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coMMERCE

commerce, commonly known as e-commerce or eCommerce, consists of the buying and selling of products or services over electronic systems such as the Internet and other computer networks. The amount of trade conducted electronically has grown extraordinarily with widespread Internet usage. The use of commerce is conducted in this way, spurring and drawing on innovations in 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 at least at some point in the transaction's lifecycle, although it can encompass a wider range of technologies such as e-mail as well.

Electronic commerce is generally considered to be the sales aspect of ebusiness. Online retailers are sometimes known as etailers and online retail is sometimes known as e-tail. but most electronic commerce involves the transportation of physical items in some way.com for new books. Almost all big retailers have electronic commerce presence on the World Wide Web.com. is referred to as business-toconsumer or B2C. If an intermediary is present. The sale and purchase transaction is completed electronically and interactively in real-time such as Amazon. There is no intermediary service. pre-qualified participants (private electronic market). commodity exchange) or limited to specific. Electronic commerce that is conducted between businesses and consumers. This is the type of electronic commerce conducted by companies such as Amazon.g. . B2B can be open to all interested parties (e. Electronic commerce that is conducted between businesses is referred to as business-to-business or B2B.A large percentage of electronic commerce is conducted entirely electronically for virtual items such as access to premium content on a website.com. Online shopping is a form of electronic commerce where the buyer is directly online to the seller's computer usually via the internet. It also consists of the exchange of data to facilitate the financing and payment aspects of the business transactions. on the other hand. then the sale and purchase transaction is called electronic commerce such as eBay.

it took about five years to introduce security protocols and DSL allowing continual connection to the Internet. These were both introduced in the late 1970s. electronic commerce was identified as the facilitation of commercial transactions electronically. automated teller machines (ATM) and telephone banking in the 1980s were also forms of electronic commerce. . Since then people began to associate a word "ecommerce" with the ability of purchasing various goods through the Internet using secure protocols and electronic payment services. The growth and acceptance of credit cards. using technology such as Electronic Data Interchange (EDI) and Electronic Funds Transfer (EFT).History Early development Originally. From the 1990s onwards. By the end of 2000. Tim Berners-Lee invented the WorldWideWeb web browser and transformed an academic telecommunication network into a worldwide everyman everyday communication system called internet/www. Commercial enterprise on the Internet was strictly prohibited until 1991.[1] Although the Internet became popular worldwide around 1994 when the first internet online shopping started. many European and American business companies offered their services through the World Wide Web. Another form of e-commerce was the airline reservation system typified by Sabre in the USA and Travicom in the UK. allowing businesses to send commercial documents like purchase orders or invoices electronically. electronic commerce would additionally include enterprise resource planning systems (ERP). In 1990. data mining and data warehousing.

 1990: Tim Berners-Lee writes the first web browser.  1984: Gateshead SIS/Tesco is first B2C online shopping and Mrs Snowball. is the first online home shopper  1985: Nissan UK sells cars and finance with credit checking to customers online from dealers' lots. . internet-only radio stations. Adult materials also become commercially available.  1994: Netscape releases the Navigator browser in October under the code name Mozilla. The first online bank opens. WorldWideWeb.com and the first commercial-free 24 hour.  1995: Jeff Bezos launches Amazon. UK is first B2B online shopping 1982: Minitel was introduced nationwide in France by France Telecom and used for online ordering. Attempts to offer flower delivery and magazine subscriptions online.  1987: Swreg begins to provide software and shareware authors means to sell their products online through an electronic Merchant account. Dell and Cisco begin to aggressively use Internet for commercial transactions. Pizza Hut offers online ordering on its Web page. Radio HK and NetRadio start broadcasting.0 is introduced in late 1994 SSL encryption that made transactions secure. as do cars and bikes.Timeline    1979: Michael Aldrich invented online shopping 1981: Thomson Holidays. Netscape 1. 72. eBay is founded by computer programmer Pierre Omidyar as AuctionWeb. using a NeXT computer.

com sold for US $7.  1999: Business.H.[3] 2009: Zappos. Niche retail companies CSN Stores and NetShops are founded with the concept of selling products through several targeted domains.[4] Retail Convergence. The peer-to-peer filesharing software Napster launches. plus up to $170 million in earn-out payments based on performance through 2012. operator of private sale website RueLaLa. which was purchased in 1997 for US $149.com acquired by Amazon. Business applications Some common applications related to electronic commerce are the following:      Email Enterprise content management Instant messaging Newsgroups Online shopping and order tracking . 2007: Business.    2003: Amazon.com.000. acquired by GSI Commerce for $180 million.  2010: US eCommerce and Online Retail sales projected to reach $173 billion.com posts first yearly profit.5 billion.   2000: The dot-com bust.com for $928 million. Donnelley for $345 million. an increase of 7 percent over 2009.com acquired by R.5 million to eCompanies. rather than a central portal. 1998: Electronic postal stamps can be purchased and downloaded for printing from the Web. ATG Stores launches to sell decorative items for the home online. 2002: eBay acquires PayPal for $1.

As result. the FTC has brought a number of cases to enforce the promises in corporate privacy statements. The Ryan Haight Online Pharmacy Consumer Protection Act of 2008. including online advertising. These activities include the use of commercial e-mails.[7] Using its authority under Section 5 of the FTC Act. which came into law in 2008.      Online banking Online office suites Domestic and international payment systems Shopping cart software Teleconferencing Electronic tickets Government regulations In the United States. any corporate privacy policy related to e-commerce activity may be subject to enforcement by the FTC. to ordering conventional . The CANSPAM Act of 2003 establishes national standards for direct marketing over email. amends the Controlled Substances Act to address online pharmacies. some electronic commerce activities are regulated by the Federal Trade Commission (FTC). Forms Contemporary electronic commerce involves everything from ordering "digital" content for immediate online consumption. The Federal Trade Commission Act regulates all forms of advertising. online advertising and consumer privacy. and states that advertising must be truthful and non-deceptive. including promises about the security of consumers’ personal information. which prohibits unfair or deceptive practices.

and initiating wire payment to another country. to "meta" services to facilitate other types of electronic commerce. Another example would be online banking. to expensive items like real estate. buying stocks. electronic commerce is mostly conducted on the World Wide Web. Generally. Impact on markets and retailers . bookshops and travel agencies. Economists have theorised that e-commerce ought to lead to intensified price competition. Data integrity and security are very hot and pressing issues for electronic commerce. The lone exception to this pattern has been the . All of these activities can be done with a few strokes of the keyboard. online bill payments. larger firms have grown at the expense of smaller ones.e. On the consumer level. An individual can go online to purchase anything from books or groceries. On the institutional level. i. as they are able to use economies of scale and offer lower prices. as it increases consumers' ability to gather information about products and prices.goods and services. transferring funds from one account to another. big corporations and financial institutions use the internet to exchange financial data to facilitate domestic and international business. 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.

the US recession has taken its toll on online sales. e-commerce has grown into a huge industry with US online retail generating $175B in revenues in 2007. e-commerce has boomed.[3] In the last decade. the ecommerce marketplace. with consumer-driven (B2C) online transactions impacting industries from travel services to consumer electronics. With more than 70% of Americans using the Internet on a daily basis for private and/or business use and the rest of the world also beginning to catch on. Research by ComScore shows sales declining by 1% for the first 49 days of the holiday season. from books and media distribution to sports & fitness.[2] 2008 holiday sales showed the first decrease in the last 7 years. This effect is most pronounced in travel services and consumer electronics. many startup e-commerce companies have rapidly stolen market share from traditional retailers and service providers.very smallest category of bookseller. online leisure travel bookings reached about . and it has become the virtual main street of the world. According to comScore. which appear to have withstood the trend The Internet has created a new economic ecosystem. Today. e-commerce's global growth curve is not likely to taper off anytime soon. However. Providing a quick and convenient way of exchanging goods and services both regionally and globally. pressuring these established traditional players to deploy their own commerce websites or to alter company strategy in retaliation. Although early 2008 estimates by Forrester Research were very strong with 2008 revenues upwards of $204B (a 17% growth rate). shops with between one and four employees.

accounted for nearly $26B of worldwide e-commerce sales occurring in 2006. which includes the purchase of digital cameras. As a consequence of e-commerce vendor gains. according to the NPD Group. Clearly. they will likely see continued declines in their revenues. They have lower operating expenses and better inventory management due to operating in a virtual commerce environment. or 44% of all online sales. operating margins. Consumer electronics. which were around $122B in the same year. mobile phones. Roughly 30% of all travel bookings currently occur online. generates revenue per employee of only $270k. It is important to note that most e-commerce players are at a competitive advantage to retailers. Best Buy (BBY). and home PC's. financial transaction processors and parcel shipping companies are among ancillary vendors who will gain. Amazon. For example.$51B in 2005. As traditional brick and mortar firms continue to lose market share to e-commerce players. and profits.com (AMZN) has revenue per employee of nearly $850k while its retail counterpart. e-commerce vendors will have the most to gain if they successfully disrupt retail customer acquisition. . disintermediate distributors/resellers. and underprice retail establishments.

The recession beginning in 2008 has slowed e-commerce. and one which is carefully being watched by many stakeholders. The taxation situation is a dynamic one. At a micro level. E-commerce Drivers There are several key drivers the growth of e-commerce The economy.. Online Taxation Several proposals have been made at the U. . if adopted. but overall sales are still growing. overall economic activity . it is more expensive driving to the offline retail store than shopping online. These proposals. state and local level that would impose additional taxes on the sale of goods and services through the Internet.g. for instance. The U. and retail spending At a macro level.total retail spending and change in consumer life style are in general are key drivers to the growth of e-commerce. e.2005-2006: E-commerce continues to seize market share from traditional retailers in the US. federal government's moratorium on states and other local authorities imposing access or discriminatory taxes on the Internet expired in November 2007. could substantially impair the growth of e-commerce. rising oil prices and gasoline costs could benefit e-commerce players. US online retail sales grew 11% in Q1 2008 compared to a growth of 16.S. consumer spending.9% in Q1 2007.S.