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What is e-commerce?
What is e-Commerce?
E-commerce , and more often e-commerce , in our understanding, this is something where money is transferred via the Internet, isn’t it?
Yes, but a little in the narrow sense of the word. Distracted by a small number of theory. And so, e-commerce , as the Internet says about it, is a whole area of the economy, consisting of:
- electronic information exchange (Electronic Data Interchange, EDI),
- electronic capital flow (Electronic Funds Transfer, EFT),
- electronic commerce (English e-trade),
- electronic money (e-cash),
- electronic marketing (e-marketing),
- electronic banking (e-banking),
- electronic insurance services (e-insurance).
E-commerce as a sector of the economy is a set of financial and trading transactions (a transaction is a transfer of money) that occur through computer Internet networks, as well as a set of business processes related to transactions.
From the general theory of e-commerce , we can see that we are only interested in e-commerce related to electronic commerce on the Internet. This area of economics on the Internet is represented by companies and enterprises that have an online store or a site with a catalog of products that can be bought on the site and paid through the site or via the Internet.
The history of e-commerce
For the first time, Michael Aldrich made the purchase and payment over the Internet, which in 1979 showed the first online shopping system.
But it was a long time ago, and since then e-commerce has been very changed and modified. Although, one cannot fail to mention the fact that by automating processes, simplifying miscalculations for an ordinary person and saving him from unnecessary calculations - e-commerce is gaining popularity. This was vividly presented in 1960 when IBM and American Airlines launched a joint system for automating the procedure for booking flights. We can only imagine how much profit this ecommerce brought to their owners. And the number of users of the SABER (Semi-Automatic Business Research Environment) system is constantly growing. This system has made air travel more accessible for ordinary passengers, helping them navigate fares and flights.
Thomson Holidays UK was made in 1981, the first online shopping system for businesses.
In 1995, Jeff Bezos launched Amazon.com and began broadcasting the first 24-hour ad-free radio stations, Radio HK and NetRadio. eBay is founded by programmer Pierre Omidyar as AuctionWeb. After 4 years, the Alibaba Group was founded in China. Business.com was sold to eCompanies for $ 7.5 million, which was acquired in 1997 for $ 149 thousand. A peer-to-peer file sharing program Napster is launched.
ATG Stores has launched the sale of home decorative items on the Internet. In December 2001, Alibaba.com achieved profitability. We continue to study the history of ecommerce)
In 2002, eBay acquired PayPal for $ 1.5 billion. Yes, yes it is eBay who invests and develops PayPal - the most famous online payment system in the world. In 2003, Amazon.com publishes its first annual profit on e-commerce. In 2004, DHgate.com, the first Chinese platform for b2b online transactions, appeared (we know little about this, since this e-commerce site is closed off by us by the “Chinese wall”), which became an incentive for other b2b sites to leave from the "yellow pages" model.
In 2007, Business.com was acquired by R.H. Donnelley for $ 345 million. In 2015, Amazon.com accounted for more than half of all e-commerce growth, selling nearly 500 million SKUs in the United States (SKU - Stock Keeping Unit, which translates as “warehouse accounting unit”). Approaching our days, e-commerce now looks something like this:
In 2017, retail sales of e-commerce (e-commerce) worldwide reached $ 2.304 trillion, up 24.8% from the previous year. The growth of e-commerce has been influenced by the rapid growth of Internet users since the 2000s.
A challenge to humanity and e-commerce
A new challenge to humanity, a self-isolation regime was announced, forcing millions of people to sit home. For many online stores, this was a chance to increase the number of sales. Here is another impetus for the development of e-commerce.
Isolation of people at home only strengthened the development of online stores and electronic commerce and the growth in their number (new online stores appeared 2 times more in the first 2 months of isolation). This is due to the fact that the business has to adapt to a new life and the best solution is to go online with e-commerce. Associated with massive closures of offline points. Profits increased the most among online stores for children with children's goods (by 22.63%), from online stores with food products (2.5 times), from online stores in the Hobby and Needlework category (by 134%) , at online stores for adults, in the category 18+ (by 112%), at online stores in the category Clothing and shoes (by 6%). In other areas of Internet commerce, online stores felt a drop in sales by an average of 22% - as open sources say from the Internet.
Summing up and drawing conclusions, we see that isolation contributes to the development of e-commerce (e-commerce).
Types of E-Commerce
All e-commerce is divided into the following types (let's look at them):
- B2B (Business-to-Business) - “the relationship between commercial organizations”, the so-called “Business for business”.
These include such sites on the Internet as Marketplace (Marketplace). Marketplace - a site that is designed, implemented, programmed so that other sites can open and register on it (they have their own subdomains and names). That is, the marketplace is a site, as a limited place for other sites (online mazin) that conduct their e-commerce.
- B2C (Business-to-Consumer) - "the relationship between the commercial organization and consumers", in the common people "Business for the buyer." We can refer to them an online store or an online catalog.
B2C + B2B = B2B2C
The list of e-commerce types is less well known to simple users:
- B2E (Business-to-Employee) - "the relationship between commercial organizations and employees (wage workers)."
- B2G (Business-to-Government) - "the relationship between the organization and the government."
- B2O (Business-to-Operator) - “the relationship between the organization and the telecom operator”.
And also types of e-commerce:
- C2A (Consumer-to-Administration) - "the relationship between consumers and administrators."
- C2B (Consumer-to-business) - "the relationship between consumers and commercial organizations."
- C2C (Consumer-to-Consumer) - “relationship between consumers”.
- A2A (Administration-to-Administration) - “relationship between administrations”.
- A2B (Administration-to-Business) - "the relationship between the administration and commercial organizations."
- A2C (Administration-to-Consumer) - "the relationship between administration and consumers."
And other e-commerce models:
- D2C (Decentralized-to-Consumer) - “decentralized relationships based on Blockchain technology (Eng. Blockchain) between consumers."
- G2B (Government-to-Business) - "the relationship between government and organization." At the institutional level, large corporations and financial institutions use the Internet to exchange financial data to facilitate domestic and international business. Data integrity and security are topical issues for e-commerce.
- P2P (Peer-to-Peer) - “relationship between persons”.
That's where the money is! Here, where it is worth looking for ideas for business development to novice entrepreneurs.
E-commerce - E-Commerce
E-commerce is an electronic purchase or sale online. E-commerce - mobile commerce, electronic money transfers, supply chain management, online marketing, online transaction processing, electronic data interchange (EDI) , inventory management system and automated data collection system.
The volume of electronic commerce in Spain in 2014 was about $ 17 billion. On average, an online shopper spends $ 1,300 a year. The most popular shopping category is clothing. Spaniards are increasingly willing to buy from their smartphones. It is expected that in the coming years, the growth rate of mobile commerce will be 48%. This is the highest rate in Europe after Scandinavia. One of the main factors in the growth of online trading has become the desire to save. Especially after 2008.
Online Payments - e-commerce . Cards are the most popular payment method in Spain: 87% of orders are paid by “plastic”. The popularity of e-wallets is also growing, including PayPal.
Let's pay attention to LOGISTICS as part of an e-commerce business when making purchases, for example, in an online store or online catalog. Online markets and retailers must find the best way to fulfill orders and deliver goods. Small companies usually control their own logistics operations because they do not have the ability to hire a third-party company. Most large companies hire contractors or a contractor company that takes care of the company's logistics needs.
Logistics, as part of the system, is also a site. Website logistics is site-system , which has parameters and objects that are maintained and monitored on the website system. Moreover, a well-chosen developer company will develop a logistics company and a site that has e-commerce and a website-logistics system associated with e-commerce. Such a company does not have an obstacle to enter e-commerce.
Advantages and disadvantages of e-commerce
The benefits of e-commerce ( e-commerce ) for business:
- Global scale (the whole world is an online store, online catalog , site system)
- Cost reduction (less staff for an online store, online catalog, website system - for example: logistics)
- Improving the supply chain (site system)
- Business is always open (24/7/365) (online store, corporate site , online catalog, website system)
- Personalization (online store, online catalog, website system)
- Quick launch of goods on the market ( landing page )
- Low cost of distribution of digital products (no need to rent a room - online store, online catalog site system, corporate site)
In brackets are the products e-commerce that are sold for the Internet Makklays .
The disadvantages of e-commerce for business are:
- A bit of complexity at the beginning of the conduct and organization of the enterprise’s activities on the Internet, legalizing the enterprise
- Possible doubts of the parties about the affiliation of a project to the company (negative anonymity)
In 2014, the e-commerce market stepped over the $ 1.3 trillion mark.
The fact is that in 2019, revenue from advertising, online promotion, online payment and delivery increased.
In 2021, projected sales on the Internet (e-commerce) will amount to $ 4.4 trillion. These numbers show how fast the e-commerce market is growing. By the end of 2021, more than 73% of online purchases will be via phone. Shopping "voice" is also gaining momentum, in 2022 they are waiting for more than 60%. The augmented reality (AR) market will grow in 2022.
An important component in communication with the client is chat bots, in 2020 more than 60%.
About 7 billion devices are now connected to e-commerce. And by 2022, their number will increase to 40 billion devices.
Online sales give new strength to small and medium-sized businesses, as well as entrepreneurs around the world.
An important role in the development of E-commerce and e-commerce was played by Paypal and small sites providing online shopping services, they allowed a simple Internet user to turn a hobby into a business, open an online store or corporate website, receive orders from Japan, Italy and the USA. Today, an Internet user and an entrepreneur sells goods in 55 countries of the world, in a company where several people are employed, and in the near future plans are development.