The Development and Future of E-Commerce
Essays are among the most frequently assigned projects to students. Whether in high school, college, or even graduate studies, students can expect to handle this coursework more than a few times. The purpose of an essay is to discuss an idea, message, or claim expressed in a thesis statement. This sample essay traces the development of e-commerce as a global phenomenon and its future role in society.
The impact of the internet cannot be overstated. Apart from serving as a channel for communication and a source of information, which makes the internet a basic necessity today, it has also drastically changed the way people conduct business. Indeed, the extent to which the internet affected business operations is unfathomable, seeing how deeply it has been entrenched in the fabric of society and how it has served as a catalyst for globalization . Transactions and exchanges conducted over the internet have become so common that there is a specific term for this: e-commerce. But what exactly is e-commerce? How has it changed the world? What are its prospects for the future? The use of e-commerce has enabled businesses to improve service provision, use time and resources more efficiently, and ultimately enjoy profitability and growth.
The History and Development of E-Commerce
E-commerce can be defined as commercial activities that take place primarily through the internet using an electronic network. These activities include the buying and selling of goods and services, the transmission of funds, and even the exchange of information. Transactions can be conducted between and among businesses, consumers, and the government (Chaffey et al., 2019). There are many examples that illustrate the concept of e-commerce. For instance, a company that markets its products and services through the internet is performing e-commerce. Consumers who place orders for products and services online are likewise taking part in e-commerce. Even transferring funds through mobile applications can be considered as e-commerce. Some of the more renowned companies that demonstrate how e-commerce are Amazon, iTunes, and eBay.
While e-commerce is a big part of daily life today, it is a fairly new phenomenon in the sense that it only emerged in the past few decades following the democratization of the internet. For the most part of history, society depended on physical transactions. It took months or even years for goods to pass through ancient trade routes like the Silk Road. Animal-powered transportation eventually gave way to mechanized transportation. By the 19 th and 20th centuries, transactions had become faster through railways, automobiles, and ships (Lee, 2016). The emergence of new technologies like the telephone and the telegraph further made transactions faster. For example, wire transfers were made possible by the use of telegraphs, with the financial company Western Union pioneering the service (Chaffey et al., 2019). In a way, the developments of the late 19 th and early 20th centuries served as a preview of the power of instantaneous transactions that were to come in the succeeding decades.
E-commerce emerged by the 1970s, when the internet started to form as a result of the merging of separate networks into one vast cohesive network. But e-commerce at this time was in its infancy, considering the high cost of installation and acquisition of internet services at the time. Few organizations could afford the internet and only those with enough resources could leverage its power (Lee, 2016). However, information and communication technology or ICT was developing at breakneck speed, and many advances that took place played a major role in ensuring that the internet and computers would become more affordable. Consequently, more and more businesses started incorporating e-commerce in their operations (Martinez-Lopez & Lopez, 2021).
The Role of E-commerce in Modern Business
Although e-commerce remained quite limited between the 1970s and 1990s, the rapid spread of the internet across the globe turned e-commerce into an everyday reality that people from almost all corners of the globe can experience. Competition played a key role in this rapid spread. Internet service providers and electronic manufacturers were quick to recognize the massive potential of e-commerce and raced to capture markets by lowering internet rates and developing more affordable electronics. These developments made it easier for small and medium enterprises to gain entry and optimize their business by use of ICT. Companies used ICT for a range of purposes such as building up market share, advertising, and setting up chain stores (Martinez-Lopez & Lopez, 2021). E-commerce was no longer just for companies that could afford it. Now, even medium-sized and smaller companies could connect to the internet, thus further making e-commerce available to the public.
E-commerce gives businesses the power to improve their service, use resources more efficiently, and ultimately enjoy profitability and growth. As mentioned earlier, e-commerce cut the time it took to conduct commercial activities. Where once it was necessary to go out and physically travel to transact, it was now possible to do most of these activities anywhere and at any hour. A classic example of this is purchasing goods. E-commerce gave companies the power to deliver merchandise to their consumers without requiring them to leave home. Websites, where people can place orders, are online 24 hours a day, and payments can be made through various channels like credit cards, debit cards, and digital wallets. Increased accessibility for consumers, of course, means better service for customers. Apart from providing better service, e-commerce also helps companies optimize their resources. For instance, e-commerce has allowed companies to use computers to monitor the flow of goods in real-time. This means companies are immediately aware if a new order has been placed or if stock is low, thus allowing them to take action in a timely manner. The drop shipping model , for instance, helps companies keep inventory costs down. Ultimately, better service and more cost-efficient operations translate to higher profits and more opportunities for growth.
Society’s widespread utilization of e-commerce is perhaps best illustrated by the e-retail industry. E-retail can be considered as a type of e-commerce that involves the buying and selling of goods. This industry continues to grow every year. Recent data shows that global e-retail sales for 2022 has reached $8.1 trillion, and this figure represents around 24% of all retail sales (Coppola, 2022). Big companies such as Amazon have also enjoyed massive growth. Amazon’s sales jumped from $177.8 billion in 2018 to almost $469.8 billion in 2021 (Wall Street Journal, 2022). E-commerce was made more crucial by the COVID-19 pandemic that emerged in late 2019. People were forced to stay at home to protect themselves from the virus, which meant e-commerce served as a means for people to conduct transactions. Though many industries shrunk because of the economic impact of the pandemic , e-commerce remained strong as it became a necessity in face of limited mobility, border restrictions, and lockdowns.
The Future
Given the exponential growth of e-commerce in the past few decades, it can be said that this sector will further expand in the future. The convenience that it offers will only win more people, especially as the world becomes further connected by ICT and the internet. As the United States Department of Commerce projects, e-commerce will continue to enjoy annual growth of around 8% in the next half decade (US Department of Commerce, 2021). But while e-commerce is certain to grow, it is also worth mentioning its influence on other aspects of business. In particular, the effects of unfettered consumption around the world have given rise to concerns over the welfare of consumers, laborers, and the environment. For e-commerce to remain sustainable in light of this projected growth, it is vital that companies integrate corporate social responsibility in their agenda.
Conclusion
In conclusion, e-commerce refers to commercial activities conducted through the internet via an electronic network. Though e-commerce emerged only in the past half century, it has enjoyed exponential growth to become an integral part of daily life for billions of people. Businesses that have integrated e-commerce into its operations enjoy benefits like enhanced quality of service to consumers, more cost-efficient use of resources, and increased profits and room for growth. Though the global economy suffered due to the effects of the coronavirus pandemic, figures indicate that the e-commerce sector will continue to expand. More people will become reliant on e-commerce, which means there are challenges and opportunities ahead for businesses.
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References
Chaffey, D., Hemphill, T., & Edmundson-Bird, D. (2019). Digital business and e-commerce management. Pearson Education.
Coppola, D. (2022, September 27). E-commerce worldwide. Statista. https://www.statista.com/topics/871/online-shopping/#editorialPicks
Lee, I. (2016). Encyclopedia of e-commerce development, implementation, and management. Business Science Reference.
Martinez-Lopez, F. J. & Lopez, D. L. (2021). Advances in digital marketing and ecommerce. Springer Nature
United States Department of Commerce. (2021). eCommerce sales and size forecast . https://www.trade.gov/ecommerce-sales-size-forecast
Wall Street Journal. (2022). Amazon.com Inc. annual income statement . https://www.wsj.com/market-data/quotes/AMZN/financials/annual/income-statement