E-commerce, in the popular sense, can be defined as: the use of the Internet and the Web to conduct business transactions. A more technical definition would be: e-commerce involves digitally enabled commercial transactions between and among organizations and individuals. Ecommerce differs from e-business in that no commercial transaction, an exchange of value across organizational or individual boundaries, takes place in
e-business. E-business is the digital enablement of transactions and processes within a firm and therefore does not include any exchange in value. E-commerce and e-business intersect at the business firm boundary at the point where internal business systems link up with suppliers. For instance, e-business turns into e-commerce when an exchange of value occurs across firm boundaries.
The unique features of e-commerce technology include:
• Ubiquity: It is available just about everywhere and at all times.
• Global Reach: the potential market size is roughly equal to the size of the online population of the world.
• Universal standards: The technical standards of the Internet, and therefore of conducting e-ommerce, are shared by all of the nations in the world. • Richness: Information that is complex and content rich can be delivered without sacrificing reach.
• Interactivity: E-commerce technologies allow two-way communication between the merchant and the consumer.
• Information density: The total amount and quality of information available to all market participants is vastly increased and is cheaper to deliver. • Personalization/Customization: E-commerce technologies enable merchants to target their marketing messages to a person’s name, interests, and past purchases. They allow a merchant to change the product or service to suit the purchasing behavior and preferences of a consumer.
• Social technology: User content generation and social networking technologies The three stages in the evolution of e-commerce are innovation, consolidation, and reinvention. Innovation took place from 1995–2000 and was characterized by excitement and idealistic visions of markets in which quality information was equally available to both buyers and merchants. However, e-commerce did not fulfill these visions during its early years. After 2000, e-commerce entered its second stage of development: consolidation. In this stage, more traditional firms began to use the Web to enhance their existing businesses. Less emphasis was placed on creating new brands. In 2006, though, e-commerce entered its current stage, reinvention, as social networking and Web 2.0 applications reinvigorated e-commerce and encouraged the development of new business models.
We are living in the Information Age. Internet has changed our lives and these changes are irreversible. Slowly every home is being taken over by Internet. People have switched over to paying all their bills online, banking online and even shopping online. Internet is being used by people for various purposes. The more people get on to internet and search for information, the more opportunities begin to develop for e commerce. Over the years internet has become the highway for online business transactions. From Banks offering online banking to online bookings with airlines, hotels and travel to insurance sectors, all business to customer types of business have hitched on to the highway for accessing millions of customers through the internet.
These are not the only businesses that are transacting via e commerce. Most of the large business houses have gone the E Commerce way to do online procurement as well as manage sales orders and Customer management. ERP systems have managed to integrate and bring online, all modules of business operations on web mode. Millions of dollars are being spent by business organisations in upgrading their IT infrastructure, Application platforms as well as re engineering their business processes to be able to get on to the highway of using E Commerce platform for their business operations. There is no choice for businesses but to get on to the E Commerce way. At various levels from the simple mom and pop shop to the global corporations, all businesses have got to adapt to E Commerce for this is the way the future is going to be. E commerce brings its own unique advantages and contribution to the businesses. First and foremost internet being a world wide web, opens up the world as a market to the businesses.
Businesses can reach out to millions of customers in an instant which is not possible in any conventional mode of marketing. One of the most significant advantages that E Commerce offers is the cost. The cost of marketing online across the globe is miniscule when compared to the actual cost of marketing in the conventional ways. The cost per transaction works out to be very cheap. More over E Commerce promotes paperless offices and processes thus contributing to savings in terms of resources too. These and many more advantages make obvious business sense for Companies to market their products and services online. In the last few years the speed of internet as well as the applications, software and hardware supporting E Commerce have developed and integrated to make E Commerce a real time business process. Online financial transaction capability has given a significant push to E Commerce. E commerce has not only caught the imagination of B to B and B to C businesses but today we have online trading which has perhaps changed the way stock markets, financial markets and commodity exchanges across the world function.
Today’s customers are net savvy and know what they want. In essence today’s customers are not willing to wait. No matter how good the product may be, speed is the essence here. From online shopping to online dating and searching for life partners, all of the individual’s needs are being addressed by businesses via the web. Looking at E Commerce from a marketing perspective brings the product or the service closer to the customer. It enables the customer to view, read, download and experience the product. The other significant difference from conventional marketing is that the online marketing enables the marketing company to customise its sales pitch or product offering to the customer. As against the conventional modes which target consumers and markets at large, with internet marketing and E Commerce it is possible to target every single individual making it more personalised and customised offer. E Commerce is just catching up. How E Commerce will develop and grow and its future impact on the way business is carried on cannot be imagined and every business small or big has no choice but to jump on to the E Commerce bandwagon.