Electronic commerce which is also known as electronic marketing or e-commerce or e-commerce comprises of selling and buying of services or products through electronic systems such as internet and computer networks. The amount of business carried out electronically has increased extraordinarily with worldwide spread of internet use.
The ground-breaking components of electronic commerce include Online Transaction Processing, Electronic Fund Transfer, Internet Marketing, Electronic Data Interchange (EDI), Supply Chain Management and Automated Data Collection (ADC) System. World Wide Web is the modern tool of electronic commerce at least at one point in the commercial transaction. However, it consists of very wider range of technologies like E-Mail.
Electronic commerce and business:
A great percentage of electronic in conducted for transportation of physical goods, but most electronic commerce involves access to finest content on a website for virtual items as well. Online retailers are most commonly known as e-tailers and online retail is well-known as e-tail. Mostly all big retailers have their presence on the World Wide Web (WWW) through electronic commerce.
Conduction of electronic commerce between different businesses is recognized as Business to Business or B2B. Business to Business can always be open for all concerned parties for example commodity exchange and limited to pre-qualified, definite participants such as private electronic market. On other hand, conduction of electronic commerce between businesses and consumer is referred to as Business to Consumer or B2C. This kind of electronic commerce is performed by big companies like Amazon.com.
Electronic commerce is mainly use for sales aspect of e-business. It also includes exchange of data to allow the payment and financial aspects of the transaction in business.
History and early development of electronic commerce:
Over the period of last thirty years, the meaning of electronic commerce has been totally transformed. Initially, electronic commerce was used for facilitation of electronic commercial transactions by using Electronic Funds Transfer (EFT) and Electronic Data Interchange (EDI) technology. These technologies were invented in the 1990s to allow businesses for electronic exchange various commercial documents like invoices and purchase orders.
The development and acceptance of other forms of electronic commerce such as Automated Teller Machines (ATM), credit cards and telephone banking were took place in 1980s. Another revolutionary tool of electronic commerce was reservation in airline systems popularly known as Sabre and Tavicom in the USA and UK respectively.
Online shopping system introduced by Michael Aldrich in the UK in 1979, was one of the significant component of electronic commerce. Later on big retail and auto companies made extensive use of electronic commerce by Aldrich system of online shopping. The limitation of the Aldrich system was that it was based on dial up and leased telephone lines. It had no broadband capability.
World Wide Web (WWW) was invented by Tim Burners in 1990 and changed the network of academic telecommunication into the system of everyday everyman worldwide communication known as internet. Some of the other important tools like Data Mining, Data Warehousing and Enterprise Resource Planning (ERP) System were introduced in electronic commerce during 1990s as well.
After 2000, many western companies started offering their services and products through World Wide Web (WWW). Since then people started to associate with a word “Electronic Commerce” with the potential to purchase different products and services through the internet.