History and Evolution of E-commerce

Electronic commerce means doing business online, typically via the Web. It is also called "e-business," "e-tailing" and "I-commerce". Although in most cases e-commerce and e-business are the same, e-commerce implies that goods and services can be purchased online, whereas e-business might be used as more of an umbrella term for a total presence on the Web, which would naturally include the e-commerce (shopping) component.

E-Commerce was birth out of the World-Wide-Web (WWW). Although many people use the terms WWW, but the WWW is just one of the many services available on the Internet. The aspect of the WWW actually is a relatively new aspect of the Internet. While the Internet was developed in the late 1960s, the WWW came into existence more than a decade ago in the early 1990s. Since then, it has grown phenomenally to become the most widely used service on the Internet.

Although the Web has made online shopping possible for many businesses and individuals, in a broader sense, e-commerce has existed for many years. For decades, banks have been using electronic funds transfer (EFT, also called wire transfer), which are electronic transmissions of account exchange information over private communication networks.

Businesses also have been engaging in a form of electronic commerce, known as electronic data interchange, for many years. Electronic Date Interchange (EDI) occurs when business transmits computer-readable data in a standard format to another business.

In the 1960s, businesses realized that many of the documents they exchange related to the shipping of goods such as invoices, purchase orders, and bills of lading and included the same set of information for almost every transaction. They also realized that they were spending a lot of time and money entering these data into their computers, printing paper forms, and then re-entering the data on the other side of the transaction. Although the purchase order, invoice, and bill of lading for each transaction contained much of the same information such as item numbers, descriptions, prices and quantities - each paper form had its own unique format for presenting that information. By creating a set of standard formats for transmitting that information electronically, businesses were able to reduce errors, avoid printing and mailing costs, and eliminate the need to re-enter the data.