CA Intermediate [Enterprise Information System (EIS)] 
                                  
                                  
                                               Chapter 4 
                                  
                                  
                                  
                                  
                                           
                                                       
                          E-Commerce, M-Commerce and Emerging Technologies 
                                           
                                           
                                           
                                           
                                           
                                           
                                  Summary Notes – Fast Track 
                                           
                                           
                                             E-Commerce 
    CA Pradip K Agrawal  Pradip K Agrawal is a commerce graduate. He is a qualified Chartered Accountant and Company Secretary. He has also 
                                   completed Quality Management System (QMS) and ISO-9001 Internal Auditor.  
                                   He has extensive experience in Information Technology (IT). He has around 13+ years in IT industry out of overall 19+ years in 
                                   corporate world. He has worked for fortune 500 companies for IT implementation, support, AMC, business process automation, 
                                   process re-engineering.  
                  E-Commerce, M-Commerce and Emerging Technologies                                                                                                                            CA Pradip K Agrawal                                                                                            Chapter 4                                                  Page 1 
                                                                                                                                                                              Traditional Commerce 
                                         Definition                                                    Traditional Commerce Delivery Model: Multi-Layer                                                                                       Traditional Commerce Delivery Model: Transaction Approach 
                      Traditional               Commerce  is  the                                  1.  Manufacturer                                                                                                                              1.  Enter into the Shop 
                      exchange  of  goods  or  services  in                                        2.  Wholesaler                                                                                                                                2.  Pick the Shopping Cart 
                      person  or  face  to  face.  The                                             3.  Retailer                                                                                                                                  3.  Select and Pick the Products 
                      customer has to interact with the                                            4.  Consumer                                                                                                                                  4.  Go to the Billing Counter 
                      business owner or a representative                                                                                                                                                                                         5.  Billing is Prepared 
                      of the business one to one.                                                                                                                                                                                                6.  Make the Payment 
                                                                                                                                                                                                                                                 7.  Pick the Products 
                                                                                                                                                                                                                                                 8.  Leave the Shop 
                                                                                                                              
                                                                                                                                                                                          E-Commerce 
                                                                                                                              
                                                                                                                              
                                                            Definition                                                                                                                                                                                    E-Commerce Delivery Model: Transaction Illustration 
                                                                                                                             E-Commerce Delivery Model: Transaction Approach 
                                                                                                                              
                             E-Commerce  is  the  process  of  doing  business                                                 1.   Order Placed by Customer                                                                                               Step 1: Go to Website and Register or Download the App  
                             electronically.  It  uses  the  technology  to  process                                                                                                                                                                       Step 2: Select the Type of Product 
                                                                                                                              2.  Shopping Cart 
                             the       transactions               between  a  company,  its                                   3.  Payment                                                                                                                  Step 3: Select the Product 
                             customers and business partners. It involves the                                                                                                                                                                              Step 4: Go for Payment 
                                                                                                                              4.  Order Completed 
                             use  of  automation  for  a  variety  of  Business  to                                                                                                                                                                        Step 5: Verify the Purchase 
                                                                                                                              5.  E-Mail sent to Merchant and Customer 
                             Business  (B2B),  Business  to  Consumer  (B2C)                                                  6.  Sent to Warehouse for Fulfillment                                                                                        Step 6: Select the Payment Options 
                                                                                                                              
                             etc.  transaction  through  reliable  and  secure                                                7.  Shipping Carrier Picks-up Shipment                                                                                       Step 7: Make the Payment 
                             connection.                                                                                                                                                                                                                   Step 8: Product is delivered 
                                                                                                                               
                                                   E-Commerce: Workflow Model                                                                                                                                                                              
                                                                                                                                                                                                                          Traditional Commerce Vs. E-Commerce 
                            1.  Customer Log-in – Website or Mobile                                                                                         Basis of Comparison                                                       Traditional Commerce                                                        E-Commerce 
                            2.  Product/Service Selection                                                                                                   Definition                                                                Manual or Face to Face                                                      Electronic 
                            3.  Customer Places Order 
                            4.  Payment Gateway                                                                                                             Scope of Business                                                         Limited to Particular Area                                                  Worldwide Reach 
                            5.  Dispatch and Shipping Process                                                                                               Accessibility                                                             Limited Time                                                                24 x 7 x 365 
                            6.  Delivery Tracking 
                            7.  COD Tracking                                                                                                                Customer Interaction                                                      Face to Face                                                                Screen to Face 
                                                                                                                                                            Physical Inspection                                                       Physically Inspected                                                        No Physical Inspection 
                                                                                                                                                            Resource Focus                                                            Supply Side                                                                 Demand Side 
                                                                                                                                                            Transaction Processing                                                    Manual                                                                      Electronic 
                                                                                                                                                            Payment                                                                   Cash, Cheque, Credit Card Etc.                                              Cash,  Cheque,  Credit  Card,  CoD 
                                                                                                                                                                                                                                                                                                                  Etc. 
                                                                                                                                                            Delivery of Goods                                                         Instantly                                                                   Takes Time 
                                                                                                                                                            Marketing                                                                 One Way Marketing                                                           One to One Marketing 
                                                                                                                                                            Information Exchange                                                      No Uniform Platform                                                         Provides Uniform Platform 
                                                                                                                                                            Layers of Delivery (Profit Impact)                                        Reduced Layer of Delivery                                                   Profit (+), Discounts, Better Price  
                                                                                                                                                            Layers of Delivery (Time Impact)                                          Reduced Layer of Delivery                                                   Faster Delivery, JIT Inventory 
                                                                                                                                                              
          E-Commerce, M-Commerce and Emerging Technologies                                                CA Pradip K Agrawal                                           Chapter 4                        Page 2 
                                                                                                        E-Commerce 
                                                                                              Laws Governing E-Commerce 
                                                                                                      A.  Commercial Law 
             Formation of Legal Entity                        Foreign Trade                                     Consumers                                         Employees 
                                                                                                                                                                      
                                                                                                                   
            1.  Companies Act, 2013                           1.  The Customs Act, 1962                          1.  Indian Contract Act, 1872                      1.  The Factories Act, 1948 
                                                                                       s                                                                              
                                                                                                                                                                      
            ⬛  E-Commerce-Private or Public Limited Co.  ⬛  Import and export of goods                           ⬛  Defines constituents of a valid contract        ⬛  Regulate working conditions of workers 
                                                                                          
            ⬛  Regulates corporate sector                     ⬛  Levy of customs duty                            ⬛  E-Commerce and E-Commerce transaction  ⬛  Extends              to    place   of   storage    and 
                                                                              
            ⬛  Governs regulatory aspects of companies in  ⬛  India signatory to GATT                                key to define constituents                         transportation 
                                                                       
               India                                          ⬛  Software downloads, debate of tariff            2.  Consumer Protection Act, 1986 
                                                                       
            2.  Income Tax Act, 1961                          2.  Foreign Trade Development and Regulation Act, 1992 
            3.                                                                                                   ⬛  Protects consumer rights 
            ⬛  Regulates taxation of income in India          ⬛  Regulates  foreign  trade  –  import  into  and  ⬛  Transactions    source   of   most  of  the 
            ⬛  Origin of transaction critical for taxation             
                                                                  export from India                                  litigations 
                                                              ⬛  Incidental matters                              3.  The Competition Act, 2002 
            3.  Goods and Service Tax Act, 2017                        
                                                              ⬛  Amazon allowed purchase from global store       ⬛  Regulates adverse effects on competition in 
            2.                                                                                                       India 
            ⬛  Upload sales and purchases invoice on  3. Foreign Exchange Management (FEMA) Act, 1999 
               central IT infrastructure                                              3.                         ⬛  Competition commission’s vigilance 
                                                                       
            ⬛  Reconciling the business transactions,  ⬛  FDI and flow of foreign exchange in India 
                                                              ⬛  FDI – 100% automatic route B2B 
               GST tax payment, Tax Credits, and                       
               Filing of e-Return.                            ⬛  FDI – B2C calibrated manner 
                                                                       
                                                                                                          B.  Special Law 
                                                                       
            1.  Information Technology Act, 2000                                                                 2.  Reserve Bank of India Act, 1932 
            ⬛  Regulates online transactions, penalties, prosecution for non-compliance                          ⬛  Credit/Debit card to be chip based 
                                                                       
            ⬛  Important aspects:                                                                                ⬛  OTP or PIN for all transactions 
               ►  Legality of products;                                                                          ⬛  Capital Adequacy norms for payment wallets like SBI buddy, PAYTM etc. 
               ►  Data protection; 
               ►  Privacy; 
               ►  Online advertising; 
               ►  Other provisions 
          E-Commerce, M-Commerce and Emerging Technologies                                                  CA Pradip K Agrawal                                           Chapter 4                         Page 3 
                                                                                                         E-Commerce 
                                      Guidelines for E-Commerce                                                                                        Benefits 
            1.  Product Warranty or Guarantee  2.  Billing                                           1.  Customers/Individuals/ Users                           2.  Business/ Sellers 
            ►  Proper Display                           ►  Format of Billing                         ►  Anytime, Anywhere, 24x7 Access                          ►  Creation of New Markets 
            ►  Documents along-with the Product         ►  Details on Billing                        ►  Various Options                                         ►  Easier Entry into New Markets 
                                                        ►  Applicable GST                            ►  Easy to find Reviews                                    ►  Increasing Customer Base 
                                                                                        s            ►  Coupons and Deals                                       ►  Instant Transactions 
                                                                                                     ►  Convenience                                             ►  Provide a Dynamic Market 
            3.  Shipping                                4.  Delivery                                 ►  Time Savings                                            ►  Elimination of Time Delays 
                                                                        
            ►  Shipping Time                            ►  Mode of Delivery                          ►  Competitive Benefits                                    ►  Reduction in Costs 
                                                                                                                                                                   ⬛   Overhead Costs 
            ►    Frequency of Shipping                  ►  Time of Delivery                            
            ►  Packing                                  ►  Location or Place of Delivery                                                                           ⬛   Advertising Costs 
                                                                                                     3.  Government 
                                                                                                                                                                   ⬛   Competitive Environment 
            5.  Return                                  6.  Payment                                  ►  Instrument to Fight Corruption                          ►  Improvement in Efficiency Due to:  
                                                                                                     ►  Ecological Impacts                                         ⬛   Reduction in Processing Cycle 
            ►  Type of Goods                            ►  Mode of Payment                                                                                         ⬛   Reduction in Errors in Processing 
                                                                                                                                                                   ⬛   Reduction in Inventory 
            ►  Time Period                              ►  Restrictions  
            ►  Verification of Authenticity                                                                                                                      
            ►  Time of Refund                                                                          
        ►                                                                                                                                                        
                                                                               
                                                                                                                                                                 
                                                                                                         E-Commerce                                              
                                                                                                          Components                                            
                                                                                                               A.  Users                                         
                                                                              B.  E-Commerce Vendors                                                                              C.  Technology Infrastructure 
            1.  Suppliers and Supply Chain                         4.  E-Commerce Catalogue and Product                8.  Showroom and Offline Purchase                  1.  Computers, Servers & Database 
               Management                                             Display 
            o  Availability  of  enough  and  right  goods  o  Proper display of all products                          o  Feel, touch or see the products                 o  Backbone for success 
               suppliers                                           o  Customers gauge the products                     o  Customers gauge the products                    o  Stores program and data 
            o  Operationally and financially safe                  o  Good catalogue – customer experience             o  Good catalogue – customer experience            o  Shared infrastructure 
            o  Real time stock inventory                           5.  Guarantees                                      9.  Privacy Policy                                 4.  Web Portal 
            o  Orders dispatched and delivered quickly 
            2.  Warehouse Operations                               o  Money back guarantees                            o  Policy    via-a-vis   customer    data    and  o  Front-end interface 
            o  Products are stored                                 o  Customer satisfaction and safety                     information                                    o  Simplicity and clarity 
            o  Picked and packed as per specifications             6.  Marketing and Loyalty Programs                  o  Disclosure  to  use  the  information  of  o  Accessed through devices 
            o  Dispatched for delivery                                                                                     customers 
                                                                   o  Long term relationship with customers            10. Security                                       3.  Digital Libraries 
            3.  Shipping and Return                                o  Airline Industry                                                                                    o  Collection of digital objects 
            o  Fast Return - USP                                   7.  Different Ordering Methods                      o  State security policy                           o  Organizing, storing and retrieving files  
            o  Effective & Efficient                                                                                   o  Online data to transact is safe 
                                                                   o  Debit Cards and Credit Cards                     o  SSL 
                                                                   o  Cash on Delivery (CoD)                           o  Fall into the hands of malicious hackers