E-commerce

Electronic commerce, commonly known as (electronic marketing) e-commerce or eCommerce, consists of the buying and selling of products or services over electronic systems such as the Internet and other computer networks. The amount of trade conducted electronically has grown extraordinarily with widespread Internet usage. The use of commerce is conducted in this way, spurring and drawing on innovations in electronic funds transfer, supply chain management, Internet marketing, online transaction processing, electronic data interchange (EDI), inventory management systems, and automated data collection systems. Modern electronic commerce typically uses the World Wide Web at least at some point in the transaction's lifecycle, although it can encompass a wider range of technologies such as e-mail as well.

A large percentage of electronic commerce is conducted entirely electronically for virtual items such as access to premium content on a website, but most electronic commerce involves the transportation of physical items in some way. Online retailers are sometimes known as e-tailers and online retail is sometimes known as e-tail. Almost all big retailers have electronic commerce presence on the World Wide Web.

Electronic commerce that is conducted between businesses is referred to as business-to-business or B2B. B2B can be open to all interested parties (e.g. commodity exchange) or limited to specific, pre-qualified participants (private electronic market). Electronic commerce that is conducted between businesses and consumers, on the other hand, is referred to as business-to-consumer or B2C. This is the type of electronic commerce conducted by companies such as Amazon.com.

Electronic commerce is generally considered to be the sales aspect of e-business. It also consists of the exchange of data to facilitate the financing and payment aspects of the business transactions.

History

Early development

The meaning of electronic commerce has changed over the last 30 years. Originally, electronic commerce meant the facilitation of commercial transactions electronically, using technology such as Electronic Data Interchange (EDI) and Electronic Funds Transfer (EFT). These were both introduced in the late 1970s, allowing businesses to send commercial documents like purchase orders 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.

Online shopping, an important component of electronic commerce, was invented by Michael Aldrich in the UK in 1979. The world's first recorded B2B was Thomson Holidays in 1981 The first recorded B2C was Gateshead SIS/Tesco in 1984 The world's first recorded online shopper was Mrs Jane Snowball of Gateshead, England During the 1980s, online shopping was also used extensively in the UK by auto manufacturers such as Ford, Peugeot-Talbot, General Motors and Nissan. All these organizations and others used the Aldrich systems. The systems used the switched public telephone network in dial-up and leased line modes. There was no broadband capability.

From the 1990s onwards, electronic commerce would additionally include enterprise resource planning systems (ERP), data mining and data warehousing.

An early example of many-to-many electronic commerce in physical goods was the Boston Computer Exchange, a marketplace for used computers launched in 1982. An early online information marketplace, including online consulting, was the American Information Exchange, another pre Internet online system introduced in 1991.

In 1990 Tim Berners-Lee invented the World Wide Web and transformed an academic telecommunication network into a worldwide everyman everyday communication system called internet/www. Commercial enterprise on the Internet was strictly prohibited until 1991 . Although the Internet became popular worldwide around 1994 when the first internet online shopping started, it took about five years to introduce security protocols and DSL allowing continual connection to the Internet. By the end of 2000, many European and American business companies offered their services through the World Wide Web. Since then people began to associate a word "ecommerce" with the ability of purchasing various goods through the Internet using secure protocols and electronic payment services.

Timeline

• 1979: Online shopping was invented in the UK by Michael Aldrich.
• 1982: Minitel was introduced nationwide in France by France Telecom and used for online ordering.
• 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: J.H. Snider and Terra Ziporyn publish Future Shop: How New Technologies Will Change the Way We Shop and What We Buy. St. Martin's Press. ISBN 0312063598.
• 1994: Netscape releases the Navigator browser in October under the code name Mozilla. Pizza Hut offers pizza 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.
• 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.
• 2008: US eCommerce and Online Retail sales projected to reach $204 billion, an increase of 17 percent over 2007.

Business applications

Some common applications related to electronic commerce are the following:

• Email
• Enterprise content management
• Instant messaging
• Newsgroups
• Online shopping and order tracking
• Online banking
• Online office suites
• Domestic and international payment systems
• Shopping cart software
• Teleconferencing
• Electronic tickets

Government regulations

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 consumer level, electronic commerce is mostly conducted on the World Wide Web. An individual can go online to purchase anything from books or groceries, to expensive items like real estate. Another example would be online banking, i.e. online bill payments, buying stocks, transferring funds from one account to another, and initiating wire payment to another country. All of these activities can be done with a few strokes of the keyboard.

On the institutional level, big corporations and financial institutions use the internet to exchange financial data to facilitate domestic and international business. Data integrity and security are very hot and pressing issues for electronic commerce today.

See also

• Dot-com company
• E-government
• E-business
• Electronic money
• Internet business
• Mobile commerce
• Paid content
• Social commerce
• Online shopping

References

• Chaudhury, Abijit (2002). e-Business and e-Commerce Infrastructure. McGraw-Hill. ISBN 0-07-247875-6. {{cite book}}: Unknown parameter |coauthors= ignored (|author= suggested) (help)
• Frieden, Jonathan D.; Roche, Sean Patrick (2006-12-19), "E-Commerce: Legal Issues of the Online Retailer in Virginia" (PDF), Richmond Journal of Law & Technology, 13 (2)
• Graham, Mark (2008), "Warped Geographies of Development: The Internet and Theories of Economic Development" (PDF), Geography Compass, 2 (3): 771, doi:10.1111/j.1749-8198.2008.00093.x
• Kessler, M. (2003). More shoppers proceed to checkout online. Retrieved January 13, 2004
• Nissanoff, Daniel (2006). FutureShop: How the New Auction Culture Will Revolutionize the Way We Buy, Sell and Get the Things We Really Want (Hardcover ed.). The Penguin Press. pp. 246 pages. ISBN 1-59420-077-7.
• Seybold, Pat (2001). Customers.com. Crown Business Books (Random House). ISBN 0-609-60772-3.
• Miller, Roger (2002). The Legal and E-Commerce Environment Today (Hardcover ed.). Thomson Learning. pp. 741 pages. ISBN 0-324-06188-9.

External links

• U.S. Federal Trade Commission E-Commerce Fact Sheets
• US Small Business Guide to E-Commerce Laws and Regulations