Electronic Commerce: Categories and Importance to the Business Environment

Electronic Commerce
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Electronic Commerce
Electronic commerce is more than just shopping on the web. According to Schneider (2017), it encompasses all business activities that utilize internet technologies. Examples of such activities include trading with other companies and processes within the company that support selling, buying, hiring, and marketing operations.
Categories of E-commerce
Schneider (2017) outlines five general categories of e-commerce: business-to-business (B2B), business-to-consumer (B2C), consumer-to-consumer (C2C), transaction and business processes, and business-to-government (B2G). The commonly used categories include B2C, B2B, and business processes supported by internet technologies (Schneider, 2017). A B2C business sells its products or services to individual consumers. An example of this category is Walmart, which sells products to customers through its website (walmart.com). On the other hand, a B2B company sells its products and services to other businesses. A good example is Amazon that sells cloud services to other companies. However, it is important to recognize that Amazon also serves as B2C as it sells many products directly to consumers through its website. As informed by Schneider (2017), one company can have business activities that fall under more than one e-commerce category. In this case, Amazon is an example of such a company.
There are also business processes that make use of internet technologies to support buying and selling activities. Schneider (2017) defines business processes as the group of logical, sequential, and related transactions and activities in which a business engages, including shipping products to customers, sending invoices, placing orders, and making payments.
Evolution of E-commerce
With the broad definition of e-commerce, its origins can be traced back to the mid-1960s when banks started using electronic funds transfers (EFTs). While EFTs were initially used to transfer money from one business checking account to another, they expanded to include transactions such as payroll deposits to accounts of employees and automatic payment of mortgage and auto loans. In the 1960s also, businesses utilized electronic data interchange (EDI) to transmit data to other businesses. As informed by Schneider (2017), until the late 1990s, a major drawback associated with using EDI was the high implementation cost that required expensive computer hardware.
While there had been some limited forms of e-commerce before the 1990s, the first wave of e-commerce, according to Schneider (2017), took place between 1995 and 2003. Major characteristics asso...