What is E-commerce?

April 25th, 2011
What is E-commerce?

Electronic commerce (commonly entitled as E-commerce) in its simplest interpretation is a new way of doing business by buying and selling services or products, that opens big perspectives in the market for any type of businesses.

In general, this term is used for all types of commercial transaction involving the transfer of information over the Internet or other computer networks.

A number of different types of businesses are covered by this term: starting from retail sites which allows consumers to exchange goods and services over the Internet with no barriers of time or distance to business exchanges between corporations.

E-commerce also includes such notions as: E-Marketing, E-Trade, E-Banking, E-Cash, E-Insurance, Electronis Data Interchange (EDI), Electronic Funds Transfer (EFS).

The Modern world's exigencies

We are living in one-of-a-kind age of a human innovation – it's time when virtual and real world successfully coexist. Whereas the older generations prefer to know the name of a shopper and to see goods by their own eyes, there are also the younger who live in the virtual world, in the social networks, getting used to live, have fun and buy online. And there are millions of them.

The reason of an incredible popularity of a virtual world is in the human's thirst for information and entertainments which is fully satisfied with the virtuality. Internet sales have appeared on a sudden as a logical step of the virtual world's development and have taken their piece of power in the world.

Electronic commerce has expanded most dynamically over the past twenty years and is predicted to continue at this rate, or even accelerate due to the impetuous increase of the Internet users amount, growing influence of the social networks and other online platforms, developing of the electronic payments systems.

How did it appear?

There are some major landmarks on the way to E-commerce in its modern look.

  • In the late 1970s electronic commerce started with using such technology as Electronic Data Interchange (EDI) and Electronic Funds Transfer (EFT) in order to facilitate commercial transactions electronically.
  • In the 1980s e-commerce has taken the form of credit cards, automated teller machines (ATM) and telephone banking.
  • Next form was the airline reservation system typified by Sabre in the USA and Travicom in the UK.
  • From the 1990s electronic commerce additionally includes enterprise resource planning systems (ERP), data mining and data warehousing.
  • In 1990, the WorldWideWeb web browser was invented and transformed into a worldwide everyman everyday communication system called internet/www.
  • By the end of 2000, many European and American business companies offered their services through the WorldWideWeb. Since a word "E-commerce" has been associated with the ability of purchasing various goods through the Internet using secure protocols and electronic payment services.

E-commerce schemas

E-commerce is divided into three acknowledged categories according to target groups of consumers.

Schema 1: B2B or Business to Business, one of the most perspective and extensively developing E-commerce trend nowadays, refers to electronic commerce between businesses. Internet platforms give an opportunity to considerably simplify all steps of the operations, make the trade more immediate. An example of a schema B2B is selling site templates to companies for using as a design base, besides any other interactions involving bulk deliveries are included.

Schema 2: B2C or Business to Consumer is when a company trades to consumer (an individual). As a rule it means retail trading. Retail web sites allow consumers to purchase by lower prices and convenience, besides it simplifies and accelerate buying products. Online shops represent an example of such type of B2C schema.

Schema 3: С2C or Consumer to Consumer supposes consummation of transactions between two consumers (individuals). Auction sites, becoming more and more popular nowadays, are an example of this schema. The main advantage of buying this way is lower price over the shop one.

View other E-commerce types

On the consumer level, electronic commerce is mostly conducted on the World Wide Web. An individual can go online to purchase anything either clothes or books, or even real estate. On the institutional level, the internet is used by corporations and financial institutions to exchange financial data . Due to this data integrity and security have become very important issues for electronic commerce.

The term of E-commerce is also closely related with shopping cart - software allowing to sell products over the Net. It is called by analogy with the real cart in the physical shopping mall, where customers collect the products to buy.

The shopping cart software also allows to place the chosen products in it, to view them later and to confirm or deny the purchase.


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"Some very important issues are mentioned here. I mean dynamic expansion, “increase of the Internet users amount, growing influence of the social networks and other online platforms, developing of the electronic payments systems.” That's really disturbing a little bit. All this things with the letter “E” are leading us to depersonalization, I guess. "


"Wow, how many types of ecommerce under View other ecommerce types link, author really did great work to pick them all. Why isn't there his name?"


"Yep, e-commerce is one more swing shovel to deepen generation's gap. My parents are always very suspicious about anything bought in the Internet."


"Hi, nice article.
I was really impressed by the words “the human's thirst for information and entertainments” - well-said."

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