside from outages and scheduled maintenance, e-commerce sites are available 24/7, enabling visitors to browse and shop at any time. Brick-and-mortar businesses tend to open for a fixed number of hours and may even close entirely on certain days.
2. Speed of access. While shoppers in a physical store can be slowed by crowds, e-commerce sites run quickly, which is determined by compute and bandwidth considerations on both the consumer device and the e-commerce site. Product and shopping cart pages load in a few seconds or less. An e-commerce transaction can comprise a few clicks and take less than five minutes.
3. Wide availability. Amazon’s first slogan was “Earth’s Biggest Bookstore.” It could make this claim because it was an e-commerce site and not a physical store that had to stock each book on its shelves. E-commerce enables brands to make a wide array of products available, which are then shipped from a warehouse or various warehouses after a purchase is made. Customers will likely have more success finding what they want.
4. Easy accessibility. Customers shopping at a physical store may have difficulty locating a particular product. Website visitors can browse product category pages in real time and use the site’s search feature to find the product immediately.
5. International reach. Brick-and-mortar businesses sell to customers who physically visit their stores. With e-commerce, businesses can sell to anyone who can access the web. E-commerce has the potential to extend a business’s customer base.
6. Lower cost. Pure play e-commerce businesses avoid the costs of running physical stores, such as rent, inventory and cashiers. They may incur shipping and warehouse costs, however.
7. Personalization and product recommendations. E-commerce sites can track a visitor’s browse, search and purchase history. They can use this data to present personalized product recommendations and obtain insights about target markets. Examples include the sections of Amazon product pages labeled “Frequently bought together” and “Customers who viewed this item also viewed”. 

Scope of E-commerce in Nepal:

Although E-Commerce has been in the market for a long while now especially in the developed countries, currently it has been growing all over the world as an easier platform for doing business as well. There are a few factors for it: one of them being people having better access to the internet, and the other one being the recent COVID-19 pandemic. Ever since the beginning of the pandemic, E-Commerce has been a safer means of shopping and transactions for people especially during the lockdown as they can shop clothes, groceries or any other goods sitting in their houses through the Internet. Even after the end of lockdown, people seem to prefer shopping via online rather than visiting the market themselves as they seem to have found it more convenient for them and I too feel the same. There are many platforms on the internet for online business for people to get engaged in it.

In Nepal, online shopping sites like Daraz, Hamrobazar, SastoDeal and many other sites have increased their business during the pandemic and it seems to be increasing even right now. After the beginning of the pandemic, 70 percent of total transactions have been online by means of E-Banking, Khalti and E-Sewa. Currently, up to 90 percent sales of jewelleries are currently conducted through digital platforms in Nepal. Online booking of vehicles through Pathao has been greater than before compared to people. Hamrobazar Online  has seen a 40 percent increase in overall traffic since the pandemic and the case is similar for other online shopping sites as well. People are slowly reverting to going local but on the online platform.Even Though e-commerce is blooming in Nepal, there are few challenges which have to be overcome:

• Traditional Shopping Habit
• Lack of Trust
• Lack of investment
• Lack of an effective payment gateway
• Lack of e-commerce friendly rules and regulations

E-commerce in Nepal has just started to develop from its infancy and requires a lot of infrastructure before it can really penetrate the large population using the internet. A careful analysis and perseverance will surely pay off as the country is finally over its transition phase.

Government’s Steps in implementation of E-commerce in nepal:

For now, due to the lack of designated laws to regulate and incorporate the e-commerce business, the companies are incorporated as per the Company Act 2063 after registration at the Office of the Company Register.

After incorporating the company as per the Company Act, it should take approval from the Department of Commerce or the Department of Industry depending upon the nature of business. For instance, if the nature of business is related to the trading of goods, it shall take approval from the Department of Commerce and if the business house is incorporated with an objective of producing goods and materials, the Department of Industry should give the approval.

Here again, there is no clear procedure and criteria for applying and issuance of licenses.

Scopes of the Electronic Transaction Act 2063

1. Creation and use of digital signature
2. Control cyber/computer-related crimes.
3. Protection of intellectual property.
4. Protection of confidentiality.
5. Regulations of an electronic transaction by establishing regulating bodies  such as

1.  Office of Certificate Control (OCC)
2. Certificate Agencies (CA)
3. Subscriber