Let's take a quick walk through the history and evolution of this industry. Ecommerce, or electronic commerce, is the buying and selling of goods and services online. It first came about in the early 1970s with the advent of electronic fund transfer (EFT), which allowed businesses to send and receive money electronically. At first, it was primarily used for businesses to communicate with one another electronically.
Later, in the early 1990s with the advent of the internet, it grew in popularity and sophistication, with new technologies and applications being developed every year. However, it didn't take long for entrepreneurs to see the potential for using this new technology to sell products and services directly to consumers. Today, ecommerce is a $22 trillion industry and growing rapidly.
In 1971, the world's first online purchase was made when a student at Stanford University bought an apple from a local grocer using Arpanet, the precursor to the internet. This marked the beginning of ecommerce as we know it today.
A few years later, in 1979, Michael Aldrich invented the concept of online shopping when he created a system that allowed customers to order goods via their television sets. His company, Telematics, was one of the first to provide home shopping services.
In 1982, Charles Keisler created Software Arts' Tadalog, the first transactional database system for personal computers. This system allowed businesses to track customer orders and inventory levels electronically, making ecommerce more efficient and streamlined.
The 1980s saw the rise of electronic data interchange (EDI), which allowed businesses to exchange data electronically. This made it possible for businesses to transmit orders, invoices, and other important documents without having to use paper. EDI became the standard for business-to-business transactions and laid the groundwork for modern ecommerce platforms.
In 1994, Netscape Navigator, the first commercial web browser, was introduced. This ushered in a new era of online shopping as it made it easier for consumers to browse and purchase goods online. Soon after, Jeff Bezos founded Amazon, which is widely considered to be the first e-commerce company. Amazon was launched as an online bookstore and within a year, Bezos had turned Amazon from a small startup into a multi-million-dollar business. In the years that followed, many other companies followed suit and began selling products online. Today it is still one of the earliest success stories in ecommerce.
In 1997, PayPal was founded as a way to securely send and receive payments online. This made it possible for businesses of all sizes to accept credit card payments electronically without having to invest in expensive hardware or software. Also, this online payment system made it much easier and more secure for people to shop online. Suddenly, people all over the world could buy and sell products without having to worry about processing payments manually.
In 2000, eBay acquired PayPal and hived off into its own independent company in 2014. Today, PayPal is one of the most popular payment processors in the world with over 267 million active users.
In 2003, Amazon debuted its Kindle e-reader which allowed users to buy and read digital books electronically. This was a game-changer for the publishing industry as it opened up a new revenue stream for authors and publishers alike. Since then, Amazon has continued to innovate in ecommerce with products like Prime shipping, Alexa voice shopping, and more.
In recent years, e-commerce has continued to grow at an incredible pace. New technologies such as blockchain and artificial intelligence are beginning to change the way we buy and sell products online. And with more and more people shopping on their mobile phones, it's safe to say that e-commerce is here to stay.
Types of E-Commerce
Now that we've taken a brief look at the history of e-commerce, let's discuss the different types of e-commerce that are being used today. The four main types of e-commerce are business-to-consumer (B2C), business-to-business (B2B), consumer-to-consumer (C2C), and consumer-to-business (C2B).
Business to Consumer (B2C)
The vast majority of e-commerce transactions fall into this category. Businesses that sell products or services directly to consumers are known as B2C businesses. Some examples of B2C businesses include Amazon, Walmart, and Starbucks.
Business to Business (B2B)
While B2C transactions make up the lion's share of e-commerce sales, there is still a significant amount of money being spent on B2B transactions. In a B2B transaction, one business sells goods or services to another business. A few examples of B2B businesses include FedEx, Grainger, and John Deere.
Consumer to Consumer (C2C)
This type of transaction occurs when two consumers buy or sell goods or services from one another. The most popular platform for C2C transactions is eBay. Other examples of C2C businesses include Airbnb and TaskRabbit.
Consumer to Business (C2B)
This type of e-commerce is relatively rare, but it does occur from time to time. In a C2B transaction, a consumer sells goods or services to a business. An example of a C2B business would be someone who sells homemade crafts on Etsy.
Ecommerce has come a long way since its humble beginnings in 1971, when a student at Stanford University bought an apple from a local grocer using Arpanet, as a way for customers to communicate electronically with businesses. Today, it is a $22 trillion industry that is only going to continue to grow in popularity and sophistication as new technologies such as blockchain and artificial intelligence are developed, and new applications are found for them.
This industry is just beginning to change the way we buy and sell products online, for businesses looking to get involved in ecommerce, now is the time! There's no telling how big this industry will become in the years to come!