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The term "electronic commerce" (e-commerce) has evolved from its meager notion of electronic shopping to mean all aspects of business and market processes enabled by the Internet and in part the World Wide Web technologies.

Electronic Commerce as Online Selling: Narrowly defined electronic commerce means doing business online or selling and buying products and services through Web storefronts. Products being traded may be physical products such as used cars or services (e.g. arranging trips, online medical consultation, and remote education). Increasingly, they include digital products such a s news, audio and video database, software and all types of knowledge-based products. It appears then electronic commerce is similar to catalog shopping or home shopping on cable TV.

Electronic Commerce as a Market Place:

Electronic Commerce


Commonly known as e-commerce or e-Commerce, 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 life-cycle, although it can 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 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 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. The sale and purchase transaction is completed electronically and interactively in real-time such as for new books. If an intermediary is present, then the sale and purchase transaction is called electronic commerce such as

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.

Business applications


An example of an automated online assistant on a merchandising website Some common applications related to electronic commerce are the following: • Document automation in supply chain and logistics • Domestic and international payment systems • Email • 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.[9] 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.[10] 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 Actto address online pharmacies.[11] 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. Global Trends in E-Retailing and Shopping

Business models across the world also continue to change drastically with the advent of e-Commerce and this change is not just restricted to USA. Other countries are also contributing to the growth of e-Commerce. For example, United Kingdom has the biggest e-commerce market in the world when measured by the amount spent per capita, even higher than USA. The internet economy in UK is likely to grow by 10% between 2010 and 2015. This has led to changing dynamics for the advertising industry Amongst emerging economies, China's e-Commerce 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.[13]

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 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.[14]

E-commerce types


E-commerce types represent a range of various schemas of transactions which are distinguished according to their participants.

  • Business-to-Business (B2B)
  • Business-to-Consumer (B2C)
  • Business-to-Employee (B2E)
  • Business-to-Government (B2G) (also known as Business to Administration or B2A)
  • Business-to-Machines (B2M)
  • Business-to-Manager (B2M)
  • Consumer-to-Business (C2B)
  • Consumer-to-Consumer (С2C)
  • Citizen (Consumer)-to-Government (C2G) (also known as Consumer-to-Administration or C2A)
  • Government-to-Business (G2B)
  • Government-to-Citizen (G2C)
  • Government-to-Employee (G2E)
  • Government-to-Government (G2G)
  • Manager-to-Consumer (M2C)
  • Peer-to-Peer (P2P)

Distribution Channels


E-commerce has grown in importance as companies have adopted PURE-CLICK and BRICK AND CLICK channel system. we can distinguish between pure-click and brick and click channel system adopted by companies.

PURE-CLICK companies are those that have launched a website without any previous existence as a firm. It is imperative that such companies must set up and operate their e-commerce websites very carefully. Customer service is of paramount importance. Ex:

BRICK and CLICK companies are those existing companies that have added an online site for e-commerce. Initially, Brick and Click companies were skeptical whether or not to add an online e-commerce channel for fear that selling their products might produce channel conflict with their off-line retailers, agents, or their own stores. However, they eventually added internet to their distribution channel portfolio after seeing how much business their online competitors were generating. Ex:

See also