E-commerce

Definition

E-commerce refers to the buying and selling of goods and services over the internet. This digital marketplace allows businesses and consumers to engage in commercial transactions without the need for physical storefronts, creating new opportunities for trade and expanding the reach of services in the modern economy.

5 Must Know Facts For Your Next Test

1. E-commerce has grown exponentially, particularly with the rise of mobile shopping and online payment options, making it a key driver of the global economy.
2. The COVID-19 pandemic significantly accelerated e-commerce adoption as more consumers turned to online shopping for safety and convenience.
3. B2C (business-to-consumer) and B2B (business-to-business) are two primary models of e-commerce, each catering to different types of transactions and customer bases.
4. E-commerce platforms often utilize sophisticated algorithms for personalized marketing, targeting consumers based on their browsing history and preferences.
5. Global e-commerce sales are expected to continue rising, with projections estimating that they will account for a substantial portion of total retail sales in the coming years.

Review Questions

• How does e-commerce influence the services sector in terms of accessibility and consumer behavior?
  • E-commerce significantly enhances accessibility in the services sector by allowing consumers to easily find and access a wide range of services online. It changes consumer behavior by enabling instant comparisons and reviews, leading to informed decision-making. This shift encourages businesses to improve their online presence and customer service, ultimately driving innovation in service delivery.
• Evaluate the impact of e-commerce on global trade patterns and economic globalization.
  • E-commerce has transformed global trade patterns by breaking down geographical barriers, enabling even small businesses to reach international markets. This shift accelerates economic globalization as companies can easily source materials from different countries and sell their products worldwide. It fosters competition among businesses and provides consumers with a broader selection of goods, which can lead to lower prices and better quality.
• Assess how e-commerce technology can shape future economic trends and consumer expectations in both developed and developing countries.
  • E-commerce technology is set to shape future economic trends by pushing towards greater digital integration across all sectors. In developed countries, advancements such as AI-driven personalization will raise consumer expectations for tailored shopping experiences. Conversely, in developing countries, mobile commerce can bridge gaps in infrastructure, making it easier for local businesses to engage in international trade. This dual impact highlights the potential for e-commerce to drive economic growth and change consumer habits globally.

Related terms

Digital Payment Systems: Technological solutions that enable secure online transactions, allowing consumers to pay for goods and services electronically.

Online Marketplaces: Platforms where multiple sellers can offer their products or services to consumers, facilitating easy access and comparison shopping.

Supply Chain Management: The management of the flow of goods and services from production to consumption, which is increasingly influenced by e-commerce logistics and distribution networks.