The campaign to reduce emission of greenhouse gases (GHG) in the environment gained momentum some decades ago, and “going green”, a term that referred to the adoption of environment-friendly habits was born. The invention of the computer as well as the internet did not just stop at that; many ideas were also born.
Great advances have been made in the world of information and communication technology in the last twenty years that have heralded previously unknown opportunities and possibilities. One of such possibilities that have sprung up as a result of these dynamic changes in ICT is e-commerce, which refers to the process of conducting business using electronic means. So what is e-commerce?
E-commerce or Electronic Commerce is a term for any type of business, or commercial transaction that involves exchanges across the Internet. Electronic commerce is regarded 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. Some applications on the internet that are mostly employed in e-commerce include e-mail, instant messaging, shopping carts, Web services, UDDI, (universal description, discovery and integration) FTP (file transfer protocol), and EDI (electronic data interchange) etc. E-commerce covers an array of businesses including consumer based retail sites, auction, business exchanges, and trading goods and services between corporations.
Electronic commerce cuts across technologies such as mobile commerce, electronic funds transfer, supply chain management, internet marketing, online transaction processing, inventory management systems, and automated data collection systems.
Electronic commerce has also led to the birth of electronic marketplaces where suppliers and potential customers are brought together to transact business. Electronic commerce can be between two businesses transferring funds, goods, services and/or data or between a business and a customer. Buying and selling goods on the Internet is one of the most popular examples of e-commerce.
Types of e-commerce transactions, based on categories of participants in the transaction are:
Business to Business (B2B): B2B transactions refer to operations where both the transacting parties are businesses, e.g., manufacturers, traders, retailers, etc.
Business to Consumer (B2C): These transactions, also called B2C e-commerce, involve operations where businesses sell electronically to end-consumers.
Consumer to Consumer (C2C): Transactions in the earliest global economic system involved barter, which is a C2C transaction. Auction sites are a good example of C2C e-commerce.
E-commerce can be a very gratifying venture, when implemented suitably; e-commerce is often faster, cheaper and more convenient than the traditional methods of bartering goods and services. Carrying out transactions electronically gives one vast competitive advantages over players who employ conventional methods. It streamlines operations and lowers costs, and in most cases eliminates the restraint of time and geographical distance.
Economists from the University of Chicago have theorized that e-commerce ought to lead to intensified price competition, as it increases consumers’ ability to gather information about products and prices.
