Electronic Commerce

• Author: Miklos Vasarhelyi, Michael Alles
• Pages: 229-232

Page 229

Electronic commerce, e-commerce or ecommerce consists primarily of the distributing, buying, selling, marketing, and servicing of products or services over electronic systems such as the Internet and other computer networks. The information technology industry might see it as an electronic business application aimed at commercial transactions. It can involve electronic funds transfer, supply chain management, e-marketing, online marketing, online transaction processing, electronic data interchange, automated inventory management systems, and automated data–collection systems. It typically uses electronic communications technology such as the Internet, extranets, e-mail, Ebooks, databases, and mobile phones. (Electronic commerce, n.d.)

It is fitting that this entry begins with the definition of e-commerce from a free encyclopedia, self-described as "the largest encyclopedia in history, in terms of both breadth and depth," entirely created by the voluntary contributions of the Internet community—for that is a very good indication of the revolutionary basis upon which e-commerce has thrived. The entry on e-commerce in the previous edition of this work also began with a quote, but one in which it was seen more as a promise than a reality: "No single force embodies our electronic transformation more than the evolving medium known as the Internet. Internet technology is having a profound effect on the global trade in services" ("The U.S. Government's Framework," 1997). At that time Forrester Research, a market research company, estimated that e-commerce would increase to $1,444 trillion by 2003. In reality, e-commerce in the United States totaled $1,679 trillion in 2003, having met that earlier forecast several years ahead of schedule (see Figure 1).

Page 230

Figure 1

Electronization of business

---

And e-commerce, which encompasses both business to business (B2B) and business to consumer (B2C), is no longer a purely U.S. phenomenon. For example, Internet sales in the United Kingdom in 2004 totaled £71.1 billion in 2004, an increase of 81 percent from 2003, while purchases by consumers totaled £18.1 billion in 2004, a tripling in three years. On the other hand, the European Union had notably less e-commerce activity, when one excludes the United Kingdom. Thus contrast the thriving business to consumer growth in the United Kingdom and the United States with the astonishingly low numbers in the first quarter of 2003—in France of just 75 million euros and in Spain of a mere 40 million euros. Obviously the story of e-commerce is one of mixed success, which indicates that the barriers to its growth are no longer technological, but the economic, legal, social, and perhaps even cultural infrastructure needed to support...