commonly known as e-commerce
, or e-business consists of the buying and selling of products
over electronic systems such as the Internet and other computer networks
. The amount of trade conducted electronically has grown extraordinarily with widespread Internet usage. The use of commerce is conducted in this way, spurring and drawing on innovations in 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
at least at some point in the transaction's lifecycle, although it can encompass a wider range of technologies such as e-mail
A large percentage of electronic commerce is conducted entirely electronically for virtual
items such as access to premium content on a website, but most electronic commerce involves the transportation of physical items in some way. Online retailers are sometimes known as e-tailers
and online retail is sometimes known as e-tail
. Almost all big retailers have electronic commerce presence on the World Wide Web
Electronic commerce that is conducted between businesses is referred to as business-to-business
or B2B. B2B can be open to all interested parties (e.g. commodity exchange
) or limited to specific, pre-qualified participants (private electronic market
). Electronic commerce that is conducted between businesses and consumers, on the other hand, is referred to as business-to-consumer
. This is the type of electronic commerce conducted by companies such as Amazon.com
. Online shopping
is a form of electronic commerce where the buyer is directly online to the seller's computer usually via the internet. There is no intermediary service. The sale and purchase transaction is completed electronically and interactively in real-time such as Amazon.com for new books. If an intermediary is present, then the sale and purchase transaction is called electronic commerce such as eBay.com
Electronic commerce is generally considered to be the sales aspect of e-business
. It also consists of the exchange of data to facilitate the financing and payment aspects of the business transactions
The meaning of electronic commerce has changed over the last 30 years. Originally, electronic commerce meant the facilitation of commercial transactions electronically, using technology such as Electronic Data Interchange
(EDI) and Electronic Funds Transfer
(EFT). These were both introduced in the late 1970s, allowing businesses to send commercial documents like purchase orders
electronically. The growth and acceptance of credit cards
, automated teller machines
(ATM) and telephone banking
in the 1980s were also forms of electronic commerce. Another form of e-commerce was the airline reservation system typified by Sabre
in the USA and Travicom
in the UK.
From the 1990s onwards, electronic commerce would additionally include enterprise resource planning
systems (ERP), data mining
and data warehousing
An early example of many-to-many electronic commerce in physical goods was the Boston Computer Exchange
, a marketplace for used computers launched in 1982. An early online information marketplace, including online consulting, was the American Information Exchange
, another pre Internet[clarification needed
] online system introduced in 1991.
In 1990, Tim Berners-Lee
invented the WorldWideWeb web browser
and transformed an academic telecommunication network into a worldwide everyman everyday communication system called internet/www. Commercial enterprise on the Internet
was strictly prohibited until 1991.
Although the Internet became popular worldwide around 1994 when the first internet online shopping started, it took about five years to introduce security protocols and DSL
allowing continual connection to the Internet. By the end of 2000, many European and American business companies offered their services through the World Wide Web
. Since then people began to associate a word "e commerce" with the ability of purchasing various goods through the Internet using secure protocols and electronic payment services
Some common applications related to electronic commerce are the following:
- Enterprise content management
- Instant messaging
- Online shopping and order tracking
- Online banking
- Online office suites
- Domestic and international payment systems
- Shopping cart software
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.
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.
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
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 consumer level, electronic commerce is mostly conducted on the World Wide Web. An individual can go online to purchase anything from books or groceries, to expensive items like real estate. Another example would be online banking, i.e. online bill payments, buying stocks, transferring funds from one account to another, and initiating wire payment to another country. All of these activities can be done with a few strokes of the keyboard.
On the institutional level, big corporations and financial institutions use the internet to exchange financial data to facilitate domestic and international business. Data integrity and security are very hot and pressing issues for electronic commerce today.
Impact on markets and retailers
Economists have theorised 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 e-commerce, bookshops
and travel agencies
. Generally, larger firms have grown at the expense of smaller ones, as they 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.
 See also
- ^ Kevin Kelly: We Are the Web Wired magazine, Issue 13.08, August 2005
- ^ "eBay acquires PayPal". eBay. http://investor.ebay.com/releasedeta...eleaseID=84142.
- ^ "Press Release". Domain Name Wire. http://domainnamewire.com/2007/07/26...scom-for-345m/.
- ^ "Press Release". TechCrunch. http://techcrunch.com/2009/07/22/amazon-buys-zappos/.
- ^ "Press Release". Reuters. http://www.reuters.com/article/idUSBNG53538820091027/.
- ^ "US Online Retail Forecast, 2009 To 2014". Forrester Research, Inc.. http://techcrunch.com/2010/03/08/for...llion-by-2014/.
- ^ "Advertising and Marketing on the Internet: Rules of the Road". Federal Trade Commission. http://www.ftc.gov/bcp/conline/pubs/.../ruleroad.shtm.
- ^ "Enforcing Privacy Promises: Section 5 of the FTC Act". Federal Trade Commission. http://www.ftc.gov/privacy/privacyin.../promises.html.
- ^ "H.R. 6353: Ryan Haight Online Pharmacy Consumer Protection Act of 2008". Govtrack. http://www.govtrack.us/congress/bill...53&tab=summary.
- ^ "Economics focus: The click and the dead". The Economist: p. 78. July 3 - 9 2010.
- Chaudhury, Abijit; Jean-Pierre Kuilboer (2002). e-Business and e-Commerce Infrastructure. McGraw-Hill. ISBN 0-07-247875-6.
- Frieden, Jonathan D.; Roche, Sean Patrick (2006-12-19). "E-Commerce: Legal Issues of the Online Retailer in Virginia" (PDF). Richmond Journal of Law & Technology 13 (2). http://law.richmond.edu/jolt/v13i2/article5.pdf
- 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. http://geospace.co.uk/files/compass.pdf
- Kessler, M. (2003). More shoppers proceed to checkout online. Retrieved January 13, 2004
- 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. pp. 246 pages. ISBN 1-59420-077-7.
- Seybold, Pat (2001). Customers.com. Crown Business Books (Random House). ISBN 0-609-60772-3.
- Miller, Roger (2002). The Legal and E-Commerce Environment Today (Hardcover ed.). Thomson Learning. pp. 741 pages. ISBN 0-324-06188-9.