What is e-commerce?
e-commerce or electronic commerce is a type of business conducted through the internet. All elements of the business, like the transfer of money and data needed to execute the transactions, are done electronically. The term refers to the sale of physical products online. But it also covers commercial transactions facilitated through the internet.
The World Wide Web was created in 1994, and the world’s first-ever e-commerce transaction happened soon after that in August 1994, when a person sold Ten Summoner’s Tales, a musical CD by Sting through NetMarket, an American retail platform. The New York Times considered this as the world’s first retail online transaction.
Since then, e-commerce has developed at a frantic pace. The global retail ecommerce sales are projected to reach $27 trillion by the end of 2020.
Types of e-commerce Businesses:
- B2C – Business-to-Consumer – Transactions happen between businesses and consumers. This is the most commonly used e-commerce business model.
- B2B – Business-to-Business – Transactions happen between two or more businesses, such as a manufacturer and supplier or a wholesaler and a retailer.
- C2C – Consumer-to-Consumer – Relates to the sale of products/services between consumers. eBay is a fine example of C2C e-commerce model.
- C2B – Consumer-to-Business – It’s the reverse of the conventional e-commerce model in which consumers make their products/services available to businesses.
Apart from the above, there are also the B2A (Business to Administration) and C2A (Consumer to Administration) models of an e-commerce business. Both these models are focused on improving administrative efficiency with the support of information technology.
The Evolution of e-commerce:
1994 – The first web browser launched:
The Netscape Navigator was launched as a browsing tool by Marc Andreessen and Jim Clark. It was primarily used on the Windows platform during the 90s.
1995 – Launch of Amazon and eBay:
Amazon was introduced to the world as a book-specific e-commerce platform by Jeff Bezos. At around the same time, Pierre Omidyar launched AuctionWeb, an online auction site that became massively popular as eBay later.
1998 – PayPal debuts as the first online payment system
This was one of the critical developments in the e-commerce evolution process. PayPal, as a money transfer tool, gave real shape to e-commerce transactions.
1999 – Alibaba Online launched as an online marketplace
The biggest e-commerce store was launched in China with $25 million-plus funding. Today it is a B2B, B2C, and C2C platform and ranks high in terms of sales, revenue, and profitability.
The Dazzling Progress
The progress in the e-commerce industry was dizzying from here on. Consumers could buy anything they needed in a few clicks. The payment processes were becoming more secure. Suppliers and delivery companies were falling over each other to grab sales with unbelievable offers loaded in favour of buyers. All these developments gave the e-commerce industry a huge shot in the arm during the late 90s and early 2000.
- In 2001, 70 per cent of consumers with an internet connection used e-commerce to purchase online during the holiday season.
- In 2005, Cyber Monday broke all records to register one of the biggest online shopping sales of the year
- In 2008, online purchases were made using mobile devices for the first time
- In 2012, B2C sales surpassed $ one trillion globally
Several developments took place in the intervening years that helped the e-commerce industry make incredible progress. Google launched its online wallet payment app in 2011, and in 2014 Apple too jumped into the fray with Apple Pay. Instagram made it easy for users to sell directly from its platform with its shoppable tags. And the Cyber Monday success story continued. In 2017, sales exceeded a whopping $6.5 billion.
The e-commerce industry is on a constant path of evolution, embracing emerging technologies to make it easy for consumers and businesses to have a smooth and secure experience during transactions. Logistics has also evolved with the introduction of Artificial Intelligence and Automation tools. The emergence of Social Media has also helped brands and buyers make informed decisions.
The future of e-commerce looks extremely positive and buoyant as more and more consumers prefer shopping online globally. In the coming years, new sales and revenue records will be created as the industry shows no signs of slowing down.