1. History of Ecommerce
One of the most popular activities on the Web is shopping. It has much allure in it — you can
shop at your leisure, anytime, and in your pajamas. Literally anyone can have their pages built to
display their specific goods and services.
History of ecommerce dates back to the invention of the very old notion of "sell and buy",
electricity, cables, computers, modems, and the Internet. Ecommerce became possible in 1991
when the Internet was opened to commercial use. Since that date thousands of businesses have
taken up residence at web sites.
At first, the term ecommerce meant the process of execution of commercial transactions
electronically with the help of the leading technologies such as Electronic Data Interchange
(EDI) and Electronic Funds Transfer (EFT) which gave an opportunity for users to exchange
business information and do electronic transactions. The ability to use these technologies
appeared in the late 1970s and allowed business companies and organizations to send
commercial documentation electronically.
Although the Internet began to advance in popularity among the general public in 1994, it took
approximately four years to develop the security protocols (for example, HTTP) and DSL which
allowed rapid access and a persistent connection to the Internet. In 2000 a great number of
business companies in the United States and Western Europe represented their services in the
World Wide Web. At this time the meaning of the word ecommerce was changed. People began
to define the term ecommerce as the process of purchasing of available goods and services over
the Internet using secure connections and electronic payment services. Although the dot-com
collapse in 2000 led to unfortunate results and many of ecommerce companies disappeared, the
"brick and mortar" retailers recognized the advantages of electronic commerce and began to add
such capabilities to their web sites (e.g., after the online grocery store Webvan came to ruin, two
supermarket chains, Albertsons and Safeway, began to use ecommerce to enable their customers
to buy groceries online). By the end of 2001, the largest form of ecommerce, Business-to-
Business (B2B) model, had around
$700 billion in transactions.
According to all available data,
ecommerce sales continued to grow
in the next few years and, by the end
of 2007, ecommerce sales accounted
for 3.4 percent of total sales.
Ecommerce has a great deal of
advantages over "brick and mortar"
stores and mail order catalogs.
Consumers can easily search through
a large database of products and
services. They can see actual prices, build an order over several days and email it as a "wish list"

2. hoping that someone will pay for their selected goods. Customers can compare prices with a
click of the mouse and buy the selected product at best prices.
Online vendors, in their turn, also get distinct advantages. The web and its search engines
provide a way to be found by customers without expensive advertising campaign. Even small
online shops can reach global markets. Web technology also allows to track customer
preferences and to deliver individually-tailored marketing.
History of ecommerce is unthinkable without Amazon and Ebay which were among the first
Internet companies to allow electronic transactions. Thanks to their founders we now have a
handsome ecommerce sector and enjoy the buying and selling advantages of the Internet.
Currently there are 5 largest and most famous worldwide Internet retailers: Amazon, Dell,
Staples, Office Depot and Hewlett Packard. According to statistics, the most popular categories
of products sold in the World Wide Web are music, books, computers, office supplies and other
consumer electronics.
Amazon.com, Inc. is one of the most famous ecommerce companies and is located in Seattle,
Washington (USA). It was founded in 1994 by Jeff Bezos and was one of the first American
ecommerce companies to sell products over the Internet. After the dot-com collapse Amazon lost
its position as a successful business model, however, in 2003 the company made its first annual
profit which was the first step to the further development.
At the outset Amazon.com was considered as an online bookstore, but in time it extended a
variety of goods by adding electronics, software, DVDs, video games, music CDs, MP3s,
apparel, footwear, health products, etc. The original name of the company was Cadabra.com, but
shortly after it become popular in the Internet Bezos decided to rename his business "Amazon"
after the world's most voluminous river. In 1999 Jeff Bezos was entitled as the Person of the
Year by Time Magazine in recognition of the company's success. Although the company's main
headquarters is located in the USA, WA, Amazon has set up separate websites in other
economically developed countries such as the United Kingdom, Canada, France, Germany,
Japan, and China. The company supports and operates retail web sites for many famous
businesses, including Marks & Spencer, Lacoste, the NBA, Bebe Stores, Target, etc.
Amazon is one of the first ecommerce businesses to establish an affiliate marketing program, and
nowadays the company gets about 40% of its sales from affiliates and third party sellers who list
and sell goods on the web site. In 2008 Amazon penetrated into the cinema and is currently
sponsoring the film "The Stolen Child" with 20th Century Fox.
According to the research conducted in 2008, the domain Amazon.com attracted about 615
million customers every year. The most popular feature of the web site is the review system, i.e.
the ability for visitors to submit their reviews and rate any product on a rating scale from one to
five stars. Amazon.com is also well-known for its clear and user-friendly advanced search
facility which enables visitors to search for keywords in the full text of many books in the
database.

3. One more company which has contributed much to the process of ecommerce development is
Dell Inc., an American company located in Texas, which stands third in computer sales within
the industry behind Hewlett-Packard and Acer.
Launched in 1994 as a static page, Dell.com has made rapid strides, and by the end of 1997 was
the first company to record a million dollars in online sales. The company's unique strategy of
selling goods over the World Wide Web with no retail outlets and no middlemen has been
admired by a lot of customers and imitated by a great number of ecommerce businesses. The key
factor of Dell's success is that Dell.com enables customers to choose and to control, i.e. visitors
can browse the site and assemble PCs piece by piece choosing each single component based on
their budget and requirements. According to statistics, approximately half of the company's
profit comes from the web site.
In 2007, Fortune magazine ranked Dell as the 34th-largest company in the Fortune 500 list and
8th on its annual Top 20 list of the most successful and admired companies in the USA in
recognition of the company's business model.
History of ecommerce is a history of a new, virtual world which is evolving according to the
customer advantage. It is a world which we are all building together brick by brick, laying a
secure foundation for the future generations.
Ecommerce Today
Ecommerce today is a remarkable experience. It has transformed traditional shopping beyond
recognition. It is so much better than any other way of shopping that it has already attracted a
great many of ecommerce-lovers.
If some years ago ecommerce was a buzz word, now it has become the order of the day. People
seem to shop literally everywhere – at their workplaces during lunch times, in rush hour when
there is nothing else to do but switch on their laptops and start surfing.
Ecommerce today gained so much popularity because its underlying technologies are evolving at
giant steps. We are even offered to ―feel‖ the product with a 3D mouse to better understand its
shape, size and texture. Why go somewhere out when all you have to do is make an order,
choose the shipping method, put up your feet and wait till the order is delivered right to your
door-step?
Ecommerce today offers so much luxury that even conventional stores have already signaled the
alarm. Although, every one agrees that it is a long way for an ecommerce to replace ―brick-and-
mortar‖ stores, it has every chance to happen in the future. Ecommerce which we are witnessing
today brings in so much adventure into our lives that it is enjoyed by the whole online
community.

4. Ecommerce today does have some drawbacks but they say ―he that fears every bush must never
go a birding‖. A lot of consumers do put up with minuses since they trust the online world and
want it to be a better place.
Ecommerce today reflects what we created at the very dawn of online electronic commerce. It is
made by us and meant for us.
Future of Ecommerce
Experts predict a promising and glorious future of ecommerce in the 21st century. In the
foreseeable future ecommerce will further confirm itself a major tool of sale. Successful
ecommerce will become a notion absolutely inseparable from the web, because e-shopping is
becoming more and more popular and natural. At the same time severe rivalry in the sphere of
ecommerce services will intensify their development. Thus prevailing future trends of
ecommerce will be the growth of Internet sales and evolution.
Each year number of ecommerce deals grows enormously. Sales volumes of on-line stores are
more than comparable with those of ―brick-and-mortar‖ ones. And the tendency will continue,
because a lot of people are ―imprisoned‖ by work and household duties, while Internet saves a
lot of time and gives opportunity to choose goods at the best prices. Present-day Internet sales
boom is the foundation for magnificent ecommerce future.
The ―quantity to quality‖ tendency of ecommerce is also becoming more and more obvious, as
the Internet has excluded geographical factor from the sale. So it doesn’t matter any more
whether your store is situated in New York or London or in a small town. To survive, merchants
will have to adapt rapidly to the new conditions. To attract more customers e-store-owners will
have not only to increase the number of available services, but to pay more attention to such
elements like attractive design, user-friendliness, appealing goods presentation, they will have to
opportunely employ modern technologies for their businesses to become parts of ecommerce
future.
Of course, those, who acquire e-stores earlier, get better chance for future success and prosperity,
though an ecommerce site itself doesn’t guarantee you anything. Only an appropriate ecommerce
solution in combination with thorough emarketing and advertising can buy you business
insurance.
History of E-Commerce
byBill H.

5. Shopping on the internet is certainly a popular past time, an
efficient time-saver, and a great way to comparison shop on virtually any kind of item you’re
interested in. The history of e-commerce as most people think of it has a short but interesting
time line. Most people don’t realize that e-commerce and its underlying technology have been
around for about forty years.
We’ve provided a brief history of e-commerce below starting with its conception and rapid
development and finishing with a brief description of e-commerce’s advantages and its early
pioneers.
The Early Years
The term e-commerce was originally conceived to describe the process of conducting business
transactions electronically using technology from the Electronic Data Interchange (EDI) and
Electronic Funds Transfer (EFT). These technologies, which first appeared in the late 1970’s,
allowed for the exchange of information and the execution of electronic transactions between
businesses, typically in the form of electronic purchase orders and invoices. EDI and EFT were
the enabling technologies that laid the groundwork for what we now know as e-commerce. The
Boston Computer Exchange, a marketplace for used computer equipment started in 1982, was
one of the first known examples of e-commerce. Throughout the 1980’s, the proliferation of
credit cards, ATM machines and telephone banking was the next step in the evolution of
electronic commerce. Starting in the early 90’s, e-commerce would also include things such as
enterprise resource planning (ERP), data warehousing and data mining.
It wasn’t until 1994 that e-commerce (as we know it today) really began to accelerate with the
introduction of security protocols and high speed internet connections such as DSL, allowing for
much faster connection speeds and faster online transaction capability. Industry ―experts‖
predicted explosive growth in e-commerce related businesses.

6. E-Commerce Begins to Emerge
In response to these expert opinions, between 1998 and 2000, a substantial number of businesses
in Western Europe and the United States built out their first rudimentary e-commerce websites.
The definition of e-commerce began to change in 2000 though, the year of the dot-com collapse
when thousands of internet businesses folded. Despite the epic collapse, many of the worlds’
most established traditional brick-and-mortar businesses were emboldened with the promise of e-
commerce and the prospect of serving a global customer base electronically. The very next year,
business to business transactions online became one of the largest forms of e-commerce with
over $700 billion dollars in sales.
Many of the dot-com collapses ―first-mover‖ failures served their offline competitors very well,
providing evidence of what not to do in building a viable online business. For example,
Webvan, which was one of the more infamous dot-com failures, trail blazed the path for
Albertsons and Safeway, two of the largest national supermarket chains, who each have
developed their own successful online grocery delivery businesses.
E-Commerce Pioneers
The birth of companies such as eBay and Amazon (launched in 1994) really began to lead the
way in e-commerce. Both eBay and Amazon were among the first to establish prominent e-
commerce brands. The most prominent e-commerce categories today are computers, books,
office supplies, music, and a variety of electronics.
Amazon.com, Inc., founded by Jeff Bezos, was the original e-commerce pioneer and certainly
the most recognizable. In the beginning, Amazon’s business model required massive investment
in warehousing, delivery and fulfillment capability and took years for Amazon to gain
profitability. But finally in 2003, almost 10 years after launching the company, Amazon.com
realized its first annual profit.
Amazon began as just an online bookstore but over the years has extended its offering to a wide
variety of product categories, including electronics, software, music, DVD’s, CD’s, video games,
MP3’s, clothing, shoes, health and beauty products and even household goods. Bezos, was
responsible for naming the company ―Amazon‖ after the world’s largest river and it enjoys a
truly global presence with stand alone websites in six other countries, including the United
Kingdom, Canada, France, Germany, Japan and China. Amazon.com was also the original
pioneer in affiliate marketing, allowing other websites to earn sales commissions for referring
Amazon products to their customers. Today, Amazon generates anywhere between 30 to 40% of
its total sales revenue from affiliates or third party merchants who list and sell their products on
Amazon’s web site. Today, the Amazon moniker certainly applies as it is one of the most
recognized and most profitable e-commerce businesses on the planet. In 1999, Jeff Bezos was
honored with Time Magazine’s ―Person of the Year‖ award, immortalizing him forever as
probably the single most recognizable figure in the entire e-commerce community.

7. Amazon and fellow e-commerce industry giant Dell remain two of the largest internet retailers in
the world, among other offline industry giants such as Staples, Office Depot, and Hewlett
Packard. Dell.com is another one of the most recognizable e-commerce brands online.
Dell.com’s website was launched in 1994 with a single static web page and their online presence
quickly grew. In 1997, Dell announced a single-day sales record of a million dollars on its
website. In fact, roughly half of Dell’s total profits come directly from their website alone. With
no offline retail outlets to speak of, Dell is another e-commerce pioneer that many businesses
have tried to model themselves after by selling products almost exclusively online.
E-Commerce Advantages
E-commerce businesses have numerous advantages over offline retail locations and catalog
operators. Consumers browsing online stores can easily search to find exactly what they are
looking for while shopping and can easily comparison shop with just a few clicks of the mouse.
Even the smallest online retail sites can sell products and turn a profit with a very simple online
presence. Web tracking technology allows e-commerce sites to closely track customer
preferences and deliver highly individualized marketing to their entire customer base.
As the popularity of e-commerce businesses continues to grow, the technology will only
continue to improve, making it even easier to open and operate a virtual online store with or
without a brick-and-mortar presence. While e-commerce is still relatively new found territory, it
certainly offers plenty of opportunity for entrepreneurs of all types.
In fact, sales data shows that from1999 until 2008 e-commerce sales have risen steadily and now
account for nearly 4% of total sales worldwide.
What is e-commerce?
Electronic commerce, commonly known as e-commerce or eCommerce, consists of the
buying and selling of products or services over electronic systems such as the Internet and other
computer networks. The amount of trade conducted electronically has grown extraordinarily
since the spread of the Internet. A wide variety of commerce is conducted in this way, spurring
and drawing on innovations in electronic funds transfer, supply chain management, Internet
marketing, online transaction processing, electronic data interchange (EDI), inventory
management systems, and automated data collection systems. Modern electronic commerce
typically uses the World Wide Web at least at some point in the transaction's lifecycle, although
it can encompass a wider range of technologies such as e-mail as well.
A small percentage of electronic commerce is conducted entirely electronically for virtual
items such as access to premium content on a website, but most electronic commerce involves
the transportation of physical items in some way. Online retailers are sometimes known as e-
tailers and online retail is sometimes known as e-tail. Almost all big retailers have electronic
commerce presence on the World Wide Web.

8. Electronic commerce that is conducted between businesses is referred to as Business-to-
business or B2B. B2B can be open to all interested parties (e.g. commodity exchange) or limited
to specific, pre-qualified participants (private electronic market).
Electronic commerce is generally considered to be the sales aspect of e-business. It also
consists of the exchange of data to facilitate the financing and payment aspects of the business
transactions.
History
Early development
The meaning of electronic commerce has changed over the last 30 years. Originally,
electronic commerce meant the facilitation of commercial transactions electronically, using
technology such as Electronic Data Interchange (EDI) and Electronic Funds Transfer (EFT).
These were both introduced in the late 1970s, allowing businesses to send commercial
documents like purchase orders or invoices electronically. The growth and acceptance of credit
cards, automated teller machines (ATM) and telephone banking in the 1980s were also forms of
electronic commerce. From the 1990s onwards, electronic commerce would additionally include
enterprise resource planning systems (ERP), data mining and data warehousing.
Perhaps it is introduced from the Telelphone Exchange Office.The earliest example of
many-to-many electronic commerce in physical goods was the Boston Computer Exchange, a
marketplace for used computers launched in 1982. The first online information marketplace,
including online consulting, was likely the American Information Exchange, another pre-Internet
online system introduced in 1991.
Web development
When the Web first became well-known among the general public in 1994, many journalists
and pundits forecast that e-commerce would soon become a major economic sector. However, it
took about four years for security protocols (like HTTPS) to become sufficiently developed and
widely deployed. Subsequently, between 1998 and 2000, a substantial number of businesses in
the United States and Western Europe developed rudimentary web sites.
In the dot com era, electronic commerce came to include activities more precisely termed
"Web commerce" - the purchase of goods and services over the World Wide Web, usually with
secure connections with e-shopping carts and with electronic payment services such as credit
card payment authorizations.
Although a large number of "pure" electronic commerce companies disappeared during the
dot-com collapse in 2000 and 2001, many "brick-and-mortar" retailers recognized that such
companies had identified valuable niche markets and began to add e-commerce capabilities to
their Web sites. For example, after the collapse of online grocer Webvan, two traditional
supermarket chains, Albertsons and Safeway, both started e-commerce subsidiaries through
which consumers could order groceries online.

9. The emergence of electronic commerce also significantly lowered barriers to entry in the
selling of many types of goods; many small home-based proprietors are able to use the internet to
sell goods. Often, small sellers use online auction sites such as eBay, or sell via large corporate
websites like Amazon.com, in order to take advantage of the exposure and setup convenience of
such sites.
$259 billion of online sales including travel are expected in 2007 in USA, an 18% increase
from the previous year, as forecasted by the State of Retailing Online 2007 report from the
National Retail Federation (NRF) and Shop.org.
Currently there are 67 Fortune 1000 companies that have ecommerce revenues greater than
$10 million. The 5 largest Internet retailers are Amazon, Staples, Office Depot, Dell, and
Hewlett Packard. This indicates that the top categories of products sold on the Internet are books,
music, office supplies, computers, and other consumer electronics. A list of Fortune 1000
companies ranked by ecommerce revenues can be found on AListNet.
Timeline
* 1990: Tim Berners-Lee wrote the first web browser, WorldWideWeb, using a NeXT
computer.
* 1994: Netscape released the Navigator browser in October under the code name Mozilla.
Pizza Hut offered pizza ordering on its Web page. The first online bank opened. Attempts to
offer flower delivery and magazine subscriptions online. Adult materials were also commercially
available, as were cars and bikes. Netscape 1.0 in late 1994 introduced SSL encryption that made
transactions secure.
* 1995: Jeff Bezos launched Amazon.com and the first commercial 24 hour, internet-only
radio stations, Radio HK and NetRadio started broadcasting. Dell and Cisco began to
aggressively use Internet for commercial transactions. eBay was founded by computer
programmer Pierre Omidyar as AuctionWeb.
* 1998: Electronic postal stamps can be purchased and downloaded for printing from the
Web.
* 1999: business.com was sold for US $7.5 million, which was purchased in 1997 for US
$150,000. The peer-to-peer filesharing software Napster was launched.
* 2000: The dot-com bust.
* 2003: Amazon.com had its first year with a full year of profit.
Business Applications
Some common applications related to electronic commerce are:

10. * E-mail and messaging
* Documents, spreadsheets, database
* Accounting and finance systems
* Orders and shipment information
* Enterprise and client information reporting
* Domestic and international payment systems
Government Regulations
In the United States, some electronic commerce activities are regulated by the Federal Trade
Commission (FTC). These activities include the use of commercial e-mails, online advertising
and consumer privacy. The CAN-SPAM Act of 2003 establishes national standards for direct
marketing over e-mail. The Federal Trade Commission Act regulates all forms of advertising,
including online advertising, and states that advertising must be truthful and non-deceptive.Using
its authority under Section 5 of the FTC Act, which prohibits unfair or deceptive practices, the
FTC has brought a number of cases to enforce the promises in corporate privacy statements,
including promises about the security of consumers’ personal information. As result, any
corporate privacy policy related to e-commerce activity may be subject to enforcement by the
FTC.
Forms
Contemporary electronic commerce involves everything from ordering "digital" content for
immediate online consumption, to ordering conventional goods and services, to "meta" services
to facilitate other types of electonric commerce.
On the consumer level, electronic commerce is mostly conducted on the World Wide Web.
An individual can go online to purchase anything from books, grocery to expensive items like
real estate. Another example will be online banking like online bill payments, buying stocks,
transferring funds from one account to another, and initiating wire payment to another country.
All these activities can be done with a few keystrokes on the keyboard.
On the institutional level, big corporations and financial institutions use the internet to
exchange financial data to facilitate domestic and international business. Data integrity and
security are very hot and pressing issues for electronic commerce these days.
Taxation
From the inception of the Internet until the late 1990s, the Internet was free of regulation by
government in the United States at all levels, and also free of any specially targeted tax levies,

11. duties, imposts, or license fees. By 1996, however, that began to change, as several U.S. states
and municipalities began to see Internet services as a potential source of tax revenue.
The 1998 Internet Tax Freedom Act halted the expansion of direct taxation of the Internet,
grandfathering existing taxes in ten US states. In the United States alone, some 30,000 taxing
jurisdictions could otherwise have laid claim to taxes on a piece of the Internet. The law,
however, did not affect sales taxes applied to online purchases. These continue to be taxed at
varying rates depending on the jurisdiction, in the same way that phone and mail orders are
taxed.
The enactment of this legislation has coincided with the beginning of a period of spectacular
Internet growth. Its proponents argue that the benefits of knowledge, trade, and communications
that the Internet is bringing to more people in more ways than ever before are worth the tax
revenue losses, if any, and that the economic and productivity growth attributable to the Internet
may well have contributed more revenues to various governments than would otherwise have
been received. Opponents, on the other hand, have argued that the Internet would continue to
prosper even if taxed, and that the current federal ban on Internet-specific levies denies
government at all levels a much-needed source of revenue.