E-commerce

E-commerce, short for electronic commerce, is all about buying and selling products and services online. Instead of going to a store, people can shop from their homes or anywhere with an internet connection. This makes it easy and convenient to get things quickly.

Many technologies help e-commerce work smoothly. For example, mobile commerce lets people shop using phones, and electronic funds transfer allows safe payments online. There are also systems to manage supply chain management, help with Internet marketing, and keep track of orders and inventory.

E-commerce is a big part of the retail world and has grown very fast because of advances in technology, like improvements in the semiconductor industry. It has changed how many people shop and do business today.

Defining e-commerce

E-commerce, or electronic commerce, refers to buying and selling products or services online. The term was first used in California in 1984. It often uses the web but can also involve other technologies like e-mail. Common examples include purchasing books from Amazon or downloading music from places like the iTunes Store.

E-commerce covers several areas, such as online retailing, electronic markets, and online auctions. It helps people shop and pay online, saving time and making transactions faster. Businesses use e-commerce in many ways, including selling directly to customers through web sites and mobile apps, participating in online marketplaces, and connecting with customers through e-mail.

Forms

E-commerce includes two main types. The first type is based on what is being sold, like digital content you can use right away or regular products and services. The second type depends on who is involved, such as businesses selling to each other (B2B), businesses selling to customers (B2C), customers selling to businesses (C2B), and customers selling to each other (C2C).

Big companies and banks also use the internet to share financial information for both local and international trade. Keeping data integrity and security is very important for e-commerce. Besides traditional e-commerce, people also use terms like m-Commerce for mobile commerce.

Governmental regulation

Different countries have rules to make sure online shopping is safe and fair. In the United States, laws like the California Privacy Rights Act and the CAN-SPAM Act of 2003 help protect people’s privacy and control how companies can send ads by email. The Federal Trade Commission makes sure online ads are honest.

Other parts of the world also have their own rules. The European Union looks at how companies sell things online to make sure customers get good deals. In India, the Information Technology Act 2000 helps control online business. China has laws to manage how people sell and buy things on the Internet, too. These rules help keep online shopping safe for everyone.

Global trends

E-commerce has become a key tool for businesses around the world, helping both small and large companies connect with customers online. It allows firms to expand into new markets, work across borders, and solve financial challenges. Small and medium businesses especially benefit, as e-commerce helps them match supply and demand more effectively and increase their revenues.

In 2012, e-commerce sales first passed $1 trillion globally. Today, mobile devices play a big role in online shopping, known as mobile commerce or m-commerce. For traditional businesses, using technology and e-commerce offers chances for fast growth. Companies invest heavily in mobile apps, and modern tools like 3D graphics — such as Facebook 3D Posts — are being used to help customers see products better before buying.

China

China’s e-commerce has grown quickly, with 668 million Internet users by 2014. By mid-2015, online shopping sales reached $253 billion, making up 10% of all consumer spending in China at that time. Chinese companies like Alibaba became leaders in the market, with an 80% share in 2013. The growth has also created Taobao villages, where rural areas have developed many online businesses, helping local economies.

Europe

In 2010, the United Kingdom led the world in spending per person on e-commerce. By 2013, the Czech Republic stood out in Europe, with nearly a quarter of its business income coming from online sales.

Arab states

The number of Internet users in Arab countries grew fast, with a 13.1% increase in 2015. Egypt, Saudi Arabia, and Morocco have the most users. The Gulf Cooperation Council countries are becoming important in e-commerce, with plans to grow even more. People in these areas are using smartphones more, which helps online shopping grow.

India

India had around 460 million Internet users by December 2017, though this is smaller than in the U.S. or Europe. Still, it is growing fast. In India, many people prefer to pay cash when their online order arrives.

Brazil

By 2016, Brazil’s e-commerce was growing fast, with sales expected to reach $17.3 billion.

Logistics

Logistics in e-commerce is mainly about fulfillment. Online shops and big stores need to figure out the best way to get orders filled and products delivered. Small companies often handle their own logistics because they can't hire outside help. Large companies usually use a special service to manage their logistics needs. Making sure these logistics work well is very important so customers are happy from the moment they place an order until they get their product.

Impacts

E-commerce has changed the way people shop and do business. Online markets grew quickly, with retail e-commerce sales reaching 2.3 trillion US dollars in 2017. Traditional stores are finding it hard to compete because online shops can offer lower prices and more choices. Customers like that they can shop from anywhere at any time, and compare prices easily.

E-commerce also affects jobs, helping create new roles in technology and customer service, but reducing jobs in areas like retail and travel agencies. For customers, online shopping is convenient and lets people read reviews and find the best deals. However, some people miss talking with a store employee face-to-face. E-commerce can also create packaging waste, but companies like Amazon are working to use less material and recycle more.

E-commerce during COVID-19

Further information: Economic impact of the COVID-19 pandemic § E-commerce

During the COVID-19 lockdowns in March 2020, many people around the world turned to shopping online. Global retail websites saw a huge jump in traffic, with 14.3 billion visits. In the United States, online sales grew by 25%, and online grocery shopping more than doubled. Even after the lockdowns ended, many people continued to prefer shopping online. Experts predicted that by 2023, the value of e-commerce sales would reach $6.5 trillion, showing just how much the pandemic changed the way we shop.

Business application

E-commerce has many useful applications for businesses. Some common ones include B2B e-commerce (business-to-business), B2C e-commerce (business-to-consumer), Conversational commerce (e-commerce via chat), and Online shopping.

Other tools and services used in e-commerce are Digital Wallet, Online auction, Online banking, Online transaction processing, and Social networking. These help businesses manage payments, communicate with customers, and sell products online.

Timeline

Here is a simple timeline showing the growth of e-commerce:

• In the early 1970s, students used a computer network to arrange a sale.
• In 1979, the first online shopping system was shown.
• In the 1980s and 1990s, more services appeared, allowing people to buy things online using computers.
• In 1995, Amazon and eBay started, changing how people shop forever.
• By the 2000s, e-commerce grew very fast, with billions of dollars being spent online every year.

Many companies and technologies helped make e-commerce what it is today.