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E-commerce

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Part of a series on

E-commerce
Online goods and services

Retail services
Banking
DVD-by-mail
Flower delivery
Food ordering
Pharmacy
Travel

Marketplace services
Advertising

Auctions
Comparison shopping
Social commerce
Trading communities

Wallet

E-books
Software
Streaming media

Mobile commerce
Payment
Ticketing
Customer service
Call centre
Help desk
Live support software
E-procurement
Purchase-to-pay

V
T
E

Electronic commerce, commonly known as E-commerce or eCommerce, is trading in products or


services using computer networks, such as the Internet. Electronic commerce draws on technologies
such as mobile commerce,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 for at least one part of the transaction's life cycle, although it may also use
other technologies such as e-mail.
E-commerce businesses usually employ some or all of the following practices:

Provide Etail or "virtual storefronts" on websites with online catalogs, sometimes gathered
into a "virtual mall".

Buy or sell on websites or online marketplaces.

Gather and use demographic data through web contacts and social media.

Use electronic data interchange, the business-to-business exchange of data.

Reach prospective and established customers by E-mail or fax (for example, with
newsletters).

Use business-to-business buying and selling.

Provide secure business transactions.


Contents
[hide]

1 Timeline

2 Business applications

3 Governmental regulation

4 Forms

5 Global trends

6 Impact on markets and retailers

7 Distribution channels

8 See also

9 References

10 Further reading

11 External links

Timeline[edit]
A timeline for the development of e-commerce:

1971 or 1972: The ARPANET is used to arrange a cannabis sale between students at
the Stanford Artificial Intelligence Laboratory and the Massachusetts Institute of Technology,
later described as "the seminal act of e-commerce" in John Markoff's book What the Dormouse
Said.[1]
1979: Michael Aldrich demonstrates the first online shopping system.[2]

1981: Thomson Holidays UK is first business-to-business online shopping system to be


installed.[3]

1982: Minitel was introduced nationwide in France by France Tlcom and used for online
ordering.

1983: California State Assembly holds first hearing on "electronic commerce" in Volcano,
California.[4] Testifying are CPUC, MCI Mail, Prodigy, CompuServe, Volcano Telephone, and
Pacific Telesis. (Not permitted to testify is Quantum Technology, later to become AOL.)

1984: Gateshead SIS/Tesco is first B2C online shopping system [5] and Mrs Snowball, 72, is
the first online home shopper[6]

1984: In April 1984, CompuServe launches the Electronic Mall in the USA and Canada. It is
the first comprehensive electronic commerce service. [7]

1984: California becomes first US state to enact an Electronic Commerce Act defining basic
consumer rights online.[citation needed]

1990: Tim Berners-Lee writes the first web browser, WorldWideWeb, using
a NeXT computer.[8]

1992: Book Stacks Unlimited in Cleveland opens a commercial sales website


(www.books.com) selling books online with credit card processing.

1992: St. Martin's Press publishes J.H. Snider and Terra Ziporyn's Future Shop: How New
Technologies Will Change the Way We Shop and What We Buy.[9]

1992: Terry Brownell launches a fully graphical, iconic navigated Bulletin board system online
shopping usingRoboBOARD/FX.[citation needed]

1993: Paget Press releases edition No. 3 of the first[citation needed] AppStore, The Electronic
AppWrapper[10]

1994: Netscape releases the Navigator browser in October under the code
name Mozilla. Netscape 1.0 is introduced in late 1994 with SSL encryption that made
transactions secure.

1994: Ipswitch IMail Server becomes the first software available online for sale and
immediate download via a partnership between Ipswitch, Inc. and OpenMarket.

1994: "Ten Summoner's Tales" by Sting becomes the first secure online purchase. [11]

1995: The US National Science Foundation lifts its former strict prohibition of commercial
enterprise on the Internet.[12]

1995: Thursday 27 April 1995, the purchase of a book by Paul Stanfield, Product Manager
for CompuServe UK, from W H Smith's shop within CompuServe's UK Shopping Centre is the
UK's first national online shopping service secure transaction. The shopping service at launch
featured W H Smith, Tesco, Virgin Megastores/Our Price, Great Universal Stores
(GUS), Interflora, Dixons Retail, Past Times, PC World (retailer) and Innovations.

1995: Jeff Bezos launches Amazon.com and the first commercial-free 24-hour, internet-only
radio stations, Radio HK andNetRadio start broadcasting. Dell and Cisco begin to aggressively
use Internet for commercial transactions.[citation needed]eBay is founded by computer
programmer Pierre Omidyar as AuctionWeb.

1996: IndiaMART B2B marketplace established in India.

1996: ECPlaza B2B marketplace established in Korea.

1996: Sellerdeck, formerly Actinic, the UK's first PC/LAN e-commerce platform established.
[citation needed]

1998: Electronic postal stamps can be purchased and downloaded for printing from the Web.
[13]

1999: Alibaba Group is established in China. 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.

2001: Alibaba.com achieved profitability in December 2001.

2002: eBay acquires PayPal for $1.5 billion.[14] Niche retail


companies Wayfair 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.
2004: DHgate.com, China's first online b2b transaction platform, is established, forcing other
b2b sites to move away from the "yellow pages" model.[15]
2007: Business.com acquired by R.H. Donnelley for $345 million.[16]

2009: Zappos.com acquired by Amazon.com for $928 million.[17] Retail Convergence,


operator of private sale website RueLaLa.com, acquired by GSI Commerce for $180 million,
plus up to $170 million in earn-out payments based on performance through 2012. [18]

2010: Groupon reportedly rejects a $6 billion offer from Google. Instead, the group buying
websites went ahead with anIPO on 4 November 2011. It was the largest IPO since Google.[19][20]

2011: Quidsi.com, parent company of Diapers.com, acquired by Amazon.com for $500


million in cash plus $45 million in debt and other obligations.[21] GSI Commerce, a company
specializing in creating, developing and running online shopping sites for brick and mortar
businesses, acquired by eBay for $2.4 billion.[22]

2013: US eCommerce and Online Retail holiday sales reach $46.5 billion, up 10 percent. [23]

2014: Overstock.com processes over $1 million in Bitcoin sales.[24] Indias e-commerce


industry is estimated to have grown more than 30% from a year earlier to $12.6 billion in 2013.
[25]
US eCommerce and Online Retail sales projected to reach $294 billion, an increase of 12
percent over 2013 and 9% of all retail sales.[26] Alibaba Group has the largest Initial public
offering ever, worth $25 billion.

Business applications[edit]

An example of an automated online assistant on a merchandising website.

Some common applications related to electronic commerce are:

Document automation in supply chain and logistics

Domestic and international payment systems

Enterprise content management

Group buying

Automated online assistant

Newsgroups

Online shopping and order tracking

Online banking

Online office suites

Shopping cart software

Teleconferencing

Electronic tickets

Social networking

Instant messaging

Governmental regulation[edit]
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 2003establishes 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. [27] 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.[28] 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.[29]
There is also collaboration between Google and US federal authorities to block illegal online
pharmacies from appearing in Google search results.[30] Recently FedEx Corporation pleaded not
guilty to charges made against it regarding dealing with illegal online pharmacies. [31]
Conflict of laws in cyberspace [32] is a major hurdle for harmonisation of legal framework for ecommerce around the world. In order to give a uniformity to e-commerce law around the world, many
countries adopted the UNCITRAL Model Law on Electronic Commerce (1996) [33]
Internationally there is the International Consumer Protection and Enforcement Network (ICPEN),
which was formed in 1991 from an informal network of government customer fair trade
organisations. The purpose was stated as being to find ways of co-operating on tackling consumer
problems connected with cross-border transactions in both goods and services, and to help ensure
exchanges of information among the participants for mutual benefit and understanding. From this
came Econsumer.gov, an ICPEN initiative since April 2001. It is a portal to report complaints about
online and related transactions with foreign companies.
There is also Asia Pacific Economic Cooperation (APEC) was established in 1989 with the vision
of achieving stability, security and prosperity for the region through free and open trade and
investment. APEC has an Electronic Commerce Steering Group as well as working on common
privacy regulations throughout the APEC region.

In Australia, Trade is covered under Australian Treasury Guidelines for electronic commerce, [34] and
the Australian Competition and Consumer Commission[35] regulates and offers advice on how to deal
with businesses online,[36] and offers specific advice on what happens if things go wrong. [37]
Also Australian government e-commerce website[38] provides information on e-commerce in Australia.
In the United Kingdom, The FSA (Financial Services Authority)[39] is the competent authority for
most aspects of the Payment Services Directive (PSD). The UK implemented the PSD through the
Payment Services Regulations 2009 (PSRs), which came into effect on 1 November 2009. The PSR
affects firms providing payment services and their customers. These firms include banks, non-bank
credit card issuers and non-bank merchant acquirers, e-money issuers, etc. The PSRs created a
new class of regulated firms known as payment institutions (PIs), who are subject to prudential
requirements. Article 87 of the PSD requires the European Commission to report on the
implementation and impact of the PSD by 1 November 2012.[40]
In India, the information technology act, 2000 governs the basic applicability of e-commerce. It is
based upon UNCITRAL Model but is not a comprehensive legislation to deal with e-commerce
related activities in India. Further, e-commerce laws and regulations in India [41] are also
supplemented by different laws of India as applicable to the field of e-commerce. For instance, ecommerce relating to pharmaceuticals, healthcare, traveling, etc. are governed by different laws
though the information technology act, 2000 prescribes some common requirements for all these
fields. The competition commission of India regulates anti competition and anti trade practices in ecommerce fields in India.

Forms[edit]
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 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.
Aside from traditional e-Commerce, m-Commerce as well as the nascent t-Commerce [42] channels
are often seen as the current 2013 poster children of electronic I-Commerce.

Global trends[edit]
In 2010, the United Kingdom had the biggest e-commerce market in the world when measured by
the amount spent per capita.[43] The Czech Republic is the European country where ecommerce
delivers the biggest contribution to the enterprises total revenue. Almost a quarter (24%) of the
countrys total turnover is generated via the online channel. [44]
Among emerging economies, China's e-commerce presence continues to expand every year. 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. [45] China's crossborder e-commerce is also growing rapidly. E-commerce transactions between China and other
countries increased 32% to 2.3 trillion yuan ($375.8 billion) in 2012 and accounted for 9.6% of
China's total international trade[46] In 2013, Alibaba had an e-commerce market share of 80% in
China.[47]
Other BRIC countries are witnessing the accelerated growth of eCommerce as well. In Russia, the
total ecommerce market is projected to total somewhere between 690 billion rubles ($23 billion) and
900 billion rubles ($30 billion) in 2015, at 2010 values. This will equal 5% of total retail volume in

Russia. Longer-term, the market size of Russian e-commerce could reach $50 billion by 2020.
Ecommerce players need to understand unique insights about trust factor, online payments and
language peculiarities to penetrate the Russian market. Brazil's eCommerce is growing quickly with
retail eCommerce sales expected to grow at a healthy double-digit pace through 2014. By 2016,
eMarketer expects retail ecommerce sales in Brazil to reach $17.3 billion. [48] India's ecommerce
growth, on the other hand, has been slower although the country's potential remains solid
considering its surging economy, the rapid growth of internet penetration, English language
proficiency and a vast market of 1.2 billion consumers (although perhaps only 50 million access the
internet through PCs and some estimate the most active group of e-commerce customers numbers
only 2-3 million). E-commerce traffic grew about 50% from 2011 to 2012, from 26.1 million to 37.5
million, according to a report released by Com Score. Still much of the estimated 14 billion dollars in
2012 ecommerce was generated from travel sites.
eCommerce is also expanding across the Middle East. Having recorded the world's fastest growth in
internet usage between 2000 and 2009, the region is home to more than 60 million internet users.
Retail, travel and gaming are the region's top eCommerce segments, in spite of difficulties such as
the lack of region-wide legal frameworks and logistical problems in cross-border transportation [citation
needed]
. E-Commerce has become an important tool for small and large businesses worldwide, not only
to sell to customers, but also to engage them.[49][50]
In 2012, ecommerce sales topped $1 trillion for the first time in history.[51]
Mobile devices are playing an increasing role in the mix of eCommerce. Some estimates show that
purchases made on mobile devices will make up 25% of the market by 2017. [52] According to Cisco
Visual Networking Index,[53] in 2014 the amount of mobile devices will outnumber the number of world
population.
Multichannel Selling is also worth mentioning, when it comes to e-commerce. As stated in Ecommerce trends for 2014, multichannel selling is relatively young but though has already managed
to become a key driver for promotion of small business companies unable to compete with media
giants in Google. The essence of it lies in equipping a few shopping platforms like Amazon or Nextag
for goods promotion.

Impact on markets and retailers[edit]


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 ecommerce,bookshops and travel agencies. Generally, larger firms 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.[54]
Individual or business involved in e-commerce whether buyers or sellers rely on Internet-based
technology in order to accomplish their transactions. E-commerce is recognized for its ability to allow
business to communicate and to form transaction anytime and anyplace. [55] Whether an individual is
in the US or overseas, business can be conducted through the internet. The power of e-commerce
allows geophysical barriers to disappear, making all consumers and businesses on earth potential
customers and suppliers. eBay is a good example of e-commerce business individuals and
businesses are able to post their items and sell them around the Globe.[56]

Distribution channels[edit]

This section does not cite any references or sources. Please help improve this section
by adding citations to reliable sources. Unsourced material may be challenged
and removed. (June 2013)
E-commerce has grown in importance as companies have adopted pure-click and brick-andclick channel systems. We can distinguish pure-click and brick-and-click channel system adopted by
companies.

Pure-click or pure-play companies are those that have launched a website without any
previous existence as a firm.

Bricks-and-clicks companies are those existing companies that have added an online site for
e-commerce.

Click-to-brick online retailers that later open physical locations to supplement their online
efforts.[57]

See also[edit]

Alternative payments

Mobile commerce

Comparison of shopping cart software

Digital economy

Electronic bill payment

Electronic money

E-commerce credit card payment system

Comparison of free software e-commerce web application frameworks

Non-store retailing

Online marketplace

Paid content

Payments as a service

Payment card

Social commerce

Types of E-commerce

Virtual economy

Wire transfer

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Further reading[edit]

Laudon, Kenneth C.; Guercio Traver, Carol (2014). E-commerce. business. technology. society.
10th edition. Pearson. ISBN 978-013-302444-9.

Chaudhury, Abijit; Kuilboer, Jean-Pierre (2002). e-Business and e-Commerce Infrastructure.


McGraw-Hill. ISBN 0-07-247875-6.

Frieden, Jonathan D.; Roche, Sean Patrick (19 December 2006). "E-Commerce: Legal Issues of
the Online Retailer in Virginia"(PDF). Richmond Journal of Law and 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.17498198.2008.00093.x.

Humeau, Philippe; Jung, Matthieu (21 June 2013). In depth benchmark of 12 ecommerce
solutions (PDF).

Kessler, M (22 December 2003), "More shoppers proceed to checkout online", USA today,
retrieved January 13, 2004.

Kotler, Philip (2009). Marketing Management. Pearson: Prentice-Hall. ISBN 978-81-317-1683-0.

Miller, Roger (2002). The Legal and E-Commerce Environment Today (hardcover ed.). Thomson
Learning. ISBN 0-324-06188-9. 741 pp.

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. ISBN 159420-077-7. 246 pp.

Seybold, Pat (2001). Customers.com. Crown Business Books (Random House). ISBN 0-60960772-3.