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 offer by
wholesalers retailing their products. This trend is set to strengthen as web sites 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 other
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 eretailers and online retail is sometimes known as e-tail. Almost all big retailers are now
electronically present on the World Wide Web.
Electronic commerce that takes place 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 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
seller's computer usually via 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 a word "ecommerce" with the
ability of purchasing various goods through the Internet using secure protocols and electronic
payment services.
Time line:
1979: Michael Aldrich invented online shopping
1981: Thomson Holidays, UK is first B2B online shopping

 1982: Minitel was introduced nationwide in France by France Telecom and used for online
ordering.
1984: Gateshead SIS/Tesco is first B2C online shopping and Mrs Snowball, 72, is the first online
home shopper
1985: Nissan UK sells cars and finance with credit checking to customers online from dealers'
lots.
1987: Swreg begins to provide software and shareware authors means to sell their products
online through an electronic Merchant account.
1990: Tim Berners-Lee writes the first web browser, WorldWideWeb, using a NeXT computer.
1992:
Terry
Brownell
launches
first
fully
graphical,
iconic
navigated Bulletin_board_system online shopping using RoboBOARD/FX.
1994: Netscape releases the Navigator browser in October under the code name Mozilla. Pizza
Hut offers online ordering on its Web page. The first online bank opens. Attempts to offer
flower delivery and magazine subscriptions online. Adult materials also become commercially
available, as do cars and bikes. Netscape 1.0 is introduced in late 1994 SSL encryption that
made transactions secure.
1995: Jeff Bezos launches Amazon.com and the first commercial-free 24 hour, internet-only
radio stations, Radio HK and NetRadio start broadcasting. Dell and Cisco begin to aggressively
use Internet for commercial transactions. eBay is founded by computer programmer Pierre
Omidyar as AuctionWeb.
1998: Electronic postal stamps can be purchased and downloaded for printing from the Web.
1998: Alibaba Group is established in China. And it leverage China's B2B and C2C,
B2C(Taobao) market by its Authentication System.
1999: 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.
2002: eBay acquires PayPal for
$1.5

billion. Niche

retail

companies CSN

Stores 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.
2007: Business.com acquired by R.H. Donnelley for $345 million.
z2009: Zappos.com acquired by Amazon.com for $928 million. 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.

 2010: Groupon reportedly rejects a $6 billion offer from Google. Instead, the group buying
websites plans 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 of Diapers.com, acquired by Amazon.com for
$500 million in cash plus $45 million in debt and other obligations. GSI Commerce, a company
specializing in creating, developing and running online shopping sites for brick and mortar
brands and retailers, acquired by eBay for $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 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.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.
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 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 UK is likely to grow by 10% between 2010 to 2015. This has led to
changing dynamics for the advertising industry.
Amongst emerging economies, China's eCommerce presence continues to expand. 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 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
Web have enabled what we call New Media, the theories that lead to the development of the
Internet were 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. At
present 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 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 andtravel 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 users needs, then, we must understand the typical users 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 web sites cant simply make products
available to be bought (surface it, they will buy); these sites must hold up their part of roleplaying the commerce transaction.
Branding serves 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 web sites must pay attention to how they communicate to users. Ecommerce 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 sites 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; its a lot easier to decide to trust a
merchant when you can speak to them face-to-face and shake their hand. Trusting a web site to
deal with you fairly and deliver your merchandise, though, well, thats harder to do when you
realize that anyone can build a commerce site. Ecommerce sites must work hard to build
the impression of trustworthiness.
Ecommerce is not only about buying and selling its also about the marketing activities used by
the company for the revenue purpose.
Different type of market in Ecommerce are :

1. email marketing email marketing

2. Online advertising

3. Affiliate marketing
4. Search engine marketing