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Electronic commerce, also known as on-line shopping, is defined as the transactions between Business to Business or Business to Consumer that occurs between a network of computers(1). The term has evolved to include, but not limited to: the buying of goods and services, the electronic transfer of funds, and all other ways of conducting business over a digital platform(2).

Evolution of E-comm


Even though several thousands of electronic transactions had taken place prior to the development of the internet; electronic commerce was not widely used until 1994.Several incidents lead to the popularity of the internet for instance the development of a internet browser (as we know it today) by Netscape, Netscape 1.0. Also, Banks, 1-800 flowers, on-line pizza purchase orders, magazine subscriptions, and even pay per use adult content added to the popularity of the internet and thus accelerating the need for a more secure and reliable electronic commerce. Traditional systems of e-commerce were comprised of a client server connected to the world wide web.

It should be noted that although electronic commerce was not widely used until 1994, the first online purchase (business to consumer) took place in the United Kingdom in 1984(3).In addition e-commerce was invented in 1979 by Micheal Aldrich in the United Kingdom.

Online E-Comm Protection

While it was thought that on-line transactions were secure, added consumer protection was need. Secure Socket Layers (SSL)were developed as a response to consumer inquiries as to security of their online transactions. Netscape developed SSL which was a protocol that indicated to a sever that a user was trying to connect to the server. The protocol then exchanged information/content with the server by using a message authentication code (MAC), a form of online cryptography. 19985,Netscape released its SSL but several security flaws were found and subsequently SSL 2.0 soon follow the release.

Online Shopping

Non-Merchant sites

A non-merchant site is a site that serves as a intermediary (commonly refereed to as the middle-man) between customers and suppliers. The non-merchant typically does not hold any goods but rather offers services linking consumers to suppliers. The largest non-merchant site, based in the United States, is Ebay. As 2011, it has sold more than 62 billion dollars in goods and has over 97 million active users world wide(4)

Ebay was founded in the late 1995 by Pierre Omidyar as an experiment to see if his computer code would work to sell a broken laser pointer. The code behaved as he hoped and consequently sold his laser pointer for $14.83(5). Today ebay not only limits itself to connecting suppliers of broken goods but it also helps in arranging consumers with credit cards with partners sites such as PayPal and BillmeLater (a subsidiary of Paypal). A wide range of goods are sold on ebay from paper clips to houses and military aircraft. Ebay also has 30 other sites world wide offering similar goods and services. Its wide range of a sorted goods and its global positioning had made it a leader in e-commerce.

Merchant sites

A merchant site, also known as a retailer site, is a site that typical sales good or services it has on-hand or in stock. According to Internetretailer.com, the largest internet retailer is Amazon.com Incorporated. Amazon.com, although it does have some merchant activites it has become, largely, a non-merchant site. The sites number 2, on its list of top 500 online retailers, is Staples Inc. Staples is an office supplies retailer with several store locations all over the United States. It primarily source of sales comes from business to consumer. 

E-commerce Today

Today, consumers enjoy shopping from the privacy of their home. Consumers conduct product search, questions about merchandise can be answered with a click of the mouse at the breakfast table, purchases can be made in the living room, deliveries can be tracked at the gym and deliveries can be completed in less than 24-hours. Although e-commerce is viewed as a leader in internet transactions it represents a small portion in today's market place in the United States. According to Nielsen.com, out of the 300 million people that live in the United States 1/3 of them are online. This has contributed to internet sales of more than 130 billion dollar in 2006(6)).With websites like Ebay and Amazon consumers can purchase a product across the globe without having to physically go there; music purchase can be made online through website portals such as iTunes.  

Internet security has improved significantly but it has come at a cost. Users are having to accept digital security certificates on a regular basis to protect their personal information in order to complete a transaction. To add to the dismay of online security the majority of online shoppers do not know what a digital security certificate is or who represents it. 

Mobile shopping has taken off recently with advances in smart phone technology. E-commerce is no longer limited to desktops or wireless bubbles as before. This implies that e-commerce can take place at anytime at anyplace. Moblie shopping has been called M-commerce and has been said to be the next evolutionary jump in e-commerce. Although m-commerce seems to be easier it does have its set backs such as children operating a cell will be able to purchase products without known the digital certificate. 

The advantages of e-commerce is that companies are viewed in a global scale. Transactions are no longer restricted to a single area or geographical boundaries. Although there are both pro's and con's the benefits to e-commerce include a reduced cost, a more efficient management system, and a improved business strategy. E-commerce has moved commerce from a traditional lines of communication to the internet's super-speedway.   


(1) http://en.wikipedia.org/wiki/E-commerce
(2) http://dictionary.reference.com/browse/Electronic+commerce
(3) April L. Benson PhD. To Buy or Not To Buy: Why We Overshop and How to Stop Trumpeter 2008
(4) http://www.ebayinc.com/who
(5) http://www.ebayinc.com/history#
(6) http://nielsen.com/us/en/measurement/online-measurement.html