E-commerce

Definition

E-commerce, or electronic commerce, refers to the buying and selling of goods and services over the internet. This form of commerce has transformed traditional retail by enabling businesses to reach a global market, allowing consumers to shop from anywhere at any time, and fostering new business models like dropshipping and subscription services.

5 Must Know Facts For Your Next Test

1. E-commerce has seen exponential growth over the last two decades, driven by advances in internet technology and increased internet accessibility worldwide.
2. Mobile commerce, or m-commerce, is a rapidly growing segment of e-commerce, as more consumers use smartphones to shop online.
3. Globalization has significantly influenced e-commerce, enabling businesses to expand their customer base beyond local markets and facilitating international trade.
4. The rise of social media platforms has transformed marketing strategies for e-commerce businesses, allowing them to engage directly with consumers and drive sales through targeted advertising.
5. E-commerce presents unique challenges such as cybersecurity risks, which require robust measures to protect consumer data and build trust in online transactions.

Review Questions

• How has e-commerce changed traditional retail practices?
  • E-commerce has revolutionized traditional retail by allowing businesses to operate without physical storefronts, thereby reducing overhead costs. Consumers can shop online from the comfort of their homes, leading to increased convenience and accessibility. This shift has also enabled retailers to analyze consumer behavior through data analytics, offering personalized shopping experiences and targeted marketing strategies.
• Discuss the implications of globalization on the growth of e-commerce.
  • Globalization has significantly impacted the growth of e-commerce by allowing businesses to connect with consumers across borders. Companies can now easily expand their reach into international markets, leading to increased competition and a wider variety of products available to consumers. However, this also presents challenges such as regulatory compliance and cultural differences that businesses must navigate to succeed in global e-commerce.
• Evaluate the long-term effects of e-commerce on supply chain management practices.
  • The long-term effects of e-commerce on supply chain management are profound, as it necessitates greater efficiency and responsiveness in logistics. Companies are leveraging advanced technologies like artificial intelligence and data analytics to optimize inventory management and reduce delivery times. Furthermore, the integration of digital payment systems streamlines transactions, enhancing overall supply chain transparency and agility while also driving down operational costs.

Related terms

Digital Payment Systems: Technological solutions that facilitate electronic transactions, allowing consumers to pay for goods and services online securely.

Supply Chain Management: The management of the flow of goods and services from suppliers to consumers, which is increasingly optimized through e-commerce technologies.

Marketplaces: Online platforms where multiple vendors can sell their products or services to consumers, such as Amazon or eBay.