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Introduction to E-commerce

E-commerce combines commerce and computer technology.
Commerce** involves the exchange, transformation, buying, and selling of goods, often involving transportation.**
E-commerce is conducting business online using IT (Information Technology), including computer technology and electronic communication.
It involves buying and selling items, goods, or services on the web using electronic communication and digital information processing technology.
EDI (Electronic Data Interchange) is an early e-commerce form but was limited by cost and proprietary standards.
The Internet, especially the World Wide Web (WWW) introduced in 1989, has revolutionized e-commerce by enabling global access and easier company relations.
The digital economy is expected to surpass traditional economies in developed countries.
E-commerce involves technologies, processes, and business strategies to facilitate information exchange within and between organizations.
It strengthens relationships with buyers, attracts new customers, improves customer responsiveness, and opens global markets.
E-commerce applies communication technologies for automated exchange of business information with customers, suppliers, and financial institutions.
The Internet is essential for e-commerce, which has emerged as a result of the Internet revolution.
Business transactions occur via telecommunications networks, particularly the Internet.
It includes buying and selling products, services, and information via computer networks.
E-commerce has revolutionized customer life by enabling easy product and service purchases like magazines and movie tickets online.

Definition of E-commerce

E-commerce is rooted in the concept of commerce, which involves buying and selling goods.
'Commercial' refers to business practices aimed at generating profits.
Electronic commerce, like traditional business, involves exchanging money for goods and services.
E-commerce is the integration of telecommunications and computing technology to conduct business.
It involves creating and managing relationships between buyers and sellers, facilitated by electronic media.
Kalakota and Whintons defined E-commerce from communication, business process, service and online perspectives:
- Communication Perspective: E-commerce is the delivery of information, products/services, or payments via telecommunications channels or computer networks.
- Business Process Perspective: E-commerce involves applying technology to automate business transactions and workflows.
- Service Perspective: E-commerce cuts service costs while improving the quality of goods/services and speeding up service delivery.
- **Online Perspective: **E-commerce provides the ability to buy and sell products and information on the internet and other online services.
With the advent of the Internet, e-commerce includes:
- Electronic trading of physical goods and intangible items like information.
- All trade-related steps, such as online marketing, ordering, payment, and delivery support.
- Electronic provision of services like after-sales support or online legal advice (Zwass).
E-commerce is the integration of communications, data management, and security capabilities.
It allows business applications within different organizations to automatically exchange information related to the sale of goods and services (Daniel Minoli and Emma Minoli).
It also includes electronic support for collaboration between companies, such as online design and engineering or virtual business consultancy teams.

History of E-commerce

E-commerce has been around for about forty years.
Originally, e-commerce described conducting business transactions electronically using EDI (Electronic Data Interchange) and EFT (Electronic Funds Transfer).
EDI is viewed as the beginning of E-commerce, with large organizations investing in its development since the 1960s.
EDI involves using standards to exchange business information and conduct electronic transactions.
Early EDI had different formats, which sometimes hindered interaction between companies.
EDI allows different companies to perform electronic dealings with one another.
The Internet was conceived in 1969 by the Advanced Research Projects Agency of the Department of Defense.
The Internet could have ended up as EDI without the emergence of the World Wide Web in the 1990s.
The web became a popular mainstream medium perceived as the fourth mainstream medium in addition to print, radio and TV.
The number of web users and content increased rapidly.
The web's popularity is due to low cost access and the simplicity of HTML authoring, which contrasts with the obstacles of EDI development.
The Internet and the Web have overcome the technical difficulty of EDI but have not solved the problem of slow development of E-commerce standards.
XML (Extensible Markup Language) provides a development tool for defining data interchange formats in various business communities.
Web services offer a flexible and effective architecture for implementation.
XML and web services will shape the course of E-commerce in the future.
The development of the Mosaic Web Browser in 1992, later named Netscape, was an important phase.
Napster, an online application for sharing music files for free, influenced what consumers wanted from the industry.
The development and adaptation of DSL and Red hat Linux benefited online business transactions.
The year 2000 saw a major merge between AOL and Time Warner which marked another important step towards the development of E-commerce.
The World wide popularity of Internet has resulted in the stable development and overwhelming acceptance of E-Commerce.

Evolution of E-commerce in India

The evolution of e-commerce in India can be divided into two waves:
- First wave
- Second wave

First Wave

The introduction of the internet in India in 1995 marked the beginning of the first wave of E-Commerce in the country.
Economic liberalization after the launch of reforms in 1991 attracted MNCs and led to the growth of the IT industry.
Implementation of liberalization policies led to the demise of the license regime, high taxes and import restrictions, and facilitated the growth of SMEs.
The IT industry and SMEs were early adopters of the internet, leading to the emergence of B2B, job searches, and matrimonial portals.
India's first online B2B directory was launched in 1996, with liberalization of international trade policies accelerating its growth.
In 1996, the first online matrimonial portal was launched in India, transforming perceptions about matchmaking.
India's online recruitment industry took shape in 1997, with the growth of the services sector resulting in additional jobs.
Internet proved to be an efficient medium for employers and job seekers to connect.
Prior to job portals, weekly government magazines such as Employment News were the means for employers and seekers to interact
The IT downturn of 2000 led to the collapse of more than 1,000 e-commerce businesses in India as a result of low internet penetration, a small online shopping user base, slow internet speed, low consumer acceptance of online shopping and inadequate logistics infrastructure. There was muted activity in the space in India between 2000 and 2005.

Second Wave

Duplication of global business models and improvement in the ecosystem
The entry of Low Cost Carriers (LCCs) in the Indian aviation sector in 2005 marked the beginning of the second wave of E-Commerce in India. Travel emerged as the largest segment.
People began relying on the internet to search for travel-related information and to book tickets.
The success of the online travel segment made consumers comfortable with shopping through the medium, thus leading to the development of online retail.
Online travel: The decision of LCCs to sell their tickets online and through third parties enabled the development of Online Travel Agents (OTAs).
LCCs changed the scene by making air travel affordable for a large number of people. The Indian Railways had already implemented the e-ticket booking initiative by the time LCCS commenced their online ticket booking schemes.
The growth of online retail was partly driven by changing urban consumer lifestyle and the need for convenience of shopping at home and developed in the second wave in 2007.
Group buying: Starting in 2010, the group buying and daily deals models became a sought after space for entrepreneurs emulating the global trend.
Social networking actively used by organizations to reach out to customers and has gone on to become an integral part of people's lives.
Social networking is a key avenue for e-Commerce players to reach out to target customers.
Companies have started establishing their presence in the social media space for branding activities, connecting with customers for feedback and advertising new product launches.

Timeline 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.
1979: Michael Aldrich demonstrates the first online shopping system.
1981: Thomson Holidays UK is first business-to-business online shopping system to be installed.
1982: Minitel was introduced nationwide in France by France Telecom and used for online ordering.
1983: California State Assembly holds first hearing on computer networks, laying the groundwork for future e-commerce regulations.

1984: The first commercial online service, called CompuServe, is launched, providing a platform for email and shopping.

Scope of e- commerce-

E-commerce encompasses a wide range of activities including buying and selling products and services over the internet, as well as activities such as online banking, ticketing, and online auctions. It is facilitated by advancements in technology, growth in internet accessibility, and shifts in consumer behavior that increasingly favor digital transactions.

electronic markets- Electronic markets refer to platforms that facilitate the buying and selling of goods and services via the internet, allowing consumers to connect with businesses and each other effectively.
electronic data exchange- Electronic data exchange involves the electronic transmission of business documents and information between organizations, streamlining processes such as order processing, invoicing, and inventory management, thereby improving efficiency and accuracy in e-commerce transactions.
- benefits of EDI- Benefits of EDI include reduced processing costs, faster transaction times, improved accuracy through minimized manual entry errors, enhanced data security, and streamlined communication between trading partners.
- working of EDI- The working of EDI involves the structured and standardized exchange of data formats, where documents such as purchase orders and invoices are transmitted directly from one computer system to another, eliminating the need for paper-based processes and human intervention.
internet commerce- Internet commerce, often referred to as e-commerce, encompasses the buying and selling of goods and services over the internet, leveraging digital platforms to facilitate transactions, customer engagement, and marketing efforts.

E- Commerce v/s Traditional commerce-

The key distinctions between e-commerce and traditional commerce include accessibility, where e-commerce can reach a global audience 24/7, while traditional commerce is typically limited to physical store hours and locations; cost efficiency, as e-commerce often incurs lower overhead costs compared to physical storefronts; and customer interaction, where e-commerce allows for personalized shopping experiences through data analytics and targeted marketing, unlike the more uniform approach often seen in traditional retail.