E-commerce

Electronic commerce, commonly known as e-commerce, eCommerce or e-comm, refers to the buying and selling of products or services over electronic systems such as the Internet and other computer networks. However, the term may refer to more than just buying and selling products online. It also includes the entire online process of developing, marketing, selling, delivering, servicing and paying for products and services. 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 one point in the transaction's life-cycle, although it may encompass a wider range of technologies such as e-mail, mobile devices and telephones as well.

A large percentage of electronic commerce is conducted entirely in electronic form for virtual items such as access to premium content on a website, but mostly electronic commerce involves the transportation of physical items in some way. Online retailers are sometimes known as e-tailers and online retail is sometimes known as e-tail. Almost all big retailers are now electronically present on the World Wide Web.

Electronic commerce that takes place between businesses is referred to as business-to-business or B2B. B2B can be open to all interested parties (e.g. commodity exchange) or limited to specific, pre-qualified participants (private electronic market). Electronic commerce that takes place between businesses and consumers, on the other hand, is referred to as business-to-consumer or B2C. This is the type of electronic commerce conducted by companies such as Amazon.com. Online shopping is a form of electronic commerce where the buyer is directly online to the seller's computer usually via the internet. There is no intermediary service involved. The sale or purchase transaction is completed electronically and interactively in real-time such as in Amazon.com for new books. However in some cases, an intermediary may be present in a sale or purchase transaction such as the transactions on eBay.com.

Electronic commerce is generally considered to be the sales aspect of e-business. It also consists of the exchange of data to facilitate the financing and payment aspects of business transactions.

HELLO SONIC

Business applications

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

Some common applications related to electronic commerce are the following:

• Document automation in supply chain and logistics
• Domestic and international payment systems
• Enterprise content management
• Group buying
• Automated online assistants
• Instant messaging
• Newsgroups
• Online shopping and order tracking
• Online banking
• Online office suites
• Shopping cart software
• Teleconferencing
• Electronic tickets
• online subscribes

Governmental regulation

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 2003 establishes 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. 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. 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.

Forms

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.

Global trends

Business models across the world also continue to change drastically with the advent of eCommerce and this change is not just restricted to USA. Other countries are also contributing to the growth of eCommerce. For example, the United Kingdom has the biggest e-commerce market in the world when measured by the amount spent per capita, even higher than the USA. The internet economy in UK is likely to grow by 10% between 2010 to 2015. This has led to changing dynamics for the advertising industry

Amongst emerging economies, China's eCommerce presence continues to expand. 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. E-Commerce has become an important tool for businesses worldwide not only to sell to customers but also to engage them.

Impact on markets and retailers

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 e-commerce, bookshops and travel agencies. Generally, larger firms have grown at the expense of smaller ones, as they 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.

E-commerce types

E-commerce types represent a range of various schemas of transactions which are distinguished according to their participants.

• Business-to-business (B2B)
• Business-to-consumer (B2C)
• Business-to-employee (B2E)
• Business-to-government (B2G) (also known as Business to Administration or B2A)
• Business-to-machines (B2M)
• Business-to-manager (B2M)
• Consumer-to-business (C2B)
• Consumer-to-consumer (С2C)
• Citizen-to-government (also known as consumer-to-administration or C2A)
• Government-to-business (G2B)
• Government-to-citizen (G2C)
• Government-to-employee (G2E)
• Government-to-government (G2G)
• Manager-to-consumer (M2C)
• Peer-to-peer (P2P)

Distribution channels

E-commerce has grown in importance as companies have adopted Pure-Click and Brick and Click channel systems. We can distinguish between pure-click and brick and click channel system adopted by companies.

• Pure-Click companies are those that have launched a website without any previous existence as a firm. It is imperative that such companies must set up and operate their e-commerce websites very carefully. Customer service is of paramount importance.
• Brick and Click companies are those existing companies that have added an online site for e-commerce. Initially, Brick and Click companies were skeptical whether or not to add an online e-commerce channel for fear that selling their products might produce channel conflict with their off-line retailers, agents, or their own stores. However, they eventually added internet to their distribution channel portfolio after seeing how much business their online competitors were generating.

See also

• Comparison of shopping cart software
• Digital economy
• Dot-com company
• e-Government
• Electronic money
• List of free and open source eCommerce software
• Multichannel ecommerce
• Non-store retailing
• Online marketplace
• Paid content
• Virtual economy

References

• Chaudhury, Abijit (2002). e-Business and e-Commerce Infrastructure. McGraw-Hill. ISBN 0-07-247875-6. {{cite book}}: Unknown parameter |coauthors= ignored (|author= suggested) (help)
• Frieden, Jonathan D.; Roche, Sean Patrick (2006-12-19). "E-Commerce: Legal Issues of the Online Retailer in Virginia" (PDF). Richmond Journal of Law & 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.1749-8198.2008.00093.x.
• Kessler, M. (2003). More shoppers proceed to checkout online. Retrieved January 13, 2004
• 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. pp. 246 pages. ISBN 1-59420-077-7.
• Seybold, Pat (2001). Customers.com. Crown Business Books (Random House). ISBN 0-609-60772-3.
• Miller, Roger (2002). The Legal and E-Commerce Environment Today (Hardcover ed.). Thomson Learning. pp. 741 pages. ISBN 0-324-06188-9.
• Kotler, Philip (2009). Marketing Management. Pearson:Prentice-Hall. ISBN 978-81-317-1683-0.

External links

E-Commerce and E-Business at Wikibooks

• US Small Business Guide to E-Commerce Laws and Regulations