The History of E-commerce

What is e-commerce?

Well, e-commerce is also referred to as electronic commerce. It can be defined as the buying and selling of products and service through the internet.  For instance, in the USA, e-commerce is something practiced on a daily basis, such as purchasing from e-retailer like Amazon or online bill payment. Nowadays, telling people to live without e-commerce may seem complicated and cause inconveniences to many.

E-commerce has been around for over 30 years and has actually come a long way since its inception, right from B2B community, to starting to share documents via the internet in the 1960s, to where we are today. We are only looking to see where the digital will take us next.


History of e-commerce

1960 – 1990: The Early Days of e-commerce

The development of the EDI (Electronic Data Interchange) paved the way for the electronic commerce. It replaced the traditional emailing and faxing of documents with the digital transfer of the data from one machine to another. The data format that was that time to carry out business transactions such as transfer orders and invoices between trading partners was ANSI ASC X12 – the official set of the standards in the North America. When orders were sent, it was then examined by Value Added Network (VAN), and finally directed to the recipients’ order processing system. This means there was no human intervention during the whole data transferring process.

In the 1970s, the term electronic commerce referred to as electronic data exchange for sending business documents such as purchase orders and voices electronically. EDI and EFT (Electronic Funds Transfer) were the leading technologies during that time and gave people a chance to exchange business information and carry out their electronic transactions.


The 1990s to present: Introducing Broadband

By 1994, the internet had begun to progress in popularity among the general public. Even though it took approximately four years to develop the security protocols including the HTTP and DSL that allowed rapid access and persistent connections to the internet.

The first secure online purchase was seen in the 1990s, and a large pizza from Pizza hut was one of them. Another secure online purchase was a sting CD sold by US retailer, NetMartet on August 11, 1994.

Just from the beginning, there were a lot of concerns and hesitations with the online shopping but the development of the security protocol, the SSL (Secure Socket Layers), an encryption certificate by the Netscape in 199. The SSL provided safe means of transmitting data over the internet. Using the SSL, web browsers were able to check and identify whether the site had an authenticated SSL certificate, and based on that, they could determine whether or not the site could be trusted.

By 2000, so many business corporations in the USA and Western Europe had represented their services in the WWW (World Wide Web). At this time, the meaning of the word e-commerce changed. And people started defining e-commerce as the process of purchasing goods and services over the internet using Secure Connections and Electronic Payment Services.

Amazon (the largest online retailer in the world) launched in 1995 as the online bookstore. And “brick-and-mortar” bookstores were limited to around 200,000 titles, and Amazon being the only store online without any physical limitation was able to offer exponentially more products to the shoppers. In 2003, online sales had increased by 26 percent and Amazon alone, reported a 28 percent sales increment year-on-year. And now Amazon generates around 40 percent of their total sales from the affiliates and sellers who list-and-sell their products via Amazon’s website.

Another major success story of dot com bubbles was Ebay –an online site which debuted in 1995. Global e-commerce company –PayPal- begun its services in 1998 and currently it operates in over 190 markets. PayPal is an acquired bank which performs payment processing for the online vendors, auction sites, and other commercial users. In 2014, United States e-commerce retail trade sales were worth almost 299 billion U.S. dollars, and by 2015, the sales had grown to more than 340 billion U.S. dollars.


What will be the future of e-commerce?

When we take a look at how drastically e-commerce has changed over the past 20 years or even 10 years, it is hard not to be excited about the future of the retail technology, and how the experience for both retailers and consumers will continue to change.

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