E-commerce

Definition

E-commerce, or electronic commerce, refers to the buying and selling of goods and services over the internet. This digital marketplace enables businesses and consumers to engage in transactions without the need for physical storefronts, creating opportunities for global trade and economic growth. E-commerce can include a wide range of activities, from retail sales to online auctions and electronic payment systems, facilitating a new level of convenience and accessibility in commerce.

5 Must Know Facts For Your Next Test

1. E-commerce has seen exponential growth due to increased internet access and smartphone usage, allowing more people to shop online.
2. Global e-commerce sales are expected to surpass trillions of dollars, highlighting its significance in the world economy.
3. Small businesses can benefit greatly from e-commerce by reaching a wider audience without the costs associated with physical stores.
4. E-commerce presents challenges such as cybersecurity risks and regulatory issues that vary by country.
5. Social media has become a key driver of e-commerce, with platforms enabling direct sales and marketing to consumers.

Review Questions

• How does e-commerce transform traditional business practices in a global economy?
  • E-commerce transforms traditional business practices by enabling transactions to occur without geographical limitations, allowing companies to reach global markets effortlessly. This shift facilitates lower operational costs as businesses can operate online without needing extensive physical presence. Additionally, it encourages competition among companies worldwide, promoting innovation and efficiency in service delivery as businesses adapt to meet diverse consumer needs.
• Discuss the implications of e-commerce on supply chain management within a global context.
  • E-commerce significantly impacts supply chain management by demanding greater efficiency and speed in the delivery of goods. With consumers expecting fast shipping times, businesses must optimize their logistics and inventory management practices to meet these demands. Furthermore, the use of digital tools in supply chain management allows for better tracking of products and data analysis, enhancing responsiveness to market changes on a global scale.
• Evaluate the long-term effects of e-commerce growth on economic structures and employment patterns around the world.
  • The growth of e-commerce is reshaping economic structures by creating new market opportunities while disrupting traditional retail sectors. As online shopping becomes more prevalent, brick-and-mortar stores face challenges that may lead to closures or transformations into hybrid models that integrate online sales. Additionally, employment patterns are evolving, with increased demand for jobs in logistics, tech support, and digital marketing while roles in traditional retail decline. This shift necessitates a reevaluation of workforce skills and training programs to adapt to an increasingly digital economy.

Related terms

Digital Payment Systems: Methods that allow consumers to pay for goods and services online, including credit cards, PayPal, and cryptocurrencies.

Supply Chain Management: The management of the flow of goods and services from suppliers to consumers, crucial for e-commerce efficiency.

Marketplace Platforms: Online platforms like Amazon or eBay that connect buyers and sellers, streamlining the e-commerce process.