E-commerce Today and Growth Trends

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Questions and Answers

What is the primary definition of e-commerce?

Digitally enabled commercial transactions between organizations and individuals. (correct)

Transacting business through traditional methods.

Using the Internet for charitable donations.

Advertising through television and print media.

Which year is marked as the beginning of e-commerce?

1990

1995 (correct)

2005

2000

What event caused growth in e-commerce to slow down significantly?

The emergence of social media marketing.

The recession of 2008–2009. (correct)

The rise of mobile commerce.

The end of the dot-com bubble.

Which of the following companies was notably successful after the dot-com bubble burst?

Amazon Signup and view all the answers

What was the estimated online consumer sales growth in 2017?

$669 billion Signup and view all the answers

How many people globally were connected to the Internet as mentioned?

More than 3.3 billion Signup and view all the answers

What is predicted to be the percentage of all e-commerce accounted for by mobile e-commerce in 2017?

25 percent Signup and view all the answers

What was one consequence of the rapid growth of e-commerce in its early years?

A market bubble in e-commerce stocks. Signup and view all the answers

Which year did e-commerce revenues return to solid growth after the dot-com bubble?

2006 Signup and view all the answers

How many Americans are expected to access the Internet using a smartphone in 2017?

223 million Signup and view all the answers

What is the approximate value of mobile e-commerce in 2017?

$170 billion Signup and view all the answers

What term describes the marketplace in e-commerce that is extended beyond traditional boundaries?

Marketspace Signup and view all the answers

Which aspect of e-commerce helps in reducing transaction costs for consumers?

Ubiquity Signup and view all the answers

What was the estimated expansion of B2B e-commerce in terms of value?

More than $7 trillion Signup and view all the answers

What enables e-commerce technology to facilitate international commercial transactions more easily than traditional commerce?

Global reach Signup and view all the answers

How is e-commerce characterized compared to traditional commerce?

It is available everywhere and all the time. Signup and view all the answers

What is the primary characteristic that differentiates e-commerce technologies from traditional commerce technologies?

E-commerce uses universal technical standards. Signup and view all the answers

How do universal standards benefit consumers in e-commerce?

They reduce search costs. Signup and view all the answers

What does the term 'richness' refer to in the context of information delivery?

The complexity and content of a message. Signup and view all the answers

What is a significant advantage of e-commerce related to the delivery of messages?

It enables rich messages to reach a large audience. Signup and view all the answers

Which characteristic of traditional commerce is generally considered a disadvantage when compared to e-commerce?

Limited geographical reach. Signup and view all the answers

In what way does e-commerce technology enhance consumer interaction compared to traditional commerce?

It allows for two-way communication. Signup and view all the answers

What impact do universal standards have on market entry costs for merchants?

They lower market entry costs. Signup and view all the answers

Why was there a trade-off between richness and reach in traditional markets prior to the web?

Broader audience access diminished message detail. Signup and view all the answers

What is a key difference between traditional commerce and online commerce according to the content?

Online commerce enables personalization and customization that traditional commerce does not. Signup and view all the answers

How do online news outlets enhance user experience compared to traditional media?

They allow users to select preferred news topics and set alerts for events. Signup and view all the answers

What model of communication does the Internet and e-commerce predominantly utilize?

Many-to-many model enabling user-generated content. Signup and view all the answers

What was the characteristic approach of previous mass media as discussed in the content?

Content is generated by professionals in a centralized manner. Signup and view all the answers

Which of the following statements best describes social technology in the context of the content?

Social technology allows users to create and share various forms of media. Signup and view all the answers

What is meant by price transparency in e-commerce?

The ease with which consumers can find various prices in a market Signup and view all the answers

How does information density affect merchants in e-commerce?

It enables them to perform price discrimination. Signup and view all the answers

What does personalization in e-commerce involve?

Targeting marketing messages to specific individuals Signup and view all the answers

Which of the following is a key advantage of e-commerce technologies regarding information?

They reduce communication costs. Signup and view all the answers

What aspect of e-commerce allows merchants to adjust their pricing strategies?

Access to real-time data about consumer interests Signup and view all the answers

In what way does customization differ from personalization in e-commerce?

Customization alters the product, while personalization modifies marketing messages. Signup and view all the answers

Why is information density important in e-commerce markets?

It makes prices and costs more transparent. Signup and view all the answers

Which scenario exemplifies price discrimination in e-commerce?

Targeting different pricing for different consumer segments Signup and view all the answers

Study Notes

E-commerce Today

E-commerce is the use of the internet and web to conduct business transactions, between organizations and individuals, exchanging value (e.g., money) for products/services.
E-commerce began in 1995, with Netscape.com accepting advertisements, popularizing the web as a commercial medium.
Early e-commerce growth was exponential, doubling and tripling in the beginning years, slower growth during 2008–2009 recession. Traditional retail sales were declining by 5% annually during this time.
E-commerce revenues grew 15 to 25% yearly until 2008–2009, then slowed. In 2016, an estimated 15% annual growth was projected.

Growth of E-commerce

A graph (Figure 10.1) displays the growth in e-commerce revenue from 2013 to 2019.
E-commerce revenue growth was very rapid in the early years, creating a market bubble in e-commerce stocks, ultimately bursting in 2001.
Many e-commerce companies failed during this time.
However, companies like Amazon, eBay, Expedia and Google saw soaring revenues, fine-tuned business models and increasing stock prices, by 2006, e-commerce revenues returned to solid growth and continued to be fastest-growing retail trade in US, Europe, and Asia.

Online Consumer Sales

Online consumer sales are expected to reach $669 billion in 2017, up more than 15% from 2016.
185 million people made online purchases in 2017, with an additional 217 million gathering information to potentially purchase in the future.
Internet usage will grow to 270 million people in the US in 2017 (up from 147 million in 2004).
More than 3.3 billion people worldwide have internet connection.

Mobile E-commerce

Mobile e-commerce saw rapid growth, with $170 billion in 2017 (25% of all e-commerce and 50% of retail e-commerce).
Mobile phone users access the internet more than 80% using their phones.

Business-to-Business E-commerce

B2B e-commerce, meaning the Internet used for business to business commerce is expanding, exceeding $7 trillion.

Why E-commerce is Different

Ubiquity: E-commerce accessibility is available everywhere, anytime. (Marketspace).
Global Reach: E-commerce transactions easily span international boundaries, with potential markets size that equals the global internet population.
Universal Standards: E-commerce uses universal standards making it easier globally for computers to connect.
Richness: E-commerce can deliver richer more diverse experiences (video, audio, text).
Interactivity: E-commerce allows for interactions and communication between consumers and vendors on a large scale.
Information Density: E-commerce offers detailed and extensive information, at low cost.
Personalization/Customization: E-commerce allows for tailored messages and products based on user preferences.
Social Technology: E-commerce supports user-generated content and online social networking.

Eight Unique Features of E-commerce Technology

Ubiquity: Wide availability through multiple devices across the world.
Global Reach: No geographical limitations.
Universal Standards: Based on common technical standards.
Richness: Supports varied content delivery methods (video, audio, text).
Interactivity: Enables two-way communication.
Information Density: Increases the available information, accuracy, and speed of transmitting information.
Personalization/Customization: Offers tailored messages and products.
Social Technology: Facilitates user content generation and social networks.

Universal Standards

Common Internet standards make e-commerce possible across different types of computers and technologies.
This contrasts with traditional commerce where standards often vary by country or region.

Richness

Information richness refers to the complexity and content of a message.
Traditional markets and sales provide the highest richness of information delivered. .
E-commerce technologies allow richer messages to vast numbers of people through video, audio and text.

Interactivity

E-commerce is interactive, allowing for two-way communication between consumers and vendors
This is different from other forms of communication (TV) and greatly expands the possible interactions.

Information Density

E-commerce significantly increases the amount and quality of information available to businesses and consumers.
Transaction and information costs decrease as information is more accurate and available in real-time, often at no or little cost .

Price Transparency

E-commerce facilitates price transparency and cost discovery for consumers.

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Description

Explore the evolution of e-commerce from its inception in 1995 to its projected growth rates. This quiz covers the impacts of economic events on e-commerce and highlights key companies that have thrived in this space. Test your knowledge on the trends that shaped online business transactions.