E-commerce draws on technologies such as mobile commerce, electronic funds transfer, supply chain management, Internet e-commerce, create online shop, web store, inventory management systems,and automated data collection systems. Modern e-commerce often utilizes the world wide web for at least one part of the operation’s life cycle although it may also use other technologies such as e-mail.
E-commerce businesses may use some or all of the following:
- Online shop websites for retail sales direct to clients
- Create online shops, which process third-party consumer-to-consumer or business-to-consumer
- Business to business buying and selling
- Assembling and using demographic data through web contacts and social media
- Business-to-business (B2B) electronic data interchange
- Marketing to established and prospective customers by fax or e-mail or fax
- Look for shop websites for advertising new products and services
Contemporary e commerce entails everything from ordering conventional goods and services to ordering "digital" content for immediate online consumption, to "meta" services to ease other types of e-commerce.
On the institutional level, big financial institutions and corporations use the internet e commerce to exchange financial data to facilitate international and domestic business.
In 2010, the United Kingdom had the largest e-commerce web store in the world when compared with the amount spent per capita. As of 2013, the Czech Republic through e-commerce, delivers the biggest contribution to the enterprises´ total revenue in Europe. Almost one-quarter (24%) of the country's total turnover is generated via the online web store.
Among emerging economies, China's e-commerce presence expands every year. With 668 million internet users, China's online market sales reached $253 billion in the first half of 2015, contributing 10% of total Chinese consumer retail sales over the same period. The Chinese retailers have been able to aid clients feel more comfortable shopping online. E-commerce operations between China and other countries increased 32% to 2.3 trillion yuan ($375.8 billion) in 2012 and constituted 9.6% of China's total international trade. In 2013, 80% of the e-commerce market in China was owned by Alibaba. In 2014, there were 600 million Internet users in China making it the world's largest online market. China is also the largest e-commerce market in the world by worth of sales, with an approximated US$899 billion in 2016.
E-Commerce has become an important medium for large and small businesses worldwide, not only to sell to clients, but also to involve them.
In 2012, e-commerce marketing peaked $1 trillion for the first time in history mobile devices are playing an increasingly important role in e commerce. This is often called mobile commerce. In 2014, an estimate recorded purchases made on mobile devices making up 25% of the market by 2017.
For primitive businesses, one research stated that cross-border e-commerce and information technology is a good avenue for the rapid growth and development for companies. Many companies have invested enormous sums of money in mobile applications. There is no limit of time and space, there are more prospects to reach out to clients around the world, and reduce unnecessary intermediate channels, thereby reducing the cost price, and have the advantage of benefiting from one on one large client data analysis, to obtain a high degree of personal customization strategic plan, so as to fully enhance the core competitiveness of the products in company.
Impact on markets and retailers
Economists have theorized that e-commerce has to result in intensified price competition, as it augments consumers' capacity to gather information about prices and products. Research by four economists at the University of Chicago have realized that the growth of online marketing has also affected industry structure in two sectors that have experienced significant growth in travel agencies, e-commerce, and bookshops. Generally, larger firms can use economies of scale and offer lower prices. The only exception to this trend has been the very smallest category of bookseller, shops averaging between 1 and 4 employees, which seem to have resisted the trend. Depending on the class, e-commerce may move the switching costs—relational, procedural, and financial—witnessed by customers.
Business or individuals involved in e-commerce whether sellers or buyers depend on Internet-based technology in order to finalize their transactions. E-commerce is recognized for its capacity to enable business to liaise and to form transaction any place and time. Whether an individual is overseas or in the US, business can take place through the internet. The strength of e-commerce allows geophysical boundaries to disappear, making all clients and businesses on earth, potential clients and suppliers. Thus, switching costs and switching barriers and may move. Ebay is a good example of e-commerce Company where businesses and individuals can post their items and market them around the world.
To understand how the e-commerce has influenced the economy and society, a few points are mentioned below:
- E-commerce provides the client or enterprise different types of information they need, making sure this information is totally transparent, and enterprises are no longer able to use the mode of advert or space to increase their competitive edge. More so, theoretically, absolute competition between the consumer sovereignty and industry will increase social welfare.
- The new economy led by e-commerce, transforms humanistic spirit as well, but above all, employee engagement. Due to the market competition, the employee's level of professionalism becomes capital for the enterprise in the niche market. The enterprises keep an eye on how to build up their inner culture and a set of interactive mechanisms which is a capital issue for most enterprises. Furthermore, even though using e-commerce decreases the information and transaction cost, its development also makes individuals overly computer literate. Cultivating a more humanistic work attitude is another aspect for enterprise to develop. Life is at the center of everything and technology is merely a tool to assist in supporting the quality of life.