evolution of online shopping project

7/29/2019 Evolution of Online Shopping Project

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E-commerce

Executive Summary

There is no doubt about it the Internet has changed the world we live in. Never

before has it been so easy to access information, communicate with people all over

the globe and share articles, videos, photos and all manner of media. The Internet has

led to an increasingly connected environment, and the growth of Internet usage has

resulted in declining distribution of traditional media: television, radio, newspapers

and magazines. People can buy goods with a click of mouse button without moving

out of their house or office. Shopping online has now become a fad. Today, there are

numerous advertisements on television promoting online shopping. Some or the other

time, each one of us has gone online to compare prices before making an expensive

purchase. And why not? The internet provides us with vast information that a

salesman most certainly cant. Also, life cant get more convenient than that. We are

pampered with discounts, services like cash on delivery, free shipping and even a 30-

day replacement period. Amazed by the world of e-commerce, I have made sincere

efforts to study the Growth of E-commercewhere it all began, how consumers are

responding to it in the world as well as in India and what it will lead to in the future.


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1.IntroductionThere were an estimated 2,405,510,175 internet users worldwide for mid-year 2012

(June 30, 2012), according to Internet World Stats. This represented about 34.3% of

the population worldwide and a 566.4% growth compared to 2000.

Sourcewww.internetworldstats.com

With such startling figures, it is only obvious that the internet is where everything is

happening in todays world. Be it socializing, expressing ones views or even

shopping, its all just a few clicks away. This chapter is a little introduction to the e-

commerce, a word we all have heard of.

1.1 E-commerce

Electronic commerce, commonly known as E-Commerce refers to the buying and

selling of products or services over electronic systems such as the Internet and othercomputer networks. However, the term may refer to more than just buying and selling

products online. It also includes the entire online process of developing, marketing,

selling, delivering, servicing and paying for products and services. 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 one point in the transaction's

life-cycle, although it may encompass a wider range of technologies such as e-mail,

mobile devices and telephones as well.

A large percentage of electronic commerce is conducted entirely in electronic form

for virtual items such as access to premium content on a website, but mostly

electronic commerce involves the transportation of physical items in some way.

Online retailers are sometimes known as e-tailers and online retail is sometimes


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known as e-tail. Almost all big retailers are now electronically present on the World

Wide Web. Electronic commerce that takes place 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 takes place 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.

Online shopping is a form of e-commerce where the buyer is directly online to the

seller's computer usually via the internet. There is no intermediary service involved.

The sale or purchase transaction is completed electronically and interactively in real-

time such as in Amazon.com for new books. However in some cases, an intermediary

may be present in a sale or purchase transaction such as the transactions on eBay.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

business transactions.


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1.2 Types of E-commerce

Ecommerce can be broken into four main categories: B2B, B2C, C2B, and C2C.

B2B (Business-to-Business)

Companies doing business with each other such as manufacturers selling to

distributors and wholesalers selling to retailers. Pricing is based on quantity of order

and is often negotiable.

B2C (Business-to-Consumer)

Businesses selling to the general public typically through catalogs utilizing shopping

cart software. By dollar volume, B2B takes the prize, however B2C is really what the

average Joe has in mind with regards to ecommerce as a whole.

Having a hard time finding a book? Need to purchase a custom, high-end computer

system? How about a first class, all-inclusive trip to a tropical island? With the advent

ecommerce, all three things can be purchased literally in minutes without human

interaction. Oh how far we've come!

C2B (Consumer-to-Business)

A consumer posts his project with a set budget online and within hours companies

review the consumer's requirements and bid on the project. The consumer reviews the

bids and selects the company that will complete the project. Elance empowers

consumers around the world by providing the meeting ground and platform for such

transactions.

C2C (Consumer-to-Consumer)

There are many sites offering free classifieds, auctions, and forums where individuals

can buy and sell thanks to online payment systems like PayPal where people can send

and receive money online with ease. eBay's auction service is a great example of

where person-to-person transactions take place every day since 1995.


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Benefits of e-commerce

Convenience Best bargain as you can visit numerous shops/suppliers. No national or international barriers, making equal playing ground for players

from developed as well as 3rd world nations.

Consumer at a demanding position and suppliers not in a very commandingone.

Drawbacks of e-commerce

Fraud and security concerns Privacy of personal information is a significant issue for some customers. Most transactions are made on the basis of a picture which doesnt go down

too well with some customers


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2.History & EvolutionThe history of e-commerce is an interesting one, and longer than one might think.

Beginning in the early days of the modern computer and only allowing simple B2B

(Business to Business) transactions, it has grown to a multi-billion dollar industry that

nearly all of us use today. But where did it all begin?

1960- EDI (Electronic Data Interchange i.e the structured transmission of data

between organizations by electronic means) permits companies to carry out electronic

transactions. Although the concept of e-commerce did not touch the daily Internet

user till the era of 1990s yet some big players had started to use EDI as early as 1960.

The railroad industry was among the first to understand the importance of EDI and

start using the same. Other players in the transportation industry followed.

1979There is always a hero. Someone who

comes out of nowhere and does something

unusual. E-commerce has its own

hero. Michael Aldrich is the man. It was the

year 1979 when Aldrich was on a stroll in a

supermarket with his wife. Suddenly, he was

hit by an idea which changed it all for e-

commerce. Aldrich connected a domestic TV

and a computer with telephone lines so as tostart selling groceries online via this model.

How they were able to tackle various

situations is a different story altogether, but

at the end of the day they did come up with a

model that helped them launch the business of online shopping.


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1981 - It was the year 1981 when Thomson Holidays picked up 66 travel agents from

around England and connected them in order to come up with what has been tagged

as first B2B (Business to Business) online shopping. These agents were able to extract

data online and understand what was available from the Thomson Brochure so as to

serve customers instantly.

1982 - This was the year for France to jot down

her name in the history books. France based

telecom company invented Minitel which has

been considered as the most happening pre-

WWW online service. Even during its infant

years users had the privilege to make online

purchases, check phone directories, chat with

each other and various other basic searches just

like it happens in todays Internet.

The first ever Minitel invented in 1982

1984 - How would it sound if someone tagged you as the first ever home shopper on

this planet. Well, Jane Snowball was tagged as the first ever home shopper when at

the age of 72 she became Tescos customer. It was the year 1984 itself when the

worlds first B2C (Business-to-Consumer) online shopping system was launched by

Tesco. The online shopping system started the concept of Online Shopping Basket

which was later renamed Online Shopping Trolley. Also, it was April 1984

when CompuServe announced Electronic Mall which was almost like the e-commerce

of today.


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1987 - Next up was a Merchant Account launched in the year 1987 that helped

software developers sell their software products online. SWREG was the name and it

happens to be one of the oldest pieces of software that is still available.

1990 - Here we go. This year marked the launch of the first web browser. The name

of the browser was World Wide Web (written by Tim Berners-Lee) which was later

renamed to Nexus so as to avoid the obvious confusion. Nexus was also the editor for

programmers who coded websites. During those days Nexus was supposed to be the

only medium to access the Internet in graphical format. The amusing part is that the

browser was launched for the public by using Internet newsgroups as the medium

of communication. This will help you understand that the communication system (on

the Internet) of those days wasnt as big as it is nowadays.

1991 -Back then NSFNET was the backbone of the Internet, but it wasnt available

for commercial use. It was the year 1991 when the NSF (National Science

Foundation) cleared the way for the commercial use of NET. This was considered to

be a major boost for the eCommerce industry and its future growth. Statistics state

that the traffic on the backbone network of NSF jumped to over 1 trillion bytes per

month in the year 1991 itself after it was opened for commercial use. By 1996 there

were over 10 million hosts online and the Internet was now a global phenomenon.

It was the year 1991 itself when University of Minnesota launched gopher, the first

point-and-click based browser that could be used to navigate files on the Internet. At

times this has been tagged as the birth of Internet. Gopher was originally designed to

ease campus communication.

The first Internet application my mom can use. ~ Mark MaCahil, Team Lead of the

computer programming team which launched Gopher.


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1992 - A book called Future Shop: How new technologies will change the way we

shop and what we buy was published in the year 1992. The book was considered

revolutionary considering the fact that it talked about what will happen in the future of

e-commerce and how the Internet will take shape.

Snider and Ziporyn (the authors of the book) powerfully describe the glass highways

of the future, which will not only benefit consumers but will also provide fantastic

opportunities for schools, hospitals, businesses, and the average American as we enter

the Information Age of the 21st century. Conrad Burns, Chair of U.S. Senate

Communications Subcommittee

1994 - This could be tagged as the Mother of all Years for e-commerce as Netscape

launched encryption certificate which became the trustworthy means of transmitting

data over the Internet. Certificates gave the browsers a chance to trust a source before

displaying its data and sharing personal information. Something that helped the end

consumer shower more interest on the Internet and indirectly on electronic

transactions.

This wasnt all. The year 1994 also marked the launch of Yahoo! though the domain

was registered later in the year 1995. This truly gave the Internet and e-commerce a

completely new direction.


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1995 - It was the year 1995 when NSF started charging a fee for registering domain

names. At that time the Internet had 12,000 domain names registered and the number

jumped to over 2 Million in the next 3 years.

January 18, 1995 was the day when the domain Yahoo.com was registered. The word

Yahoo is an acronym for Yet Another Hierarchical Officious Oracle.

One must understand that by now a lot of other services that would later rule the web

had started to appear. Some of these were Amazon, AuctionWeb (which later becameeBay) and Verisign etc.

1998 - PayPal came into existence in the year 1998. The current PayPal system that

we see is actually the merger of X.COM, a financial service company of the late

2000s, and Cofinity which happened to be a payment and cartographic company. It

was the year 1998 only when Google entered the world of e-commerce and Yahoo!

launched Yahoo! Stores online.


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2000 - The dot-com bust as we know it today wasnt something that happened in a

day, over speculation for a period of time (approx. 1995-2000) where just the prefix

e- or .com in names could make stock prices rise at great rates. This saw a great

many companies rise and fall.

Many entrepreneurs came up with brilliant plans and most got pretty generous

venture capitalists, most of these firms started working on the principle expand the

market and later profits will cover all present debts and losses. This speculation was

constantly taking the market upwards with NASDAQ at a peak of 5132.52 points on

March 10, 2000. After this the market goes down and with them the over speculating

ones were just wiped off the market.

2002 - PayPal the company which offered an alternative (through internet) to cash or

check payment was acquired by eBay for $1.5 billion. CSN Stores and NetShops were

founded with the concept of domain specific commodity and sprung with many online

stores, going for one item on each website.

2003 - Online shopping matures showing to the world their confidence. Amazon.com

posted first yearly profit and thus again making presence on the stock market.

2007 - Acquisition of Business.com by R.H. Donnelley for $345 million, making way

for bigger players in technology domain.

2008 - Tremendous growth in US in Ecommerce with sales figures touching $204

billion, a decent 17% rise from the previous year.


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2009 - Online RetailerAmazon.com has an estimated turnover on a daily basis is

over US $2.5 trillion with growth rate of 14% annually. Ebay having sales of US

$1.89 billion, these numbers alone speak.

And then? - The rest, they say, is history. As we know it, the Internet continues to

grow with major and minor e-commerce companies launching their own set of stores.

Today, we can literally buy anything via the Internet. That is the wonderland of e-

commerce.

Online Shopping in todays world Anything and everything is available on the

internet! All sort of transactions take place on the web. No need to wait in a line or for

the sale to start as we now have the privilege to shop online, get pampered with a

wide choice and heavy discounts (like Cyber Monday in the USA, the concept is

being brought to India by Citigroup)

Customers have become the kings and entrepreneurs understand that. This explains

why online shopping has become so customer-friendly. With services like cash on

delivery (for those who dont believe in plastic money) and 30-day replacement, we

just cant ask for more.

evolution of online shopping project

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