e-commerce the use of the Internet, the Web, and mobile apps and browsers running on mobile devices

to transact business. More formally, digitally enabled commercial transactions between and among
organizations and individuals

e-business the digital enabling of transactions and processes within a firm, involving information
systems under the control of the firm

E-commerce primarily involves transactions that cross firm boundaries. E-business primarily involves the
application of digital technologies to business processes within the firm.

Internet worldwide network of computer networks built on common standards

World Wide Web (the Web) an information system running on Internet infrastructure that provides
access to billions of web pages

mobile platform provides the ability to access the Internet from a variety of mobile devices

such as smartphones, tablets, and other ultralightweight laptop computers

MAJOR TRENDS IN E-COMMERCE 2016–2017

BUSINESS

• Retail e-commerce in the United States continues double-digit growth (over 15%), with global growth
rates

even higher in Europe and emerging markets such as China, India, and Brazil.

• Mobile e-commerce (both retail and travel sales) explodes and is estimated to reach over $180 billion
in the

United States in 2016.

• The mobile app ecosystem continues to grow, with over 210 million Americans using mobile apps.

• Social e-commerce, based on social networks and supported by advertising, emerges and continues to
grow,

generating $3.9 billion in revenue for the top 500 social media retailers in the United States in 2015.
• Local e-commerce, the third dimension of the mobile, social, local e-commerce wave, also is growing
in the United States, fueled by an explosion of interest in on-demand services such as Uber, to over $40
billion in 2016.

• B2B e-commerce in the United States continues to strengthen and grow to $6.7 trillion.

• On-demand service firms like Uber and Airbnb attract billions in capital, garner multi-billion dollar
valuations, and show explosive growth.

• Mobile advertising continues growing at astronomical rates, accounting for almost two-thirds of all
digital ad spending.

• Small businesses and entrepreneurs continue to flood into the e-commerce marketplace, often riding
on the infrastructures created by industry giants such as Apple, Facebook, Amazon, Google, and eBay.

TECHNOLOGY

• A mobile computing and communications platform based on smartphones, tablet computers,

wearable devices, and mobile apps becomes a reality, creating an alternative platform for online
transactions, marketing, advertising, and media viewing. The use of mobile messaging services such as
WhatsApp and Snapchat continues to expand, and these services are now used by over 60% of
smartphone users.

• Cloud computing completes the transformation of the mobile platform by storing consumer content
and software on “cloud” (Internet-based) servers and making it available to any consumer-connected
device from the desktop to a smartphone.

• The Internet of Things, comprised of billions of Internet-connected devices, continues to grow

exponentially.

• As firms track the trillions of online interactions that occur each day, a flood of data, typically referred
to as big data, is being produced.

• In order to make sense out of big data, firms turn to sophisticated software called business analytics
(or web analytics) that can identify purchase patterns as well as consumer interests and intentions in
milliseconds.

SOCIETY

• User-generated content, published online as social network posts, tweets, blogs, and pins, as well as
video

and photo-sharing, continues to grow and provides a method of self-publishing that engages millions.
• The amount of data the average American consumes continues to increase, more than doubling from
an average of about 34 gigabytes in 2008 to an estimated 74 gigabytes today.

• Social networks encourage self-revelation, while threatening privacy.

• Participation by adults in social networks increases; Facebook becomes ever more popular in all

demographic categories.

• Conflicts over copyright management and control continue, but there is substantial agreement among

online distributors and copyright owners that they need one another.

• Taxation of online sales becomes more widespread.

• Surveillance of online communications by both repressive regimes and Western democracies grows.

• Concerns over commercial and governmental privacy invasion increase.

• Online security continues to decline as major sites are hacked and lose control over customer
information.

• Spam remains a significant problem despite legislation and promised technology fixes.

• On-demand service e-commerce produces a flood of temporary, poorly paid jobs without benefits.
business-to-consumer (B2C) e-commerceonline businesses selling to individual consumers

business-to-business (B2B) e-commerceonline businesses selling to other businesses

consumer-toconsumer (C2C) e-commerce consumers selling to other consumers

mobile e-commerce (m-commerce)use of mobile devices to enable online transactions

social e-commerce e-commerce enabled by social networks and online social relationship

local e-commerce e-commerce that is focused on engaging the consumer based on his or her current

geographic location .

E-COMMERCE: A BRIEF HISTORY

It is difficult to pinpoint just when e-commerce began. There were several precursors

to e-commerce. In the late 1970s, a pharmaceutical firm named Baxter Healthcare

initiated a primitive form of B2B e-commerce by using a telephone-based modem that

permitted hospitals to reorder supplies from Baxter. This system was later expanded

during the 1980s into a PC-based remote order entry system and was widely copied
throughout the United States long before the Internet became a commercial environment. The 1980s
saw the development of Electronic Data Interchange (EDI) standards

that permitted firms to exchange commercial documents and conduct digital commercial transactions
across private networks.

Disintermediation displacement of market middlemen who traditionally are intermediaries

between producers and consumers by a new direct relationship between producers and consumers

friction-free commercea vision of commerce in which information is equally distributed, transaction

costs are low, prices can be dynamically adjusted to reflect actual demand, intermediaries decline, and
unfair competitive advantages are eliminated

first mover a firm that is first to market in a particular area and that moves quickly to

gather market share

network effect occurs where users receive value from the fact that everyone else uses the

same tool or product

Web 2.0 set of applications and technologies that enable user-generated content