(I) What is E-commerce about?
Electronic commerce is defined as the buying and selling of products or services over electronic systems such as the Internet and to a lesser extent, other computer networks. It is generally regarded as the sales and commercial function of e-Business. There has been a massive increase in the level of trade conducted electronically since the widespread penetration of the Internet. A wide variety of commerce is conducted via e-commerce, including electronic funds transfer, supply chain management, Internet marketing, online transaction processing, electronic data interchange (EDI), inventory management systems, and automated data collection systems. According to the editor-in-chief of International Journal of Electronic Commerce, Vladimir Zwass, ‘Electronic commerce is sharing business information, maintaining business relationships and conducting business transactions by means of telecommunications networks’. He maintains that in its purest form, electronic commerce has existed for over 40 years, originating from the electronic transmission of messages during the Berlin airlift in 1948. From this, electronic data interchange (EDI) was the next stage of e-commerce development. In the 1960s a cooperative effort between industry groups produced a first attempt at common electronic data formats. The formats, however, were only for purchasing, transportation and finance data, and were used primarily for intra-industry transactions. It was not until the late 1970s that work began for national Electronic Data Interchange (EDI) standards, which developed well into the early 1990s. EDI is the electronic transfer of a standardized business transaction between a sender and receiver computer, over some kind of private network or value added network (VAN). Both sides would have to have the same application software and the data would be exchanged in an extremely rigorous format. In sectors such as retail, automotive, defense and heavy manufacturing, EDI was developed to integrate information across larger parts of an organization’s value chain from design to maintenance so that manufacturers could share information with designers, maintenance and other partners and stakeholders. Before the widespread uptake and commercial use of the Internet, the EDI system was very expensive to run mainly because of the high cost of the private networks. Thus, uptake was limited largely to cash-rich multinational corporations using their financial strength to pressure and persuade (with subsidies) smaller suppliers to implement EDI systems, often at a very high cost. By 1996 no more than 50,000 companies in Europe and 44,000 in the USA were using EDI, representing less than 1 per cent of the total number of companies in each of the respective continents.
According to Zwass, electronic commerce has been re-defined by the dynamics of the Internet and traditional e-commerce is rapidly moving to the Internet. With the advent of the Internet, the term e-commerce began to include: Electronic trading of physical goods and of intangibles such as information. All the steps involved in trade, such as on-line marketing, ordering payment and support for delivery. Electronic support for collaboration between companies such as collaborative on-line design and engineering or virtual business consultancy teams. The entire world is turning to the Internet and businesses everywhere are eager to get online. However, many traditional store owners remain wary of taking such a step into the digital world. Most choose to stick with what they know, which often means doing everything on their own. But companies around the world find out quickly that if they want to grow, to expand, to be successful, they need to be found online. Apple Inc. alongside Amazon.com Inc., Staples Inc., and Wal-Mart Stores Inc. are the major pacesetters in the e-commerce world. (Soure: internet:...
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