A transaction that involves buying or selling online is called E Commerce. Electronic commerce comprises of online credit card transactions, e-cash, e-billing, e-cheques, electronic invoices, purchase order and financial statements. This is typically using the World Wide Web for at least one part of the transaction’s life cycle although it may also use other technologies such as e-mail.
The major different kinds of e-commerce are: Business-to-Business (B2B); Business-to-Consumer (B2C); Business-to-Government (B2G); Consumer-to-Consumer (C2C); and Mobile Commerce (m-commerce).B2B e-commerce is simply defined as e-commerce between companies.
E-commerce businesses majorly employ:
- Online shopping web sites for retail sales direct to consumers
- Business-to-business buying and selling.
- Business-to-business (B2B) electronic data interchange
- Marketing to prospective and established customers by e-mail.
- Online financial exchanges for currency exchanges or trading purposes.
With the rise of e-commerce, a new vocabulary has emerged and now terms like virtual enterprise, virtual bank, network marketing, online shopping, payment and advertising are not unheard of.
Subsequently e-commerce has also become a detrimental factor in impacting the society and economies worldwide, for instance, B2B is a rapidly growing business in the world that leads to lower cost and then improves the economic efficiency and also bring along the growth of employment.
The following excerpt from the well known writer Ron Berry explains very simply about the impact of e-commerce on the global economy
The internet is quickly becoming the major choice for electronic commerce transactions. The internet will definitely changes the global economy as all organizations and companies are looking towards the e-commerce. The increase in e-commerce via the Internet is definitely moving society a little closer to the “global village” concept that has been touted as a future way of life. More importantly, it is changing the face of business.
The internet also plays very important role in the field of small businesses and entrepreneurs competing global economy. Because of the internet the small and virtual organizations are gaining more profits because there is no need for maintaining large staffs, huge capitals, multi-lingual, transitional infrastructures.
People began using internet for business purposes by publishing static web pages from advertising and dynamic pages soon emerged and allowed organizations to support online sales, customer service and other value added services.
Although e-commerce is not a new industry it has created a new economic model. Most people agree that e-commerce will positively impact economic society in the future, but in its early stages its impacts are difficult to gauge. E-commerce has numerous social benefits: one, the cost of running an e-commerce business is very low when compared with running a physical store; two, there is no rent to pay on expensive premises; and three, business processes are simplified and less man-hours are required to run a typical business smoothly. In the area of law, education, culture and also policy, e-commerce will continue to rise in impact. E-commerce will truly take human beings into the information society.