Meaning and Features of E-Commerce

From the marketplace to the network

E-commerce (short for electronic commerce) means carrying on commercial transactions — buying and selling goods and services, and the exchange of money and information that goes with them — over computer networks, chiefly the internet. Instead of a buyer and seller meeting in a physical shop, they meet on a website or a mobile application; instead of cash across a counter, money moves electronically; instead of a paper bill, the buyer receives an electronic invoice.

A useful way to see e-commerce is as the whole cycle of a trade carried out electronically: the customer searches for a product, compares options, places an order, pays online, and the seller confirms, packs and delivers the goods, after which support and returns may follow — every stage supported by the network.

Traditional commerce vs. e-commerce

Main features of e-commerce

• Anywhere, anytime trading — a customer can shop at midnight or from another city; the online store never closes.
• Wide reach and global market — a small seller can reach buyers far beyond the local area, even across the country or the world.
• Electronic payment — money is exchanged through electronic payment systems rather than physical cash.
• Digital catalogue and search — products are displayed with descriptions, images, prices and reviews, and buyers can search and compare quickly.
• Faster transactions and lower cost — orders are placed and processed in minutes, and the seller saves on rent and shop-floor staff.
• Automation — order processing, invoicing and record-keeping are handled by software with little manual work.
• Information-rich — buyers get detailed product information, and sellers gather useful data about demand and customer preferences.

Broadly related terms …