E-commerce


E-commerce refers to commercial activities including the electronic buying or selling products and services which are conducted on online platforms or over the Internet. E-commerce draws on technologies such as mobile commerce, electronic funds transfer, supply chain management, Internet marketing, online transaction processing, electronic data interchange, inventory management systems, and automated data collection systems. E-commerce is a part of retail. It is the largest segment of the electronics industry and is in turn driven by the technological advances of the semiconductor industry.

Defining e-commerce

The term was coined and first employed by Robert Jacobson, Principal Consultant to the California State Assembly's Utilities & Commerce Committee, in the title and text of California's Electronic Commerce Act, carried by the late Committee Chairwoman Gwen Moore and enacted in 1984.
E-commerce typically uses the web for at least a part of a transaction's life cycle although it may also use other technologies such as e-mail. Typical e-commerce transactions include the purchase of products or services. There are three areas of e-commerce: online retailing, electronic markets, and online auctions. E-commerce is supported by electronic business. The existence value of e-commerce is to allow consumers to shop online and pay online through the Internet, saving the time and space of customers and enterprises, greatly improving transaction efficiency, especially for busy office workers, and also saving a lot of valuable time.
E-commerce businesses may also employ some or all of the following:
  • Online shopping for retail sales direct to consumers via web sites and mobile apps, conversational commerce via live chat, chatbots, and voice assistants.
  • Providing or participating in online marketplaces, which process third-party business-to-consumer or consumer-to-consumer sales. Drop shipping is commonplace in such operations.
  • Business-to-business buying and selling. B2B, or what is referred to as business-to-business is defined by the Cambridge dictionary as business arrangements or trade between different businesses, rather than between businesses and the general public.
  • Direct-to-Consumer sales, in which manufactures or brands sell directly to end customers without traditional retail intermediaries. This model has expanded rapidly with the growth of digital storefronts and social commerce platforms such as Shopify, TikTok Shop, and Instagram Checkout.
  • Data-driven marketing, gathering demographic and behavioral data through web analytics and social media.
  • B2B electronic data interchange.
  • Marketing to prospective and established customers by e-mail or fax.
  • Engaging in pretail for launching new products and services.
  • Online financial exchanges for currency exchanges or trading purposes.
There are five essential categories of E-commerce:
Contemporary electronic commerce can be classified into two categories. The first category is business based on types of goods sold. The second category is based on the nature of the participant.
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 pressing issues for electronic commerce.
Aside from traditional e-commerce, the terms m-Commerce as well t-Commerce have also been used.

Governmental regulation

In the United States, California's Electronic Commerce Act, enacted by the Legislature, the more recent California Privacy Rights Act, enacted through a popular election proposition and to control specifically how electronic commerce may be conducted in California. In the US in its entirety, electronic commerce activities are regulated more broadly by the Federal Trade Commission. 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 a 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.
Conflict of laws in cyberspace is a major hurdle for harmonization of legal framework for e-commerce around the world. In order to give a uniformity to e-commerce law around the world, many countries adopted the UNCITRAL Model Law on Electronic Commerce.
Internationally there is the International Consumer Protection and Enforcement Network, which was formed in 1991 from an informal network of government customer fair trade organisations. The purpose was stated as being to find ways of co-operating on tackling consumer problems connected with cross-border transactions in both goods and services, and to help ensure exchanges of information among the participants for mutual benefit and understanding. From this came Econsumer.gov, an ICPEN initiative since April 2001. It is a portal to report complaints about online and related transactions with foreign companies.
There is also Asia Pacific Economic Cooperation. APEC was established in 1989 with the vision of achieving stability, security and prosperity for the region through free and open trade and investment. APEC has an Electronic Commerce Steering Group as well as working on common privacy regulations throughout the APEC region.
In Australia, trade is covered under Australian Treasury Guidelines for electronic commerce and the Australian Competition & Consumer Commission regulates and offers advice on how to deal with businesses online, and offers specific advice on what happens if things go wrong.
The European Union undertook an extensive enquiry into e-commerce in 2015–16 which observed significant growth in the development of e-commerce, along with some developments which raised concerns, such as increased use of selective distribution systems, which allow manufacturers to control routes to market, and "increased use of contractual restrictions to better control product distribution". The European Commission felt that some emerging practices might be justified if they could improve the quality of product distribution, but "others may unduly prevent consumers from benefiting from greater product choice and lower prices in e-commerce and therefore warrant Commission action" in order to promote compliance with EU competition rules.
In the United Kingdom, the Financial Services Authority was formerly the regulating authority for most aspects of the EU's Payment Services Directive, until its replacement in 2013 by the Prudential Regulation Authority and the Financial Conduct Authority. The UK implemented the PSD through the Payment Services Regulations 2009, which came into effect on 1 November 2009. The PSR affects firms providing payment services and their customers. These firms include banks, non-bank credit card issuers and non-bank merchant acquirers, e-money issuers, etc. The PSRs created a new class of regulated firms known as payment institutions, who are subject to prudential requirements. Article 87 of the PSD required the European Commission to report on the implementation and impact of the PSD by 1 November 2012.
In India, the Information Technology Act 2000 governs the basic applicability of e-commerce.
In China, the Telecommunications Regulations of the People's Republic of China, stipulated the Ministry of Industry and Information Technology as the government department regulating all telecommunications related activities, including electronic commerce. On the same day, the Administrative Measures on Internet Information Services were released, the first administrative regulations to address profit-generating activities conducted through the Internet, and lay the foundation for future regulations governing e-commerce in China. On 28 August 2004, the eleventh session of the tenth NPC Standing Committee adopted an Electronic Signature Law, which regulates data message, electronic signature authentication and legal liability issues. It is considered the first law in China's e-commerce legislation. It was a milestone in the course of improving China's electronic commerce legislation, and also marks the entering of China's rapid development stage for electronic commerce legislation.

Global trends

E-commerce has become an important tool for small and large businesses worldwide, not only to sell to customers, but also to engage them.
Cross-border e-Commerce is also an essential field for e-Commerce businesses.  It has responded to the trend of globalization. It shows that numerous firms have opened up new businesses, expanded new markets, and overcome trade barriers; more and more enterprises have started exploring the cross-border cooperation field. In addition, compared with traditional cross-border trade, the information on cross-border e-commerce is more concealed. In the era of globalization, cross-border e-commerce for inter-firm companies means the activities, interactions, or social relations of two or more e-commerce enterprises. However, the success of cross-border e-commerce promotes the development of small and medium-sized firms, and it has finally become a new transaction mode. It has helped the companies solve financial problems and realize the reasonable allocation of resources field. SMEs can also precisely match the demand and supply in the market, having the industrial chain majorization and creating more revenues for companies.
In 2012, e-commerce sales topped $1 trillion for the first time in history.
Mobile devices are playing an increasing role in the mix of e-commerce, this is also commonly called mobile commerce, or m-commerce. In 2014, one estimate saw purchases made on mobile devices making up 25% of the market by 2017.
For traditional businesses, one research stated that information technology and cross-border e-commerce is a good opportunity for the rapid development and growth of enterprises. Many companies have invested an enormous volume of investment in mobile applications. The DeLone and McLean Model stated that three perspectives contribute to a successful e-business: information system quality, service quality and users' satisfaction. There is no limit of time and space, there are more opportunities to reach out to customers around the world, and to cut down unnecessary intermediate links, thereby reducing the cost price, and can benefit from one on one large customer data analysis, to achieve a high degree of personal customization strategic plan, in order to fully enhance the core competitiveness of the products in the company.
Modern 3D graphics technologies, such as Facebook 3D Posts, are considered by some social media marketers and advertisers as a preferable way to promote consumer goods than static photos, and some brands like Sony are already paving the way for augmented reality commerce. Wayfair now lets you inspect a 3D version of its furniture in a home setting before buying.