What is E-commerce? Definition of E-commerce?

What is E-commerce? Definition of E-commerce?

Ecommerce is online transaction (buying and selling) of goods and services via mobile and internet.

When does E-commerce start? Timeline of E-commerce? Evolution of E-commerce?

In 1972 the students from university of California and MIT Massachusetts conducted first online transaction. The Stanford students sold tiny amount of Marijuana using the Arpanet account at Stanford Artificial Intelligence Laboratory.

In 1979 Michael Aldrich developed the first online shopping system. He connected a domestic television via telephone line to convert it a real time transaction processing computer which was called teleshopping.

The first business to business online shopping system Thomson Holidays UK installed in 1981.

Mintel an online service accessible by phone lines was used to buy online, books train tickets, chat, check stock prices etc.

In 1984 the world first B2C (Business to Consumer) online shopping system was introduced by Tesco. Jane Snowball became first home shopper at the age of 72 when she became Tesco customer.

In the year 1990 the first web browser called World Wide Web later changed into Nexus launched by Tim Berners Lee.

1991 NSF (National Science Foundation) opens the internet for commercial use.

11 August 1994 the first secure online purchase was a Sting CD Sold by US retailer, NetMarket.

1995 Jeff Bezos launched the Amazon.com; it was the first site in US which started to sell books online.

Auction Web was created in 1995 by Pierre Omidyar which name was changed into 1997 and become eBay.

M-Commerce is new trend of E-commerce was launched in London in 1997 by Kelvin Duffey.

In 1998 the Paypal under the name Confinity (a combination of confidence and infinity) a money transfer service was founded byMax Levchin, Peter Thiel, Luke Nosek and Ken Howrey.

Where and who use E-commerce?

According to purpose we use two parameters to classify the e-commerce into categories

Types of goods sold

Nature of participants

Types of goods sold: E-commerce business sell a variety of goods such as

  • Physical goods such as food and beverages, gadgets,  appliances, apparel and fashion accessories, furniture, hand make and custom products, beauty and personal care products
  • Digital and informative products like software, music, educational products, online courses, images, video, e-books
  • Online services of selling tickets, insurance, banking consulting, education coaching, treatment, remote technical support, SEO consultant, Online marketing services, Web design and development.

Nature of participants:  There are 6 types of e-commerce business

Business to Business (B2B): In this model   transactions are between two business and companies. Two companies exchange goods, services and information between them. This is also called e-biz. The examples of B2B business are

  • Services provider companies like software companies, document hosting companies, brokering companies.
  • Sell or resell the goods produced by the other manufacturer e.g. retailer.
  • Transaction between two companies for manufacture the products like raw material.

Business to Consumer (B2C): This is widely used type of business in which companies offer their product, goods or services for sale online. On web site the customers view the product, place order and make payment on the web site or at the time of delivery. After receiving the order specification, companies process the order, send products to the consumer. Famous example of this model is Amazon.com, Walmart etc

Consumer to Business (C2B): It is a type of commerce in which a consumer offers his product or services to organizations. Example of such is online job board website where the job seeker places his requirement and services and companies bid for the services. Other examples Market research (Online Survey, interviews), Consumer feedback channels (rating, reviews, customer service lines), social media (user communities, Facebook pages, Twitter followings) etc.

Consumer to Consumer (C2C): The purpose of this to provide a platform so that a consumer can sale its products and services to another consumer. Some example of this eBay, Olx etc, where a consumer advertise his product and service for sale and other consumer buy them online.

Business to Administration (B2A): Here Administration refers to government or public administration.

In this e-commerce include all online transactions between companies and public administration or government. The services are social security, legal documents and registers etc.

Consumer to Administration (C2A): Here the consumer offers his product or services for sale to the Administration/Government. Examples are teachers offer distance learning services, use electronic means to transmit payments, file tax return, payment of bill, payment of insurance etc.

How E-commerce works? Process of E-commerce?

Typical process of e-commerce observe the following steps

1: The user land on a website to place an order. The different products and categories are displayed on the website that is loaded in the website database.

2: Customer can create an account and place the items in the cart and place an order.

3: The web browser communicates back and forth on internet with web server that manages the store’s website.

4: Web server sends order to order manager; order manager queries the database to find out the required product of the customer.

5: If the item is not in the stock, the stock database can order new supplies from the wholesalers or manufacturer. If stock database confirms the stock of desired products, the order manager continue the process.

6: Next step is to communicate with merchant system to take payments using the customer credit or debit card number.

7: Merchant system check whether bank account has enough fund, after confirmation by the bank computer, merchant system authorized the transaction for further process.

8:The order  manager confirm the transaction success and web server shows the customer a web page that confirms the order has been proceeded and transaction is completed.

9: Order manager orders the warehouse to dispatch the goods, after dispatching the goods an email is sent to the customer about dispatching the products.

10: The goods are delivered to the customer.

Why E-commerce? Benefits of E-commerce? Advantages of E-commerce?

Today in the era of technology and world have become a global village, the e-commerce has huge impact on business to flourish worldwide. The advantages that we get from e-commerce are

  • E-commerce can expand your brand name and business worldwide.
  • Search Engines helps to gain new customers and new markets for your product.
  • The products reach more customers by using e-commerce.
  • Store and product promotion becomes easy, affordable and effective.
  • E-commerce breaks the barriers of the hourly rate.
  • E-commerce free the business from geographical limits.
  • The cost of inventory management reduced a lot.
  • Keep an eye on changing consumer habits and trends with the help of e-commerce.
  • Sell  and advertise your products using different channels like the commercial website, social media pages, and forums
  • E-commerce provides scalability and growth to the business.
  • It saves cost of establishing physical store, insurance or setup infrastructure.

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