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Introduction to E Commerce

Written By: 

Aditi Garg


Carry ‘the globe’ in your shopping bag!! It’s not exaggerating the fact if I say: the world is now coalesced to a click on our computers. Since long ago, all alluring materials around have taken an exodus to the world of internet. No often do we now think of taking a stroll through the market before buying a mobile handset, but a healthy online research which in some cases is consequently followed by an online purchase. The scenario is not limited to mobiles alone. It covers a wide range of products like home appliances, consumer electronic goods, books, apparels, travelling packages etc and even the electronic content itself.
 A Representational Image Showing 'e' for ECommerce World

Fig. 1: A Representational Image Showing 'e' for ECommerce World

What is E Commerce?
E Commerce stands for electronic commerce and caters to trading in goods and services through the electronic medium such as internet, mobile or any other computer network. It involves the use of Information and Communication Technology (ICT) and Electronic Funds Transfer (EFT) in making commerce between consumers and organizations, organization and organization or consumer and consumer. With the growing use of internet worldwide, Electronic Data Interchange (EDI) has also increased in humungous amounts and so has flourished e-commerce with the prolific virtual internet bazaar inside the digital world which is righty termed as e-malls.
We now have access to almost every knick-knack of our daily lives at competitive prices on the internet. No matter one is educated or illiterate, an urbane or a countryman, in India or in U.K; all you need is an internet connection and a green bank account. With e-commerce then, you can buy almost anything you wish for without actually touching the product physically and inquiring the salesman n number of times before placing the final order. Here is a beautiful picture depicting how has human life evolved to adapt to the digital world and hence trading over the internet. As seen, from pizza and potted plant to pair of shoes, we have everything on sale on the internet available in tempting offers..!!, Amazon, eBay, Naaptol, Myntra, etc are some of the most popular e-commerce websites.
 A Figure Depicting Evolution of Human Life to Adapt Digital World and Trading Over the Internet Through ECommerce

Fig. 2: A Figure Depicting Evolution of Human Life to Adapt Digital World and Trading Over the Internet Through ECommerce

The Breakthrough Beginners
Tracing some steps back, it’s been recorded that some institutes of the western world started exchanging information and data electronically by the late 1970s. But the concept of online trading of goods was first witnessed much later with the dawn of 1990. In 1994, Jeff Bezos; an American businessman started his e-commerce website, now popularly known as Amazon was the first online firm to execute secured online transactions. At the onset, Amazon was known as an online bookstore, but with the whelming customer-response it expanded to trading in books, music, apparels, CDs/DVDs, electronics, MP3s, videogames and many more. Running successfully, round-the-clock since 1994, surprisingly Amazon recorded its first profit in the year 2003 only. Although, Amazon proved to be a successful business model by late 2003, it’s no less than a fact stating its tremendous popularity. The ‘enriched library’, online review system and a user friendly website are still the starred assets of this e-commerce company.
Dell Inc emerged as the first company ever to record sales in millions of dollars in 1997. It was also the first company to sell large number of assembled computers online. It is popularly known for its successful business model and in the year 2007, it was listed as the 34th largest company in the Fortune500 list.


Types of E-Commerce
Divulging the types of e-commerce requires throwing some light on the narrow line of distinction between e-commerce and e-business on the first hand. While e-commerce uses ICT in making inter-business, inter-organizational and business-to-consumer transactions, e-business is a broader term and uses technology in enhancing one’s business. It concentrates on adding customer value by using digital media.
E-Commerce can be classified into the following categories:
·         B2B e-commerce - B2B or business-to-business is the type of e-commerce in which the trading takes place between two businesses or organizations/companies without the involvement of consumer. The product may then be sold to the consumer by any of the organization under its brand name. For example, a car manufacturer may purchase some of its accessories from another company and then sell the finished product to its customers. Another, direct specimen is HP and Intel. HP computers are integrated with processors made by Intel. A majority of such deals occurs over the internet. A lot of revenue in e-commerce is garnered from B2B type of internet commerce. 
·         B2C e-commerce - In recent times, B2C or business-to-consumer e-commerce has grown into the most popular and prolific form of online trade. It is commerce between businesses and consumers. It is more commonly known as online retailing and involves customers purchasing goods and services online., Dell computers,, Travelocity, etc are some of the flourishing examples of B2C e-commerce. B2C e-commerce has facilitated a click and drag online store in place of the conventional brick and mortar retailing stores. It has reduced transaction costs by increasing consumers’ access to information thereby easing the whole procedure of buying and selling goods and services. Consumers can now easily compare various features offered by different brands over the same product and add genuineness to their decision. In addition to this, we also have some good online reviewers like rotten tomatoes, top10reviews, etc, that provides online reviews for various products and services and helps consumers in making a best buy both online as well as offline.
·         B2G e-commerce - B2G stands for business-to-government e-commerce. When the commerce takes place between companies and some government organization, it is called as business-to-government commerce. These types of transactions are usually undertaken in public interest in order to make the system more transparent and fidel.
·         C2C e-commerce - Consumer-to-consumer commerce is the trade between two consumers or private individuals. C2C transactions bear an analogy with the traditional trading methods corresponding to classified ads, auctions and other vertical industries. Popular websites facilitating C2C e-commerce are eBay,, Napster, etc. The consumer commerce over online bazaar helps buyers to negotiate and buy at a selective price.
·          M-commerce - M-commerce or mobile commerce is the budding area of digital commerce which uses wireless technology for online trading. Cellular telephones, tablets, personal digital assistants and other handheld devices are used for m-commerce. This imminent source of electronic commerce facilitates a faster, cheaper, easily accessible and more secure method for exchange of goods and services. Mobile commerce has stimulated other useful applications such as mobile/SMS banking, e-recharge, application development and many more.


Conceptual Framework
Internet economy is a broader term which includes both e-commerce and e-business. There are various elements governing the process of online trading of goods and services. These elements are classified as different layers as per the framework given by Center for Research and Electronic Commerce (CREC) at the University of Texas in the following manner:
1.      Layer1- Internet and Network Infrastructure
This layer is facilitated by the companies that provide enabling hardware, software and networking devices for the internet, internet service providers (ISPs), fiber optic cable makers, PC manufacturers, etc. Examples for such providers include CISCO, AT&T, AOL, etc. This layer also deals with the network framework which establishes an effective connection between the buyer and the supplier. The network lattice on which the internet works today is based on packet switching technique. In this technique, the message is broken down into small packets. Every packet bears the address of its source and destination. This way the message enjoys a flexible and faster medium of communication. These packets are then assembled in order at the destination computer for ultimate delivery. The internet infrastructure works under the governance of certain protocols. These set of rules and regulations are collectively termed as TCP/IP protocol. Here TCP stands for Transmission Control protocol and IP signify Internet protocol.
2.      Layer2- Internet Applications Infrastructure
This layer is facilitated by companies that design software products for buyer’s web- interface with the seller. Integrity at this layer enables a secure online transaction. Such companies comprise IBM, Adobe, Oracle, TCS, etc. These companies provide web development design and consultancy services to various online businesses. It is at this layer where the type of e-commerce is determined.
3.      Layer3- Internet Intermediaries
This layer facilitates the real scenario of e-commerce. It includes companies that establish links between the buyers and the sellers by creating the virtual market where the online trading takes place. It interfaces the application layer to the users. Interactive catalogs and directory support services are examples of this layer. While the interactive catalog deals with people, the directory catalog deal interacts directly with software applications. Online travel agents like Travelocity; Content Aggregators like Yahoo! and Google, etc are examples of such intermediaries.  
4.      Layer4- Internet Commerce
This layer is facilitated by companies that sell products or services directly to consumers and businesses. These companies include the online retailers or the E-tailers like Amazon, Dell, eBay, etc.
 A Figure Depicting 4th Level of Conceptual ECommerce Framework Facilitated By Companies Selling Products Directly to Businesses

Fig. 3: A Figure Depicting 4th Level of Conceptual ECommerce Framework Facilitated By Companies Selling Products Directly to Businesses and Customers


Applications of e-commerce
The development in e-commerce industry has fuelled growth in many other industries as well in parallel.
·         E-banking - E-banking or internet banking is a sophisticated form of banking which facilitates consumers to make monetary transactions online using their existing bank accounts, credit cards, debit cards, ATM cards or stored-value cards. One can view his/her account details, transfer funds, make payments, and take mini statements for account history. The Electronic Payment System (EPS) via e-banking completes the loop of e-commerce by making payment thereby assuring sellers of the buyers and vice versa. It facilitates a secure and swift payment gateway for any online transaction. The huge input and public response for e-commerce has prompted almost every public and private bank to be visibly active in the online market also.
·         Shipping industry - If there is one industry which stands to gain with the growing spirit of electronic commerce, its shipping and courier industry for sure. E-commerce had instigated the establishment and growth of international and national shipping firms. FedEx (FDS) and United Parcel Service (UPS) are two of the major shipping companies responsible for shipping a large sector of online purchase.
·         Electronic Media - Visibly present as newspapers and news channels round the globe since years, the print media has steadily but beautifully occupied the digital world with the growth of internet users and internet economy hence, in recent times. In comparison to the on-paper news, electronic newspaper can give latest/current news readily available at a click.
·         Electronic Auctions - The brick and mortar trading stores have witnessed an innovative approach for making goods available at a market-negotiated price; called auction. The internet has added a new dimension to this area as in E-Auction where buyers and sellers can bid online and trade in a wide range of products., Olx, and are some of the popular e-auction websites.
Latest Trends and Future Scope
1.      The social media buzz, needless to mention is a seraphic area for maximizing e-commerce. More and more businesses are available on SN sites to build as well as promote their brand names on the e-bazaar. Integrating the facebook applications such as ‘like’ and ‘share’ is the favorite customization for e-commerce websites these days.
2.      Search engine optimization for e-commerce website.
3.      With the rising use of internet on mobile handsets, development of mobile specific websites is a god idea to promote m-commerce.


THANK YOU SO MUCH.......smiley

nice one....

I also like to say admit that most of the market is get covered by the online marketing. We used to sell or buy product online and only because of that e-Commerce Market in India 2013 showing a big contribution in the economy. You can find the all the research reports related to that at

Thanks for sharing the interesting, simple and description defination of eCommerce. I have never read before. Nowadays, a large amount of ecommerce websites are developing in Magento CMS. Despite the fact that administrative panel does not differ simple controls in magento ecommerce, you'll be able to understand it for a couple days. Megento ecommerce development

Edward I agree with you. No doubt, Magento is the best CMS for eCommerce but this is also the fact that its a complicated CMS. A man who don't have programming background can never easily handle it. In the other hand, now wordpress has much developed even you can design any kind of website i.e eCommerce website or an online store and easily manage it. Various agencies are developing these kind of projects like wordpress website developers Anyways, thanks for your nice job.

indecisionThank you so much for your helping us in the stream of eommerce


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