E-commerce involves the use of the Internet, the World Wide Web (Web), and mobile apps and browsers running on mobile devices to transact business. Although the terms Internet and Web are often used interchangeably, they are actually two very different things. The Internet is a worldwide network of computer networks, and the Web is one of the Internet’s most popular services, providing access to billions of web pages. An app (shorthand for application) is a software application. The term is typically used when referring to mobile applications, although it is also sometimes used to refer to desktop computer applications as well.
More formally, e-commerce can be defined as digitally enabled commercial transactions between and among organizations and individuals. Each of these components of our working definition of e-commerce is important. Digitally enabled transactions include all transactions mediated by digital technology. For the most part, this means transactions that occur over the Internet, the Web, and/or via mobile devices. Commercial transactions involve the exchange of value (e.g., money) across organizational or individual boundaries in return for products and services. Exchange of value is important for understanding the limits of e-commerce. Without an exchange of value, no commerce occurs. The professional literature sometimes refers to e-commerce as digital commerce. For our purposes, we consider e-commerce and digital commerce to be synonymous.
The rapid growth and change that has occurred in the first quarter-century of e-commerce represents just the beginning—what could be called the first 30 seconds of the e-commerce revolution. Technology continues to evolve at exponential rates. This underlying ferment presents entrepreneurs with opportunities to create new business models and businesses in traditional industries and in the process, disrupt, and in some instances, destroy existing business models and firms. The rapid growth of e-commerce is also providing extraordinary growth in career and employment opportunities.
Improvements in underlying information technologies and continuing entrepreneurial innovation in business and marketing promise as much change in the next decade as was seen in the previous two decades. The twenty-first century will be the age of a digitally enabled social and commercial life, the outlines of which we can still only barely perceive at this time. Analysts estimate that by 2023, consumers worldwide will be spending around $7 trillion and businesses over $32 trillion in digital transactions. It appears likely that e-commerce will eventually impact nearly all commerce, and that most commerce will be e-commerce by the year 2050, if not sooner.
Business fortunes are made—and lost—in periods of extraordinary change such as this. The next five years hold exciting opportunities—as well as significant risks— for new and traditional businesses to exploit digital technology for market advantage, particularly in the wake of the Covid-19 pandemic, which is expected to have a broad and lasting impact on many aspects of life, ranging from how businesses operate, to consumer behavior, to social and cultural life.
It is important to study e-commerce in order to be able to perceive and understand the opportunities and risks that lie ahead. By the time you finish this book, you will be able to identify the technological, business, and social forces that have shaped, and con- tinue to shape, the growth of e-commerce, and be ready to participate in, and ultimately guide, discussions of e-commerce in the firms where you work. More specifically, you will be able to analyze an existing or new idea for an e-commerce business, identify the most effective business model to use, and understand the technological underpinnings of an e-commerce presence, including the security and ethical issues raised, as well as how to optimally market and advertise the business, using both traditional e-marketing tools and social, mobile, and local marketing.