Electronic and Mobile Commerce - Principles of Information Systems - page 313

and is growing more rapidly. As early as 2003, over 80 percent of U.S. companies had already
experimented with some form of B2B online procurement. 1
Covisint operates a Web portal that supports B2B by performing data translations and
code conversions to enable auto makers and parts suppliers to collaborate on orders, schedul-
ing, shipping, and other manufacturing-related tasks. Covisint is expanding its data transla-
tion and collaboration services into the healthcare industry to enable sharing of patient care
data among healthcare providers and insurance companies. 2

Business-to-Consumer (B2C) E-Commerce
Early business-to-consumer (B2C) e-commerce pioneers competed with the traditional
“brick-and-mortar” retailers in an industry selling their products directly to consumers. For
example, in 1995, upstart Amazon.com challenged well-established booksellers Walden-
books and Barnes and Noble. Although Amazon did not become profitable until 2003, the
firm has grown from selling only topics on a U.S.-based Web site to selling a wide variety of
products (including apparel, CDs, DVDs, home and garden supplies, and consumer elec-
tronic devices) from international Web sites in Canada, China, France, Germany, Japan, and
the United Kingdom. Although it is estimated that B2C e-commerce represents only about
3.4 percent of retail sales in the U.S., the rate of growth of online purchases is three times
faster than the growth in total retail sales. 3 One reason for the rapid growth is that shoppers
find that many goods and services are cheaper when purchased via the Web, including stocks,
books, newspapers, airline tickets, and hotel rooms. They can also compare information
about automobiles, cruises, loans, insurance, and home prices to find better values.
More than just a tool for placing orders, the Internet is an extremely useful way to compare
prices, features, and value. Internet shoppers can, for example, unleash shopping bots or
access sites such as eBay Shopping.com, Google Froogle, Shopzilla, PriceGrabber, Yahoo!
Shopping, or Excite to browse the Internet and obtain lists of items, prices, and merchants.
Yahoo! is adding what it calls “social commerce” to its Web site by creating a new section of
Yahoo! where users can go to see only those products that have been reviewed and listed by
other shoppers. As mentioned in Chapter 7, bots are software programs that can follow a
user's instructions; they can also be used for search and identification.
By using B2C e-commerce to sell directly to consumers, producers or providers of con-
sumer products can eliminate the middlemen, or intermediaries, between them and the
consumer. In many cases, this squeezes costs and inefficiencies out of the supply chain and
can lead to higher profits and lower prices for consumers. The elimination of intermediate
organizations between the producer and the consumer is called disintermediation.
Dell is an example of a manufacturer that has successfully embraced this model to achieve
a strong competitive advantage. People can specify a unique computer online, and Dell as-
sembles the components and ships the computer directly to the consumer within five days.
Many retailers have elected to increase their sales by adding a Web site component to
their operations. For example, American Eagle Outfitters launched a B2C Web site for
Martin + OSA, its brand targeting 28- to 40-year old men and women. Says Laura Dubin-
Wander, president of Martin + Osa: “We're excited to introduce Martin + Osa as a global
brand through our e-commerce Web site. Free shipping and returns, along with unique
shopping tools, give customers a world-class online shopping experience that's both fric-
tionless and fun.” 4

business-to-consumer (B2C)
e-commerce
A form of e-commerce in which
customers deal directly with an
organization and avoid
intermediaries.

Consumer-to-Consumer (C2C) E-Commerce
Consumer-to-consumer (C2C) e-commerce is a subset of e-commerce that involves con-
sumers selling directly to other consumers. eBay is an example of a C2C e-commerce site;
customers buy and sell items directly to each other through the site. Founded in 1995, eBay
has become one of the most popular Web sites in the world; in 2007, 2.3 billion items were
listed for sale and 276 million registered users bought and sold items valued at more than
$57 billion. 5
Many C2C sites are on the Web, with some of the more popular being Bidzcom,
Craigslist, eBid, ePier, Ibidfree, Ubid, and Tradus. The growth of C2C is responsible for

consumer-to-consumer (C2C)
e-commerce
A subset of e-commerce that
involves consumers selling directly
to other consumers.