E-commerce

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Electronic commerce, commonly written as e-commerce, is the trading or facilitation of trading in

products or services using computer networks, such as the Internet. Electronic commerce draws on
technologies such as mobile commerce, electronic funds transfer, supply chain
management, Internet marketing, online transaction processing, electronic data
interchange (EDI), inventory management systems, and automated data collection systems. Modern
electronic commerce typically uses the World Wide Web for at least one part of the transaction's life
cycle, although it may also use other technologies such as e-mail.
E-commerce businesses may employ some or all of the following:

Online shopping web sites for retail sales direct to consumers

Providing or participating in online marketplaces, which process

third-party business-to-consumer or consumer-to-consumer sales

Business-to-business buying and selling

Gathering and using demographic data through web contacts and

social media

Business-to-business electronic data interchange

Marketing to prospective and established customers by e-mail or

fax (for example, with newsletters)

Engaging in pretail for launching new products and services

Contents
[hide]

1Timeline

2Business applications

3Governmental regulation

4Forms

5Global trends

6Impact on markets and retailers

7Impact on supply chain management

8The social impact of e-commerce

9Distribution channels

10Examples of new e-commerce systems

11See also

12References

13Further reading

14External links

Timeline[edit]
A timeline for the development of e-commerce:

1971 or 1972: The ARPANET is used to arrange a cannabis sale

between students at the Stanford Artificial Intelligence
Laboratory and the Massachusetts Institute of Technology, later
described as "the seminal act of e-commerce" in John Markoff's
book What the Dormouse Said.[1]

1979: Michael Aldrich demonstrates the first online

shopping system.[2]

1981: Thomson Holidays UK is first business-to-business online

shopping system to be installed.[3]

1982: Minitel was introduced nationwide in France by France

Tlcom and used for online ordering.

1983: California State Assembly holds first hearing on "electronic

commerce" in Volcano, California.[4] Testifying are CPUC, MCI Mail,
Prodigy, CompuServe, Volcano Telephone, and Pacific Telesis. (Not
permitted to testify is Quantum Technology, later to become AOL.)

1984: Gateshead SIS/Tesco is first B2C online shopping

system [5] and Mrs Snowball, 72, is the first online home shopper [6]

1984: In April 1984, CompuServe launches the Electronic Mall in

the USA and Canada. It is the first comprehensive electronic
commerce service.[7]

1990: Tim Berners-Lee writes the first web

browser, WorldWideWeb, using a NeXT computer.[8]

1992: Book Stacks Unlimited in Cleveland opens a commercial

sales website (www.books.com) selling books online with credit
card processing.

1993: Paget Press releases edition No. 3 [9] of the first[citation needed] app
store, The Electronic AppWrapper [10]

1994: Netscape releases the Navigator browser in October under

the code name Mozilla. Netscape 1.0 is introduced in late 1994
with SSL encryption that made transactions secure.

1994: Ipswitch IMail Server becomes the first software available

online for sale and immediate download via a partnership
between Ipswitch, Inc. and OpenMarket.

1994: "Ten Summoner's Tales" by Sting becomes the first secure

online purchase.[11]

1995: The US National Science Foundation lifts its former strict

prohibition of commercial enterprise on the Internet. [12]

1995: Thursday 27 April 1995, the purchase of a book by Paul

Stanfield, Product Manager for CompuServe UK, from W H Smith's
shop within CompuServe's UK Shopping Centre is the UK's first
national online shopping service secure transaction. The shopping
service at launch featured W H Smith, Tesco, Virgin
Megastores/Our Price, Great Universal Stores
(GUS), Interflora, Dixons Retail, Past Times, PC World (retailer) and
Innovations.

1995: Jeff Bezos launches Amazon.com and the first commercialfree 24-hour, internet-only radio stations, Radio HK
and NetRadio start broadcasting. eBay is founded by computer
programmer Pierre Omidyar as AuctionWeb.

1996: IndiaMART B2B marketplace established in India.

1996: ECPlaza B2B marketplace established in Korea.

1998: Electronic postal stamps can be purchased and downloaded

for printing from the Web.[13]

1999: Alibaba Group is established in China. Business.com sold for

US $7.5 million to eCompanies, which was purchased in 1997 for
US $149,000. The peer-to-peer filesharing
software Napster launches. ATG Stores launches to sell decorative
items for the home online.

2000: The dot-com bust.

2001: Alibaba.com achieved profitability in December 2001.

2002: eBay acquires PayPal for $1.5 billion.[14] Niche retail

companies Wayfair and NetShops are founded with the concept of
selling products through several targeted domains, rather than a
central portal.

2003: Amazon.com posts first yearly profit.

2003: Bossgoo B2B marketplace established in China.

2004: DHgate.com, China's first online b2b transaction platform, is

established, forcing other b2b sites to move away from the "yellow
pages" model.[15]

2007: Business.com acquired by R.H. Donnelley for $345 million.[16]

2009: Zappos.com acquired by Amazon.com for $928 million.

[17]
Retail Convergence, operator of private sale website
RueLaLa.com, acquired by GSI Commerce for $180 million, plus up
to $170 million in earn-out payments based on performance through
2012.[18]

2010: Groupon reportedly rejects a $6 billion offer from Google.

Instead, the group buying websites went ahead with an IPO on 4
November 2011. It was the largest IPO since Google.[19][20]

2011: Quidsi.com, parent company of Diapers.com, acquired

by Amazon.com for $500 million in cash plus $45 million in debt and
other obligations.[21] GSI Commerce, a company specializing in
creating, developing and running online shopping sites for brick and
mortar businesses, acquired by eBay for $2.4 billion.[22]

2014: Overstock.com processes over $1 million in Bitcoin sales.

[23]
Indias e-commerce industry is estimated to have grown more
than 30% from 2012 to $12.6 billion in 2013.[24] US eCommerce and
Online Retail sales projected to reach $294 billion, an increase of
12 percent over 2013 and 9% of all retail sales.[25] Alibaba
Group has the largest Initial public offering ever, worth $25 billion.

Business applications[edit]

An example of an automated online assistant on a merchandising website.

Some common applications related to electronic commerce are:

Document automation in supply chain and logistics

Domestic and international payment systems

Enterprise content management

Group buying

Print on demand

Automated online assistant

Newsgroups

Online shopping and order tracking

Online banking

Online office suites

Shopping cart software

Teleconferencing

Electronic tickets

Social networking

Instant messaging

Pretail

Digital Wallet

Governmental regulation[edit]
In the United States, some electronic commerce activities are regulated by the Federal Trade
Commission (FTC). These activities include the use of commercial e-mails, online advertising and
consumer privacy. The CAN-SPAM Act of 2003 establishes national standards for direct marketing
over e-mail. The Federal Trade Commission Act regulates all forms of advertising, including online
advertising, and states that advertising must be truthful and non-deceptive. [26] Using its authority
under Section 5 of the FTC Act, which prohibits unfair or deceptive practices, the FTC has brought a
number of cases to enforce the promises in corporate privacy statements, including promises about
the security of consumers' personal information.[27] As result, any corporate privacy policy related to
e-commerce activity may be subject to enforcement by the FTC.
The Ryan Haight Online Pharmacy Consumer Protection Act of 2008, which came into law in 2008,
amends the Controlled Substances Act to address online pharmacies.[28]
Conflict of laws in cyberspace is a major hurdle for harmonisation of legal framework for ecommerce around the world. In order to give a uniformity to e-commerce law around the world, many
countries adopted the UNCITRAL Model Law on Electronic Commerce (1996) [29]
Internationally there is the International Consumer Protection and Enforcement Network (ICPEN),
which was formed in 1991 from an informal network of government customer fair trade
organisations. The purpose was stated as being to find ways of co-operating on tackling consumer
problems connected with cross-border transactions in both goods and services, and to help ensure
exchanges of information among the participants for mutual benefit and understanding. From this
came Econsumer.gov, an ICPEN initiative since April 2001. It is a portal to report complaints about
online and related transactions with foreign companies.
There is also Asia Pacific Economic Cooperation (APEC) was established in 1989 with the vision
of achieving stability, security and prosperity for the region through free and open trade and
investment. APEC has an Electronic Commerce Steering Group as well as working on common
privacy regulations throughout the APEC region.
In Australia, Trade is covered under Australian Treasury Guidelines for electronic commerce, [30] and
the Australian Competition and Consumer Commission[31] regulates and offers advice on how to deal
with businesses online,[32][33] and offers specific advice on what happens if things go wrong.[34]
In the United Kingdom, The Financial Services Authority (FSA)[35] was formerly the regulating
authority for most aspects of the EU's Payment Services Directive (PSD), until its replacement in
2013 by the Prudential Regulation Authority and the Financial Conduct Authority.[36] The UK
implemented the PSD through the Payment Services Regulations 2009 (PSRs), which came into
effect on 1 November 2009. The PSR affects firms providing payment services and their customers.
These firms include banks, non-bank credit card issuers and non-bank merchant acquirers, e-money
issuers, etc. The PSRs created a new class of regulated firms known as payment institutions (PIs),
who are subject to prudential requirements. Article 87 of the PSD requires the European
Commission to report on the implementation and impact of the PSD by 1 November 2012. [37]
In India, the Information Technology Act 2000 governs the basic applicability of e-commerce.
In China, the Telecommunications Regulations of the People's Republic of China (promulgated on
25 September 2000), stipulated the Ministry of Industry and Information Technology (MIIT) as the
government department regulating all telecommunications related activities, including electronic
commerce.[38] On the same day, The Administrative Measures on Internet Information Services
released, is the first administrative regulation to address profit-generating activities conducted

through the Internet, and lay the foundation for future regulations governing e-commerce in China.
[39]
In 28 August 2004, the eleventh session of the tenth NPC Standing Committee adopted The
Electronic Signature Law, which regulates data message, electronic signature authentication and
legal liability issues. It is considered the first law in Chinas e-commerce legislation. It was a
milestone in the course of improving Chinas electronic commerce legislation, and also marks the
entering of Chinas rapid development stage for electronic commerce legislation. [40]

Forms[edit]
Contemporary electronic commerce involves everything from ordering "digital" content for immediate
online consumption, to ordering conventional goods and services, to "meta" services to facilitate
other types of electronic commerce.
On the institutional level, big corporations and financial institutions use the internet to exchange
financial data to facilitate domestic and international business. Data integrity andsecurity are
pressing issues for electronic commerce.
Aside from traditional e-Commerce, the terms m-Commerce (mobile commerce) as well (around
2013) t-Commerce[41] have also been used.

Global trends[edit]
In 2010, the United Kingdom had the biggest e-commerce market in the world when measured by
the amount spent per capita.[42] As of 2013, the Czech Republic was the European country where
ecommerce delivers the biggest contribution to the enterprises total revenue. Almost a quarter
(24%) of the countrys total turnover is generated via the online channel. [43]
Among emerging economies, China's e-commerce presence continues to expand every year. With
384 million internet users, China's online shopping sales rose to $36.6 billion in 2009 and one of the
reasons behind the huge growth had been the improved trust level for shoppers. The Chinese
retailers have been able to help consumers feel more comfortable shopping online. [44] E-commerce
transactions between China and other countries increased 32% to 2.3 trillion yuan ($375.8 billion) in
2012 and accounted for 9.6% of China's total international trade [45] In 2013, Alibaba had an ecommerce market share of 80% in China.[46]
In 2013, Brazil's eCommerce was growing quickly with retail eCommerce sales expected to grow at
a healthy double-digit pace through 2014. By 2016, eMarketer expected retail ecommerce sales in
Brazil to reach $17.3 billion.[47] India has an internet user base of about 243.2 million as of January
2014.[citation needed] Despite being third largest userbase in world, the penetration of Internet is low
compared to markets like the United States, United Kingdom or France but is growing at a much
faster rate, adding around 6 million new entrants every month. [citation needed] In India, cash on delivery is
the most preferred payment method, accumulating 75% of the e-retail activities. [citation needed]
E-Commerce has become an important tool for small and large businesses worldwide, not only to
sell to customers, but also to engage them.[48][49]
In 2012, ecommerce sales topped $1 trillion for the first time in history.[50]
Mobile devices are playing an increasing role in the mix of eCommerce. In 2014, one estimate saw
purchases made on mobile devices making up 25% of the market by 2017. [51]
In 2014, there were 600 million Internet users in China (twice as many than in the US), making it the
world's biggest online market.[52]
For traditional businesses, one research stated that information technology and cross-border ecommerce is a good opportunity for the rapid development and growth of enterprises. Many
companies have invested enormous volume of investment in mobile applications.The DeLone and

McLean Model stated that 3 perspectives are contributed to a successful e-business, including
information system quality, service quality and users satisfaction. [53] There is no limit of time and
space, there are more opportunities to reach out to customers around the world, and to cut down
unnecessary intermediate links, thereby reducing the cost price, and can benefit from one on one
large customer data analysis, to achieve a high degree of personal customization strategic plan, in
order to fully enhance the core competitiveness of the products in company [54]

Impact on markets and retailers[edit]

Economists have theorized that e-commerce ought to lead to intensified price competition, as it
increases consumers' ability to gather information about products and prices. Research by four
economists at the University of Chicago has found that the growth of online shopping has also
affected industry structure in two areas that have seen significant growth in ecommerce, bookshops and travel agencies. Generally, larger firms are able to use economies of
scale and offer lower prices. The lone exception to this pattern has been the very smallest category
of bookseller, shops with between one and four employees, which appear to have withstood the
trend.[55] Depending on the category, e-commerce may shift the switching costsprocedural,
relational, and financialexperienced by customers.[56]
Individual or business involved in e-commerce whether buyers or sellers rely on Internet-based
technology in order to accomplish their transactions. E-commerce is recognized for its ability to allow
business to communicate and to form transaction anytime and anyplace. Whether an individual is in
the US or overseas, business can be conducted through the internet. The power of e-commerce
allows geophysical barriers to disappear, making all consumers and businesses on earth potential
customers and suppliers. Thus, switching barriers and switching costs my shift. [56] eBay is a good
example of e-commerce business individuals and businesses are able to post their items and sell
them around the Globe.[57]
In e-commerce activities, supply chain and logistics are two most crucial factors need to be
considered. Typically, cross-border logistics need about few weeks time round. Based on this low
efficiency of the supply chain service, customer satisfaction will be greatly reduced. [58] Some
researcher stated that combining e-commerce competence and IT setup could well enhance
companys overall business worth.[59] Other researcher stated that e-commerce need to consider the
establishment of warehouse centers in foreign countries, to create high efficiency of the logistics
system, not only improve customers satisfaction, but also can improve customers loyalty.[weasel words].
Some researcher investigated that if a company want to enhance international customers
satisfaction, where cultural website need to be adapted in particular country, rather than solely
depending on its local country. However, according to this research findings, the researcher found
that German company had treated its international website as the same local model, such as in UK
and US online marketing.[60] A company could save money and make decision quickly via the
identical strategy in different country. However, opportunity cost could be occurred, if the local
strategy does not match to a new market, the company could lose its potential customer.[61]

Impact on supply chain management[edit]

For a long time, companies had been troubled by the gap between the benefits which supply chain
technology has and the solutions to deliver those benefits. However, the emergence of e-commerce
has provided a more practical and effective way of delivering the benefits of the new supply chain
technologies.[62]
E-commerce has the capability to integrate all inter-company and intra-company functions, meaning
that the three flows (physical flow, financial flow and information flow) of the supply chain could be
also affected by e-commerce. The affections on physical flows improved the way of product and
inventory movement level for companies. For the information flows, e-commerce optimised the

capacity of information processing than companies used to have, and for the financial flows, ecommerce allows companies to have more efficient payment and settlement solutions. [62]
In addition, e-commerce has a more sophisticated level of impact on supply chains: Firstly, the
performance gap will be eliminated since companies can identify gaps between different levels of
supply chains by electronic means of solutions; Secondly, as a result of e-commerce emergence,
new capabilities such implementing ERP systems have helped companies to manage operations
with customers and suppliers. Yet these new capabilities are still not fully exploited. Thirdly,
technology companies would keep investing on new e-commerce software solutions as they are
expecting investment return. Fourthly, e-commerce would help to solve many aspects of issues that
companies may feel difficult to cope with, such as political barriers or cross-country changes. Finally,
e-commerce provides companies a more efficient and effective way to collaborate with each other
within the supply chain.[62]

The social impact of e-commerce[edit]

Along with the e-commerce and its unique charm that has appeared gradually, virtual enterprise,
virtual bank, network marketing, online shopping, payment and advertising, such this new
vocabulary which is unheard-of and now has become as familiar to people. This reflects that the ecommerce has huge impact on the economy and society from the other side. [63] For instance, B2B is
a rapidly growing business in the world that leads to lower cost and then improves the economic
efficiency and also bring along the growth of employment.[64]
To understand how the e-commerce has affected the society and economy, this article will mention
three issues below:
1. The e-commerce has changed the relative importance of time, but as the pillars of indicator of the
countrys economic state that the importance of time should not be ignored.
2. The e-commerce offers the consumer or enterprise various information they need, making
information into total transparency, will force enterprise no longer is able to use the mode of space or
advertisement to raise their competitive edge.[65] Moreover, in theory, perfect competition between the
consumer sovereignty and industry will maximize social welfare. [66]
3. In fact, during the economic activity in the past, large enterprise frequently has advantage of
information resource, and thus at the expense of consumers. Nowadays, the transparent and realtime information protects the rights of consumers, because the consumers can use internet to pick
out the portfolio to the benefit of themselves. The competitiveness of enterprises will be much more
obvious than before, consequently, social welfare would be improved by the development of the ecommerce.
4. The new economy led by the e-commerce change humanistic spirit as well, but above all, is the
employee loyalty.[67] Due to the market with competition, the employees level of professionalism
becomes the crucial for enterprise in the niche market. The enterprises must pay attention to how to
build up the enterprises inner culture and a set of interactive mechanisms and it is the prime problem
for them. Furthermore, though the mode of e-commerce decrease the information cost and
transaction cost, however, its development also makes human being are overly computer literate. In
hence, emphasized more humanistic attitude to work is another project for enterprise to
development. Life is the root of all and high technology are merely an assistive tool to support our
quality of life.
The e-commerce is not a kind of new industry, but it is creating a new economic model. Most of
people agree that the e-commerce indeed to be important and significant for economic society in the
future, but actually that is a bit of clueless feeling at the beginning, this problem is exactly prove the
e-commerce is a sort of incorporeal revolution.[68]Generally speaking, as a type of business active
procedure, the e-commerce is going to leading an unprecedented revolution in the world, the
influence of this model far exceeded the commercial affair itself. [69] Except the mentioned above, in

the area of law, education, culture and also policy, the e-commerce will continue that rise in impact.
The e-commerce is truly to take human beings into the information society.

Distribution channels[edit]
This section does not cite any references (sources). Please help improve this section
by adding citations to reliable sources. Unsourced material may be challenged
and removed. (June 2013)
E-commerce has grown in importance as companies have adopted pure-click and brick-andclick channel systems. We can distinguish pure-click and brick-and-click channel system adopted by
companies.

Pure-click or pure-play companies are those that have launched a

website without any previous existence as a firm.

Bricks-and-clicks companies are those existing companies that

have added an online site for e-commerce.

Click-to-brick online retailers that later open physical locations to

supplement their online efforts.[70]

Examples of new e-commerce systems[edit]

According to eMarketer research company, "by 2017, 65.8 per cent of Britons will use smartphones".
[71]

Bringing online experience into the real world, also allows the development of the economy and the
interaction between stores and customers. A great example of this new e-commerce system is what
the Burberry store in London did in 2012. They refurbished the entire store with numerous big
screens, photo-studios, and also provided a stage for live acts. Moreover, on the digital screens
which are across the store, some fashion shows images and advertising campaigns are displayed
(William, 2014). In this way, the experience of purchasing becomes more vivid and entertaining while
the online and offline components are working together.
Another example is the Kiddicare smartphone app, in which consumers can compare prices. The
app allows people to identify the location of sale products and to check whether the item they are
looking for is in stock, or if it can be ordered online without going to the `real store (William, 2014).
In the United States, the Walmart app allows consumers to check product availability and prices both
online and offline. Moreover, you can also add to your shopping list items by scanning them, see
their details and information, and check purchasers ratings and reviews.

See also[edit]

Alternative payments

Comparison of shopping cart software

Digital economy

Electronic bill payment

Electronic money

E-commerce credit card payment system

Comparison of free software e-commerce web application

frameworks

Non-store retailing

Online marketplace

Paid content

Payments as a service

Types of e-commerce

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Further reading[edit]

Laudon, Kenneth C.; Guercio Traver, Carol (2014). E-commerce. business.

technology. society. 10th edition. Pearson. ISBN 978-013-302444-9.

Chaudhury, Abijit; Kuilboer, Jean-Pierre (2002). e-Business and eCommerce Infrastructure. McGraw-Hill. ISBN 0-07-247875-6.

Frieden, Jonathan D.; Roche, Sean Patrick (19 December 2006). "ECommerce: Legal Issues of the Online Retailer in
Virginia" (PDF). Richmond Journal of Law and Technology 13 (2).

Graham, Mark (2008). "Warped Geographies of Development: The Internet

and Theories of Economic Development" (PDF). Geography
Compass 2 (3): 771. doi:10.1111/j.1749-8198.2008.00093.x.

Humeau, Philippe; Jung, Matthieu (21 June 2013). In depth benchmark of

12 ecommerce solutions (PDF).

Kessler, M (22 December 2003), "More shoppers proceed to checkout

online", USA today, retrieved 13 January 2004.

Kotler, Philip (2009). Marketing Management. Pearson: PrenticeHall. ISBN 978-81-317-1683-0.

Miller, Roger (2002). The Legal and E-Commerce Environment

Today (hardcover ed.). Thomson Learning. ISBN 0-324-06188-9. 741 pp.

Nissanoff, Daniel (2006). FutureShop: How the New Auction Culture Will
Revolutionize the Way We Buy, Sell and Get the Things We Really
Want (hardcover ed.). The Penguin Press. ISBN 1-59420-077-7. 246 pp.

Seybold, Pat (2001). Customers.com. Crown Business Books (Random

House). ISBN 0-609-60772-3.

External links[edit]

E-Commerce and E-Business at Wikibooks

Small Business E-Commerce Resources, US: SBA

NDL: 00577580

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