By Nanditha Krishna and Harinandana

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What is ‘e-commerce’ ?

Electronic commerce is better known to us as ‘e-commerce’. It is one of the largest sectors of the electronics industry. It essentially involves the purchase-both buying and selling of products via electronic means such as internet or other e-services. It will be an understatement to say that e-services are simplifying our lives in a trillion ways. Technology has changed our lives in unimaginable ways. Need to buy grocery? Or stationary? Or order food ? Or books? or shop clothes ? We have numerous applications available to us on our phones(and other electronic gadgets) and products are just a click away away from being available to us.  Add to this, Cash/Card on delivery has changed the way we purchase products online.

Thus, the e-commerce industry is a rapidly growing one.

E-commerce actively utlilizes mobile commerce, e-fund transfer, internet marketing and transaction processing.

We get to choose from a very broad range of products online. Online shopping has given us more choices in purchasing products. It can provide flexible personalized product and customer customization. It can also help organizations save a lot of time and help them expand business, ensuring access of products to the whole world, not limiting it to a specific area. Geographical constraints are overcome.

Online stores like Amazon, Flipkart and Myntra are examples of E–commerce websites. Various discount vouchers available on their websites have helped encourage online shopping.

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Brief History of E-commerce :
( The source for the tidbits of history of e-commerce we’ve collected and mentioned below is Wikipedia).

The venture was started in 1971 or 1972 when the ARPANET used to arrange a cannabis sale between students at the Stanford Artificial Intelligence Laboratory and the Massachusetts Institute of Technology. This initiative was later called as “the seminal act of e-commerce” by John Markoff in his book ‘ What the Dormouse Said’ . In 1972, Mohammed M. Atalla filed a patent for a secure transaction system over telecommunications networks, utilizing encryption techniques to assure telephone link security. This is considered as a precursor to Internet-based e-commerce. In 1979, Michael Aldrich demonstrated the first online shopping system and in 1981,the first business-to- business (B2B) online shopping system was installed by Thomson Holidays UK.  In 1982,’Mintel’ was introduced nationwide in France by France Telecom and was used for online ordering.

Gateshead SIS/Tesco is the first B2C online shopping  system and Mrs Snowball is the first online home shopper . This was in 1984. In April 1984, CompuServe launches the Electronic Mall in the US and Canada. It is the first comprehensive electronic commerce service. The first internet based system for e-commerce ,Compumarket was introduced by Sequola  Data Corp in May 1989. Here, sellers and buyers could post items for sale and buyers could search the data base and make purchases with a credit card .

In 1995 , Amazon.com was launched by Jeff Bezos which inturn became a revolution in the field of e-commerce. E-bay was founded by computer programmer Purre Omidyar as an Auction Web. It is the first online auction site supporting person-to-person transactions. By 1999, Global e-commerce reached $150 billion and by 2001 had the largest userbase of any e-commerce site. In 2003, Amazon.com posted it’s first yearly profit and by 2015, Amazon accounts for more than half of all e-commerce growth , selling almost 500 millions SKU’s in  the US. The Global e-commerce transactions generate $29.267 trillion including $35.516 trillion B2B transactions and $3.851 trillion for B2C sales by the end of 2017.

Though India has the second most user base in the world , the growth of e-commerce is comparatively low in our country . This is because, Indians prefer ‘cash-on- delivery’ system as the most efficient payment method.

E-commerce in India

The e-commerce market in India is estimated to grow from $10 billion every year to between $ 70 – 260 billion every year by 2025* .

In 2017, the largest e-commerce companies in India were Flipkart, Amazon,Myntra, Paytm and Snapdeal.

In 2018, Amazon beat Flipkart and was recorded as the biggest e-commerce in India in terms of revenue.

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Impacts on customers

 E-commerce is in simple words convenient to customers. It can also grand you with international market and quality products which may not be available in the retailer shops nearby. The detailed information of a particular product is gained by the customer and it also cuts the transaction costs which is made possible by the lack of intermediates.
However it also has certain demerits which include the assurance about the quality of the product or- in the case of clothes wrong size chosen is a big problem. The returning of products and the refunding of money spent is also another threat in this  field.

Impacts on environment
  The use of cardboards is a major issue in the case of e-commerce. In 2018, they generated 1.3 million tons of container cardboards in North America which was 1.1 million in 2017**.
 This shows that as the use of e-commerce increases, the use of cardboard containers also increases and only 35 percent of North American cardboard manufacturing is from recycled content. In Europe, the recycling rate is 80 percent and in Asia ,it is 93 percent. Amazon has reduced usage of packaging material by 19 percent by 2016 since they are the largest users of cardboard boxes.

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Impacts on Traditional retail
 The frequently referred trend “retail apocalypse” is a major impact caused by e-commerce to the traditional retailer . The rise of e-commerce outlets like Amazon*** , has made the traditional retailing community’s efforts to attract the consumers harder. They are now forced to change their sales strategies. They also use the internet for promotions and advertisements.

Impact on markets and retailers

E-commerce markets are growing at noticeable rates. The online market is expected to grow by 56% in 2015–2020****.
In 2017, retail e-commerce sales worldwide amounted to 2.3 trillion US dollars and e-retail revenues are projected to grow to 4.88 trillion US dollars in 2021*****.

Impact on supply chain management

The emergence of e-commerce has provided an efficient way of delivering the benefits of the new supply chain technologies.

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Impact on employment

E-commerce has helped generate new job opportunities due to information related services, software app and digital products-to manage large amounts of information, customer demands, and production processes. Warehouse require more staff to be managed, supervised and organized.

Sources :
* https://retail.economictimes.indiatimes.com/news/industry/indian-e-commerce-market-to-touch-200-bn-gmv-by-2025-bofa-ml/49735275

https://economictimes.indiatimes.com/industry/services/retail/amazon-pips-snapdeal-to-become-indias-2nd-largest-online-marketplace-after-flipkart/articleshow/52017176.cms?from=mdr

https://m.economictimes.com/small-biz/startups/battle-for-top-slot-flipkart-continues-to-nudge-ahead-of-amazon-in-terms-of-gross-sales/articleshow/58388338.cms

** http://lite.cnn.com/en/article/h_bad505d11b50114d6a78bc4f7a40f4ce?utm_source=Sailthru&utm_medium=email&utm_campaign=Issue:%202019-07-16%20Supply%20Chain%20Dive:%20Operations%20%5Bissue:21926%5D&utm_term=Supply%20Chain%20Dive:%20Operations

***
https://www.theatlantic.com/business/archive/2017/04/retail-meltdown-of-2017/522384/

****
https://www.digitalcommerce360.com/2016/01/29/online-sales-will-reach-523-billion-2020-us/

*****
https://www.statista.com/topics/871/online-shopping/

General other sources :
Wikipedia
Economic Times
CNN News
Business Standard