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What is electronic commerce?
Electronic commerce or e-commerce as it is commonly known is a broad term used to describe a multi-layered form of business. There are different ways in which this sort of business is conducted. Firstly, there is business-to-business e-commerce which differs greatly from the more commonly known business-to-consumer e-commerce. The business to consumer form of electronic commerce is mostly conducted through the web. It is most common through sites such as e-bay where the consumers have a wide range of choice and can deal directly with other consumers or with businesses. This form of online shopping takes longer to arrive but there is much more choice for the consumer. This allows the consumer to track the movements of their packages or even transfer funds from the comfort of their own home. This is more convenient as it is safer if done through secure sites and a lot cheaper for both parties involved. Business to consumer e-commerce is on the rise worldwide as it is getting more exposure and people become more computer literate and aware of such practices.
What issues are associated with electronic commerce
In the business to business aspect of electronic commerce the most common form of transfer between businesses is electronic data interchange (EDI). This form of transfer was created to automate and speed up the exchange of information between companies that regularly do business together. For example, one computer might receive information that the mail has been ordered and the next day the other company’s computer will be able to have the confirmation without having to go through the long process of actually meeting face to face and money physically exchanging hands. If two businesses do business like this it is a lot more efficient than actually using clerks and can cut down the need for people to be involved in data transfer. Apart from EDI there are other forms of data transfer such as electronic catalogs and electronic money transfer.
E-commerce is attractive because it reduces the cost of doing business. Sending a few bytes of data over a network is cheaper, faster and more convenient than sending a messenger or even making a phone call. One of the primary concerns is security. The Internet is very public, and many people hesitate to send sensitive data over the wires where it might be intercepted by nefarious third parties. There have been a few cases in which the data has been intercepted and it has been made public. Often people are scared to use this form of commerce because of lack of education on the subject and how it can improve the way that they conduct business. With the growth of electronic commerce there has been an increase in the number of cases of fraud and identity theft being reported. Not all businesses are like this, not even the majority but the few that are guilty of unsavoury practices has heightened public awareness and possibly slowed down the growth of e-commerce.
Another issue which is becoming widely known by most users is spyware. The term "spyware" refers to any computer technology that gathers information about a person or organization without their knowledge or consent. Most commonly, it is put on a computer to secretly collect information about the user that is then sent to advertisers and other interested parties. Spyware can be installed on a computer as part of a software virus or as the result of adding a new program. There are often misconceptions in regard to spyware as when it is installed with the users consent it is not considered spyware. Often the programs can be deleted without causing much harm but they are still considered a breach of privacy which can result in scepticism towards the implementation of e-commerce as the users habitual form of commerce.
History of Electronic Commerce
As e-commerce is a relatively new form of business there is not much history to it. The main business to business aspect started in the mid nineties when there was a merger between AOL and Time Warner which has further cemented the impact of the e-commerce industry on the entertainment and internet providing services. Since in America the main provider is AOL this merger was pivotal in making the industry well known as the two companies had relatively different focuses until they came together. Another key moment in the history was the formation of napster. This program was very controversial and eventually was forced to be shut down but it helped to shed light upon the potential this industry had when given enough exposure. At the turn of the century there were major attacks on the some of the most dominant sites in the e-commerce industry such as yahoo, eBay and Amazon. These attacks brought to light the need of increased security online.
It is predicted that the revenues in e-commerce will grow from between 40 and 50 percent yearly until 2006. As is being seen now more traditional companies such as best and less, Wal-Mart and target are slowly integrating their business to consumer relationship into the e-commerce industry as it increases their customer base and they can use both forms of commerce to conduct their business. It is also predicted that these trends will be followed and there will be substantial growth in the business to consumer form of e-commerce in years to come. There are variations of the business to consumer form of e-commerce such as, consumer to consumer where the consumers sell directly to each other through auction sites, there is also peer to peer where the consumers download a program and they sell to each directly or they can be for free.
Why is it important
The importance of e-commerce has never been more obvious than it is now. Since the rise and fall of several dot.com sites e-commerce has since been recognized as a separate entity in most developed countries economies. Since it is no longer just considered a passing phase on closer observation the reason for the United States economic boom of the nineties was largely due to the e-commerce industry. According to experts as the “non-technical� economy slows so will the “internet economy� however not at the same rate. As the e-commerce industry becomes more commonplace in most peoples household it is evident that the dot.com companies will most likely return to their former glory since that they have the possibility of being globally known without half the cost of setting up as traditional business. So the e-commerce industry is indeed here to stay.
Louie Lishomwa 12:28, 10 Sep 2004 (EST)
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