E-COMMERCE

In its simplest form, ecommerce is the buying and selling of products and services by businesses.
and consumers over the Internet. People use the term 'ecommerce' to describe encrypted
payments on the Internet.
Sometimes these transactions include the real-time transfer of funds from buyer to seller and
sometimes this is handled manually through an eft-pos terminal once a secure order is received
by the merchant.
Internet sales are increasing rapidly as consumers take advantage of lower prices offered by
wholesalers retailing their products. This trend is set to strengthen as websites address consumer
security and privacy concerns.
Electronic commerce, commonly known as e-commerce, eCommerce or e-comm, refers to the
buying and selling of products or services over electronic systems such as the Internet and others
computer networks. However, the term may refer to more than just buying and selling products
online. It also includes the entire online process of developing, marketing, selling, delivering,
servicing and paying for products and services. 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 one point in the transaction's life-cycle, although it
may encompass a wider range of technologies such as e-mail, mobile devices and telephones as
well.
A large percentage of electronic commerce is conducted entirely in electronic form for virtual
items such as access to premium content on a website, but mostly electronic commerce involves
the transportation of physical items in some way. Online retailers are sometimes known as e-
retailers and online retail is sometimes known as e-tail. Almost all big retailers are now
electronically present on the World Wide Web.
Business-to-Business (B2B) electronic commerce
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 takes place
between businesses and consumers, on the other hand, is referred to as business-to-consumer or
 B2C. 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
The seller's computer usually connects through the internet. There is no intermediary service involved. The sale or

purchase transaction is completed electronically and interactively in real-time such as in

Amazon.com for new books. However, in some cases, an intermediary may be present in a sale or
purchase transaction such as the transactions on 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 business transactions.

HISTORY OF E COMMERCE
Originally, electronic commerce was identified as 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 or invoices 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. 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 by NSF until 1995. Although the Internet
became popular worldwide around 1994 with the adoption of Mosaic web browser, 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 the word 'ecommerce' with the
ability of purchasing various goods through the Internet using secure protocols and electronic
payment services.
Time line:
. 1979:Michael Aldrichinventedonline shopping
. 1981Thomson Holidays, UK is first B2B online shopping
. 1982Minitelwas introduced nationwide inFrancebyFrance Telecom and used for online
ordering.
. 1984GatesheadSIS/Tescois first B2C online shopping and Mrs. Snowball, 72, is the first online
home shopper
. 1985: NissanUK sells cars and finance with credit checking to customers online from dealers.
lots.
. 1987Swregbegins to provide software and shareware authors means to sell their products
online through an electronicMerchant account.
. 1990Tim Berners-Leewrites the first web browser,World Wide Web, using aNeXTcomputer.
. 1992: Terry Brownell launches first fully graphical iconic
navigatedBulletin board systemonline shopping usingRoboBOARD/FX.
. 1994Netscapereleases the Navigator browser in October under the code nameMozilla. Pizza
Hutoffers online ordering on its Web page. The first online bank opens. Attempts to offer
flower delivery and magazine subscriptions online.Adultmaterials also become commercially
available, as do cars and bikes.Netscape1.0 was introduced in late 1994SSLencryption that
made transactions secure.
. 1995: Jeff Bezos launchesAmazon.comand the first commercial-free 24 hour, internet-only
radio stations, Radio HK andNetRadiostart broadcasting.DellandCiscobegin to aggressively
use Internet for commercial transactions.eBayis founded by computer programmer Pierre
Omidyar as AuctionWeb.
. 1998Electronic postal stampscan be purchased and downloaded for printing from the Web.
. 1998: Alibaba Group is established in China. And it leverages China's B2B and C2C,
B2C(Taobao) market by its Authentication System.
. 1999: Business.comsold for US $7.5 million to eCompanies, which was purchased in 1997 for
US $149,000. The peer-to-peer filesharing software Napsterlaunches.ATG Storeslaunches to
sell decorative items for the home online.
. 2000: Thedot-com bust.
. 2002eBayacquiresPayPalfor $1.5 billion. Niche retail companiesCSN
StoresandNetShopsare founded with the concept of selling products through several targeted
domains, rather than a central portal.
. 2003Amazon.composts first yearly profit.
. 2007Business.comacquired byR.H. Donnelleyfor $345 million.
. z2009: Zappos.comacquired byAmazon.comfor $928 million. Retail Convergence, operator of
private sale website RueLaLa.com, acquired byGSI Commerce for $180 million, plus up to
$170 million in earn-out payments based on performance through 2012.
. 2010Grouponreportedly rejects a $6 billion offer fromGoogleInstead, the group buying
Websites plan to go ahead with an IPO in mid-2011.
. 2011: US eCommerce and Online Retail sales projected to reach $197 billion, an increase of 12
percent over 2010. Quidsi.com, parent company ofDiapers.com, acquired byAmazon.comfor
$500 million in cash plus $45 million in debt and other obligations.GSI Commercea company
specializing in creating, developing and running online shopping sites for brick and mortar
brands and retailers, acquired byeBayfor $2.4 billion.

Some common applications related to electronic commerce are the following:

Document automation in supply chain and logistics
Domestic and international payment systems
Enterprise content management
Group buying
Automated online assistants
Instant messaging
Newsgroups
Online shopping and order tracking
Online banking
Online office suites
Shopping cart software
Teleconferencing
Electronic tickets

GOVERNMENTAL REGULATION
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. 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 to address online pharmacies.

Forms
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. At 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.

Global trends
Business models across the world also continue to change drastically with the advent of
eCommerce and this change is not just restricted to the USA. Other countries are also contributing to
the growth of eCommerce. For example, the United Kingdom has the biggest e-commerce
market in the world when measured by the amount spent per capita, even higher than the USA.
The internet economy in the UK is likely to grow by 10% between 2010 and 2015. This has led to
changing dynamics for the advertising industry.
Among emerging economies, China's eCommerce presence continues to expand.
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 has been the improved trust level for shoppers. The Chinese
Retailers have been able to help consumers feel more comfortable shopping online.

eMarketing:
There is no doubt about it – the Internet has changed the world we live in. Never before has it
been so easy to access information, communicate with people all over the globe and share
articles, videos, photos and all manner of media.

The Internet has led to an increasingly connected environment, and the growth of Internet usage
has resulted in declining distribution of traditional media: television, radio, newspapers and
magazines. Marketing in this connected environment and using that connectivity to market is
eMarketing.

eMarketing embraces a wide range of strategies, but what underpins successful eMarketing is a
user-centric and cohesive approach to these strategies. While the Internet and the World Wide
The web has enabled what we call New Media, the theories that lead to the development of the
The internet was being developed from the 1950s.

Forces fueling e-commerce:

There are at least three major forces fueling e-commerce: economic forces, marketing and
customer interaction forces, and technology, particularly multimedia convergence.

Economic forces:
One of the most evident benefits of e-commerce is economic efficiency resulting from the
reduction in communications costs, low-cost technological infrastructure, speedier and more
economic electronic transactions with suppliers, lower global information sharing and
advertising costs, and cheaper customer service alternatives.
Economic integration is either external or internal. External integration refers to the electronic
networking of corporations, suppliers, customers/clients, and independent contractors into one
community communicating in a virtual environment (with the Internet as medium). Internal
integration, on the other hand, is the networking of the various departments within a corporation,
and of business operations and processes. This allows critical business information to be stored
in a digital form that can be retrieved instantly and transmitted electronically. Internal integration
is best exemplified by corporate intranets. Among the companies with efficient corporate
Intranets are Procter and Gamble, IBM, Nestle and Intel.

Market forces.
Corporations are encouraged to use e-commerce in marketing and promotion to capture
international markets, both big and small. The Internet is likewise used as a medium for
enhanced customer service and support. It is a lot easier for companies to provide their target
consumers with more detailed product and service information using the Internet.
Technology forces.
The development of ICT is a key factor in the growth of e-commerce. For instance, technological
advances in digitizing content, compression and the promotion of open systems technology have
paved the way for the convergence of communication services into one single platform. This in
turn has made communication more efficient, faster, easier, and more economical as the need to
set up separate networks for telephone services, television broadcast, cable television, and
Internet access is eliminated. From the standpoint of firms/businesses and consumers, having
Only one information provider means lower communications costs.
Moreover, the principle of universal access can be made more achievable with convergence.
the high costs of installing landlines in sparsely populated rural areas is a disincentive to
telecommunications companies to install telephones in these areas. Installing landlines in rural
areas can become more attractive to the private sector if revenues from these landlines are not
limited to local and long distance telephone charges, but also include cable TV and Internet
charges. This development will ensure affordable access to information even by those in rural
areas and will spare the government the trouble and cost of installing expensive landlines.

Impact on Markets and Retailers

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 have 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.
Most people have an understanding of commerce based on their experience as shoppers and
buyers, and they bring this experience with them when they start shopping online. In order to
meet the user’s needs, then, we must understand the typical user’s experience of traditional
commerce.
Most problems with commerce sites are due to misunderstandings on the part of the site creators.
about how users understand the structure and elements of typical commerce transactions. Users
have formed schemas to understand commerce, but commerce sites routinely ignore these
schemas.
Commerce is a communicative transaction between two parties playing very familiar.
roles: buyer and seller. For commerce to occur, somebody must do the selling, and somebody
must do the buying, and these two somebodies must share a basic understanding of how the
transaction is generally supposed to flow. Ecommerce websites can’t simply make products
available to be bought (surface it, they will buy…); these sites must hold up their part of role-
playing the commerce transaction.
Brandingserves as a marker of corporate identity, and so has some value to the user, but the
Hubbub over branding misses some very important concerns that users have.
Ecommerce websites must pay attention to how theycommunicate to usersEcommerce sites
play their role of seller by trying to broadcast two messages to potential buyers: “buy from us”
and "trust us". The impact of these explicit messages, though, is often corrupted by contradictory
or distracting messages implicit in the site’s implementation of navigation flow, page layout,
visual continuity, and information space.
Ecommerce sites seem to shout the message that they are trustworthy, that users need have no
trepidation over purchasing from these sites, but trust derives not from assertions but rather from
experience and judgment. People interact, and they make judgments and form expectations of
others based on what they experience and what they surmise; it’s a lot easier to decide to trust a
merchant when you can speak to them face-to-face and shake their hand. Trusting a website to
deal with you fairly and deliver your merchandise, though, well, that’s harder to do when you
realize that anyone can build a commerce site. Ecommerce sites must work hard to build
theimpression of trustworthiness.

Ecommerce is not only about buying and selling; it is also about the marketing activities used by
the company for the revenue purpose.
Different types of markets in Ecommerce are:
Email marketing
2. Online advertising
3. Affiliate marketing
Search engine marketing