Defining e-commerce

Summary

E-commerce (electronic commerce) refers to commercial activities—especially the buying and selling of products and services—conducted over online platforms or the Internet. It typically uses the web for part or all of a transaction’s life cycle (and may also use other technologies such as email). Common e-commerce transactions include purchasing physical goods (e.g., books) and digital services such as music downloads delivered through online stores. E-commerce relies on supporting technologies and systems such as mobile commerce, electronic funds transfer, supply chain management, Internet marketing, online transaction processing, electronic data interchange (EDI), inventory management, and automated data collection. It is supported by electronic business and is often described as enabling consumers to shop and pay online more efficiently, saving time and improving transaction efficiency. E-commerce can be organized into areas such as online retailing, electronic markets, and online auctions, and it is commonly categorized by participant relationships (e.g., business-to-business, business-to-consumer, consumer-to-consumer, and direct-to-consumer) as well as by the type of goods and services involved (including digital content and “meta” services that facilitate other electronic commerce).

Key Points

• 1

  E-commerce is the online buying and selling of products and services, often using the web across the transaction lifecycle.

• 2

  It is enabled by technologies such as online payments, transaction processing, supply chain and inventory systems, and marketing/analytics tools.

• 3

  E-commerce is commonly classified by transaction participants (B2B, B2C, C2C, D2C) and by the type of goods/services (including digital content and facilitating services).

• 4

  The term “e-commerce” was first used in 1984 in California’s Electronic Commerce Act, and e-commerce is considered a major part of retail and the electronics-driven technology ecosystem.