E-commerce: A Comprehensive Summary

Definition and Background

E-commerce, or electronic commerce, refers to commercial activities conducted through electronic platforms or the internet, involving the buying and selling of products and services. It relies on technologies such as mobile commerce, electronic funds transfer, supply chain management, and internet marketing.

The term "e-commerce" emerged in the 1980s, coined by Robert Jacobson, a California State Assembly consultant, in the state's Electronic Commerce Act.

Forms and Types

E-commerce can be classified into two categories:

  • Business-based: Based on the type of goods sold, ranging from digital content to physical goods and services.
  • Participant-based: Based on the nature of the participants, including business-to-business (B2B), business-to-consumer (B2C), consumer-to-business (C2B), and consumer-to-consumer (C2C).

Governmental Regulations

E-commerce is regulated by various government agencies worldwide. In the United States, the Federal Trade Commission (FTC) oversees electronic mail practices, online advertising, and consumer privacy. The Ryan Haight Online Pharmacy Consumer Protection Act of 2008 regulates online pharmacies.

Internationally, the International Consumer Protection and Enforcement Network (ICPEN) works on consumer issues related to cross-border transactions. The Asia Pacific Economic Cooperation (APEC) promotes e-commerce within the region and harmonizes privacy regulations.

Global Trends

E-commerce has become a significant tool for businesses of all sizes, providing opportunities for sales and customer engagement. Cross-border e-commerce has emerged as a growing field, enabling companies to expand into new markets and overcome trade barriers.

Mobile devices play a crucial role in e-commerce, with mobile commerce (m-commerce) accounting for a significant portion of online sales.

Impact

On Markets and Retailers: E-commerce has led to increased market growth while challenging traditional brick-and-mortar retailers due to lower prices and higher efficiency. Many retailers have adopted omnichannel strategies, blending online and offline offerings.

On Supply Chain Management: E-commerce has improved supply chain efficiency by optimizing physical, information, and financial flows. It enables companies to track inventory, process orders, and make payments more effectively.

On Employment: E-commerce has created new jobs in information technology, software development, and digital marketing while simultaneously displacing workers in certain sectors, such as retail and travel agencies.

On Customers: E-commerce offers convenience, access to a wider range of products, and price comparisons for customers. However, it also raises concerns about security, privacy, and the lack of human interaction.

On the Environment: E-commerce has environmental implications due to packaging materials and the transportation of goods.

E-commerce during COVID-19

During the COVID-19 pandemic, e-commerce experienced unprecedented growth as people shifted to online shopping due to lockdowns and social distancing measures.

Business Applications

Common applications of e-commerce include:

  • Online marketplaces
  • Subscription services
  • Digital content distribution
  • Online banking and financial services
  • Social commerce

Timeline

Key milestones in e-commerce history include:

  • 1971-1972: First online sale on ARPANET
  • 1981: First B2B online shopping system
  • 1984: California's Electronic Commerce Act
  • 1989: First internet-based e-commerce system
  • 1990: Creation of the World Wide Web
  • 1994: Netscape browser release with SSL encryption
  • 1995: Amazon and eBay founded
  • 2001: Alibaba Group established in China
  • 2002: eBay acquires PayPal
  • 2014: Alibaba Group's record-breaking IPO
  • 2020: Global e-commerce sales exceed $4 trillion