Electronic commerce, commonly known as e-commerce, ecommerce, e Commerce or e-comm, refers to the buying and selling of products or services

over electronic systems such as the Internet and other computer networks. However, the term may refer to more than just buying and selling products online. It also includes the entire online process of developing, marketing, selling, delivering, servicing and paying for products and services. The amount of trade conducted electronically has grown extraordinarily with widespread Internet usage. The use of commerce is conducted in this way, spurring and drawing on innovations in electronic funds transfer, supply chain management, Internet marketing, online transaction processing, electronic data interchange (EDI), inventory management systems, and automated data collection systems. Modern electronic commerce typically uses the World Wide Web at least at one point in the transaction's life-cycle, although it may encompass a wider range of technologies such as e-mail, mobile devices and telephones as well. A large percentage of electronic commerce is conducted entirely in electronic form for virtual items such as access to premium content on a website, but mostly electronic commerce involves the transportation of physical items in some way. Online retailers are sometimes known as e-tailers and online retail is sometimes known as e-tail. Almost all big retailers are now electronically present on the World Wide Web. Electronic commerce that takes place between businesses is referred to as business-to-business or B2B. B2B can be open to all interested parties (e.g. commodity exchange) or limited to specific, pre-qualified participants (private electronic market). Electronic commerce that takes place between businesses and consumers, on the other hand, is referred to as business-to-consumer or B2C. This is the type of electronic commerce conducted by companies such as Amazon.com. Online shopping is a form of electronic commerce where the buyer is directly online to the seller's computer usually via the internet. There is often no intermediary service involved, and the sale or purchase transaction is completed electronically and interactively in real-time. However in some cases, an intermediary may be present in a sale or purchase transaction, or handling recurring or one-time purchase transactions for online games. Electronic commerce is generally considered to be the sales aspect of e-business. It also consists of the exchange of data to facilitate the financing and payment aspects of business transactions.

History
Early development
Originally, electronic commerce was identified as the facilitation of commercial transactions electronically, using technology such as Electronic Data Interchange (EDI) and Electronic Funds Transfer (EFT). These were both introduced in the late 1970s, allowing businesses to send commercial documents like purchase orders or invoices electronically. The growth and acceptance of credit cards, automated teller machines (ATM) and telephone banking in the 1980s were also forms of electronic commerce. Another form of ecommerce was the airline reservation system typified by Sabre in the USA and Travicom in the UK. From the 1990s onwards, electronic commerce would additionally include enterprise resource planning systems (ERP), data mining and data warehousing In 1990, Tim Berners-Lee invented the WorldWideWeb web browser and transformed an academic telecommunication network into a worldwide everyman everyday communication system called [1] internet/www. Commercial enterprise on the Internet was strictly prohibited by NSF until 1995. Although the Internet became popular worldwide around 1994 with the adoption of Mosaic web browser, it took about five years to introduce security protocols and DSL allowing continual connection to the Internet. By

the end of 2000, many European and American business companies offered their services through the World Wide Web. Since then people began to associate a word "ecommerce" with the ability of purchasing various goods through the Internet using secure protocols and electronic payment services.

The Internet has created a new economic ecosystem, the e-commerce marketplace, and it has become the virtual main street of the world. Providing a quick and convenient way of exchanging goods and services both regionally and globally, e-commerce has boomed. Today, e-commerce has grown into a huge industry with US online retail generating $175B in revenues in 2007, with consumer-driven (B2C) online transactions impacting industries from travel services to consumer electronics, from books and media distribution to sports & fitness. With more than 70% of Americans using the Internet on a daily basis for private and/or business use and the rest of the world also beginning to catch on, e-commerce's global growth curve is not likely to taper off anytime soon. However, the US recession has taken its toll on online sales. Although early 2008 estimates by Forrester Research were very strong with 2008 [2] revenues upwards of $204B (a 17% growth rate), 2008 holiday sales showed the first decrease in the last 7 years. Research by ComScore shows sales declining by 1% for the first 49 days of the holiday season.
[3] [1]

In the last decade, many startup e-commerce companies have rapidly stolen market share from traditional retailers and service providers, pressuring these established traditional players to deploy their own commerce websites or to alter company strategy in retaliation. This effect is most pronounced in travel services and consumer electronics. According to comScore, online leisure travel bookings reached about $51B in 2005, or 44% of all online sales, which were around $122B in the same year. Roughly 30% of all travel bookings currently occur online. Consumer electronics, which includes the purchase of digital cameras, mobile phones, and home PC's, accounted for nearly $26B of worldwide e-commerce sales occurring in 2006, according to the NPD Group. As traditional brick and mortar firms continue to lose market share to e-commerce players, they will likely see continued declines in their revenues, operating margins, and profits. It is important to note that most e-commerce players are at a competitive advantage to retailers. They have lower operating expenses and better inventory management due to operating in a virtual commerce environment. For example,Amazon.com (AMZN) has revenue per employee of nearly $850k while its retail counterpart, Best Buy (BBY), generates revenue per employee of only $270k. Clearly, e-commerce vendors will have the most to gain if they successfully disrupt retail customer acquisition, disintermediate distributors/resellers, and under-price retail establishments. As a consequence of e-commerce vendor gains, financial transaction processors and parcel shipping companies are among ancillary vendors who will gain.

2005-2006: E-commerce continues to seize market share from traditional retailers in the US.

E-commerce Drivers
There are several key drivers the growth of e-commerce

Differentiation vs. Click-and-Mortars

Many e-commerce websites have established their leadership positions through low prices, high customer satisfaction, and convenient interfaces--but that position is becoming less and less unique. The largest retailers, such as Wal-Mart, Target, and Best Buy are pressing harder to gain market share online. The inroads the click-and-mortar retailers have been making is evident in recent come data, which shows the unique user traffic at the aforementioned sites increasing at greater year-over-year rates vs. pure e-commerce players. Those pure play e-tailers that develop and deploy the most unique web technologies to enhance consumer experiences and keep prices competitive will be in the best position to ward off the click-and-mortar convoy.

Internet Penetration and Emerging Markets

Global Internet penetration rates have an enormous impact on e-commerce growth rates. Currently, more than 30.2% of the world has access to the internet, and hence, e-commerce. Reduced Internet surfing charges, Internet technology development covering expanded bandwidth, and increased speeds & reliability could make e-commerce available to a large pool of emerging market consumers. In India, only about 60 million (or 5.2%) of a total 1 billion person population currently have access to the internet. In China, the internet penetration rate is now at 29% as of

June 2010. The companies that are able to gain significant traction first in emerging markets will be at great advantage to competitors.

Who Stands to Gain?

Online Travel Services
Expedia (EXPE) and Hotels.com are among many successful online travel service providers who stand to gain the most from recent growth trends. These players focus on travel-related transactions for airline seats, hotel rooms, car rentals, cruises, tours, and a host of other services. Travelzoo is a smaller player that has taken a novel approach to selling travel packages.

Online Retail
Overstock.com (OSTK) and Amazon.com (AMZN), two of the more successful online retailers, should continue to do well because of their consumer electronics focus.

Consumer Electronics
Sony (SNE) and Philips Electronics are among the leading consumer electronics manufacturers benefiting from an increase in e-commerce consumer electronics sales. For these companies, internet presence increases the visibility, easy availability and volume sales of their consumer electronics products.

Financial Transaction Services

EBS , EBay/PayPal and Authorize.net are examples of two leading financial transaction processors that get a cut every time you make a online purchase using their processing platform. More than 175 thousand merchants use Authorize.net (ANET) to help consumers accept credit cards and electronic check payments online. As more merchants move online, these types of

Travel Industry
Travel service companies, such as airlines, hotels, cruise ships, and rental car companies, also benefit from ecommerce intermediaries selling their products more quickly and easily than was previously possible and to a wider consumer base.

Shipping
FedEx (FDX) and United Parcel Service (UPS), two of the major shipping company players, are responsible for shipping the majority of products that are purchased online by consumers. As consumers continue to buy more online, these companies will see demand for their shipping services rise.

E-commerce Software
Many companies interested in selling products and services through the Internet choose to contract the construction and operation of their e-commerce platforms to third-party vendors. Some of these companies, such as Volusion eCommerce, GSI Commerce (GSIC), Web Cube and Digital River (DRIV) offer comprehensive, integrated packages that include software, web-hosting, order fulfillment and distribution and online marketing. Other firms offer more limited services such as Ariba (ARBA) and Akamai Technologies (AKAM). These two companies are e-commerce software vendors that make money selling software for e-commerce applications. All of these e-commerce service providers stand to gain as e-commerce traffic accelerates.

Traditional retailers like Gap are scrambling to keep up with the e-commerce trend, offering online catalog shopping in addition to traditional stores.

User Interface
E-commerce software are in the early phases of carving our core feature areas, either integrated within the software or via partnership with third parties. Such features as marketing (SEO), fulfillment (shipping) and as mentioned earlier web-hosting are becoming as much as part of the software as its ability to simply provide order management. Additionally, firms such as aitendantare focusing on interface design to deliver a more robust e-commerce experience. Emerging technologies includes natural language instruction.

Web Analytics
One interesting niche of e-commerce services is the area of "web-analytics". These tools provide the management of online shops and all kind of e-commerce platforms a great inside of what happens on their websites. In particular they allow them to run real-time experiments with their advertising and marketing, to allow them to rapidly optimise their sales pipeline. Not only can they tell when sales improve, but they can also see which adverts brought those sales, and the routes the customers took through the e-commerce site to get there. Two major players are Omniture (OMTR) and Visual Sciences (VSCN) (former WebSideStory). One question for the future is how such niche players will compete with business analytic/intelligence solutions like SAS. They will also need to keep an eye on Google (GOOG), who have their own Google Analytics software, which they provide for free to customers of their advertising products....

Who Stands to Lose?

Traditional Retail
Circuit City Stores (CC) and Best Buy (BBY) are prime examples of traditional retailers that have been losing market share to e-commerce startups over the last decade. These firms are now working aggressively to create an online presence for themselves in an attempt to halt earlier losses. In fact, with the added pressure of the recession, Circuit City filed for bankruptcy and is closing all of its stores. Specialty retailers like Zale (ZLC) have also faced increased competition from internet company sites.

Traditional Travel Agencies

American Express Company (AXP) is an example of a major travel agency that has seen demand for their travelrelated services decrease as more consumers and businesses rely on online travel portals.

Direct Retail Marketing

CDW (CDWC) and Systemax (SYX) are direct marketers of consumer electronics. Both will see business decline if the revenue distribution of consumer electronics sales continues to shift to online vendors. As more businesses buy from online intermediaries, the direct marketers' services are increasingly being bypassed.

Business application:
In a recent survey of manufacturing executives, 92% of respondents feel eBusiness is important, and 84% (and growing) believe that eBusiness is essential to the long-term success of their companies, and that they will be less competitive if they do not conduct business online. These manufacturers consider their Website to be their most powerful and cost-effective marketing tool, and that eBusiness will make/is making a measurable positive impact on their business. If your goals include reducing costs, improving operational efficiency, and increasing profits via the Internet, we have helped many companies attain those benefits. For more than 10 years (out of nearly 20 years in business) ISM has been in the forefront, helping companies in diverse industries to use the Internet to streamline business processes, reduce costs, increase customer loyalty and satisfaction, improve their bottom line, and expand their Web presence. Over time we have developed tools and methods for:

Developing a thorough understanding of your business goals and processes; Encapsulating and adapting specific business processes for automated Web-based applications; Integrating your current Enterprise applications (e.g. ERP) and IT infrastructure with Web-based applications; Designing, building, deploying, enhancing, maintaining, even hosting and managing (if desired) Web-based applications

While developing Web-based applications for clients we have built many hundreds of configurable, reusable components which enable us develop powerful custom Web-based applications for you very quickly, and at surprisingly low cost. Web-based applications we have developed are enabling our clients to:

Empower customers (i.e., distributors and OEM's) with Web-based applications to manage their own accounts with B2B customer service, environmental inquiries, process returns, check order status, place orders, check inventory status and availability, product configuration and engineering, and much more.

Improve employee productivity with an Intranet where employees can manage their customers, leads, and opportunities(CRM), access competitor profiles and product comparisons, access HR applications, submit and manage IT requests, manage appropriation requests, and much more.

Facilitate information exchange with supplier networks, to improve productivity and reduce cost by enabling vendor-managed inventory, and more.

E-Commerce Applications Using AWS and Amazon

Amazon.com has the expertise and trust to help you deliver effective e-commerce solutions by providing the following services and technologies:

Amazon Web Services (AWS). If you have an existing e-commerce application or want to
fully customize a new e-commerce site, AWS provides the infrastructure needed to deploy your application in the cloud. AWS provides businesses and website owners with massive compute power that easily scales as your business grows, handles your applications most demanding storage requirements, and delivers powerful database functionality that is both easy to use and flexible enough to support a wide variety of web applications. Learn more tens of millions of customers on Amazon.com. Checkout by Amazon is a checkout solution that leverages Amazons e-commerce capabilities and offers your customers a familiar, trusted experience. Learn more

Checkout by Amazon. Benefit from the secure payments and checkout experience used by

Amazon Simple Pay. Amazon Simple Pay is a set of payment-only products that allow your
customers to use payment information from their Amazon.com account on your website. You dont have to worry about obtaining and storing payment information and your customers can use a trusted and familiar payment service to pay for their goods or services. Learn more

Fulfillment by Amazon. You sell it, we ship it. Over more than a decade and millions of
orders and customers, Amazon has created one of the most advanced fulfillment networks in the world and your business can now benefit from our expertise. When a customer places an order we pick, pack, and ship it. Learn more

Amazon WebStore. Amazon WebStore provides you with a branded e-commerce site backed
by the support, selection, and expertise of Amazon. You can feel confident knowing that your WebStore is going to be up and running when customers visit your site. Better yet, WebStore is easy to set up and comes with a number of great marketing features so you can start selling in minutes. Learn more

Amazon Advertising Services. Amazon provides a host of options for placing ads for your
goods and services on Amazon.com and securing paid placement for your goods and services. Learn more

Amazon Mechanical Turk. The Amazon Mechanical Turk service is a marketplace for work
that gives your application programmatic access to human intelligence. This service can be used to seek human judgment from within your algorithms. For example, when you add an item to your product catalog, use Mechanical Turk to have workers classify the product (dress, accessory, shoes,

jacket, blazer, etc.) and provide metadata to enable better search and discovery for your users. Learn more

Benefits at a Glance
Easy to use. Amazon e-commerce solutions are designed to be simple and to make it easy for
you to get started. Whether youre using turnkey website authoring tools or simple web services APIs, youll get a platform that makes it easy for you to deliver e-commerce applications for your customers.

Flexible. You can use one or all of the Amazon e-commerce technologies described above to meet
your unique business needs and demands. Mix and match fulfillment, payment, advertising, and infrastructure services from Amazon and other vendors to build the right application for your business needs. sizes.

Cost-Effective. Amazon e-commerce solutions are low cost and affordable for businesses of all Scalable, Reliable, and High-performance. Utilize Amazons battle-tested
technologies and infrastructure, the virtual backbone of Amazon.coms multi-billion dollar retail business that has been honed for over a decade. physical, operational, and software measures.

Secure. AWS utilizes an end-to-end approach to secure and harden our infrastructure, including

E-Commerce Application Resources

References: 1. http://www.wikinvest.com/concept/E-Commerce 2.