E-Marketplaces

     

                Markets play a central role in the economy, facilitating the exchange of information, goods, services and payments. They create economic value for buyers, sellers, market intermediaries and for society at large.

                Electronic markets have three main functions:

•       Matching buyers and sellers:

                Determination of product offerings

•       Product features offered by sellers

•       Aggregation of different products

Search of buyers for sellers and of sellers for buyers

                                price and product information

                                organizing bids and bartering

                                matching seller offerings with buyer preferences

Price discovery

                enabling price comparisons

•       Facilitating the exchange of information, goods, services and payments associated with market transactions:

                                Logistics

                                                Delivery of information, goods or services  to  buyers

                                Settlement

                                                Transfer of payments to sellers

                                Trust

                                                Credit system, reputations, rating agencies like  consumers reports and BBB, special escrow and online trust agencies.

•       Providing an institutional infrastructure such as a legal and regulatory framework, which enables the efficient functioning of the market.

Legal

                Commercial code, contract law

                dispute resolution, intellectual property protection

Import and export law

Regulatory

                Rules and regulations, monitoring, enforcement.

                Emergence of electronic marketplaces changed several of the processes used in trading and supply chains.

ü     Lower information search cost for buyers.

ü     Diminished information asymmetry between sellers  and buyers.

ü     Greater temporal separation between time of purchase and time of possession of physical products purchased in the e-marketplace.

ü     The ability of buyers and sellers to be in different locations.

•       Types of e-marketplaces

                Electronic storefronts:

                An electronic storefront refers to a single company’s web site where products and services are sold. These belong to:

•       Manufacturers

•       Retailers

•       Individuals

                Storefront Mechanisms:

•       Electronic catalog

•       Search engine

•       Electronic cart

•       E-auction facilities

•       Payment gateway where payment          arrangements are made

•       Shipment court where shipping arrangements   are made

•       Customer Services (product & warranty information)

                Electronic Malls

                An e-mall is an online shopping location where many stores are located. It contains a directory of product categories and the stores in each category.

                 

                Information Portals

•       A portal is a mechanism that is used in e-marketplaces.

•       It is an information gateway.

•       The growing use of internet and intranets, many organizations encounter info. overload.

•       Info. is scattered across numerous documents, email messages, and databases at different locations in disparate systems. 

•       Finding relevant and accurate info. is often time consuming and requires access to multiple systems.

•       Organizations lose a lot of productive employee time consequently. 

•       Solution is an information portal: is a single point of access through a web browser to critical business information located inside and outside of an organization.

•       Portals can be personalized by the users.

•       Types of Portals

    Commercial (public) portals

                Offer contents for diverse communities.

                They can be customized by the user and offer fairly routine content in real time. E.g. A stock ticker and news about a preselected items.

                yahoo.com, msn.com etc.

Corporate portals

                Provide organized access to rich content within relatively narrow corporate and partners’ communities.

Publishing portals

                for communities with specific interests. They provide little customization but extensive online search features.

                e.g. Techweb.com and zdnet.com

                 

                Voice portals

                Web sites with audio interfaces. They can be accessed by a standard telephone or cell phone.

                Aolbyphone.com is a service that allows users to retrieve e mail and news via telephone.

                It uses both speech and text to speech technologies.

                bevocal.com offer access to the internet from telephones and tools to build voice portals.

                Voice portals are popular for 1800 numbers that provide self service to customers with info. Available in internet databases.

                 

                Personal portals

                These target specific filtered information for individuals. They offer relatively narrow content and are typically very personalized, effectively having an audience of one.

                Mobile portals

                Portals that are accessible from mobile devices. E.g. i-mode. Following are the interesting applications of i-mode:

                Shopping guides

                Addresses and telephone numbers of shops in the major shopping malls in Tokyo and other Japanese cities are provided with a supporting search engine. Users can get info. About best selling books and music and can buy them.

                Maps and transportation

                Digital maps show detailed guides of local routes and stops of the major public transportation systems in all major cities.

                Train and bus timetables, guides to shopping malls and automatic notification of train delays.

                Ticketing

                Airline tickets, events and entertainment tickets can be purchased online.

                News and reports

                Fast access to global news, local traffic updates, and weather reports are provided.

                Additional Services

                Banking, stock trading, telephone directory searches, dictionary services and horoscopes are available.

•       Role and value of Intermediaries in E-Commerce

•       Intermediaries play an important role in commerce by providing value-added activities and services to buyers and sellers. In an e-marketplace producers and consumers may interact directly like producers set prices of products; sometimes prices are negotiated.

•       However, direct interaction sometimes unfeasible. In this case, intermediaries can play a vital role to address the following limitations:

Search cost:

                                It may be expensive for producers and consumers to find each other. Thousands of products are exchanged among thousands of vendors and millions of consumers in e-marketplaces. Producers may have trouble to accurately gauging consumer demands for new products. Intermediaries maintain databases of consumer preferences and can predict consumer demands and reduce search costs by selectively routing information from producers to consumers and by matching customers with products and services.

  Lack of privacy:

                                Sometimes buyer or seller want to remain anonymous or at least wish to protect some information relevant to a trade. Intermediaries can relay messages and make pricing and allocation decisions without revealing the identity of one or both parties.

Incomplete information: 

                                The buyer may need more information than the seller is able or willing to provide, like information about product quality, competing products or customer satisfaction. An intermediary can gather such information from sources other than the product provider, including independent evaluators and other customers.

               

Contract risk:

                A consumer may refuse to pay after receiving a product or a producer may provide inferior products or give inadequate post purchase service. Intermediaries have a number of tools to reduce such risks.

•       They can expose them by disseminating information about their behavior. The threat of publicizing bad behavior or removing a seal of approval  may encourage both producers and consumers  to meet the broker’s standard for fair dealing.

•       The broker may accept responsibility of the parties’ behavior in transaction and act as a cop on its own. Escrow Agencies 

•       The broker can provide insurance against bad behavior.