Electronic commerce

Definitions Electronic commerce, commonly known as (electronic marketing) e-commerce or ecommerce, consists of the buying and selling of products or services over electronic systems such as the Internet and other computer networks. The amount of trade conducted electronically has grown extraordinarily with widespread Internet usage. The use of commerce is conducted in this way, spurring and drawing on innovations in electronic funds transfer, supply chain management, Internet marketing, online transaction processing, electronic data interchange (EDI), inventory management systems, and automated data collection systems. Modern electronic commerce typically uses the World Wide Web at least at some point in the transaction’s lifecycle, although it can encompass a wider range of technologies such as e-mail as well.
A large percentage of electronic commerce is conducted entirely electronically for virtual items such as access to premium content on a website, but most electronic commerce involves the transportation of physical items in some way. Online retailers are sometimes known as e-tailers and online retail is sometimes known as e-tail. Almost all big retailers have electronic commerce presence on the World Wide Web.

Electronic commerce that is conducted between businesses is referred to as business-to-business or B2B. B2B can be open to all interested parties (e.g. commodity exchange) or limited to specific, pre-qualified participants (private electronic market). Electronic commerce that is conducted between businesses and consumers, on the other hand, is referred to as business-to-consumer or B2C. This is the type of electronic commerce conducted by companies such as Amazon.com.
Electronic commerce is generally considered to be the sales aspect of e-business. It also consists of the exchange of data to facilitate the financing and payment aspects of the business transactions.

Early development
The meaning of electronic commerce has changed over the last 30 years. Originally, electronic commerce meant the facilitation of commercial transactions electronically, using technology such as Electronic Data Interchange (EDI) and Electronic Funds Transfer (EFT). These were both introduced in the late 1970s, allowing businesses to send commercial documents like purchase orders or invoices electronically. The growth and acceptance of credit cards, automated teller machines (ATM) and telephone banking in the 1980s were also forms of electronic commerce. Another form of e-commerce was the airline reservation system typified by Sabre in the USA and Travicom in the UK.
Online shopping is an important component of electronic commerce. From the 1990s onwards, electronic commerce would additionally include enterprise resource planning systems (ERP), data mining and data warehousing.
An early example of many-to-many electronic commerce in physical goods was the Boston Computer Exchange, a marketplace for used computers launched in 1982. An early online information marketplace, including online consulting, was the American Information Exchange, another pre Internet online system introduced in 1991.
In 1990 Tim Berners-Lee invented the WorldWideWeb web browser and transformed an academic telecommunication network into a worldwide everyman everyday communication system called internet/www. Commercial enterprise on the Internet was strictly prohibited until 1991 .[1] Although the Internet became popular worldwide around 1994 when the first internet online shopping started, it took about five years to introduce security protocols and DSL allowing continual connection to the Internet. By the end of 2000, many European and American business companies offered their services through the World Wide Web. Since then people began to associate a word “ecommerce” with the ability of purchasing various goods through the Internet using secure protocols and electronic payment services.
Business applications:
1.    E-mail: Electronic mail, most commonly abbreviated email and e-mail, is a method of exchanging digital messages. E-mail systems are based on a store-and-forward model in which e-mail computer server systems accept, forward, deliver and store messages on behalf of users, who only need to connect to the e-mail infrastructure, typically an e-mail server, with a network-enabled device for the duration of message submission or retrieval. Originally, e-mail was always transmitted directly from one user’s device to another’s; nowadays this is rarely the case.
An electronic mail message consists of two components, the message header, and the message body, which is the email’s content. The message header contains control information, including, minimally, an originator’s email address and one or more recipient addresses. Usually additional information is added, such as a subject header field.
2.    Instant messaging: Instant messaging (IM) is a form of real-time direct text-based communication between two or more people using shared clients. The text is conveyed via devices connected over a network such as the Internet.
IM falls under the umbrella of chat, as it is a real-time text-based networked communication system, but is distinct in that it is based on clients that facilitate connections between specified known users (often using “Buddy List”, “Friend List” or “Contact List”), whereas Chat includes web-based applications that allow communication between (often anonymous) users in a multi-user environment. (an analogy would be comparing a telephone and a bar-room. With the telephone, you have to know the contact information to reach the other person, whereas you just show up at the bar and see who is there to chat with)
3.    Online shopping: Online shopping is the process consumers go through to purchase products or services over the Internet. An online shop, eshop, e-store, internet shop, webshop, webstore, online store, or virtual store evokes the physical analogy of buying products or services at a bricks-and-mortar retailer or in a shopping mall.
The metaphor of an online catalog is also used, by analogy with mail order catalogs. All types of stores have retail web sites, including those that do and do not also have physical storefronts and paper catalogs. Online shopping is a type of electronic commerce used for business-to-business (B2B) and business-to-consumer (B2C) transactions
Commerce Industry Framework:
The basic framework of e-commerce enables doing business online. The framework consists of a comprehensive structure beginning with the based technology layer to the general service layer. E-commerce has, to a certain extent, changed markets structure. Traditionally, market ties were created through the exchange of goods, services, and money. E-commerce has brought in an essential element: information. Market ties are now based on information services, information goods and electronic money. Although the nature of exchanging products remains unchanged, the channel and the format of doing business have changed. To better understand the basic framework of e-commerce, the following paragraphs explain the features of the major layers in the environment of e-commerce.
Basic Framework
1.    The First layer: Network Infrastructure
Also known as the “Information Superhighway”, network infrastructure is the foundation layer of hardware infrastructure. It is a mixture of many forms of information transport systems, which include telecom, cable TV, wireless and the Internet.  These systems, in particular the Internet, provide various types of telecommunication channels for transmission of contents used in e-commerce.
2.    The Second Layer: Multimedia Content and Network Publishing
While the Information Superhighway is the transportation basis that allows content such as text, sounds and images to be transmitted, the second layer provides an architecture that enables the content to be developed in a programming language know as Hyper Text Markup Language (HTML) for publishing on the World Wide Web (WWW).  Another programming language in use is Java, which enables multimedia content to be transmitted to end users’ personal computers via various networks such as cable, wireless, fiber optics and satellites.
3.    The Third layer: Messaging and Information Dissemination
Messaging transmission is usually done by the following technologies:
a.    Communicating non-formatted data: by using facsimile, electronic mail, which mainly directs to individuals.
b.    Communicating formatted data: by using Electronic Data Interchange (EDI) without human intervention.  It is mainly used for business documents such as purchase orders, invoices and packing lists.  Messaging transmission technology has encouraged business process automation.
c.    Hyper Text Transfer Protocol (HTTP):  HTTP is an information dissemination tool generally used on the Internet.  It uses a common display format to publish non-formatted multimedia messages in various environments.
d.    Uniform Resource Locator (URL):  URL is at present used by many web surfers to search for information.
4.    The Fourth layer: Security Protection in Business Services
This layer is regarded as the essential facilities for doing business because it is required by both business corporations and individuals in business transactions. The facilities include standardized product catalogues, price lists, electronic payment methods, secured transmission of business information, and the authentication of identity of both trading parties.  The ultimate goal of e-commerce is that the seller gets the payment and the buyer obtains the product.  To ensure transaction security, e-commerce needs to ensure content reliability, integrity, non-repudiation, and to provide the relevant evidence in case of disputes.  Therefore, payment security on the web is crucial to ensure smooth completion of a transaction.  The prevailing method of security measure is by electronic certification which provides ‘end-to-end’ security protection.
5.    The Fifth layer: Practical Application of E-commerce
E-commerce is widely employed in supply chain management, electronic marketing, electronic advertising, online shopping, online entertainment, pay-information service and network banking.
Network Infrastructure for E-Commerce:
Network infrastructure is required for e-commerce to transport content. I-way is a high-capacity, interactive electronic pipeline used to transfer content in case of e-commerce. I-way can transfer any type of context like, text, graphics, audio, video. In other words, multimedia contents are
Easily transported through I-way.
Components of I-way: – Consumer access equipment. – Local on-ramps,and – Global information distribution networks.
Consumer access equipment are devices used by consumers to access the multimedia interactive contents of e-commerce. In this segment, hardware and software vendors are also included.
Local or access road, or on-ramps: This segment of I-way simplify linkages between businesses, universities, and homes to the communications backbone. There are four different types of provider of access ramps: – telecom-based – cable TV-based – wireless-based and – computer-based online information services. These providers link users and e-commerce application providers.
Global information distribution networks are the infrastructure that is connecting countries and continents.
There are seven major issues to be discussed about I-way: cost, subsidies, allocation of scarce resources, regulation, universal access, privacy and social issues. Cost: Who will pay for constructing the I-way? Subsidies: Who are to be given subsidies? Allocation of scarce resources: Investment of the allocation of different scarce resources would be wasted or not. Regulation: Who will fund for the highway and who will write and enforce the rules to use the highway? Universal access: who can access and at what cost? Privacy: Is using online activities secure? Social and religious barriers: In cyberspace, everybody has right to write anything or publish.