What is eCommerce?

eCommerce has revolutionized global trade and can be generally defined as:

1. The buying and selling of goods and services over the Internet
2. The transfer of funds through the Internet

1994 is considered the birth of mainstream eCommerce. In this year entrepreneur Jeff Bezos started Amazon.com out of his garage. Since then, businesses from every industry, large and small, have scrambled to get online.

Nearly a quarter of the world’s population - roughly 1.4 billion use the Internet on a regular basis in 2008. This number is expected to surpass 1.9 billion unique users, or 30% of the world’s population, in 2012, according to IDC.

But here's the exciting part...

Nearly half of all Internet users will make online purchases in 2008. By 2012, there will be more than 1 billion online buyers worldwide making business to consumer (B2C) transactions worth $1.2 trillion dollars.

Business to business (B2B) eCommerce will be ten times larger, totaling $12.4 trillion worldwide in 2012, according to IDC research.

But as big and as impressive such figures are, sometimes it's hard to grasp how these statistics impact our lives on a day-to-day basis. To get a more revealing picture, we need to examine consumer spending patterns (i.e. what people do in the real world).

For example, according to recent statistics from www.itfacts.biz:

• 76% of all car buyers with Internet access researched their car online before buying.
• 74% of men and women with Internet access research all major products online before purchasing.
• 70% of consumers with Internet access booked their flights online (versus 25% who booked by telephone).

And this is just a small piece of the pie!

In addition to the buying and selling of goods over the Internet, the following activities also come under the umbrella of eCommerce:

• Business-to-business (B2B) transactions (e.g. when a retailer purchases stock electronically from a wholesale supplier).
• Individual share-traders and financial institutions that use the Internet to buy and sell shares.
• Consumers and businesses that pay their bills online.

As well as benefiting large companies, the good news is that eCommerce has allowed thousands of small businesses to flourish.

According to recent research by payment processor PayPal, of the small businesses that currently sell online:

• 64% said that the Internet has increased their revenues or sales
• 48% felt that the Internet helped expand their geographic reach
• 73% saved money by decreasing administrative costs.

Want to collect your piece of the eCommerce pie?