What is E-commerce? 

E-commerce is the activity of electronically buying or selling of products on online services or over the Internet. Electronic commerce draws on technologies such as mobile commerce, electronic funds transfer, supply chain management, Internet marketing, online transaction processing, electronic data interchange (EDI), inventory management systems, and automated data collection systems. E-commerce is in turn driven by the technological advances of the semiconductor industry, and is the largest sector of the electronics industry.

E-commerce operates in all four of the following major market segments: business to business, business to consumer, consumer to consumer, and consumer to business.

History of E-commerce

In recent years, e-commerce has revolutionized industries such as supply chain and retail. The sales in e-commerce have been increasing in the past few years, and experts say that these numbers are expected to rise more in 2021 and the next few years. However, before this online service became a successful venture, it also began small-scale, just like everything else. 

1960s: Electronic Data Interchange Began

Many experts believe that e-commerce began in the 1960s when Electronic Data Interchange was developed. The aim of this technology was to replace mail and fax. Hence, this development made data exchange possible through digital transfer. People were able to transmit orders, invoices, and other information without the need for human intervention.

1972:  First E-commerce Transaction

The first e-commerce transaction was made between students of Stanford University and Massachusetts Institute of Technology.

1979:  Birth of Teleshopping or Online Shopping

A few years after the first e-commerce transaction, Michael Aldrich, an english inventor, developed the concept of what we all know now as online shopping. After a supermarket run, Aldrich with his wife had an idea of utilizing their telephone line to serve as a transaction processing computer and connect it with their television. This served as a connection to the supermarket so that their goods would be delivered. What Aldrich did gave birth to what we all call now as teleshopping or online shopping. A year later, this teleshopping system was developed as a business to business system. 

1982: World’s First E-commerce Company

Boston Computer Exchange, also called the BCE and BoCoEx, was the world’s first e-commerce company. It dominated the electronic trading in used computers in the US during this time. The company was in operation even before the internet became widely available to the general public. The main objective of the company was to establish a platform for an online database of products where sellers and buyers can buy, sell, and trade computers.

1991: World Wide Web

Tim Berners Lee and Robert Cailliau built a hypertext project known as WorldWideWeb in 1990. They utilized a NeXT computer in order to produce the first web server, as well as write the first web browser. A year after development, they were able to publicly debut their product making internet services in 1991 available to the general public. After doing so, they developed the URL, HTML, and HTTP. 

1995: Commercial Enterprises Operations Via The Internet/ Birth of Amazon and eBay

A year after the internet was available to the public, the first commercial website, dotcom, was created in 1992. E-commerce was still not as famous as of that time because restrictions on online transactions were still in place. However, in 1995, ban of commercial enterprise operations via the internet was lifted. This paved the way for the growth of e-commerce for the next coming years. 

It is good to highlight also that in this same year e-commerce giant companies Amazon and eBay were founded. Amazon, at that time, started to be an online bookstore and offered more titles compared to its offline competitors. eBay, on the other hand, began as any typical online store, however, it was mainly preferred by people at that time because of its online auctions. 

1998: PayPal Was Introduced 

In 1998, founders Max Levhin, Peter Thiel, Like Nosek, and Ken Howery introduced PayPal to the market. PayPal was introduced to the rising e-commerce industry as a money transfer tool. This made global e-commerce possible as an acquired bank that does payment processing for online sellers, auction sites, and commercial users. Because of this development, customers are able to send, receive, and hold funds, in a wide range of different currencies. By 2000, PayPal would merge with Elon Musk’s online banking company that would then pave the way for it to rise to fame and popularity.

2000s: Increased Visibility of E-commerce To People

With the continuous improvement in technology, this made it possible for almost everyone to have fast and reliable internet connections in their homes. With that, this paved the way for better e-commerce. People were then able to have better access to online shops. People were also able to facilitate product research and search for competitive prices and alternatives. 

Furthermore, in the 2010s, there was a significant increase in the use of social media which then helped for e-commerce sites such as Amazon, eBay, and Alibaba to be more visible to a wider range of people. Online social media platforms such as Facebook also offered advertising opportunities to business owners via sponsored posts, pages, or stories. With these, businesses were able to produce paid campaigns that could reach specific people and get into the social media feeds to target a wide variety of audiences.

2020: Fast Growth of E-commerce 

According to experts, the growth of e-commerce just recently has accelerated approximately five years. Here are the reasons why the industry had a significant increase the past year:

  • COVID-19 Pandemic

One of the most obvious reasons why there was an observed increased sales in the e-commerce industry is due to the fact that the COVID-19 pandemic has forced people to stay in homes and shift from shopping in physical stores to digital ones. Even those who are already of age and are used to shopping in stores used digital online systems to shop for the first time. In addition to that, COVID has made more businesses join the e-commerce business revolution than ever before. More companies are expanding their e-commerce strategies because of the decreasing number of people going to physical stores due to the fear for their health. With that, COVID-10 has accelerated and expanded the e-commerce industry’s growth. 

  • Personalization of Online Shopping Experience

The increasing trend for e-commerce for the past year can also be attributed to the personalization of online shopping experience of consumers or buyers. E-commerce companies are leveraging personalization technology using personal data of consumers to give them a more personal and customized experience. Companies are utilizing social media platforms and search engine tracking tools  in order to extract a number of personal data about their visitors and buyers, including customer demographics, page visits, search queries, previous purchase history, and other important personal data. Using these data, companies deliver a more personal experience on their e-commerce sites through effectively showing content, product recommendations, and specific offers based on the customer’s preferences. This is the science of personalization, it mimics the customer’s experience in physical stores through producing content in a more personalized manner in e-commerce online sites. 

  • Social Commerce and Influencer Marketing

Social commerce and social media marketing are two different things. Social commerce is selling products directly though the social media network. It is not considered as a social media marketing because one does not redirect users to an online shop, however it gives them the ability to directly checkout products within the network they are currently using at the moment. 

Companies are pairing this social commerce with influencer marketing in order to boost sales. In 2020, there was an increased number of businesses focusing on influencer marketing through sponsored content partnership. Social commerce combined with celebrities that have thousands to millions of followers is a recipe to drive sales directly from social. Companies have observed that it is a very effective strategy in influencing people to buy their products. With that, it is expected that this trend will continue and evolve even through 2021 and the next years to come. 


E-commerce has evolved from a simple online trading to a massive industry that allows people to buy, sell, auction, and many more. People have moved beyond the initial discovery of just being able to buy something online. Today, e-commerce involves personalization of experience and using social media to be more effective not only for businesses but also for consumers. With the current trend that we are seeing with e-commerce, the industry will sure have a continued success. Today, there is definitely no other way but up for e-commerce. 


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