E-COMMERCE In its simplest form ecommerce is the buying and selling of products and services by businesses and consumers over the Internet. People use the term "ecommerce" to describe encrypted payments on the Internet.

Sometimes these transactions include the real-time transfer of funds from buyer to seller and sometimes this is handled manually through an eft-pos terminal once a secure order is received by the merchant.

Internet sales are increasing rapidly as consumers take advantage of lower prices offer by wholesalers retailing their products. This trend is set to strengthen as web sites address consumer security and privacy concerns.

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-retailers 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.

HISTORY OF E COMMERCE

Originally, electronic commerce was identified as the facilitation of commercial transactions electronically, using technology such as Electronic Data Interchange (EDI) and Electronic Funds Transfer (EFT). These were both introduced in the late 1970s, allowing businesses to send commercial documents like purchase orders or invoices electronically. The growth and acceptance of credit cards, automated teller machines (ATM) and telephone banking in the 1980s were also forms of electronic commerce. Another form of e-commerce was the airline reservation system typified by Sabre in the USA and Travicom in the UK.

From the 1990s onwards, electronic commerce would additionally include enterprise resource planning systems (ERP), data mining and data warehousing. In 1990, 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 by NSF until 1995. Although the Internet became popular worldwide around 1994 with the adoption of Mosaic web browser, it took about five years to introduce security protocols and DSL allowing continual connection to the Internet. By the end of 2000, many European and American business companies offered their services through the World Wide Web. 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.

Time line:

1979:Michael Aldrichinventedonline shopping 1981:Thomson Holidays, UK is first B2B online shopping

1982:Minitelwas introduced nationwide inFrancebyFrance Telecomand used for online ordering.

1984:GatesheadSIS/Tescois first B2C online shopping and Mrs Snowball, 72, is the first online home shopper

1985:NissanUK sells cars and finance with credit checking to customers online from dealers' lots.

1987:Swregbegins to provide software and shareware authors means to sell their products online through an electronicMerchant account.

1990:Tim Berners-Leewrites the first web browser,WorldWideWeb, using aNeXTcomputer.

1992: Terry Brownell launches first fully graphical, iconic navigatedBulletin_board_systemonline shopping usingRoboBOARD/FX.

1994:Netscapereleases the Navigator browser in October under the code nameMozilla.Pizza Hutoffers online ordering on its Web page. The first online bank opens. Attempts to offer flower delivery and magazine subscriptions online.Adultmaterials also become commercially available, as do cars and bikes.Netscape1.0 is introduced in late 1994SSLencryption that made transactions secure.

1995: Jeff Bezos launchesAmazon.comand the first commercial-free 24 hour, internet-only radio stations, Radio HK andNetRadiostart broadcasting.DellandCiscobegin to aggressively use Internet for commercial transactions.eBayis founded by computer programmer Pierre Omidyar as AuctionWeb.

1998:Electronic postal stampscan be purchased and downloaded for printing from the Web.

1998:Alibaba Groupis established in China. And it leverage China's B2B and C2C, B2C(Taobao) market by its Authentication System.

1999:Business.comsold for US $7.5 million to eCompanies, which was purchased in 1997 for US $149,000. The peer-to-peer filesharing softwareNapsterlaunches.ATG Storeslaunches to sell decorative items for the home online.

2000: Thedot-com bust.

2002:eBayacquiresPayPalfor $1.5 billion.Niche retail companiesCSN StoresandNetShopsare founded with the concept of selling products through several targeted domains, rather than a central portal.

2003:Amazon.composts first yearly profit.

2007:Business.comacquired byR.H. Donnelleyfor $345 million.

z2009:Zappos.comacquired byAmazon.comfor $928 million.Retail Convergence, operator of private sale website RueLaLa.com, acquired byGSI Commercefor $180 million,plus up to $170 million in earn-out payments based on performance through 2012.

2010:Grouponreportedly rejects a $6 billion offer fromGoogle. Instead, the group buying websites plans to go ahead with an IPO in mid-2011.

2011: US eCommerce and Online Retail sales projected to reach $197 billion, an increase of 12 percent over 2010.Quidsi.com, parent company ofDiapers.com, acquired byAmazon.comfor $500 million in cash plus $45 million in debt and other obligations.GSI Commerce, a company specializing in creating, developing and running online shopping sites for brick and mortar brands and retailers, acquired byeBayfor $2.4 billion.

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

GOVERNMENTAL REGULATIONIn 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.

eMarketing:

There is no doubt about it the Internet has changed the world we live in. Never before has it been so easy to access information, communicate with people all over the globe and share articles, videos, photos and all manner of media.

The Internet has led to an increasingly connected environment, and the growth of Internet usage has resulted in declining distribution of traditional media: television, radio, newspapers and magazines. Marketing in this connected environment and using that connectivity to market is eMarketing.

eMarketing embraces a wide range of strategies, but what underpins successful. eMarketing is a user-centric and cohesive approach to these strategies. While the Internet and the World Wide Web have enabled what we call New Media, the theories that lead to the development of the Internet were being developed from the 1950s.

Forces fueling e-commerce:

There are at least three major forces fueling e-commerce: economic forces, marketing and customer interaction forces, and technology, particularly multimedia convergence.

Economic forces:

One of the most evident benefits of e-commerce is economic efficiency resulting from the reduction in communications costs, low-cost technological infrastructure, speedier and more economic electronic transactions with suppliers, lower global information sharing and advertising costs, and cheaper customer service alternatives.

Economic integration is either external or internal. External integration refers to the electronic networking of corporations, suppliers, customers/clients, and independent contractors into one community communicating in a virtual environment (with the Internet as medium). Internal integration, on the other hand, is the networking of the various departments within a corporation, and of business operations and processes. This allows critical business information to be stored in a digital form that can be retrieved instantly and transmitted electronically. Internal integration is best exemplified by corporate intranets. Among the companies with efficient corporate intranets are Procter and Gamble, IBM, Nestle and Intel.

Market forces.Corporations are encouraged to use e-commerce in marketing and promotion to capture international markets, both big and small. The Internet is likewise used as a medium for enhanced customer service and support. It is a lot easier for companies to provide their target consumers with more detailed product and service information using the Internet.

Technology forces.

The development of ICT is a key factor in the growth of e-commerce. For instance, technological advances in digitizing content, compression and the promotion of open systems technology have paved the way for the convergence of communication services into one single platform. This in turn has made communication more efficient, faster, easier, and more economical as the need to set up separate networks for telephone services, television broadcast, cable television, and Internet access is eliminated. From the standpoint of firms/businesses and consumers, having only one information provider means lower communications costs.

Moreover, the principle of universal access can be made more achievable with convergence. At present the high costs of installing landlines in sparsely populated rural areas is a disincentive to telecommunications companies to install telephones in these areas. Installing landlines in rural areas can become more attractive to the private sector if revenues from these landlines are not limited to local and long distance telephone charges, but also include cable TV and Internet charges. This development will ensure affordable access to information even by those in rural areas and will spare the government the trouble and cost of installing expensive landlines.

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 andtravel 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.

Most people have an understanding of commerce based on their experience as shoppers and buyers, and they bring this experience with them when they start shopping online. In order to meet the users needs, then, we must understand the typical users experience of traditional commerce.

Most problems with commerce sites are due to misunderstandings on the part of the site creators about how users understand the structure and elements of typical commerce transactions. Users have formedschemas to understand commerce , but commerce sites routinely ignore these schemas.

Commerce is a communicative transaction between two parties playing very familiar roles:buyerandseller. For commerce to occur, somebody must do the selling, and somebody must do the buying, and these two somebodies must share a basic understanding of how the transaction is generally supposed to flow. Ecommerce web sites cant simply make products available to be bought (surface it, they will buy); these sites must hold up their part of role-playing the commerce transaction.

Brandingserves as a marker of corporate identity, and so hassomevalue to the user, but the hubbub over branding misses some very important concerns that users have.

Ecommerce web sites must pay attention to how theycommunicate to users. Ecommerce sites play their role of seller by trying to broadcast two messages to potential buyers: buy from us and trust us. The impact of these explicit messages, though, is often corrupted by contradictory or distracting messages implicit in the sites implementation of navigation flow, page layout, visual continuity, and information space.

Ecommerce sites seem to shout the message that they are trustworthy, that users need have no trepidation over purchasing from these sites, but trust derives not from assertions but rather from experience and judgment. People interact, and they make judgments and form expectations of others based on what they experience and what they surmise; its a lot easier to decide to trust a merchant when you can speak to them face-to-face and shake their hand. Trusting a web site to deal with you fairly and deliver your merchandise, though, well, thats harder to do when you realize thatanyonecan build a commerce site. Ecommerce sites must work hard to build theimpression of trustworthiness.

Ecommerce is not only about buying and selling its also about the marketing activities used by the company for the revenue purpose.

Different type of market in Ecommerce are :

1. email marketing email marketing

2. Online advertising

3. Affiliate marketing

4. Search engine marketing