Electronic commerce (e-commerce) is the marketing, buying and selling of merchandise or services over the Internet. It encompasses the entire scope of online product and service sales from start to finish. E-commerce tools include computer platforms, applications, solutions, servers and various software formats manufactured by e-commerce service providers and purchased by merchants to increase online sales.
E-commerce facilitates the growth of online business. It is categorized as follows:
- Online marketing
- Online advertising
- Online sales
- Product delivery
- Product service
- Online billing
- Online payments
The e-commerce concept relates to business or financial transactions that facilitate electronic payments of items purchased from online stores and service vendors. E-commerce covers a broad range of business activities, from digital content used for online consumption to conventional orders of online merchandise. Online banking is another form of e-commerce. E-commerce transactions are conducted between businesses, businesses and consumers, businesses and government, businesses and employees and consumers and businesses.
Online shopping is an e-commerce format, in which real-time sales transactions occur as a consumer purchases an item or service from an online store. This may be explained as an interactive collaboration between a consumer and merchant. In online shopping, there is no intermediary – just the interaction between the online buyer and store/service provider. Here, electronic financial transactions are conducted securely. E-commerce also describes the exchange of data between the financing, billing and payment aspects of electronic business transactions.
There is high scope of e-commerce in each aspect of business, at present it is in the embryonic stage but in future e-commerce would be the part of day to day activity of business firms.
Following are the marketing areas where we seek scope of e-commerce:
(i) Marketing, sales and sales promotion.
(ii) Pre-sales, subcontracts, supply.
(iii) Financing and insurance.
(iv) Commercial transactions – ordering, delivery, payment.
(v) Product service and maintenance.
(vi) Co-operative product development.
(vii) Distributed co-operative working.
(viii) Use of public and private services.
(x) Transport and logistics.
(xi) Public procurement.
(xii) Automatic trading of digital goods like games, learning material, songs and music etc.
(xiii) Accounting and financial management.
(xiv) Legal advice
Significance of Web Commerce
Today, we can see e-commerce is becoming a part of study of almost all the courses in management and commerce. It is an integral part of any book or manuscript that is written on retailing, and it claims a significant share in this text also. The reason behind this lies in the fact that e-commerce technology is different and more powerful than any of the other technologies we have seen in the past century.
While these other technologies transformed economic life in the 20th century, the evolving Internet and other ITs will shape the 21st century in many ways. The foremost of these is the rise of a sizeable class of Internet-habituated consumers, and then is the creation of an ecosystem essential for e-tailing’s growth. In India’s case, both these factors are poised to fall into place rapidly.
Prior to the development of e-tailing, the process of marketing and selling goods was a mass- marketing and/or sales force-driven process. Consumers were considered as passive targets of advertising (promotional) “campaigns,” and branding blitzes were intended to influence their long-term product perceptions (brand positioning) and immediate purchasing behavior.
Selling was conducted in typical well-insulated “channels.” Consumers were viewed to be trapped by geographical and social boundaries, unable to search widely for the alternatives with best price and quality. Information about prices, costs, and tariffs could be hidden from the customers to get the resultant profitable “information asymmetries” for the selling firm.
Here, information asymmetry means any disparity in relevant market information among parties in a transaction. E-commerce has challenged much of these traditional retail business norms, assumptions, and behavior.