E-Commerce

(a) Media convergence

Media convergence is the merging of previously separate industries and technologies (telecommunications, computing, broadcasting/TV, publishing and entertainment) into a single digital platform that delivers voice, data, text, audio and video over the same network. Because all information is turned into digital bits, a single device (such as a smartphone or smart TV) and a single network (the Internet) can carry what once needed telephones, TVs, newspapers and radios.

(b) Influence on e-commerce

• New channels and products: digital content (music, video, e-books, news) can be sold and delivered online directly.
• Richer shopping experience: product videos, live streaming, interactive ads and social media combine in one place.
• Lower cost and wider reach: one network serves many types of customers, so sellers can reach a global audience at low cost.
• New business models: online advertising, subscriptions (streaming), bundled services and mobile commerce arise.
• Convenient access: consumers can browse, compare, pay and communicate from one device, anywhere and at any time.
• Competition and partnerships: telecom, media and IT firms enter each other's markets and form alliances.

(c) Technological factors driving convergence

1. Digitization: all media (text, audio, video) converted into bits that can be stored, copied and sent in the same way.
2. Data compression (MP3, MPEG, JPEG), which reduces bandwidth needs for audio and video.
3. High-bandwidth networks: fibre optics, broadband, 4G/5G and Wi-Fi provide capacity for rich content.
4. Powerful and cheap processors and storage, allowing multimedia devices at low cost.
5. Common protocols (TCP/IP) and the Internet acting as a universal carrier.
6. Improved software and standards (browsers, streaming, cloud computing).

(d) Market factors driving convergence

1. Consumer demand for integrated, convenient services on one device.
2. Competition among telecom, cable and media companies looking for new revenue sources.
3. Deregulation and liberalization of telecom and broadcast markets, letting firms enter each other's sectors.
4. Mergers and strategic alliances to combine content, distribution and technology.
5. Economies of scale and scope from sharing infrastructure and content.
6. Falling prices of devices and Internet access, and growth of advertising and digital content markets.

(a) Digital wallet

A digital (electronic) wallet is software, a mobile app or an online service that securely stores a user's payment information (bank account, debit/credit card details, e-cash balance), passwords, and sometimes loyalty cards and identity data. It allows the user to pay for goods and services electronically without entering details each time. Examples: eSewa, Khalti, IME Pay, PayPal, Google Pay, Apple Pay.

Types: server-side wallets (stored with a provider such as eSewa) and client-side wallets (stored on the user's device).

(b) Use in e-commerce

1. Online checkout: the customer chooses the wallet at a shopping site and pays after authentication (PIN/OTP/biometric); the shipping and billing information can be filled in automatically.
2. Micropayments: small payments for content, apps, tickets and mobile top-ups.
3. Mobile and QR payments at shops and for bill payment (electricity, water, internet).
4. Person-to-person transfers and refunds, cash-back and discounts.
5. Security: card numbers are tokenized and encrypted, so merchants do not see them.
6. Convenience: one-click payments, a transaction history and loyalty management.

(c) Issues in designing an electronic payment system

1. Security: protection against fraud, theft and tampering with encryption, authentication, digital signatures and non-repudiation.
2. Authentication and authorization of users and merchants.
3. Privacy and anonymity: protecting transaction data, and whether payments can be traced.
4. Integrity and reliability: transactions must be accurate and atomic, with no loss or duplication; the system must be highly available.
5. Convertibility and interoperability: the money must be convertible to other forms and work across banks, wallets and currencies using open standards.
6. Cost and efficiency: low transaction fees, particularly for micropayments, and speed.
7. Scalability: the system must handle growth in users and volume.
8. Ease of use and acceptance: simple interfaces and wide merchant and consumer acceptance.
9. Legal and regulatory compliance: central bank rules, anti-money-laundering and consumer protection.
10. Divisibility and transferability of the electronic money.

(a) EDI

Electronic Data Interchange (EDI) is the computer-to-computer exchange of structured business documents (purchase orders, invoices, shipping notices, payments) between organizations in a standard, machine-readable format, with no human intervention. Common standards are ANSI X12 and UN/EDIFACT. Documents are translated by EDI software, sent over a value-added network (VAN) or the Internet, and translated back into the receiver's application format.

(b) Use of EDI in e-commerce

EDI is the basis of business-to-business (B2B) e-commerce. A typical flow is:

1. The buyer's system generates a purchase order and sends it as an EDI message.
2. The supplier's system receives it, checks the stock and replies with an acknowledgement.
3. The supplier sends an advance shipping notice and an electronic invoice.
4. The buyer pays by electronic funds transfer (EFT), and the receipt is confirmed.

It is used in supply-chain management, just-in-time inventory, customs, banking, retail replenishment and logistics. Benefits: fewer errors from re-keying, faster order cycles, lower paper and labour costs, and lower inventory.

(c) Influence on information flow in international trade

International trade involves many parties (exporter, importer, banks, customs, shipping lines, insurers) and many documents. EDI has:

1. Speeded up document exchange from days to minutes across borders and time zones.
2. Reduced paperwork and errors: standard formats (UN/EDIFACT) remove language and format barriers.
3. Streamlined customs clearance: electronic declarations, bills of lading and certificates of origin speed up clearance.
4. Improved tracking and visibility of goods in the supply chain.
5. Integrated trade finance: letters of credit and payments become faster.
6. Reduced costs and delays, which increases trade volume and makes just-in-time supply possible for international partners.
7. Increased trust and long-term relationships between trading partners, though it needs initial investment and agreed standards.

A corporate (digital) library holds an organization's information resources in electronic form for its employees and customers. The different types of digital documents used are as follows.

1. Text documents: word-processor files (DOC, DOCX, TXT, RTF), reports, memos, manuals and policies.
2. Portable documents: PDF files, which keep the layout and are used for reports, forms, contracts, brochures and e-books.
3. Hypertext and markup documents: HTML/XML pages, intranet content, wikis and knowledge bases, with links between documents.
4. Spreadsheets and databases: XLS/CSV files and database records, used for financial data, statistics and catalogues.
5. Images and scanned documents: scanned paper records, drawings and photographs (JPEG, PNG, TIFF) stored using document imaging, often with OCR to make text searchable.
6. Audio documents: recorded meetings, training, podcasts and voice mail (MP3, WAV).
7. Video documents: training videos, presentations and conferences (MP4, MPEG).
8. Presentations and multimedia: PPT slides and interactive content.
9. Email and messages: archived correspondence and electronic forms.
10. Structured/electronic business documents: EDI messages, invoices, purchase orders and digital forms.
11. Reference and technical documents: patents, standards, CAD drawings, journals, theses and e-books.

They are organized with metadata and indexing, version control and access control, so that they can be searched, shared and protected.

(a) I-way

The I-way (Information Superhighway, or the Information Highway) is the high-speed, high-capacity network infrastructure that connects homes, businesses, schools and governments and carries voice, data, video and multimedia information. In practice it is the Internet together with the underlying telecommunications, cable, satellite and wireless networks. It is the foundation of e-commerce. It has four main components: the consumer access equipment, local on-ramps (the access providers, such as telecom, cable, ISPs and wireless), global information distribution networks (long-distance backbones: fibre, satellites), and the information content and services.

(b) Market forces influencing the I-way

1. Telecommunications and cable competition: deregulation lets telecom, cable and wireless firms compete in each other's markets, which pushes investment and improves access.
2. Consumer demand for entertainment, online shopping, banking, education and communication drives need for more bandwidth.
3. Business demand: firms need fast, reliable networks for B2B transactions, supply-chain management and cloud services.
4. Technology advances (fibre optics, broadband, 4G/5G, satellites, compression), which lower cost and raise capacity.
5. Convergence of computing, media and communication, creating new markets for content and services.
6. Government policy and regulation: licensing, standards, universal-service goals and investment in infrastructure.
7. Content providers and advertisers, who need networks to reach audiences and create revenue.
8. Mergers and strategic alliances among telecom, cable, software and media companies.
9. Falling prices of devices and access, increasing the number of users.

The mercantile process model describes the stages of a commercial transaction as the customer sees them: pre-purchase interaction (search and discovery), purchase consummation (ordering and payment) and post-purchase interaction (after the sale). From the customer's perspective, post-purchase interaction includes the following.

1. Order confirmation and tracking: an e-mail or SMS acknowledges the order and the customer can follow its status, from dispatch to delivery.
2. Delivery and receipt: the goods (or digital download or service) are delivered, and the customer checks quantity and quality against the order and the invoice.
3. Invoicing and payment follow-up: the customer receives the bill or e-receipt and may complete a deferred payment (such as cash on delivery or credit).
4. Customer support and service: help desk, FAQs, live chat or e-mail for questions, installation and troubleshooting.
5. Returns, refunds and exchanges: a clear policy for defective, wrong or unwanted goods, with a refund to the original payment method.
6. Warranty and maintenance: claims under warranty, repairs, spare parts and software updates.
7. Complaints and dispute resolution: a mechanism to report problems and get redress.
8. Feedback and reviews: the customer rates the product and seller, which informs other buyers.
9. Relationship management: loyalty points, personalized offers, newsletters and repeat-purchase incentives, which build trust and customer retention.

Good post-purchase interaction increases satisfaction, trust and repeat business, which is critical in e-commerce where customers cannot inspect the goods beforehand.

The World Wide Web (WWW) is an architecture for accessing linked information over the Internet. It combines three concepts.

1. Global hypertext publishing

• Information is published as hypertext documents written in HTML, with hyperlinks that connect one document to another, on the same or any other server in the world.
• Each resource has a unique address, the URL, so any document can be referenced globally.
• Anyone can publish by placing pages on a web server. Documents may contain text, images, audio and video (hypermedia). The links form a global "web" of information that users navigate by clicking.

2. Universal reader

• A single program, the web browser (Chrome, Firefox, Edge), can retrieve and display documents from any web server, regardless of the platform, operating system or the type of information source.
• It uses standard formats (HTML, CSS, JPEG, etc.) and the common protocol HTTP, so the user needs only one tool to access many Internet services (web, FTP, e-mail interfaces).
• Plug-ins and scripts extend its capabilities.

3. Client-server architecture

• The client (browser) sends an HTTP request for a resource identified by a URL; the web server (Apache, IIS, Nginx) locates the document or runs a program (CGI, PHP, servlet) and returns the response.
• The server stores and processes data and the client handles presentation. Interactions are stateless request/response pairs, and servers may connect to databases and application servers (three-tier architecture).

Together: servers publish hypertext documents (publishing), the browser acts as a single universal client to read them, and HTTP over a client-server model ties the two together, which is how the web became the platform for e-commerce.

(a) Cryptography

Cryptography is the science of securing information by transforming it into an unreadable form (encryption) using an algorithm and a key, and restoring it (decryption) only by authorized parties. The original message is plaintext and the encrypted message is ciphertext.

Types:

• Symmetric-key (secret-key) cryptography: the same key encrypts and decrypts (DES, 3DES, AES). It is fast but key distribution is a problem.
• Asymmetric-key (public-key) cryptography: a pair of keys, public (to encrypt or verify) and private (to decrypt or sign) (RSA, ECC). It is slower but solves key distribution.
• Hash functions (SHA-256, MD5): produce a fixed-length digest for checking integrity.

(b) Use for data and message transaction security in e-commerce

1. Confidentiality: order details, card numbers and passwords are encrypted, either with symmetric encryption (AES) or by encrypting the message with the receiver's public key. SSL/TLS (HTTPS) uses public-key cryptography to exchange a session key and then symmetric encryption for the data.
2. Integrity: a hash (message digest) of the message is sent with it; if the message is changed in transit, the receiver's digest will not match.
3. Authentication: digital certificates (X.509) issued by a certification authority bind a public key to the identity of a website or user, and proves the identity of the parties.
4. Non-repudiation: the sender signs the message digest with the private key (digital signature); the sender cannot later deny having sent the order or payment, and the receiver can verify it with the sender's public key.
5. Secure payment protocols: SSL/TLS and SET protect the payment details; tokenization and encryption protect stored card data.
6. Digital envelope: the message is encrypted with a random symmetric key, which is itself encrypted with the receiver's public key, combining speed with easy key exchange.
7. Key management: public key infrastructure (PKI) manages generation, distribution and revocation of keys and certificates.

These are unique features of e-commerce technology.

1. Ubiquity E-commerce is available everywhere and at any time: at home, at work, or on the move through mobile devices. The market is not restricted to a physical place or opening hours (the "marketspace"). This lowers transaction costs because the customer need not travel, and increases convenience. Example: A customer in Pokhara can order a book from Daraz at 11 pm from a mobile phone, while a physical shop would be closed.

2. Richness Richness is the complexity and content of a message that can be delivered: audio, video and text together, and the ability to provide personalized, interactive content. Traditionally there was a trade-off between richness and reach; the web allows both. The web supports rich, interactive messages to a large audience. Example: An online clothing store shows photos, a 360-degree view, a size guide and a video of the product, and a live chat with a sales agent, while a printed catalogue offers only static pictures.

3. Information density Information density is the total amount and quality of information available to all participants in the market, merchants and consumers alike. E-commerce technologies reduce the cost of collecting, storing and communicating information, while increasing its currency, accuracy and timeliness. Prices and costs become more transparent, so consumers can compare easily and merchants learn more about customers. Example: On a price-comparison website, a consumer can instantly compare the prices, specifications and reviews of a phone across many sellers, while sellers can see customers' browsing and purchase data to personalize offers.

(a) E-commerce business model

A business model is the set of planned activities designed to result in a profit in a marketplace; it describes how a company will create, deliver and capture value. An e-commerce business model is a business model that is applied in, or enabled by, the Internet and the web. It states what the firm sells, to whom, how it will reach customers and how it will earn revenue. Examples: online retailer (Daraz), marketplace (eBay), content provider, portal, transaction broker, market creator, service provider, community provider.

(b) Key elements of an e-commerce business model

1. Value proposition: why a customer should buy from the firm; the benefits offered that solve problems or meet needs better than alternatives, such as personalization, convenience, reduced search cost, lower price or wide selection.
2. Revenue model: how the firm earns income. Typical models: advertising (fees from advertisers), subscription (fees for access to content or service), transaction fee (commission on a sale), sales (selling goods, information or services) and affiliate (referral fees).
3. Market opportunity: the intended market space (where the firm wants to operate) and the realistic revenue potential in that space; includes the size and growth of the market segments.
4. Competitive environment: the other firms selling similar products in the same market space: direct and indirect competitors, their size, market share and pricing.
5. Competitive advantage: the factors that allow the firm to produce a superior product or lower price than competitors, such as first-mover advantage, unfair advantage (brand, unique technology), leverage and asymmetries.
6. Market strategy: the plan to promote products and reach the target audience: advertising, social media, search engine marketing, partnerships and customer acquisition.
7. Organizational development: the plan to organize work, define roles and structure the firm (departments, hiring and responsibilities) to carry out the business plan.
8. Management team: the experienced people with skills, record and reputation to run the business, including advisors and board members.

A sound model requires all eight elements to fit together consistently.

(a) Security threats in e-commerce

E-commerce systems have three main points of vulnerability: the client, the communication channel and the server. The common threats are:

1. Malicious code: viruses, worms, Trojan horses, ransomware and spyware that damage data or steal information.
2. Phishing and social engineering: fake e-mails or websites trick users into disclosing passwords and card numbers.
3. Hacking and cyber-vandalism: unauthorized access, defacement of sites or disruption of operations.
4. Credit card fraud and identity theft: misuse of stolen card details and personal data.
5. Spoofing and pharming: faking a website's identity, or redirecting users to a false site.
6. Denial of Service (DoS/DDoS): flooding a server so that legitimate users cannot reach it.
7. Sniffing and man-in-the-middle attacks: eavesdropping on or altering data in transit.
8. Data breach and insider threats: theft or misuse of stored customer data.
9. Spam and adware, and SQL injection / cross-site scripting that exploit web application flaws.
10. Repudiation: a party denies a transaction it made.

(b) Client-server security

Client-side:

• Antivirus and anti-malware, regular patches, and firewalls.
• Secure browsers with up-to-date plug-ins, restricting scripts, ActiveX and cookies.
• Strong passwords and two-factor authentication; user education against phishing.
• Digital certificates for authenticating the user to the server.

Server-side:

• Firewalls and intrusion detection/prevention systems to filter traffic.
• Access control and authentication: user IDs, passwords, biometrics, OTP and role-based permissions.
• Regular updates and patches to the OS and web server, disabling unused services, and secure coding to avoid SQL injection and XSS.
• Anti-DoS measures (load balancers, rate limiting) and monitoring/logging.
• Backup and recovery, and a security policy with periodic audits.

(c) Data and transaction security

1. Encryption of data in transit and at rest: SSL/TLS (HTTPS) between browser and server uses public-key cryptography to establish a session key, then symmetric encryption (AES) for data.
2. Digital signatures and certificates (PKI), issued by certification authorities, authenticate the parties and provide non-repudiation.
3. Message digests (hash functions) guarantee the integrity of messages.
4. Secure payment protocols and services: SET, 3-D Secure, tokenization and OTP for card payments; payment gateways.
5. Secure storage: database encryption and masking of card numbers; compliance with PCI-DSS.
6. Virtual private networks (VPN) for secure access to private networks.
7. Audit trails, transaction logs and legal measures (e.g. Electronic Transactions Act) support accountability.

Together these ensure confidentiality, integrity, authentication, authorization and non-repudiation of e-commerce transactions.

E-payment is the transfer of monetary value between a payer and a payee through electronic means (the Internet, card networks, banking networks or mobile networks) without exchanging physical cash or paper cheques. Main types are credit/debit cards, electronic checks, stored value systems (prepaid cards, e-wallets) and digital cash.

(a) Credit card transactions

Parties: cardholder (customer), merchant, issuing bank (customer's bank), acquiring bank (merchant's bank), card network (Visa, Mastercard) and a payment gateway.

1. The customer selects goods and enters card number, expiry date and CVV on the merchant's checkout page (sent over SSL/TLS).
2. The merchant sends the details through the payment gateway to the acquiring bank (authorization request).
3. The acquirer forwards the request through the card network to the issuing bank, which checks that the card is valid, the funds or credit limit are sufficient and that there is no fraud flag.
4. The issuer approves or declines; the response returns along the same path and the merchant shows the result.
5. Settlement: the merchant submits approved transactions in a batch; the issuer pays the acquirer, which credits the merchant after deducting a discount/processing fee (about 2-3%). The customer is billed monthly.

Pros: widely accepted, convenient, global, credit period, dispute and chargeback protection. Cons: risk of card fraud and data theft, merchant fees, not usable by people without cards, interest on unpaid dues, unsuitable for micro-payments.

(b) Electronic checks

An e-check is the electronic version of a paper cheque. The payer gives bank account and routing details (or a digitally signed cheque) to the payee.

1. The customer authorizes the payment on the merchant site, supplying account details and a digital signature.
2. The merchant forwards the e-check to its bank (or a clearing house).
3. The bank sends it through an automated clearing house (ACH) to the customer's bank.
4. The customer's bank verifies the signature and balance, debits the account and transfers funds to the merchant's bank, which credits the merchant.

Pros: cheaper than cards, familiar cheque model, good for B2B and recurring bills, digital signatures give security, faster than paper. Cons: slower than cards (days to clear), risk of insufficient funds or bounced cheques, needs a bank account, requires an infrastructure of PKI/clearing houses, limited acceptance.

(c) Stored value payment systems

The customer deposits money in advance into a prepaid account (smart card, prepaid card or e-wallet such as eSewa, Khalti, PayPal balance). The value is stored on the card chip or in the provider's server database.

1. The user loads money from a bank account or cash agent.
2. At purchase, the user enters a PIN/OTP or scans a QR code.
3. The system checks the balance, deducts the amount from the user's account and credits the merchant's account.
4. The merchant later withdraws the money to its bank account.

Pros: no bank account or credit needed, good for small payments, spending limited to the balance, fast, low transaction cost, anonymity to the merchant. Cons: balance limited, lost card or phone may mean lost money, value can be stolen if account is hacked, acceptance limited to the provider's network, regulatory limits, no interest on stored money.

M-commerce is e-commerce conducted through mobile handheld devices (phones, tablets) over wireless networks. U-commerce (ubiquitous commerce) extends this: commerce is available anywhere, anytime, through any device and embedded in the physical environment itself. The factors that make U-commerce different are:

1. Ubiquity of technology: M-commerce depends on a device the user carries and actively operates; U-commerce embeds computing in everyday objects (sensors, RFID, wearables, smart appliances, IoT) so that it is present everywhere, often invisibly.
2. Universality of access: U-commerce works across many devices, networks and platforms with seamless handover, not just a mobile phone and its connection.
3. Context awareness and personalization: Using location, time, user profile and sensor data, U-commerce offers goods and services proactively (for example a fridge reordering milk, a shop sending an offer as you pass), whereas M-commerce is mostly user-initiated.
4. Unique identification: Objects and people are uniquely identified (RFID, NFC, biometrics), enabling automatic tracking and payment.
5. Universal standards and interoperability: Different systems must communicate through common standards; M-commerce works with fewer standards.
6. Unobtrusive/automatic interaction: Transactions happen with minimal human involvement (machine-to-machine), such as a smart car paying tolls.
7. Integration of physical and online worlds: U-commerce blends offline and online commerce; M-commerce is mainly an online channel through a mobile.
8. Privacy and security concerns: Constant data collection raises larger privacy issues than in M-commerce.

Industry value chain is the set of activities and the linked organizations through which raw materials are turned into a finished product or service and delivered to the final consumer within an industry. Each stage adds value, and the chain spans several firms: suppliers, manufacturers, distributors, retailers and customers. E-commerce changes it by cutting intermediaries, speeding information flow and lowering transaction costs.

Generic players in the value chain

1. Suppliers (raw material/component providers): supply inputs such as materials, parts or content.
2. Manufacturers/producers: convert inputs into finished goods or services.
3. Transporters/logistics providers: move goods between stages (shipping, warehousing, courier).
4. Distributors/wholesalers: buy in bulk from manufacturers and supply to retailers; hold inventory.
5. Retailers: sell to end consumers, online or in stores.
6. Customers/consumers: the end users who pay for the product, and whose demand drives the chain.
7. Support players: banks and payment providers, advertisers, regulators and information service providers.

The flow of goods moves from suppliers to customers, the flow of money moves the other way, and information flows in both directions.

Digital wallet (e-wallet) is a software application or online service that securely stores a user's payment information (card details, bank account, balance, identity data, shipping address and sometimes loyalty cards) and lets the user pay for online and offline purchases without typing details each time. Examples are PayPal, Apple Pay, Google Pay, eSewa and Khalti.

How it works

1. Registration and set-up: The user creates an account and adds funding sources (cards, bank account) or loads money. The data is encrypted and stored on the device or provider's server. Often the real card number is replaced by a token.
2. Selection at checkout: At a merchant site or shop the user chooses the wallet as the payment method.
3. Authentication: The user proves identity with a password, PIN, OTP, fingerprint or face recognition.
4. Payment request: The wallet sends the encrypted payment details (or token) and amount to the merchant, payment gateway or via NFC/QR code.
5. Authorization: The gateway forwards the request to the bank or card network, which checks funds and approves or declines.
6. Confirmation and settlement: The wallet deducts the amount from the balance or linked account, the merchant is credited, and both receive confirmations.

Benefits include convenience, speed, security through tokenization, and not exposing card numbers to merchants.

Catalog in an e-commerce application is an organized collection of the products or services a business sells, giving for each item its name, code, description, images, price, availability, category and attributes. It is the electronic equivalent of a printed catalog and lets customers browse, search and compare products.

Ways of creating catalogs

1. Static catalog: A set of ordinary HTML pages, each listing products. It is created by hand with a web editor, is simple and cheap and suits small businesses with few, rarely changing products, but updating is laborious.
2. Dynamic catalog: Product data is stored in a database and pages are generated on request by server-side scripts (PHP, ASP, JSP, etc.). The steps are:
   • design the database tables (products, categories, prices, stock, images);
   • enter or import product data (forms, CSV/XML upload, supplier feeds);
   • write templates and queries to display products by category, search or filter;
   • add features such as search, sorting, personalization and links to the shopping cart. Changes in the database appear immediately on the site, and it scales to thousands of products.
3. Using e-commerce platforms/software: Ready-made catalog tools such as Shopify, Magento, WooCommerce or OpenCart provide admin panels for adding products, categories and images, with templates and inventory management.
4. Catalog from supplier/marketplace feeds: Product information is imported from suppliers or marketplaces through XML/CSV feeds or APIs.

Malicious code (malware) is any program or code designed to damage, disrupt, steal data from or gain unauthorized access to a computer system without the owner's consent. It includes viruses, worms, Trojan horses, ransomware, bots/botnets, backdoors and logic bombs.

Potentially unwanted programs (PUPs) are programs that the user may have knowingly or unknowingly installed, usually bundled with free software, that perform unwanted actions.

Adware displays unwanted advertisements.

1. It arrives bundled with freeware or through browser extensions and toolbars.
2. Once installed it shows pop-ups, banners and redirects to ad pages, changes the home page or search engine, and tracks browsing habits to target ads.
3. Effects: slow computer and browser, distraction, and risk of leading to malicious sites.

Spyware secretly collects information about the user.

1. It installs silently, often via Trojans, deceptive downloads or email attachments.
2. It monitors activity with keyloggers, screen capture, cookies and browser history, and records passwords, card numbers and personal data.
3. It sends the collected data to the attacker over the Internet, who uses it for identity theft, fraud or selling to third parties.
4. Effects: privacy loss, financial theft, slow system.

Protection: antivirus/anti-spyware software, firewalls, updated software, downloading only from trusted sources and reading installer options carefully.

Advertisers pay for online ads using several pricing models.

1. Barter: Ad space is exchanged for goods or services, with no cash involved.
2. Flat fee/sponsorship: A fixed price for a set period or placement (for example a banner on the homepage for a month), regardless of views or clicks.
3. CPM (cost per thousand impressions): The advertiser pays for every 1,000 times the ad is displayed. Cost = (impressions / 1000) x CPM rate. Suitable for branding.
4. CPC (cost per click) / PPC: Pay only when a user clicks the ad. Used by Google Ads; suits traffic generation.
5. CPA/CPL/PPA (cost per action, acquisition or lead): Pay only when a user completes a defined action such as a purchase, sign-up or form submission.
6. CPV (cost per view): Used for video ads, charged when a viewer watches for a set time or interacts.
7. Hybrid models: A combination, for example a base fee plus a performance bonus, or CPM plus CPC.
8. Affiliate/revenue sharing: The advertiser pays a commission on sales made through the affiliate's link.

Impression-based models transfer risk to the advertiser; action-based models transfer it to the publisher.

Facebook Exchange (FBX): A real-time bidding ad exchange (introduced 2012, later replaced by Custom Audiences) that let advertisers retarget users who had visited their website or viewed a product. Cookies identified the visitor, and the advertiser bid in real time to show a related ad on that user's Facebook news feed or sidebar. This brings back interested customers and raises conversion rates.

Reaction buttons: Beyond the Like button, users can react with Love, Haha, Wow, Sad and Angry. Marketers use them to

• measure how people feel about a post or ad, giving richer feedback than likes;
• increase engagement and reach, since reactions spread posts to friends' feeds;
• learn customer sentiment and improve products and content;
• build audiences from people who reacted for retargeting.

Sponsored messages (Messenger ads/sponsored messages): Paid messages sent directly to users' Messenger inbox, usually to people who have already chatted with the page. They offer personalized offers, announcements and product updates, support direct conversation, and carry a call-to-action button. Because messages are personal and targeted by interest and behavior, they get high open and response rates.

Together these tools support targeted advertising, brand engagement and word-of-mouth marketing on Facebook.

Search Engine Optimization (SEO) is the process of improving a website's structure and content so that it ranks higher in the unpaid (organic) results of search engines such as Google, increasing traffic, visibility and sales without paying for ads.

On-page SEO covers optimization done on the website itself:

1. Keyword research and placement: Find terms users search for and use them naturally in the title, headings, first paragraph, body and URL, avoiding keyword stuffing.
2. Title tag and meta description: Write unique, concise titles (about 60 characters) with the main keyword and a compelling description (about 155 characters) to attract clicks.
3. Headings: Use one H1 and structured H2/H3 headings.
4. Quality content: Original, useful, regularly updated content that matches search intent.
5. URL structure: Short, readable URLs containing keywords.
6. Image optimization: Descriptive file names, alt text and compressed images.
7. Internal linking: Link related pages to help crawling and spread authority.
8. Page speed and mobile-friendliness: Fast loading and responsive design.
9. Technical items: XML sitemap, robots.txt, canonical tags, HTTPS and schema markup.

A recommendation system suggests products a customer is likely to want, increasing sales and satisfaction.

Content-based filtering

• It recommends items similar to those the user liked or bought in the past, comparing item attributes (category, brand, price, keywords, description).
• Steps: build a profile of the user's preferred attributes, represent each product as a feature vector (for example TF-IDF), compute similarity (such as cosine similarity) between profile and products, and recommend the highest scoring ones.
• Example: a customer who bought a Python programming book is shown other programming books.
• Strengths: needs no data about other users, recommends new items, explains its choices. Weaknesses: narrow recommendations (overspecialization), needs good item features, cold start for new users.

Collaborative filtering

• It recommends items based on the behavior of similar users, using ratings, purchases and clicks, without needing item content.
• User-based: find users with similar rating patterns (nearest neighbors, using Pearson correlation or cosine similarity) and recommend what they liked but the target user has not seen. Item-based: find items often bought or rated together ("customers who bought this also bought").
• Example: Amazon's "customers who bought this item also bought".
• Strengths: finds surprising items across categories, works for any type of item. Weaknesses: cold start for new users and items, sparse data, scalability problems.

Many e-commerce sites combine both in hybrid recommenders.

B2C (business-to-consumer) e-commerce is the sale of products and services by businesses directly to individual consumers over the Internet. The main B2C business models are:

1. Portal: A gateway site offering search, news, email, entertainment and shopping in one place; revenue comes from advertising, referral fees and subscriptions. Examples: Yahoo, MSN, Google.
2. E-tailer (online retailer): Sells physical goods directly to consumers through a website, either purely online or alongside physical stores (click-and-mortar). Revenue comes from product sales. Examples: Amazon, Daraz, Sastodeal.
3. Content provider: Distributes digital content (news, music, video, e-books) and earns from subscriptions, pay-per-view or advertising. Examples: Netflix, Spotify, Kantipur Online, Wall Street Journal.
4. Transaction broker: Processes transactions for buyers who would otherwise do them in person or by phone, earning a fee per transaction. Examples: online travel booking (Expedia, Nepali airline ticketing portals), stock brokers, insurance sellers.
5. Market creator: Builds a digital environment where buyers and sellers meet and trade, earning a commission or listing fee. Examples: eBay, Etsy, Hamro Bazar.
6. Service provider: Offers online services such as cloud storage, photo sharing, web hosting or software as a service. Revenue from subscriptions, sales or ads. Examples: Google Drive, Dropbox, Flickr.
7. Community provider: Provides an online meeting place for people with similar interests, earning from ads, premium memberships and affiliate fees. Examples: Facebook, LinkedIn, Twitter, Reddit.

Why security is essential in e-commerce

E-commerce handles money, card numbers, personal data and business secrets over open networks. Without security, customers will not trust online shopping, and merchants face fraud losses, theft of data, service interruptions, legal penalties and damage to reputation. Security protects confidentiality, builds trust, keeps the business running and ensures legal compliance.

Dimensions of e-commerce security

1. Integrity: Information sent or displayed is not altered by unauthorized parties.
   • Consumer view: the order, price and payment amount are not changed in transit.
   • Merchant view: the order and product data on the site are not tampered with.
2. Nonrepudiation: Neither party can later deny the transaction.
   • Consumer view: the merchant cannot deny receiving an order and payment.
   • Merchant view: the customer cannot deny placing the order (digital signatures, logs).
3. Authenticity: The ability to identify the identity of the other party.
   • Consumer view: is this a genuine site and not a fake one?
   • Merchant view: is this customer who they claim to be (is the card theirs)?
4. Confidentiality: Information is seen only by authorized people.
   • Consumer view: card numbers and personal details are not exposed.
   • Merchant view: customer data and business data such as price lists are protected (encryption, SSL/TLS).
5. Privacy: The ability to control the use of personal information.
   • Consumer view: the information is not used or sold without consent.
   • Merchant view: customer data is stored and used according to law and policy.
6. Availability: The site and services are accessible when needed.
   • Consumer view: the site is up and orders can be placed.
   • Merchant view: the site is protected from denial-of-service attacks and failures so sales are not lost.

Tools include encryption, digital signatures and certificates, firewalls, authentication (passwords, OTP, biometrics), secure payment gateways, antivirus and regular backups.

(a) Digital cash

Digital (electronic) cash is money in the form of electronic tokens issued by a bank and used like physical cash.

1. The customer withdraws money from a bank account; the bank issues digitally signed electronic coins (blinded so that the bank cannot link them to the customer) and stores them in the customer's e-wallet.
2. At purchase, the customer sends the coins to the merchant.
3. The merchant checks the bank's signature and sends the coins to the bank, which verifies they have not been spent before and credits the merchant's account.
4. The bank removes the spent coins, preventing double spending.

Advantages: anonymity, suitable for micro-payments, no card needed, low transaction costs. Disadvantages: double-spending and counterfeit risk, lost wallet means lost money, limited acceptance, needs software and a bank issuer, and anonymity can aid money laundering.

(b) Electronic checks (e-checks)

1. The customer signs an electronic cheque with a digital signature and sends it to the merchant with account details.
2. The merchant deposits it with its bank.
3. The merchant's bank sends it through a clearing house (ACH) to the customer's bank.
4. The customer's bank verifies the signature and balance, debits the customer's account and transfers money to the merchant's bank.

Advantages: low cost, familiar to users, good for B2B, secure through digital signatures, easy to track. Disadvantages: clearing takes days, bounced cheques, needs a bank account and PKI support, limited acceptance.

(c) Electronic billing presentment and payment (EBPP)

EBPP systems let companies present bills electronically (via email, website or the biller's site) and let customers pay online.

1. The biller generates the bill and presents it either directly (biller's own site) or through a consolidator (a third-party portal collecting bills from many billers).
2. The customer is notified, views the bill and approves it.
3. The customer authorizes payment from a bank account or card, or sets up automatic payment.
4. The bank or processor transfers the money to the biller and a receipt is returned.

Advantages: saves printing, postage and processing costs, faster payment and better cash flow, convenience, fewer errors, environment-friendly. Disadvantages: security and privacy risk, needs internet access, set-up cost, consumers may lose track of bills, and a lack of standards across billers.

E-commerce can be classified by the degree of digitization of three dimensions: the product/service sold, the process (ordering, payment) and the delivery agent.

Pure e-commerce: All three dimensions are digital. The product is digital, the process (ordering, payment) is online, and delivery is through the Internet. Examples: downloading software, e-books, music from Spotify, online banking or an online course.

Partial e-commerce: At least one dimension is physical. Typically the order and payment happen online but the product is delivered physically. Examples: ordering a shirt from Daraz or Amazon and receiving it by courier; booking a physical product online and paying cash on delivery.

Firm value chain

A firm value chain (Michael Porter) is the set of activities a single firm performs to create value for its customers and profit. It has primary activities (inbound logistics, operations, outbound logistics, marketing and sales, service) and support activities (firm infrastructure, human resource management, technology development, procurement). Each activity adds value and incurs cost.

Value web

A value web is a networked business system that coordinates the value chains of several firms (suppliers, distributors, partners and customers) through Internet technology, so they share information and work together in real time rather than in a rigid sequence. Examples: Dell with its suppliers, or an airline alliance.

Significance in e-commerce

• E-commerce technology reveals where cost can be cut and value added (online ordering, automated procurement, digital marketing, customer service).
• It reduces transaction and search costs and eliminates unnecessary intermediaries.
• Value webs improve coordination, so inventory, product design and delivery are synchronized across partners, giving faster response and lower inventory.
• They help firms find the right partners, enter new markets and gain competitive advantage.
• They help customers by giving them better choice and information.

Importance of building catalogs

1. The catalog is the main way customers discover products, since they cannot touch the goods online.
2. It organizes products in categories so that searching, filtering and comparison are easy.
3. It presents accurate descriptions, images, prices and availability, supporting purchase decisions and reducing returns.
4. It links to the shopping cart, inventory and order systems.
5. It supports marketing (personalization, promotions, recommendations) and search engine visibility.
6. It lowers costs of printed catalogs and can be updated quickly.

Static vs dynamic catalog

Identity theft is the fraudulent use of another person's personal information (name, citizen number, bank or card details, passwords) to commit fraud, such as making purchases, opening accounts or taking loans in the victim's name. It is commonly carried out through phishing, data breaches, malware and spoofing.

Spoofing means misrepresenting oneself by using fake email addresses, or by masquerading as someone else, or by redirecting a web link to an address different from the intended one, with the site masquerading as the intended destination.

Impact on e-commerce:

• Fake sites or emails that imitate a genuine shop or bank trick customers into giving card numbers and passwords.
• Merchants may accept fraudulent orders made with stolen identities and bear chargebacks.
• Loss of customer trust and brand reputation, and legal liability.

Pharming is an attack that redirects users from a genuine website to a fraudulent one even when they type the correct address, by poisoning DNS servers or changing the host file on the user's machine through malware.

Impact on e-commerce:

• Customers unknowingly enter login and payment details on a fake site, leading to theft and fraud.
• It is hard to detect since the URL looks correct, and it affects many users at once.
• Merchants lose sales and trust, and may face lawsuits.

Protection: SSL certificates and checking the padlock/URL, DNS security, anti-malware, two-factor authentication, and user education.

Pinterest is a visual discovery platform where users save ("pin") images and links to boards. Businesses use different kinds of pins for marketing.

Rich pins: Pins that automatically carry extra information pulled from the website's metadata. Types include product pins (real-time price, availability and a buy link), recipe pins (ingredients, cooking time), article pins (headline, author, description) and app pins (install button). They make pins more useful, increase clicks and sales and keep information updated.

Promoted pins: Paid ads that look like regular pins but appear higher in search results and home feeds to a targeted audience. Advertisers choose targeting (keywords, interests, demographics, location) and pay by impressions or clicks (CPC/CPM). They increase reach, traffic and conversions, and can be tracked with analytics.

Cinematic pins: Animated pins that move as the user scrolls the feed, showing a sequence of images or short animation to tell a story about a product. They attract attention and engagement and are used for brand awareness and product launches.

Impressions: The number of times an ad or web page is displayed to users, whether or not it is clicked. It measures exposure and reach (usually counted per thousand, as in CPM). The same user can be counted multiple times, unlike unique reach.

Click-through rate (CTR): The percentage of impressions that lead to a click on the ad or link.

$\text{CTR} = \frac{\text{Clicks}}{\text{Impressions}} \times 100\%$

For example, 50 clicks from 5,000 impressions gives $\text{CTR} = 50/5000 \times 100 = 1\%$. A higher CTR means the ad is relevant and effective, and it influences ad quality scores and costs.

Page views: The total number of times a web page is loaded or viewed, including repeat views by the same visitor. It measures how much content is consumed and the popularity of pages. It is different from unique visitors (number of distinct people) and visits (sessions). Page views per visit indicate engagement.

Together these metrics measure the reach, appeal and traffic effect of online marketing campaigns.

Why SEO is essential

1. Most online experiences begin with a search engine, and most users look only at the first page of results, so ranking decides visibility.
2. It brings targeted free (organic) traffic, lowering marketing cost compared with paid ads.
3. Higher ranking builds credibility and trust.
4. Traffic from people actively searching for products converts well, increasing sales.
5. It gives long-term results and competitive advantage, and improves user experience (speed, mobile, navigation).

Off-page SEO

Off-page SEO covers actions taken outside the website to increase its authority and reputation.

1. Link building (backlinks): Earn links from high-quality, relevant sites through guest posts, directories, press releases, partnerships and creating shareable content. Search engines treat quality backlinks as votes of trust, and anchor text should be relevant.
2. Social media marketing: Share content on Facebook, Twitter, LinkedIn and others to gain traffic, shares and brand signals.
3. Social bookmarking and forums/Q&A: Post useful contributions on Reddit, Quora and discussion forums with links to the site.
4. Influencer outreach and brand mentions: Collaborating with influencers and bloggers.
5. Online reviews and local listings: Google Business Profile, directories and customer reviews.
6. Content marketing: Videos, infographics and articles published on other platforms.

Spammy, paid or irrelevant links should be avoided because they can be penalized.

Significance

Analytics turns data about visitors and customers into decisions.

• It shows how many visitors arrive, from where (search, social, direct, referral), which pages they see and where they leave.
• It measures the success of campaigns and the return on advertising spend.
• It reveals customer demographics, interests and behavior for better targeting and personalization.
• It tracks conversions and sales, identifies weak pages and improves site design and user experience.
• Social media analytics also measures engagement (likes, shares, comments), reach, follower growth and brand sentiment, helping to plan content and respond to customers.

How Google Analytics is done

1. Create a Google Analytics account and property for the website.
2. Insert the tracking code (JavaScript snippet or tag via Google Tag Manager) into every page.
3. The code records visitors' actions and sends them to Google's servers.
4. Set up goals/conversions and e-commerce tracking (purchases, revenue).
5. View reports: audience, acquisition, behavior, conversions, and real-time data; then analyze and act.

How social media analytics is done

1. Define objectives and metrics (reach, engagement, clicks, conversions, sentiment).
2. Use the built-in tools (Facebook/Meta Insights, Twitter Analytics, Instagram Insights) or tools such as Hootsuite and Sprout Social.
3. Collect data on posts, audience and campaigns, with UTM links to track traffic to the site.
4. Analyze patterns, compare with competitors and use the findings to improve content and targeting.

Auctioning in e-commerce

An online auction is a market mechanism in which a seller offers an item on a website and buyers place competing bids, and the price is determined by the bids within a time limit. Steps:

1. The seller registers, lists the item with description, photos, starting price, reserve price and duration.
2. Buyers register and place bids; the system displays the current highest bid and may use proxy bidding (the system raises bids automatically up to a buyer's maximum).
3. When the time ends, the highest bidder (above the reserve) wins.
4. The buyer pays (often via an escrow or payment service) and the seller ships; the site charges listing and commission fees. Example: eBay, Hamro Bazar bidding.

Types of auctions

1. English auction: Prices start low and rise as bidders outbid each other; the highest bidder wins. The most common type.
2. Dutch auction: The price starts high and drops until a bidder accepts it; also used where multiple identical items are sold at the lowest successful bid.
3. First-price sealed-bid auction: Bids are submitted secretly and the highest bidder pays his or her own bid.
4. Second-price sealed-bid (Vickrey) auction: The highest bidder wins but pays the second-highest bid, which encourages truthful bidding.
5. Reverse auction: Buyers post a requirement and sellers compete by lowering prices; the lowest offer wins. Used in procurement.
6. Double auction: Both buyers and sellers submit bids and asks, which are matched (as in stock exchanges).
7. Yankee auction: A multi-unit variant of the English auction.

Competitive advantage

A firm has a competitive advantage when it can produce a superior product or service, or deliver comparable products at lower prices, than most or all of its competitors, so that it earns higher profits. In a business model it comes from using some feature that others cannot match easily. It can be achieved through the following dimensions.

1. Asymmetry: A firm has an advantage when it has more of a resource (knowledge, information, brand, financial strength, technology, location, bargaining power) than its competitors or its customers, and others cannot easily obtain it. Example: a firm with unique proprietary technology or exclusive supplier contracts. Firms can build such asymmetry through patents, trade secrets, first-mover positions and exclusive data.
2. Complementary resources: Competitive advantage needs not only a product or idea but also other assets that support it: marketing and distribution, brand, a trained workforce, logistics, financial resources, customer service and an existing customer base. A firm that has such complementary resources can bring its innovation to market more effectively. Example: a retailer with warehouses and a delivery network can scale an e-commerce site faster than a startup.
3. Perfect market: In a perfectly competitive market there are many buyers and sellers, with equal information, identical products and no barriers, so no firm can earn extra profit. The Internet makes markets closer to perfect (price comparison, low search costs), reducing advantage that comes from information. Firms respond by creating imperfections in their favour through branding, differentiation, personalization, switching costs and network effects, which move them away from the perfect market.
4. Leverage: Using a firm's existing assets, such as its brand, customer base, data and infrastructure, to enter new markets and add value at low additional cost. Example: Amazon leveraged its retail infrastructure and customer base to offer cloud services, and Google leveraged its search audience to offer email and maps.

Other sources include lower cost (cost leadership), differentiation, focus and first-mover advantage. Sustained advantage requires that these assets be hard for competitors to copy.

(a) Digital wallet

A digital wallet (e-wallet) is software, an app or an online service that securely stores a user's payment credentials (card details, bank account, balance), identity information and shipping address, and lets the user pay online or in shops without re-entering them. Examples: PayPal, Google Pay, Apple Pay, eSewa, Khalti.

(b) How it works

1. The user registers and adds cards, bank accounts or loads money; the data is encrypted and often tokenized.
2. At checkout the user selects the wallet and authenticates (password, PIN, OTP, biometrics).
3. The wallet sends the payment information (or token) to the merchant or payment gateway, filling forms automatically, or through NFC/QR.
4. The gateway sends it to the bank/card network for authorization.
5. If approved, the money is debited from the wallet or linked account and credited to the merchant; both get confirmation.

(c) SET (Secure Electronic Transaction)

SET is a protocol developed by Visa and Mastercard for secure card payments over the Internet. It uses digital certificates, digital signatures and encryption, and a dual signature that lets the merchant see the order but not the card number, and the bank see the payment instruction but not the order details. Parties: cardholder (with wallet software), merchant, issuer, acquirer, payment gateway and certificate authority.

Payment authorization

Authorization is the process by which the merchant checks that the cardholder's account is valid and has enough credit for the purchase.

1. The cardholder places an order; the wallet creates an order message for the merchant and a payment message (card details) encrypted with the payment gateway's public key, linked by the dual signature.
2. The merchant verifies the cardholder's certificate and signature and sends an authorization request, containing the payment message and the amount, to the payment gateway.
3. The gateway decrypts the payment information, verifies the signatures and sends an authorization request to the issuing bank through the card network.
4. The issuer approves or rejects the request and the gateway returns an authorization response (signed) to the merchant.
5. The merchant accepts the order, informs the cardholder and ships the goods.

Payment capture

Capture is the process by which the merchant claims the money from the authorized transaction, after shipment.

1. The merchant sends a capture request to the payment gateway, with the final amount and the transaction reference/authorization token.
2. The gateway checks it against the authorization and sends the request to the issuer through the clearing network.
3. The issuer transfers funds to the acquirer, which credits the merchant's account.
4. The gateway sends a capture response to the merchant, who keeps it as a record, and the cardholder is billed on the statement.

Display ad marketing

Display advertising is the use of visual ads such as banners, images, rich media, pop-ups and video placed on websites, apps and social networks, to promote brand awareness, drive traffic and sales. Ads are bought through ad networks and exchanges (Google Display Network), targeted by audience, contextual and retargeting, and priced by CPM, CPC or CPA.

Metrics and their influence

1. Attrition rate: The percentage of customers or visitors who leave or are lost at a stage (for example those who click an ad but do not continue to purchase, or customers who stop buying). $\text{Attrition rate} = \frac{\text{Customers lost during period}}{\text{Customers at start of period}} \times 100\%$ A high attrition rate means ad money is wasted and the targeting, landing page or product is poor; marketers adjust creative and audience and use retargeting to bring users back.
2. View-to-cart ratio: The percentage of product page views that lead to the item being added to the cart. $\text{View-to-cart ratio} = \frac{\text{Add-to-cart actions}}{\text{Product views}} \times 100\%$ It shows how attractive and relevant the product and landing page are for the people the ad brings. A low ratio suggests poor targeting, price or page design, so the ad message and page must be improved.
3. Acquisition rate: The percentage of visitors (or people reached) who become customers or register, often with the cost of acquiring each. $\text{Acquisition rate} = \frac{\text{New customers acquired}}{\text{Visitors/ad clicks}} \times 100\%$ It shows how effectively ads convert audience into customers; a higher rate with a low cost per acquisition gives a good return and guides the budget to the best placements.
4. Retention rate: The percentage of customers who continue to buy over a period. $\text{Retention rate} = \frac{\text{Customers at end} - \text{New customers}}{\text{Customers at start}} \times 100\%$ High retention means that display ads (including retargeting) and the shop build loyalty; retaining a customer costs less than acquiring one, so it increases lifetime value and profit.

Marketers monitor these together to find the weak stage of the funnel (ad, view, cart, purchase, repeat) and optimize the campaign.

Social e-commerce is the use of social networks (Facebook, Instagram, TikTok, WhatsApp, Pinterest) to discover, recommend, discuss and buy products, often without leaving the platform. Its growth is driven by the following factors.

1. Growth of social network usage: Billions of people spend hours daily on social platforms, so sellers go where the audience already is. In Nepal, Facebook and TikTok reach most internet users.
2. Mobile and smartphone penetration: Cheap smartphones and mobile data let users browse, chat and pay from the same app they use for socializing.
3. Trust through peer influence: People trust friends, family, reviews and influencers more than adverts. Word of mouth, ratings, comments and user-generated content shorten the buying decision.
4. Influencer and celebrity marketing: Influencers promote products to loyal followers, creating awareness and quick sales at relatively low cost.
5. Integrated shopping features: Shops on Facebook/Instagram, "Buy" buttons, live-stream selling, shoppable posts and in-app checkout reduce steps between discovery and purchase.
6. Targeted advertising and data: Platforms hold detailed data on interests, age, location and behaviour, so ads can be targeted precisely and measured, giving a good return on spend.
7. Low entry cost: A small business can open a page or group with almost no investment, with no need for a full website or technical skill, which attracts small sellers.
8. Two-way communication and engagement: Customers can ask questions, get instant replies, give feedback and share content, building community and loyalty.
9. Social proof and virality: Likes, shares and recommendations spread products quickly to new buyers.
10. Easier digital payments: Wallets (eSewa, Khalti), mobile banking and cash-on-delivery make buying through social channels convenient.

EDI (Electronic Data Interchange) is the computer-to-computer exchange of structured business documents (purchase orders, invoices, shipping notices, payments) between trading partners in a standard electronic format, such as ANSI X12 or UN/EDIFACT, with no manual re-keying. Documents are transmitted over private networks, value-added networks (VAN) or the Internet.

How it works: the sender's application produces a document, a translator converts it into the standard format, it is sent through a VAN or Internet (AS2), and the receiver's translator converts it into its own application format and processes it automatically.

Significance of EDI in e-commerce

1. Speed: Documents arrive in seconds instead of days by post or fax, shortening the order-to-cash cycle.
2. Accuracy: No manual data entry, so fewer errors and disputes.
3. Lower cost: Saves paper, printing, postage, storage and clerical labour; the cost per document is much lower.
4. Reduced inventory (JIT): Real-time orders and stock information let firms hold less stock and use just-in-time supply.
5. Better relationships and standardization: Common formats make it easy to trade with many partners.
6. Security and audit trail: Transactions are authenticated and logged.
7. Faster payment: Electronic invoices and payment instructions speed up settlement.

Example: A supermarket chain's system detects that stock of rice is low and automatically sends a purchase order (EDI 850) to its supplier. The supplier's system receives it and replies with an advance ship notice (856) and later an invoice (810). The retailer's system matches the invoice with the order and receipt, and payment is made by electronic funds transfer. The whole process occurs without paperwork, taking hours instead of a week, with fewer errors and less stock held.

Virtual currency is a digital representation of value that is issued and used within an online community, and is not legal tender issued by a government. Examples: Bitcoin and Ethereum (decentralized cryptocurrencies), game currencies (V-bucks, gold coins), loyalty points and platform credits. Types are closed (earned and spent only inside one platform), one-way convertible (bought with real money but not redeemable) and two-way convertible (can be exchanged for real money, such as Bitcoin).

How it works

1. A user obtains currency by buying with real money, earning it (mining, rewards, selling goods) or receiving it from others.
2. It is stored in a digital wallet that holds private keys or an account balance.
3. For payment, the user sends a transaction to the merchant's wallet address, authorized with a digital signature.
4. In a cryptocurrency, the transaction is broadcast to a peer-to-peer network, verified by nodes (miners or validators) using consensus (proof of work/stake), and recorded in a blockchain ledger that is hard to alter, with no central bank.
5. In a closed platform, the issuer simply updates account balances.
6. The recipient can hold, spend or convert it to real money on an exchange.

Usages in e-commerce

• Payment for goods and services online (some merchants accept Bitcoin).
• Low-cost cross-border payments and remittances without banks and high fees.
• Micropayments for small items such as articles, songs, in-game items.
• Loyalty and reward programs to retain customers.
• Digital goods and in-game or virtual-world economies.
• Fundraising (token sales/ICO) and decentralized finance.
• Fewer chargebacks and fraud, since transactions are irreversible.

Its drawbacks are price volatility, legal uncertainty (not legal in Nepal), and security risk if a wallet is lost.

A catalog in e-commerce is an organized, searchable collection of the products or services a seller offers online. For each item it holds a product ID/SKU, name, description, images, specifications, price, availability, category and related items. It is the online equivalent of a printed catalog and the storefront through which customers browse, compare and choose products.

Types: static catalog (fixed HTML pages, suitable for small sets of items) and dynamic catalog (items stored in a database and pages generated on request, supporting search, filtering and personalization).

How catalogs are created

1. Plan the product structure: Decide categories, subcategories and attributes (size, color, brand) and a naming/SKU convention.
2. Collect product data: Gather descriptions, specifications, prices and photographs from suppliers or the company's inventory/ERP system.
3. Design the database: Store products, categories, prices, images and stock in a database with unique IDs.
4. Enter or import data: Add records using an admin interface or bulk import (CSV/XML) or supplier feeds.
5. Build the presentation layer: Templates produce pages for category listings, product details, search results and comparison, using the data.
6. Add features: Search, filters, sorting, reviews, recommendations, shopping-cart link and multi-language/currency.
7. Integrate and maintain: Link with inventory and pricing, and keep the data updated; test and publish. Tools include e-commerce platforms such as Shopify, WooCommerce and Magento, which provide catalog management out of the box.

A good catalog has clear images, accurate information, easy navigation and fast loading.

Intrusion: An intrusion is any unauthorized attempt or action to gain access to, misuse, damage or disable a computer system, network or data, bypassing its security. Examples are password cracking, exploiting software vulnerabilities, SQL injection, malware, denial-of-service and insider misuse.

Intrusion Detection System (IDS): An IDS monitors network traffic and system activity, looks for signs of malicious behaviour or policy violations, and raises alerts (an intrusion prevention system, IPS, can also block it).

Types

• Network-based IDS (NIDS): Placed at key points of the network, it inspects packets passing by.
• Host-based IDS (HIDS): Installed on a server, it watches logs, system files, processes and configuration changes.

Detection methods

• Signature-based (misuse) detection: Compares activity with a database of known attack patterns. It is accurate for known attacks but cannot detect new ones.
• Anomaly-based detection: Learns normal behaviour and flags deviations (such as unusual login times or traffic spikes). It can detect new attacks but may give false alarms.

Use in e-commerce security

1. Protects web servers, databases and payment systems holding customer and card data from attack.
2. Gives early warning (alerts to administrators by email/SMS), so the response is quick.
3. Logs events for forensic analysis and evidence.
4. Helps detect SQL injection, DoS attacks, port scans and unauthorized access attempts.
5. Works with firewalls (which only filter by rule) as a second layer, and supports compliance such as PCI DSS.
6. An IPS can automatically block the source IP or terminate the connection.

Thus an IDS maintains the confidentiality, integrity and availability of the e-commerce site and customer trust.

Social engineering is the manipulation of people, rather than technology, to make them reveal confidential information or perform actions that compromise security. The attacker exploits trust, fear, curiosity or helpfulness. Common forms are phishing emails, pretexting (pretending to be bank staff or IT support), baiting (infected USB drives), tailgating (following an authorized person into a restricted area), shoulder surfing, and vishing (voice calls). Defence is user awareness training, verification procedures and strict policies.

Access control for authorization

Authentication proves who a user is; authorization decides what that user may do. Access control mechanisms enforce this in e-commerce, so customers, staff, vendors and administrators get only the rights they need (the principle of least privilege).

1. Access control lists (ACL): Each resource (file, database table, page) has a list of users or groups and the permissions (read, write, delete) granted. Used for files and routers.
2. Role-based access control (RBAC): Permissions are assigned to roles (customer, seller, accountant, admin) and users are given roles. A customer can view only their own orders, while an admin can manage products.
3. Discretionary access control (DAC): The owner of a resource decides who may access it.
4. Mandatory access control (MAC): The system enforces access by security labels or clearance levels (such as confidential, secret) that users cannot change.
5. Rule/attribute-based control: Access depends on conditions such as time, location, device or transaction amount (for example, large payments need extra approval).
6. Other measures: Passwords, multi-factor authentication, tokens and session management, digital certificates, firewalls and audit logs, which make sure only authorized users reach protected data and functions.

Example: in an online store a shopper may browse the catalog and view his orders, a warehouse staff member can update stock, and only the manager can change prices or view sales reports.

Facebook offers free and paid tools (Pages, Groups, Ads Manager, Insights, Messenger, Shops, Live) for a three-stage marketing process: acquiring fans, amplifying their reach, and strengthening the brand.

1. Fan acquisition (getting followers)

• Create a complete, branded Facebook Page with logo, cover photo, description, contact details and a call-to-action button.
• Invite existing customers and friends, and add a Like/Follow button and Facebook plugin on the website, emails and print material.
• Run page-like or follower ad campaigns in Ads Manager with targeting by location, age, interest and custom/lookalike audiences.
• Offer contests, giveaways, discounts and exclusive content to encourage following.
• Post regularly with useful and entertaining content, using Insights to learn when fans are active.

2. Amplification (spreading the message)

• Encourage fans to like, comment and share posts, so friends see the brand through their news feeds (social proof).
• Use boosted posts and sponsored ads to reach beyond the fans, including fans' friends (reach through "friends of fans").
• Use Facebook Live, Stories, video, events and Groups to increase engagement.
• Work with influencers and use hashtags, tagging and user-generated content.
• Retarget website visitors using the Facebook Pixel and measure results with Insights.

3. Brand strengthening

• Respond quickly to comments and Messenger messages (chatbots can help) to build trust and customer service.
• Maintain a consistent voice and visual identity and share stories, values and testimonials.
• Build a community through Groups and polls, collect reviews and ratings.
• Use Facebook Shops to link brand with purchase, and track sentiment and loyalty with Insights.

Together, they create a cycle: more fans, more reach, and stronger loyalty, which produces repeat sales at a low cost.

Recommendation system: software that predicts items a user is likely to want (products, movies, articles) using data on the user's behaviour, preferences and other users, and then suggests them (for example "Customers who bought this also bought", Amazon, Netflix, Daraz).

Significance in e-commerce

1. Personalization: Each customer sees relevant products, which improves the experience.
2. Higher sales: Cross-selling and up-selling increase conversion rate and average order value.
3. Discovery: Customers find items in a large catalog (including long-tail products) that they would not search for.
4. Customer retention and loyalty: Relevant suggestions encourage repeat visits.
5. Reduced search effort / information overload.
6. Marketing insight: Reveals customer trends for targeted email and promotions, and inventory planning.

Collaborative filtering vs content-based filtering

Many systems use a hybrid approach combining both to overcome their limitations.

The Electronic Transactions Act, 2063 (2008) of Nepal gives legal recognition to electronic records and digital signatures and provides for the control of certifying authorities that issue digital certificates. Its provisions on digital certificates are as follows.

1. Definition: A digital certificate is an electronic certificate issued by a Certifying Authority that binds a public key to its owner (subscriber), certifying that the digital signature belongs to that person.
2. Controller of Certification: The Government of Nepal appoints a Controller (Office of the Controller of Certification, under the Ministry of Communication and Information Technology). The Controller licenses and supervises certifying authorities, sets standards, approves their rules and monitors their activities, and acts as the root certifying authority.
3. License of Certifying Authority: A person wishing to issue digital certificates must obtain a license from the Controller on application, meeting the qualifications and paying the fee; the license is for a fixed period, renewable, and can be suspended or cancelled for breach of the Act.
4. Issue of certificate: The Certifying Authority issues a digital certificate to a subscriber on application, after verifying identity and the key pair, and publishes it in a repository. The subscriber is responsible for protecting their private key.
5. Suspension and revocation: The certificate may be suspended or revoked on the request of the subscriber, if it was obtained by false information, if the key is compromised or if the law requires, and the revocation is published.
6. Duties of the Certifying Authority: It must use reliable systems, maintain records, keep subscribers' information confidential, publish its practice statement and notify the Controller and subscribers about revocation.
7. Duties of the subscriber: Provide correct information, secure the private key and inform the authority at once on compromise.
8. Recognition of foreign certificates: The Controller may recognize foreign certifying authorities' certificates with government approval.
9. Offences and penalties: Issuing false certificates or furnishing false information to obtain one, or operating without a license, is punishable by fine and/or imprisonment.

Thus the Act builds a trust framework so that digital signatures verified by certificates have the same legal validity as handwritten signatures.

Dual signature

A dual signature is a digital signature technique, used in the SET (Secure Electronic Transaction) protocol, that links two separate messages intended for two different recipients so that each recipient can read and verify only its own message, yet the two are provably bound together. In SET the two messages are the Order Information (OI), meant for the merchant, and the Payment Information (PI), meant for the bank (payment gateway).

Why it is needed: The merchant should not see the customer's card number (PI), and the bank should not see what was ordered (OI) for privacy. However, the bank must be sure the payment authorizes this particular order, and the merchant must know payment is available. A dual signature gives this link without disclosing both messages to both parties.

Dual signature operation

1. Compute the hash (message digest) of the payment information: $PIMD = H(PI)$.
2. Compute the hash of the order information: $OIMD = H(OI)$.
3. Concatenate them and hash again to form the payment-order message digest: $POMD = H(PIMD \parallel OIMD)$.
4. Encrypt the POMD with the customer's private key to get the dual signature: $DS = E_{KR_c}\big[H(H(PI)\parallel H(OI))\big]$

Verification: The merchant has OI, DS and PIMD (not PI). It computes $H(PIMD \parallel H(OI))$ and compares it with the value obtained by decrypting DS with the customer's public key. The bank has PI, DS and OIMD (not OI). It computes $H(H(PI)\parallel OIMD)$ and compares in the same way. If they match, the signature is valid and the messages are unaltered.

Use in the purchase request of SET

1. The customer browses, selects goods and the merchant sends its certificate and the payment gateway's certificate (with a transaction ID).
2. The customer's software creates OI and PI, calculates the dual signature as above.
3. The customer sends the merchant: OI, DS, PIMD and the PI package encrypted for the bank. The PI package contains PI, DS, OIMD and the customer's certificate, sealed in a digital envelope using the gateway's public key (the merchant cannot open it). The customer's certificate is also sent.
4. The merchant verifies the customer's certificate and the dual signature using OI, DS and PIMD, processes the order and forwards the encrypted PI package to the payment gateway with its own request for authorization.
5. The gateway decrypts the package with its private key, verifies the customer's certificate and the dual signature using PI, DS and OIMD, then requests authorization from the issuing bank through the card network.
6. The gateway returns the authorization response to the merchant, which then confirms the order to the customer, and later captures payment.

So the merchant learns nothing of card details, the bank learns nothing of the order, and neither can be tricked by a payment reused for a different order.

Digital marketing is the promotion of products, services and brands using digital channels and technologies such as search engines, websites, email, social media, mobile apps, display and video ads, and content, in order to reach, engage and convert customers and to measure the results.

Why it is essential in e-commerce

1. Wide reach at low cost: Can reach a global or local audience much more cheaply than traditional media.
2. Targeting and personalization: Ads and messages are targeted by interest, location, age and behaviour.
3. Measurability: Clicks, conversions and cost per sale can be tracked in real time, so campaigns can be optimized and return on investment known.
4. Drives traffic and sales: Online shops depend on visitors; SEO, ads, email and social bring them to the site.
5. Customer relationship: Interaction, feedback and retargeting increase loyalty and repeat purchases.
6. Brand awareness and 24/7 availability, and a level playing field for small businesses.
7. Flexibility: Campaigns can be changed or stopped immediately.

Marketing metrics in e-mail marketing

1. Click-through rate (CTR): The percentage of recipients who click a link in the email. $CTR = \frac{\text{Number of clicks}}{\text{Emails delivered}}\times 100\%$ It shows how engaging the subject, content, offer and call-to-action are. A low CTR means the message or targeting should be improved, for example by better subject lines, clearer buttons and segmenting the list.
2. Bounce-back (bounce) rate: The percentage of sent emails that could not be delivered. $\text{Bounce rate} = \frac{\text{Bounced emails}}{\text{Emails sent}}\times 100\%$ Hard bounces (invalid address) and soft bounces (full mailbox). A high rate shows a poor, outdated list, harms sender reputation and deliverability (more mail goes to spam), and wastes money, so lists must be cleaned and verified.
3. Conversion rate: The percentage of recipients who complete the desired action (purchase, sign-up, download) after the email. $\text{Conversion rate} = \frac{\text{Conversions}}{\text{Emails delivered}}\times 100\%$ It is the final measure of success; it decides the revenue and ROI of the campaign. A low rate with a good CTR suggests a problem with the landing page, price or checkout.

Marketers monitor all three together, test variations (A/B testing), and refine the list, content and timing to increase sales.

B2B e-commerce is the online exchange of products, services or information between businesses (a manufacturer and its suppliers, a wholesaler and retailers), rather than with consumers. Transactions are usually large in value and volume, involve negotiated prices, contracts and repeated orders, and use EDI, extranets, portals and e-marketplaces. It reduces procurement cost, speeds up the supply chain and widens the supplier and buyer base.

B2B business models

1. Company-centric (sell-side, buy-side) models
   • Sell-side: A single seller offers products to many business buyers through its own website or extranet (Dell Premier, Cisco). Direct sales, personalized catalogs and price lists.
   • Buy-side: A large buyer posts needs (RFQ/ tender) on its site and suppliers bid (e-procurement, such as Walmart's supplier portal). It lowers the buyer's purchasing cost.
2. E-marketplaces (third-party exchange): An independent intermediary brings many buyers and sellers together on one platform and earns transaction fees, listing fees or subscriptions.
   • Horizontal marketplaces serve many industries with common products such as office supplies (Alibaba, IndiaMART).
   • Vertical marketplaces serve one industry such as steel, chemicals or automobiles.
3. Exchanges: Open public marketplaces where many buyers and sellers trade (often commodities) at dynamic, spot-market prices.
4. Industry consortia: Marketplaces established by a group of large companies in an industry (such as Covisint in automotive) to buy or sell among themselves and with their partners.
5. Private trading networks/private exchanges: A large firm invites selected trusted partners to a secure network for collaborative planning, inventory sharing and procurement.
6. Auction/reverse auction models: Sellers or buyers bid to set the price.
7. Intermediary (broker) and aggregator models: Combine catalogs from many suppliers, or pool buyers' demand to get volume discounts.

Benefits: lower costs, fewer errors, shorter cycle times and a larger market. Challenges: integration with existing systems, trust and security, and standards.

Omni-channel e-commerce means giving the customer a seamless, integrated, consistent experience across all channels and devices (physical store, website, mobile app, social media, marketplace, call centre, email), where data, inventory, prices, promotions and customer profile are shared in real time. The customer can start on one channel and continue or complete on another without losing context. It differs from multi-channel, in which channels exist but operate separately, and the focus is the customer journey rather than the individual channel.

Key features: unified inventory and customer data, consistent pricing and branding, flexible fulfilment (buy online, pick up in store; ship from store; return anywhere), and personalized service wherever the customer is.

Example: A customer sees a pair of shoes on a shop's Instagram page and views them on the mobile app. She saves them in the cart, and later checks on the website the stock at a nearby outlet. She visits the store, tries the shoes and, because her cart and loyalty points are linked, completes the purchase with the app's discount at the counter, or opts for home delivery. A later return can be made in the store even though she bought online. The retailer sees one customer profile and sends relevant offers. Examples in practice are Starbucks and Walmart's app and store integration.

Benefits: better customer experience and loyalty, higher sales and conversion, less lost stock through the unified inventory, and richer data on customer behaviour.

Both are B2B e-marketplace structures, but they differ in who owns them and who they serve.

Exchanges are open markets run by a neutral intermediary, while consortiums are industry-owned platforms for the owners' collaboration and purchasing.

An e-payment system is a system that allows money to be paid and received electronically over the Internet or electronic networks, without cash or cheques. It includes credit and debit cards, e-wallets (eSewa, Khalti), internet and mobile banking, electronic cheques, smart cards, e-cash and payment gateways (connectIPS). It provides speed, convenience, 24/7 service, and a record of the transaction, but needs security (encryption, authentication) and trust.

How online credit card transactions work

Parties: customer (cardholder), merchant, issuing bank (the customer's), acquiring bank (merchant's) and payment gateway/card network (Visa, Mastercard).

1. The customer selects products, goes to checkout and enters card number, expiry date, CVV and billing details on a secure (SSL/TLS, https) page.
2. The merchant's server sends the details through the payment gateway to the acquiring bank.
3. The acquirer sends the authorization request via the card network to the issuing bank.
4. The issuing bank checks the validity of the card, the available credit and fraud rules (and 3-D Secure/OTP verification), and approves or declines.
5. The response returns through the same path to the merchant, and the customer sees confirmation or failure.
6. If approved, the amount is reserved on the cardholder's credit line, and the merchant ships the goods.
7. Settlement: At the end of the day the merchant submits approved transactions in a batch (capture); the issuing bank pays the acquirer, which credits the merchant account minus the merchant discount fee. The customer is billed on the monthly statement and pays the issuer.

Security measures are encryption, tokenization, CVV, 3-D Secure and PCI DSS compliance.

Developing an e-commerce website requires careful consideration of the following basic elements.

1. Business objectives and target audience: Define what is sold, to whom, the business model (B2C, B2B) and goals, since all design decisions depend on them.
2. Domain name and hosting: A short, memorable domain and reliable, scalable, secure web hosting with good uptime.
3. Platform and technology: Choose the e-commerce platform or custom development (Shopify, WooCommerce, Magento, own code), the database and the programming stack.
4. Website design and usability: A clean, attractive, branded, mobile-responsive design with easy navigation, search, filters, fast loading and accessibility.
5. Product catalog: Well-organized categories with clear titles, descriptions, images, prices and stock status.
6. Shopping cart and checkout: Simple cart, few checkout steps, guest checkout, order summary and confirmation emails.
7. Payment gateway: Multiple payment methods (cards, wallets, bank transfer, cash on delivery) with secure processing.
8. Security: SSL/TLS certificate, secure authentication, protection against hacking, backups and data privacy compliance (PCI DSS).
9. Order management, inventory and shipping: Integration with stock, delivery partners, tracking, returns and refund policy.
10. Customer service: Contact details, live chat, FAQ, reviews and ratings, and account management.
11. Marketing and SEO: Search engine friendly URLs and content, analytics, email and social media integration.
12. Legal elements and testing: Terms, privacy policy, compliance with the Electronic Transactions Act; testing and performance and scalability planning, with maintenance.

Cryptography is the science of converting readable data (plaintext) into unreadable form (ciphertext) with an algorithm and key, and back again, to protect it. It gives e-commerce confidentiality, integrity, authentication and non-repudiation.

Uses of cryptography

1. Symmetric-key encryption (AES, DES) uses one shared secret key and is fast; it encrypts the bulk of data such as the payment details and sessions.
2. Asymmetric (public-key) encryption (RSA, ECC) uses a public key and a private key. It is used for secure key exchange (the symmetric session key is encrypted with the receiver's public key) and for identity.
3. Digital signatures: The sender signs a message digest with the private key; the receiver verifies with the public key. This gives authentication, integrity and non-repudiation (the buyer cannot deny an order).
4. Digital certificates and PKI: A certificate authority binds a public key to an identity, so customers can trust a website (SSL/TLS, https).
5. Secure protocols: SSL/TLS, SET and IPsec use these techniques to secure payment and communication; passwords and card numbers are stored encrypted.

Hash functions

A hash function $H$ takes a message of any length and produces a fixed-size digest (such as SHA-256 gives 256 bits): $h = H(m)$. Its properties are: one-way (cannot recover $m$ from $h$), deterministic, a small change in $m$ changes $h$ completely, and collision resistance (hard to find two messages with the same hash).

Uses in e-commerce:

• Integrity check: The hash is sent or stored with the message; if the recomputed hash differs, the data was altered (order amount, price).
• Digital signatures: Hash is signed instead of the whole message, which is faster. SET's dual signature also uses hashes.
• Password storage: Only the salted hash of the password is kept in the database, so a breach does not reveal passwords.
• Message authentication codes (HMAC) to authenticate API and payment gateway messages, and checksums of downloads.
• Used in blockchain and certificate fingerprints.

Together, they secure transactions between customers, merchants and banks.

Adware (advertising-supported software) is software that automatically displays or downloads unwanted advertisements, such as pop-ups, banners and redirects, on a user's computer or browser. It is often bundled with free software and installed without clear consent. Some adware is only an annoyance, but it can also track browsing habits and collect personal data (acting as spyware), slow the system, change the browser homepage and open the way for other malware. Protection is by installing software from trusted sources, using anti-malware tools, keeping the browser updated and using pop-up blockers.

SSL protocol in e-commerce

Secure Sockets Layer (SSL), and its successor Transport Layer Security (TLS), is a protocol that works between the application layer (HTTP) and the transport layer (TCP) to give a secure channel between a browser and a web server. HTTP over SSL/TLS is HTTPS, shown with the padlock.

It provides: confidentiality (encryption of data), integrity (message authentication codes) and authentication (of the server by its certificate, and optionally the client).

Working (handshake)

1. The browser sends "client hello" with supported SSL/TLS versions and cipher suites and a random number.
2. The server replies with "server hello", its choice of cipher, a random number, and its digital certificate (with the public key), issued by a CA.
3. The browser verifies the certificate (valid CA signature, domain, expiry).
4. The browser generates a pre-master secret, encrypts it with the server's public key and sends it.
5. Both compute the same symmetric session key from the secret and the random numbers.
6. Finished messages confirm the handshake; then all data is encrypted with the fast symmetric key and protected by MAC.

Uses in e-commerce: protecting credit card numbers, passwords and personal data during checkout and login; assuring customers that the site is genuine; preventing eavesdropping and tampering; required by payment standards (PCI DSS); and also helps search ranking and trust.

Social marketing uses social networks (Facebook, Instagram, TikTok, YouTube, LinkedIn) to build awareness, engage and sell.

• Create business pages and communities and post regular content (images, video, stories, live streams).
• Run targeted paid ads, work with influencers and use user-generated content, contests and hashtags.
• Customers like, share and review, so the brand spreads through word of mouth, and social shops allow buying within the app.
• Analytics measure reach, engagement and conversions, and enable customer service through comments and messages.

Mobile marketing reaches customers on smartphones and tablets.

• SMS/MMS promotions, push notifications from apps, mobile-optimized websites and email, mobile ads (in-app, banner), QR codes and mobile wallet coupons.
• Apps provide personalized offers, loyalty programs and easy ordering and payment.
• Location- and time-based messages are sent, and results are tracked per device. Because phones are always with the user, response is quick and personal; for example, a telecom's data pack offer by SMS, or flash-sale push notifications from Daraz.

Local marketing targets customers in a specific geographic area.

• Register on Google Business Profile/Maps, local directories and listings with correct name, address and phone; use local keywords in SEO.
• Geo-targeted ads on social media and search, "near me" searches, location-based mobile offers (geofencing, beacons).
• Encourage local reviews and ratings, run local events and collaborations.
• Useful for restaurants, shops and services which want walk-in or nearby delivery customers; e.g. a Kathmandu cafe advertising to people within 3 km.

Together, social media builds engagement, mobile offers direct, immediate contact, and local marketing converts nearby searchers into customers, increasing traffic and sales at low cost, with measurable results.

A search engine (Google, Bing) is a system that finds web pages relevant to a user's query and ranks them. It works in the following stages.

1. Crawling: Automated programs called crawlers (spiders, bots, such as Googlebot) start from a list of known URLs and follow hyperlinks from page to page, discovering new and updated pages. They respect robots.txt and sitemaps, and revisit pages periodically according to how often they change.
2. Indexing: The content of each crawled page (text, title, headings, links, images, metadata) is analyzed, broken into words (tokenized, stemmed, stop words removed) and stored in a huge database called the inverted index, which maps each word to the list of documents containing it, with positions and frequency. This makes lookup fast.
3. Query processing: When the user enters a query, the engine interprets it (spelling correction, synonyms, intent, location, language), converts it to terms and fetches matching pages from the index.
4. Ranking: The matching pages are scored with algorithms using hundreds of signals, such as keyword relevance, content quality, link analysis (PageRank: pages linked by many important pages rank higher), freshness, page speed, mobile friendliness, user location and past behaviour, and security (HTTPS).
5. Result presentation: The results page (SERP) shows the ordered organic results with title and snippet, plus paid ads, maps, images and featured answers. User clicks and dwell time are fed back to improve ranking.

Thus: crawl, index, process query, rank, display. For e-commerce this explains why SEO (good content, keywords, links, fast mobile site) increases visibility.

The Electronic Transactions Act, 2063 (2008) is Nepal's main cyber law. It gives legal validity to electronic transactions and controls related offences. Its main contents are:

1. Objective and scope: To make transactions through electronic means (electronic records and digital signatures) reliable and legally valid, replacing paper-based requirements, and to regulate computer and cyber crimes. It applies to Nepal and also to offences committed outside Nepal against computers in Nepal.
2. Legal recognition of electronic records and digital signatures: Where law requires writing, signature or original, an electronic record or digital signature satisfies it. Electronic records can be used as evidence, and government offices can accept and issue documents electronically.
3. Attribution, receipt and dispatch: Rules on when an electronic record is deemed sent or received and by whom.
4. Digital signature and certificates: Provision for a Controller of Certification, licensing of Certifying Authorities, issuing, suspension and revocation of digital certificates, and duties of subscribers.
5. Government use: Electronic records and signatures can be used in government work, and the government may publish rules by electronic means (gazette).
6. Computer crimes and penalties: Offences such as unauthorized access, damage to computer systems, destroying or altering source code, publishing illegal material (obscene or defamatory), cyber-fraud, breach of confidentiality, and false information, with punishment by fines and imprisonment (for example, fine up to Rs 200,000 or imprisonment up to 3 years or both for some offences).
7. IT Tribunal: A tribunal is formed to hear cases and appeals under the Act; appeals against its decisions go to the High Court.
8. Others: Provisions on the protection of personal data and confidentiality, the Controller's powers of investigation, and the Government's power to make rules.

Thus, it supports e-commerce and e-governance in Nepal by providing a legal basis for digital contracts, signatures and security.