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E-commerce (electronic commerce) is the activity of
electronically The field of electronics is a branch of physics and electrical engineering that deals with the emission, behaviour and effects of electrons using electronic devices. Electronics uses active devices to control electron flow by amplification a ...
buying or selling of products on online services or over the
Internet The Internet (or internet) is the global system of interconnected computer networks that uses the Internet protocol suite (TCP/IP) to communicate between networks and devices. It is a ''internetworking, network of networks'' that consists ...
. E-commerce draws on technologies such as mobile commerce,
electronic funds transfer Electronic funds transfer (EFT) is the electronic transfer of money from one bank account to another, either within a single financial institution or across multiple institutions, via computer-based systems, without the direct intervention of b ...
,
supply chain management In commerce, supply chain management (SCM) is the management of the flow of goods and services including all processes that transform raw materials into final products between businesses and locations. This can include the movement and sto ...
,
Internet marketing The Internet (or internet) is the global system of interconnected computer networks that uses the Internet protocol suite (TCP/IP) to communicate between networks and devices. It is a '' network of networks'' that consists of private, pub ...
, online transaction processing, electronic data interchange (EDI), inventory management systems, and automated data collection systems. E-commerce is in turn driven by the technological advances of the
semiconductor industry The semiconductor industry is the aggregate of companies engaged in the design and fabrication of semiconductors and semiconductor devices, such as transistors and integrated circuits. It formed around 1960, once the fabrication of semico ...
, and is the largest sector of the
electronics industry The electronics industry is the economic sector that produces electronic devices. It emerged in the 20th century and is today one of the largest global industries. Contemporary society uses a vast array of electronic devices built-in automated or ...
.


Defining e-commerce

The term was coined and first employed by Dr. Robert Jacobson, Principal Consultant to the California State Assembly's Utilities & Commerce Committee, in the title and text of California's Electronic Commerce Act, carried by the late Committee Chairwoman Gwen Moore (D-L.A.) and enacted in 1984. E-commerce typically uses the web for at least a part of a transaction's life cycle although it may also use other technologies such as
e-mail Electronic mail (email or e-mail) is a method of exchanging messages ("mail") between people using electronic devices. Email was thus conceived as the electronic (digital) version of, or counterpart to, mail, at a time when "mail" meant ...
. Typical e-commerce transactions include the purchase of products (such as books from
Amazon Amazon most often refers to: * Amazons, a tribe of female warriors in Greek mythology * Amazon rainforest, a rainforest covering most of the Amazon basin * Amazon River, in South America * Amazon (company), an American multinational technology c ...
) or services (such as
music download A music download (commonly referred to as a digital download) is the digital transfer of music via the Internet into a device capable of decoding and playing it, such as a personal computer, portable media player, MP3 player or smartphone. Thi ...
s in the form of
digital distribution Digital distribution, also referred to as content delivery, online distribution, or electronic software distribution, among others, is the delivery or distribution of digital media content such as audio, video, e-books, video games, and othe ...
such as
iTunes Store The iTunes Store is a digital media store operated by Apple Inc. It opened on April 28, 2003, as a result of Steve Jobs' push to open a digital marketplace for music. As of April 2020, iTunes offered 60 million songs, 2.2 million apps, 25,00 ...
). There are three areas of e-commerce: online retailing, electronic markets, and online auctions. E-commerce is supported by electronic business. The existence value of e-commerce is to allow consumers to shop online and pay online through the Internet, saving the time and space of customers and enterprises, greatly improving transaction efficiency, especially for busy office workers, but also saving a lot of valuable time. E-commerce businesses may also employ some or all of the following: *
Online shopping Online shopping is a form of electronic commerce which allows consumers to directly buy goods or services from a seller over the Internet using a web browser or a mobile app. Consumers find a product of interest by visiting the website of the ...
for retail sales direct to consumers via
web sites A website (also written as a web site) is a collection of web pages and related content that is identified by a common domain name and published on at least one web server. Examples of notable websites are Google, Facebook, Amazon, and Wikip ...
and mobile apps, and conversational commerce via live chat,
chatbot A chatbot or chatterbot is a software application used to conduct an on-line chat conversation via text or text-to-speech, in lieu of providing direct contact with a live human agent. Designed to convincingly simulate the way a human would beha ...
s, and voice assistants; * Providing or participating in
online marketplace An online marketplace (or online e-commerce marketplace) is a type of e-commerce website where product or service information is provided by multiple third parties. Online marketplaces are the primary type of multichannel ecommerce and can be a wa ...
s, which process third-party business-to-consumer (B2C) or
consumer-to-consumer Customer to customer (C2C or consumer to consumer) markets provide a way to allow customers to interact with each other. Traditional markets require business to customer relationships, in which a customer goes to the business in order to purchas ...
(C2C) sales; * Business-to-business (B2B) buying and selling; * Gathering and using demographic data through web contacts and social media; * B2B electronic data interchange; * Marketing to prospective and established
customer In sales, commerce, and economics, a customer (sometimes known as a client, buyer, or purchaser) is the recipient of a good, service, product or an idea - obtained from a seller, vendor, or supplier via a financial transaction or exchange for ...
s by
e-mail Electronic mail (email or e-mail) is a method of exchanging messages ("mail") between people using electronic devices. Email was thus conceived as the electronic (digital) version of, or counterpart to, mail, at a time when "mail" meant ...
or fax (for example, with
newsletter A newsletter is a printed or electronic report containing news concerning the activities of a business or an organization that is sent to its members, customers, employees or other subscribers. Newsletters generally contain one main topic of in ...
s); * Engaging in
pretail Pretail (also referred to as pre-tail, pre-retail, pre-launch, or pre-commerce) is a sub-category of e-commerce and online retail for introducing new products, services, and brands to market by pre-launching online, from creating an interest waitli ...
for launching new products and services; * Online financial exchanges for currency exchanges or trading purposes. There are five essential categories of E-commerce: * Business to Business * Business to Consumer * Business to Government * Consumer to Business * Consumer to Consumer


Forms

Contemporary electronic commerce can be classified into two categories. The first category is business based on types of goods sold (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). The second category is based on the nature of the participant ( B2B,
B2C Direct-to-consumer (DTC) or business-to-consumer (B2C) is the business model of selling products directly to customers and thereby bypassing any third-party retailers, wholesalers, or any other middlemen. Direct-to-consumer sales are usually tr ...
, C2B and
C2C Trenitalia c2c Limited,Companies House extract company no 789726 ...
). On the institutional level, big corporations and financial institutions use the internet to exchange financial data to facilitate domestic and international business.
Data integrity Data integrity is the maintenance of, and the assurance of, data accuracy and consistency over its entire life-cycle and is a critical aspect to the design, implementation, and usage of any system that stores, processes, or retrieves data. The ter ...
and
security" \n\n\nsecurity.txt is a proposed standard for websites' security information that is meant to allow security researchers to easily report security vulnerabilities. The standard prescribes a text file called \"security.txt\" in the well known locat ...
are pressing issues for electronic commerce. Aside from traditional e-commerce, the terms m-Commerce ( mobile commerce) as well (around 2013) t-Commerce have also been used.


Governmental regulation

In the United States, California's Electronic Commerce Act (1984), enacted by the Legislature, and the more recent California Privacy Rights Act (2020) enacted through a popular election proposition, control specifically how electronic commerce may be conducted in California. In the US in its entirety, electronic commerce activities are regulated more broadly by the
Federal Trade Commission The Federal Trade Commission (FTC) is an independent agency of the United States government whose principal mission is the enforcement of civil (non-criminal) antitrust law and the promotion of consumer protection. The FTC shares jurisdiction ov ...
(FTC). These activities include the use of commercial e-mails, online advertising and
consumer privacy Consumer privacy is information privacy as it relates to the consumers of products and services. A variety of social, legal and political issues arise from the interaction of the public's potential expectation of privacy and the collection and d ...
. The
CAN-SPAM Act of 2003 The Controlling the Assault of Non-Solicited Pornography And Marketing (CAN-SPAM) Act of 2003 is a law passed in 2003 establishing the United States' first national standards for the sending of commercial e-mail. The law requires the Federal Trad ...
establishes national standards for direct marketing over e-mail. The
Federal Trade Commission Act The Federal Trade Commission Act of 1914 was a United States federal law which established the Federal Trade Commission. The Act was signed into law by US President Woodrow Wilson in 1914 and outlaws unfair methods of competition and unfair acts ...
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. As a 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 The Controlled Substances Act (CSA) is the statute establishing federal U.S. drug policy under which the manufacture, importation, possession, use, and distribution of certain substances is regulated. It was passed by the 91st United States ...
to address online pharmacies. Conflict of laws in cyberspace is a major hurdle for harmonization of legal framework for e-commerce 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). 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 and the
Australian Competition & Consumer Commission The Australian Competition and Consumer Commission (ACCC) is the chief competition regulator of the Government of Australia, located within the Department of the Treasury. It was established in 1995 with the amalgamation of the Australian Tr ...
regulates and offers advice on how to deal with businesses online, and offers specific advice on what happens if things go wrong. In the United Kingdom, The
Financial Services Authority The Financial Services Authority (FSA) was a quasi-judicial body accountable for the regulation of the financial services industry in the United Kingdom between 2001 and 2013. It was founded as the Securities and Investments Board (SIB) in 198 ...
(FSA) 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 The Financial Conduct Authority (FCA) is a financial regulatory body in the United Kingdom, but operates independently of the UK Government, and is financed by charging fees to members of the financial services industry. The FCA regulates financ ...
. 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. In India, the Information Technology Act 2000 governs the basic applicability of
e-commerce E-commerce (electronic commerce) is the activity of electronically buying or selling of Product (business), products on online services or over the Internet. E-commerce draws on technologies such as mobile commerce, electronic funds transfer, su ...
. 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 The Ministry of Industry and Information Technology of the Chinese government, established in March 2008, is the state agency of the People's Republic of China responsible for regulation and development of the postal service, Internet, wireless ...
(MIIT) as the government department regulating all telecommunications related activities, including electronic commerce. 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. On 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 China's e-commerce legislation. It was a milestone in the course of improving China's electronic commerce legislation, and also marks the entering of China's rapid development stage for electronic commerce legislation.


Global trends

In 2010, the United Kingdom had the highest per capita e-commerce spending in the world. As of 2013, the Czech Republic was the European country where e-commerce delivers the biggest contribution to the enterprises' total revenue. Almost a quarter (24%) of the country's total turnover is generated via the online channel. Among emerging economies, China's e-commerce presence continues to expand every year. With 668 million Internet users, China's online shopping sales reached $253 billion in the first half of 2015, accounting for 10% of total Chinese consumer retail sales in that period. The Chinese retailers have been able to help consumers feel more comfortable shopping online. 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. In 2013,
Alibaba Ali Baba "Ali Baba and the Forty Thieves" ( ar, علي بابا والأربعون لصا) is a folk tale from the ''One Thousand and One Nights''. It was added to the collection in the 18th century by its French translator Antoine Galland, ...
had an e-commerce market share of 80% in China. In 2014, there were 600 million Internet users in China (twice as many as in the US), making it the world's biggest online market. China is also the largest e-commerce market in the world by value of sales, with an estimated in 2016. Research shows that Chinese consumer motivations are different enough from Western audiences to require unique e-commerce app designs instead of simply porting Western apps into the Chinese market. Recent research indicates that electronic commerce, commonly referred to as e-commerce, presently shapes the manner in which people shop for products. The GCC countries have a rapidly growing market and are characterized by a population that becomes wealthier (Yuldashev). As such, retailers have launched Arabic-language websites as a means to target this population. Secondly, there are predictions of increased mobile purchases and an expanding internet audience (Yuldashev). The growth and development of the two aspects make the GCC countries become larger players in the electronic commerce market with time progress. Specifically, research shows that the e-commerce market is expected to grow to over $20 billion by 2020 among these GCC countries (Yuldashev). The e-commerce market has also gained much popularity among western countries, and in particular Europe and the U.S. These countries have been highly characterized by consumer-packaged goods (CPG) (Geisler, 34). However, trends show that there are future signs of a reverse. Similar to the GCC countries, there has been increased purchase of goods and services in online channels rather than offline channels. Activist investors are trying hard to consolidate and slash their overall cost and the governments in western countries continue to impose more regulation on CPG manufacturers (Geisler, 36). In these senses, CPG investors are being forced to adapt to e-commerce as it is effective as well as a means for them to thrive. In 2013, Brazil's e-commerce was growing quickly with retail e-commerce sales expected to grow at a double-digit pace through 2014. By 2016, eMarketer expected retail e-commerce sales in Brazil to reach $17.3 billion. India has an Internet user base of about 460 million as of December 2017. Despite being the third largest user base in the world, the penetration of the 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. In India, cash on delivery is the most preferred payment method, accumulating 75% of the e-retail activities. The India retail market is expected to rise from 2.5% in 2016 to 5% in 2020. The future trends in the GCC countries will be similar to that of the western countries. Despite the forces that push business to adapt e-commerce as a means to sell goods and products, the manner in which customers make purchases is similar in countries from these two regions. For instance, there has been an increased usage of smartphones which comes in conjunction with an increase in the overall internet audience from the regions. Yuldashev writes that consumers are scaling up to more modern technology that allows for mobile marketing. However, the percentage of smartphone and internet users who make online purchases is expected to vary in the first few years. It will be independent on the willingness of the people to adopt this new trend (The Statistics Portal). For example, UAE has the greatest smartphone penetration of 73.8 per cent and has 91.9 per cent of its population has access to the internet. On the other hand, smartphone penetration in Europe has been reported to be at 64.7 per cent (The Statistics Portal). Regardless, the disparity in percentage between these regions is expected to level out in future because e-commerce technology is expected to grow to allow for more users. The e-commerce business within these two regions will result in competition. Government bodies at the country level will enhance their measures and strategies to ensure sustainability and consumer protection (Krings, et al.). These increased measures will raise the environmental and social standards in the countries, factors that will determine the success of the e-commerce market in these countries. For example, an adoption of tough sanctions will make it difficult for companies to enter the e-commerce market while lenient sanctions will allow ease of companies. As such, the future trends between GCC countries and the Western countries will be independent of these sanctions (Krings, et al.). These countries need to make rational conclusions in coming up with effective sanctions. The rate of growth of the number of internet users in the Arab countries has been rapid – 13.1% in 2015. A significant portion of the e-commerce market in the Middle East comprises people in the 30–34 year age group. Egypt has the largest number of internet users in the region, followed by Saudi Arabia and Morocco; these constitute 3/4th of the region's share. Yet, internet penetration is low: 35% in Egypt and 65% in Saudi Arabia. E-commerce has become an important tool for small and large businesses worldwide, not only to sell to customers, but also to engage them. Cross-border e-Commerce is also an essential field for e-Commerce businesses.  It has responded to the trend of globalization. It shows that numerous firms have opened up new businesses, expanded new markets, and overcome trade barriers; more and more enterprises have started exploring the cross-border cooperation field. In addition, compared with traditional cross-border trade, the information on cross-border e-commerce is more concealed. In the era of globalization, cross-border e-commerce for inter-firm companies means the activities, interactions, or social relations of two or more e-commerce enterprises. However, the success of cross-border e-commerce promotes the development of small and medium-sized firms, and it has finally become a new transaction mode. It has helped the companies solve financial problems and realize the reasonable allocation of resources field. SMEs ( small and medium enterprises) can also precisely match the demand and supply in the market, having the industrial chain majorization and creating more revenues for companies. In 2012, e-commerce sales topped $1 trillion for the first time in history. Mobile devices are playing an increasing role in the mix of e-commerce, this is also commonly called mobile commerce, or m-commerce. In 2014, one estimate saw purchases made on mobile devices making up 25% of the market by 2017. For traditional businesses, one research stated that information technology and cross-border e-commerce is a good opportunity for the rapid development and growth of enterprises. Many companies have invested an enormous volume of investment in mobile applications. The DeLone and McLean Model stated that three perspectives contribute to a successful e-business: information system quality, service quality and users' satisfaction. 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 the company. Modern 3D graphics technologies, such as
Facebook 3D Posts Facebook 3D Posts was a feature on the social networking website Facebook. It was first enabled on October 11, 2017 by introducing a new native 3D media type in Facebook News Feed. Initially the users could only post 3D objects from Oculus Mediu ...
, are considered by some social media marketers and advertisers as a preferable way to promote consumer goods than static photos, and some brands like Sony are already paving the way for augmented reality commerce. Wayfair now lets you inspect a 3D version of its furniture in a home setting before buying.


Logistics

Logistics in e-commerce mainly concerns fulfillment. Online markets and retailers have to find the best possible way to fill orders and deliver products. Small companies usually control their own logistic operation because they do not have the ability to hire an outside company. Most large companies hire a fulfillment service that takes care of a company's logistic needs.


Impacts


Impact on markets and retailers

E-commerce markets are growing at noticeable rates. The online market is expected to grow by 56% in 2015–2020. In 2017, retail e-commerce sales worldwide amounted to 2.3 trillion US dollars and e-retail revenues are projected to grow to 4.891 trillion US dollars in 2021. Traditional markets are only expected 2% growth during the same time. Brick and mortar retailers are struggling because of online retailer's ability to offer lower prices and higher efficiency. Many larger retailers are able to maintain a presence offline and online by linking physical and online offerings. E-commerce allows customers to overcome geographical barriers and allows them to purchase products anytime and from anywhere. Online and traditional markets have different strategies for conducting business. Traditional retailers offer fewer assortment of products because of shelf space where, online retailers often hold no inventory but send customer orders directly to the manufacture. The pricing strategies are also different for traditional and online retailers. Traditional retailers base their prices on store traffic and the cost to keep inventory. Online retailers base prices on the speed of delivery. There are two ways for marketers to conduct business through e-commerce: fully online or online along with a brick and mortar store. Online marketers can offer lower prices, greater product selection, and high efficiency rates. Many customers prefer online markets if the products can be delivered quickly at relatively low price. However, online retailers cannot offer the physical experience that traditional retailers can. It can be difficult to judge the quality of a product without the physical experience, which may cause customers to experience product or seller uncertainty. Another issue regarding the online market is concerns about the security of online transactions. Many customers remain loyal to well-known retailers because of this issue. Security is a primary problem for e-commerce in developed and developing countries. E-commerce security is protecting businesses' websites and customers from unauthorized access, use, alteration, or destruction. The type of threats include: malicious codes, unwanted programs ( ad ware, spyware), phishing, hacking, and cyber vandalism. E-commerce websites use different tools to avert security threats. These tools include firewalls,
encryption software Encryption software is software that uses cryptography to prevent unauthorized access to digital information. Cryptography is used to protect digital information on computers as well as the digital information that is sent to other computers over ...
, digital certificates, and passwords.


Impact on supply chain management

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. 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 optimized the capacity of information processing than companies used to have, and for the financial flows, e-commerce allows companies to have more efficient payment and settlement solutions. 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, like SAP ERP, Xero, or Megaventory, 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.


Impact on employment

E-commerce helps create new job opportunities due to information related services, software app and digital products. It also causes job losses. The areas with the greatest predicted job-loss are retail, postal, and travel agencies. The development of e-commerce will create jobs that require highly skilled workers to manage large amounts of information, customer demands, and production processes. In contrast, people with poor technical skills cannot enjoy the wages welfare. On the other hand, because e-commerce requires sufficient stocks that could be delivered to customers in time, the warehouse becomes an important element. Warehouse needs more staff to manage, supervise and organize, thus the condition of warehouse environment will be concerned by employees.


Impact on customers

E-commerce brings
convenience Convenient procedures, products and services are those intended to increase ease in accessibility, save resources (such as time, effort and energy) and decrease frustration. A modern convenience is a labor-saving device, service or substan ...
for customers as they do not have to leave home and only need to browse websites online, especially for buying products which are not sold in nearby shops. It could help customers buy a wider range of products and save customers' time. Consumers also gain power through online shopping. They are able to research products and compare prices among retailers. Thanks to the practice of user-generated ratings and reviews from companies like
Bazaarvoice Bazaarvoice is a technology company based in Austin, Texas, that provides software that allows brands and retailers to collect and display several types of user-generated content (UGC) on their e-commerce websites. Bazaarvoice's services include ...
,
Trustpilot Trustpilot Group plc, is a Danish consumer business operating a review website founded in Denmark in 2007 which hosts reviews of businesses worldwide. Nearly 1 million new reviews are posted each month. The site offers freemium services to busin ...
, and Yelp, customers can also see what other people think of a product, and decide before buying if they want to spend money on it. Also, online shopping often provides sales promotion or discounts code, thus it is more price effective for customers. Moreover, e-commerce provides products' detailed information; even the in-store staff cannot offer such detailed explanation. Customers can also review and track the order history online. E-commerce technologies cut transaction costs by allowing both manufactures and consumers to skip through the intermediaries. This is achieved through by extending the search area best price deals and by group purchase. The success of e-commerce in urban and regional levels depend on how the local firms and consumers have adopted to e-commerce. However, e-commerce lacks human interaction for customers, especially who prefer face-to-face connection. Customers are also concerned with the security of online transactions and tend to remain loyal to well-known retailers. In recent years, clothing retailers such as
Tommy Hilfiger Thomas Jacob Hilfiger ( /hɪlˈfɪgər/; born March 24, 1951) is an American fashion designer and the founder of Tommy Hilfiger Corporation. After starting his career by co-founding a chain of jeans/fashion stores called People's Place in upst ...
have started adding Virtual Fit platforms to their e-commerce sites to reduce the risk of customers buying the wrong sized clothes, although these vary greatly in their fit for purpose. When the customer regret the purchase of a product, it involves returning goods and refunding process. This process is inconvenient as customers need to pack and post the goods. If the products are expensive, large or fragile, it refers to safety issues.


Impact on the environment

In 2018, E-commerce generated of container
cardboard Cardboard is a generic term for heavy paper-based products. The construction can range from a thick paper known as paperboard to corrugated fiberboard which is made of multiple plies of material. Natural cardboards can range from grey to light b ...
in North America, an increase from ) in 2017. Only 35 percent of North American cardboard manufacturing capacity is from recycled content. The recycling rate in Europe is 80 percent and Asia is 93 percent. Amazon, the largest user of
boxes A box (plural: boxes) is a container used for the storage or transportation of its contents. Most boxes have flat, parallel, rectangular sides. Boxes can be very small (like a matchbox) or very large (like a shipping box for furniture), and can ...
, has a strategy to cut back on packing material and has reduced packaging material used by 19 percent by weight since 2016. Amazon is requiring retailers to manufacture their product packaging in a way that doesn't require additional shipping packaging. Amazon also has an 85-person team researching ways to reduce and improve their packaging and shipping materials. Accelerated movement of packages around the world includes accelerated movement of living things, with all its attendant risks.
Weed A weed is a plant considered undesirable in a particular situation, "a plant in the wrong place", or a plant growing where it is not wanted.Harlan, J. R., & deWet, J. M. (1965). Some thoughts about weeds. ''Economic botany'', ''19''(1), 16-24. ...
s, pests, and
disease A disease is a particular abnormal condition that negatively affects the structure or function of all or part of an organism, and that is not immediately due to any external injury. Diseases are often known to be medical conditions that a ...
s all sometimes travel in packages of seeds. Some of these packages are part of brushing manipulation of e-commerce reviews.


Impact on traditional retail

E-commerce has been cited as a major force for the failure of major U.S. retailers in a trend frequently referred to as a "retail apocalypse." The rise of e-commerce outlets like Amazon has made it harder for traditional retailers to attract customers to their stores and forced companies to change their sales strategies. Many companies have turned to sales promotions and increased digital efforts to lure shoppers while shutting down brick-and-mortar locations. The trend has forced some traditional retailers to shutter its brick and mortar operations.


E-commerce during COVID-19

In March 2020, global retail website traffic hit 14.3 billion visits signifying an unprecedented growth of e-commerce during the lockdown of 2020. Later studies show that online sales increased by 25% and online grocery shopping increased by over 100% during the crisis in the United States. Meanwhile, as many as 29% of surveyed shoppers state that they will never go back to shopping in person again; in the UK, 43% of consumers state that they expect to keep on shopping the same way even after the lockdown is over. Retail sales of e-commerce shows that COVID-19 has a significant impact on e-commerce and its sales are expected to reach $6.5 trillion by 2023.


Business application

Some common applications related to electronic commerce are:


Timeline

A timeline for the development of e-commerce: * 1971 or 1972: The
ARPANET The Advanced Research Projects Agency Network (ARPANET) was the first wide-area packet-switched network with distributed control and one of the first networks to implement the TCP/IP protocol suite. Both technologies became the technical foun ...
is used to arrange a
cannabis ''Cannabis'' () is a genus of flowering plants in the family Cannabaceae. The number of species within the genus is disputed. Three species may be recognized: ''Cannabis sativa'', '' C. indica'', and '' C. ruderalis''. Alternatively ...
sale between students at the
Stanford Artificial Intelligence Laboratory Stanford University has many centers and institutes dedicated to the study of various specific topics. These centers and institutes may be within a department, within a school but across departments, an independent laboratory, institute or center ...
and the
Massachusetts Institute of Technology The Massachusetts Institute of Technology (MIT) is a private land-grant research university in Cambridge, Massachusetts. Established in 1861, MIT has played a key role in the development of modern technology and science, and is one of t ...
, later described as "the seminal act of e-commerce" in John Markoff's book '' What the Dormouse Said''. * 1979: Michael Aldrich demonstrates the first
online shopping Online shopping is a form of electronic commerce which allows consumers to directly buy goods or services from a seller over the Internet using a web browser or a mobile app. Consumers find a product of interest by visiting the website of the ...
system. * 1981: Thomson Holidays UK is the first business-to-business (B2B) online shopping system to be installed. * 1982: Minitel was introduced nationwide in France by
France Télécom Orange S.A. (), formerly France Télécom S.A. (stylized as france telecom) is a French multinational corporation, multinational telecommunications corporation. It has 266 million customers worldwide and employs 89,000 people in France, and 5 ...
and used for online ordering. * 1983:
California State Assembly The California State Assembly is the lower house of the California State Legislature, the upper house being the California State Senate. The Assembly convenes, along with the State Senate, at the California State Capitol in Sacramento. The Asse ...
holds first hearing on "electronic commerce" in Volcano, California. Testifying are CPUC, MCI Mail, Prodigy, CompuServe, Volcano Telephone, and Pacific Telesis. (Not permitted to testify is Quantum Technology, later to become AOL.) California's Electronic Commerce Act was passed in 1984. * 1983: Karen Earle Lile (AKA Karen Bean) and Kendall Ross Bean create e-commerce service in
San Francisco Bay Area The San Francisco Bay Area, often referred to as simply the Bay Area, is a populous region surrounding the San Francisco, San Pablo, and Suisun Bay estuaries in Northern California. The Bay Area is defined by the Association of Bay Area Gov ...
. Buyers and sellers of pianos connect through a database created by Piano Finders on a
Kaypro Kaypro Corporation was an American home and personal computer manufacturer based out of San Diego in the 1980s. The company was founded by Non-Linear Systems (NLS) to compete with the popular Osborne 1 portable microcomputer. Kaypro produced a ...
personal computer using DOS interface. Pianos for sale are listed on a
Bulletin board system A bulletin board system (BBS), also called computer bulletin board service (CBBS), is a computer server running software that allows users to connect to the system using a terminal program. Once logged in, the user can perform functions such a ...
. Buyers print list of pianos for sale by a
dot matrix printer A dot matrix printer is an impact printer that prints using a fixed number of pins or wires. Typically the pins or wires are arranged in one or several vertical columns. The pins strike an ink-coated ribbon and force contact between the ribbon ...
. Customer service happened through a Piano Advice Hotline listed in the
San Francisco Chronicle The ''San Francisco Chronicle'' is a newspaper serving primarily the San Francisco Bay Area of Northern California. It was founded in 1865 as ''The Daily Dramatic Chronicle'' by teenage brothers Charles de Young and Michael H. de Young. The pa ...
classified ads and money transferred by a bank
wire transfer Wire transfer, bank transfer, or credit transfer, is a method of electronic funds transfer from one person or entity to another. A wire transfer can be made from one bank account to another bank account, or through a transfer of cash at a cash ...
when a sale was completed. * 1984:
Gateshead Gateshead () is a large town in northern England. It is on the River Tyne's southern bank, opposite Newcastle to which it is joined by seven bridges. The town contains the Millennium Bridge, The Sage, and the Baltic Centre for Contemporary Ar ...
SIS/
Tesco Tesco plc () is a British Multinational corporation, multinational groceries and general merchandise retailer headquartered in Welwyn Garden City, England. In 2011 it was the third-largest retailer in the world measured by gross revenues an ...
is first B2C online shopping system and Mrs Snowball, 72, is the first online home shopper * 1984: In April 1984,
CompuServe CompuServe (CompuServe Information Service, also known by its initialism CIS) was an American online service provider, the first major commercial one in the world – described in 1994 as "the oldest of the Big Three information services (the ot ...
launches the Electronic Mall in the US and Canada. It is the first comprehensive electronic commerce service. * 1989: In May 1989, Sequoia Data Corp. introduced Compumarket, the first internet based system for e-commerce. Sellers and buyers could post items for sale and buyers could search the database and make purchases with a credit card. * 1990:
Tim Berners-Lee Sir Timothy John Berners-Lee (born 8 June 1955), also known as TimBL, is an English computer scientist best known as the inventor of the World Wide Web. He is a Professorial Fellow of Computer Science at the University of Oxford and a profe ...
writes the first web browser, WorldWideWeb, using a
NeXT Next may refer to: Arts and entertainment Film * ''Next'' (1990 film), an animated short about William Shakespeare * ''Next'' (2007 film), a sci-fi film starring Nicolas Cage * '' Next: A Primer on Urban Painting'', a 2005 documentary film Lit ...
computer. * 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 of the first app store, The Electronic AppWrapper * 1994:
Netscape Netscape Communications Corporation (originally Mosaic Communications Corporation) was an American independent computer services company with headquarters in Mountain View, California and then Dulles, Virginia. Its Netscape web browser was on ...
releases the Navigator browser in October under the code name
Mozilla Mozilla (stylized as moz://a) is a free software community founded in 1998 by members of Netscape. The Mozilla community uses, develops, spreads and supports Mozilla products, thereby promoting exclusively free software and open standards, wi ...
.
Netscape Netscape Communications Corporation (originally Mosaic Communications Corporation) was an American independent computer services company with headquarters in Mountain View, California and then Dulles, Virginia. Its Netscape web browser was on ...
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 through NetMarket. * 1995: The US
National Science Foundation The National Science Foundation (NSF) is an independent agency of the United States government that supports fundamental research and education in all the non-medical fields of science and engineering. Its medical counterpart is the Nationa ...
lifts its former strict prohibition of commercial enterprise on the Internet. * 1995: Thursday 27 April 1995, the purchase of a book by Paul Stanfield, product manager for
CompuServe CompuServe (CompuServe Information Service, also known by its initialism CIS) was an American online service provider, the first major commercial one in the world – described in 1994 as "the oldest of the Big Three information services (the ot ...
UK, from
W H Smith WHSmith (also written WH Smith, and known colloquially as Smith's and formerly as W. H. Smith & Son) is a British retailer, headquartered in Swindon, England, which operates a chain of high street, railway station, airport, port, hospital and m ...
'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 WHSmith (also written WH Smith, and known colloquially as Smith's and formerly as W. H. Smith & Son) is a British retailer, headquartered in Swindon, England, which operates a chain of high street, railway station, airport, port, hospital and m ...
,
Tesco Tesco plc () is a British Multinational corporation, multinational groceries and general merchandise retailer headquartered in Welwyn Garden City, England. In 2011 it was the third-largest retailer in the world measured by gross revenues an ...
,
Virgin Megastores Virgin Megastores is an international entertainment retailing chain, founded in early 1976 by Richard Branson as a record shop on London's Oxford Street. In 1979 the company opened their first Megastore at the end of Oxford Street and Totte ...
/ Our Price, Great Universal Stores ( GUS), Interflora, Dixons Retail, Past Times,
PC World (retailer) PC World was a British retail chain of mass market computer megastores. Established in November 1991, it became part of Dixons Retail in February 1993, and then part of Dixons Carphone, after the merger of Dixons Retail and Carphone Warehouse ...
and Innovations. * 1995:
Amazon Amazon most often refers to: * Amazons, a tribe of female warriors in Greek mythology * Amazon rainforest, a rainforest covering most of the Amazon basin * Amazon River, in South America * Amazon (company), an American multinational technology c ...
is launched by
Jeff Bezos Jeffrey Preston Bezos ( ;; and Robinson (2010), p. 7. ''né'' Jorgensen; born January 12, 1964) is an American entrepreneur, media proprietor, investor, and commercial astronaut. He is the founder, executive chairman, and former preside ...
. * 1995:
eBay eBay Inc. ( ) is an American multinational e-commerce company based in San Jose, California, that facilitates consumer-to-consumer and business-to-consumer sales through its website. eBay was founded by Pierre Omidyar in 1995 and became a ...
is founded by computer programmer Pierre Omidyar as AuctionWeb. It is the first online auction site supporting person-to-person transactions. * 1995: The first commercial-free 24-hour, internet-only radio stations, Radio HK and NetRadio start broadcasting. * 1996: The use of Excalibur BBS with replicated "storefronts" was an early implementation of electronic commerce started by a group of SysOps in
Australia Australia, officially the Commonwealth of Australia, is a sovereign country comprising the mainland of the Australian continent, the island of Tasmania, and numerous smaller islands. With an area of , Australia is the largest country b ...
and replicated to global partner sites. * 1998: Electronic postal stamps can be purchased and downloaded for printing from the Web. * 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 Napster was a peer-to-peer file sharing application. It originally launched on June 1, 1999, with an emphasis on digital audio file distribution. Audio songs shared on the service were typically encoded in the MP3 format. It was founded by Shaw ...
launches. ATG Stores launches to sell decorative items for the home online. * 1999: Global e-commerce reaches $150 billion * 2000: The
dot-com bust The dot-com bubble (dot-com boom, tech bubble, or the Internet bubble) was a stock market bubble in the late 1990s, a period of massive growth in the use and adoption of the Internet. Between 1995 and its peak in March 2000, the Nasdaq Compos ...
. * 2001:
eBay eBay Inc. ( ) is an American multinational e-commerce company based in San Jose, California, that facilitates consumer-to-consumer and business-to-consumer sales through its website. eBay was founded by Pierre Omidyar in 1995 and became a ...
has the largest userbase of any e-commerce site. * 2001: Alibaba.com achieved profitability in December 2001. * 2002:
eBay eBay Inc. ( ) is an American multinational e-commerce company based in San Jose, California, that facilitates consumer-to-consumer and business-to-consumer sales through its website. eBay was founded by Pierre Omidyar in 1995 and became a ...
acquires
PayPal PayPal Holdings, Inc. is an American multinational financial technology company operating an online payments system in the majority of countries that support online money transfers, and serves as an electronic alternative to traditional pape ...
for $1.5 billion. 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 Amazon most often refers to: * Amazons, a tribe of female warriors in Greek mythology * Amazon rainforest, a rainforest covering most of the Amazon basin * Amazon River, in South America * Amazon (company), an American multinational technology c ...
posts first yearly profit. * 2004: DHgate.com, China's first online B2B transaction platform, is established, forcing other B2B sites to move away from the "
yellow pages The yellow pages are telephone directories of businesses, organized by category rather than alphabetically by business name, in which advertising is sold. The directories were originally printed on yellow paper, as opposed to white pages for ...
" model. * 2007: Business.com acquired by R.H. Donnelley for $345 million. * 2014: US e-commerce and online retail sales projected to reach $294 billion, an increase of 12 percent over 2013 and 9% of all retail sales. Alibaba Group has the largest
Initial public offering An initial public offering (IPO) or stock launch is a public offering in which shares of a company are sold to institutional investors and usually also to retail (individual) investors. An IPO is typically underwritten by one or more investm ...
ever, worth $25 billion. * 2015:
Amazon Amazon most often refers to: * Amazons, a tribe of female warriors in Greek mythology * Amazon rainforest, a rainforest covering most of the Amazon basin * Amazon River, in South America * Amazon (company), an American multinational technology c ...
accounts for more than half of all e-commerce growth, selling almost 500 Million SKU's in the US. * 2017: Retail e-commerce sales across the world reaches $2.304 trillion, which was a 24.8 percent increase than previous year. * 2017: Global e-commerce transactions generate , including for business-to-business (B2B) transactions and for business-to-consumer (B2C) sales. * 2020:
Government of India The Government of India (ISO: ; often abbreviated as GoI), known as the Union Government or Central Government but often simply as the Centre, is the national government of the Republic of India, a federal democracy located in South Asia, c ...
launched BHIM UPI digital payment interface in 2016. In the year 2020 it had 2 billion digital payment transactions.


See also

* Comparison of free software e-commerce web application frameworks * Comparison of shopping cart software *
Customer intelligence Customer intelligence (CI) as part of business intelligence is the process of gathering and analyzing information regarding customers, and their details and activities, to build deeper and more effective customer relationships and improve decisi ...
*
Digital economy The digital economy is a portmanteau of digital computing and economy, and is an umbrella term that describes how traditional brick-and-mortar economic activities (production, distribution, trade) are being transformed by Internet, World Wide Web ...
* E-commerce credit card payment system * Electronic bill payment *
Electronic money Digital currency (digital money, electronic money or electronic currency) is any currency, money, or money-like asset that is primarily managed, stored or exchanged on digital computer systems, especially over the internet. Types of digital cu ...
* Non-store retailing * Payments as a service * South Dakota v. Wayfair, Inc. * Types of e-commerce * Timeline of e-commerce


References


Further reading

* * * * * * * * * * *


External links

* {{DEFAULTSORT:E-commerce E-commerce Electronics industry Non-store retailing Retail formats Supply chain management