History&Evolution of E-commerce

E- Commerce (EC) – the process of electronically buying and selling goods, services and information. EC enables users to communicating, collaborating and discovering information by linked computer systems of the vendor, host and buyer. At the same time, it allows them to do online transaction.

The emergence of EC started in the early 1970s with Electronic Funds Transfer (EFT), which allows organizations to transfer funds with one another electronically.

In the late 1970s, Electronic Data Interchange (EDI) was introduced to improve the limitation of EFT, by extend business transactions from financial institutions to other types of business. Different to EFT( only allow for the transfer of funds), EDI also provides transactions and information exchanges. However, EDI was not widely accepted because the system limited to special networks such as large corporations, and it is costly, complex to administer for small business.

Later, the new type of applications which is Electronic Mail (e-mail) was widely adopted in business world in the late 1980s. When it was first introduced, this system was considered a major breakthrough.

Afterward, a strong foundation of prosperous EC continues to be built. During 1990s, the internet was opened for commercial use. At the period as well, users started to participate in World Wide Web (WWW), and the phenomenon of rapid personal computer (PCs) usage growth. Integrated with the commercialization of the internet, web invention and PC networks, these 3 factors have made EC possible and successful.

There is an important phase in the history of EC that I would like to share with you guys. For your information, there was development of Mosaic web-browser in 1992. This web-browser was soon given the form of a browser which could be downloaded and was named as Netscape. The arrival of Netscape provides users a simple browser to surf the internet. It further broadened the scope and possibility of electronic commercial transaction.

In 1994, Amazon.com (http://www.amazon.com/) and eBay.com (http://www.ebay.com.my/) are examples of internet companies which allows electronic transactions (sell products over the internet). Thanks to their founders! Because of them, we now have the opportunity to enjoy the buying and selling advantages of the internet! In addition, Dell.com (http://www.dell.com.my/) has also contributed much to the process of EC development. It was launched in 1994 and selling goods over the WWW with no retail outlets, no middlemen, and it enables customers to choose the product based on their budget and requirements. With approximately half of the company‘s profit comes from the web sites, the successful of Dell.com has been proven. In that particular year, the internet started to become popular among the general public. However, it took four years to develop the security protocols and DSL, which allowed rapid access and connection to the internet (1998).

What we have discussed above is one of the types of EC – business to consumer (B2C). It was the first and also the most common type which involves e-business providing goods and/or services to end consumers.

In 1999, the emphasis of EC shifted from B2C to business to business (B2B), which is the electronic transaction between multiple businesses, and does not involve common products or consumers.

In 2000, the meaning of the world EC was changed. People began to define the term EC as the process of purchasing of available goods and services over the internet using secure connections and electronic payment services. In the same year as well, the dot com collapse and led to unfortunate results, many EC companies disappeared. But, the “brick and mortar” retailers recognized the advantages of EC and started to add such capabilities to their web sites. At the end of 2001, the largest form of EC, B2B model made $700 billion in transactions.

Web 2.0

Web 2.0 is a second generation of web development and web design. It is characterized as facilitating communication, information sharing, and collaboration on the WWW. It has led to the development and evolution of web-based communities, hosted services, and web applications. Examples include social-networking sites, video-sharing sites, wikis, and blogs. Web 2.0 websites also considered as the Read/Write web, which allow users to do more than just retrieve information. Users can own the data on a Web 2.0 site and exercise control over that data. For example, they are provided with tools to add a comment or to edit the content.

Today, EC is so much better than any other way of shopping that it has already attracted many EC-lovers. People seem to shop literally everywhere – at their workplaces during lunch time, in rush hour, or when there is nothing else to do; they will just switch on their laptops and start surfing. EC today enable us to have a better understanding of product’s shape, size and texture through online. So, why go somewhere out when all you have to do is make an order, choose the shipping method, put up your feet and wait until the order is delivered right up to your door-step?

Posted by shu hui