E-commerce

Definition

E-commerce, or electronic commerce, refers to the buying and selling of goods or services over the internet. It encompasses a wide range of business activities, from online retail and digital marketplaces to mobile payments and cloud-based software services, that leverage digital technologies to facilitate commercial transactions and transform how businesses operate and interact with customers.

5 Must Know Facts For Your Next Test

1. E-commerce has transformed the competitive landscape by lowering barriers to entry, enabling small businesses and entrepreneurs to reach global markets.
2. The growth of e-commerce has led to the rise of new business models, such as subscription-based services, digital content distribution, and on-demand delivery.
3. E-commerce has significantly impacted the retail industry, leading to the decline of traditional brick-and-mortar stores and the rise of online shopping platforms.
4. The COVID-19 pandemic has accelerated the adoption of e-commerce, as consumers have increasingly turned to online shopping for essential goods and services.
5. Effective e-commerce strategies often involve the integration of data analytics, personalization, and omnichannel approaches to enhance the customer experience and drive sales.

Review Questions

• Explain how e-commerce has influenced trends in global competition and business ownership.
  • E-commerce has transformed global competition by lowering barriers to entry, allowing small businesses and entrepreneurs to reach international markets more easily. This has led to increased competition, as companies can now compete on a global scale. Additionally, the growth of e-commerce has enabled new business models, such as online marketplaces and subscription-based services, which have disrupted traditional industries and created new opportunities for business ownership and entrepreneurship.
• Describe how e-commerce has impacted the nature and functions of distribution (place) and the competitive world of retailing.
  • E-commerce has fundamentally changed the distribution and retailing landscape. Online platforms have become the primary 'place' for many consumer transactions, reducing the need for physical retail locations. This has led to the decline of traditional brick-and-mortar stores and the rise of e-commerce giants and online marketplaces. E-commerce has also transformed the functions of distribution, as products can be shipped directly to consumers, bypassing physical storefronts. This has increased the importance of logistics, supply chain management, and last-mile delivery in the competitive world of retailing.
• Analyze how e-commerce trends have contributed to the transformation of businesses through information technology.
  • E-commerce has been a driving force in the digital transformation of businesses. The integration of e-commerce platforms, data analytics, and information systems has enabled companies to gather valuable customer data, personalize the shopping experience, and optimize their operations. E-commerce has also led to the development of cloud-based software services, mobile commerce, and other technology-driven solutions that have revolutionized how businesses interact with customers, manage their supply chains, and streamline their operations. The ability to leverage information technology has become a critical competitive advantage in the e-commerce landscape.

Related terms

Online Retail: The sale of physical or digital products through a website or mobile application, allowing consumers to purchase items remotely and have them delivered to their doorstep.

Digital Marketplaces: Online platforms that connect buyers and sellers, enabling transactions and the exchange of goods, services, or information in a virtual environment.

Mobile Commerce (m-commerce): The use of mobile devices, such as smartphones and tablets, to conduct commercial transactions, including making purchases, transferring funds, and accessing financial services.