History of E-Commerce

Abstract

E-commerce or electronic commerce, also known as e-business, refers to the transaction of goods and services through electronic communications. Although the general public has become familiar with e-commerce only in the last decade or so, e-commerce has actually been around for over 30 years. There are two basic types of e-commerce: business-to-business (B2B) and business-to-consumer (B2C). In B2B, companies conduct business with their suppliers, distributors, and other partners through electronic networks. In B2C, companies sell products and services to consumers. Although B2C is the better known to the general public, B2B is the form that actually dominates e-commerce in terms of revenue.1 The concept of e-commerce is related to notions of Internet economy and digital economy. All these concepts relate to the use of new information and communication technologies for economic activities, but with different focuses. Internet economy refers to the economic activities that generate revenue from the Internet or Internet-related products or services (Costa, 2001). Therefore, pre-Internet e-commerce, as will be detailed in the following section, cannot be called Internet economy. On the other hand, some activities, such as building Internet connections for commercial purposes, are a part of Internet economy, but they are not necessarily e-commerce. Digital economy is based on digital technologies such as computer, software, and digital networks. In most cases, digital economy is the same as e-commerce. However, not all activities in the digital economy are e-commerce activities. For example, purchasing computer gear from a storefront retailer is not an activity of e-commerce, although it certainly is a key component of the digital economy. Hence, e-commerce, Internet economy, and digital economy are closely related but have different concepts. E-commerce has been perhaps one of the most prevalent terms in this digital era. Although e-commerce was once looked upon simply as an expressway to wealth, it has actually transformed the way people conduct business. An historical analysis of e-commerce will provide insights into the evolution of the application of information and communication technologies in the commercial arena. Furthermore, an analysis of the evolution of e-commerce in the past as well as its present state will enable us to project future trends in e-commerce.