History and Evolution of E-Commerce

I find it interesting that in just over a decade, online shopping has changed the concept of ecommerce. Ecommerce first became possible in 1991 when the Internet was open to commercial use. Thousands of businesses have taken up residence at web sites ever since, transforming business processes into how it is today.

Now, before I continue, let us define what e-commerce is. E-commerce is a process of the execution of commercial transactions electronically with the help of the leading technologies like Electronic Data Interchange (EDI) and Electronic Funds Transfer (EFT) which gave an opportunity for users to exchange business information and do electronic transactions.

E-commerce started to become popular in 1994. It started to become known as the process of purchasing available goods and services over the Internet using secure connections and electronic payment service, making it easy for customers to search through a large database of products and services, compare prices and buy the selected product at best prices with a click of the mouse.


I believe that the advantages and benefits of ecommerce have became so recognize and visible that even the collapse of dot.com in 2000, which resulted in disappearance of many ecommerce companies, did not discourage the “brick and mortar” retailers from adding such capabilities to their websites. In fact, vast numbers are doing so.

By the end of 2001, the largest form of ecommerce, Business-to-Business (B2B) model, had around $700 billion in transactions. Ecommerce sales continued to grow in the next few years and, by the end of 2007, according to all available data, ecommerce sales accounted for 3.4 percent of total sales.

Websites such as eBay and Amazon are synonymous with ecommerce. Currently the 5 largest and most famous worldwide Internet retailers are Amazon, Dell, Staples, Office Depot and Hewlett Packard. Dell was the first company to record a million dollars in online sales in 1997. The key factor of Dell’s success is that Dell.com enables customers to choose and to control online, i.e. visitors can browse the site and assemble PCs piece by piece choosing each single component based on their budget and requirements. According to statistics, approximately half of the company’s profit comes from the web site.

E-commerce today is still at its infancy and it is evolving according to the customer advantage. In my opinion, the evolution of this will never end. As long as technology breathes in the air, it will continue improving for the better.

Sources: http://newmedia.medill.northwestern.edu/courses/nmpspring01/brown/Revstream/history.htm