E-commerce refers to the transactions that are done by businesses through electronic medium, usually the internet, without any use of paper documentation. This term is usually used interchangeably with the term e-business.1

This technology dates back to the 1970s when some companies and organization used it to send their business documents electronically. During this period, the internet was still not wide spread like today hence its slow adoption. It started gaining popularity in 1991 when the internet was opened to commercial use. It was until the year 1994 when the security protocols for faster accessibility of the internet were developed when most companies from the United States and Western Europe started show casing their services in the internet. Amazon and EBay were among the first companies to allow transactions on the internet platform. It’s during this time that most people understood e-commerce as a process of executing a transaction over the internet using secure connections. The most commonly goods and services sold in the internet are computers, books, music, office appliances and other electronic gadgets.2

The two companies that have contributed to the development of e-commerce are Amazon and Dell Inc.Amazon Company developed user friendly review system within its web site that allows customers to rate any goods or services that they received via this mode of transaction. Dell has also made e-commerce easier with its unique strategy that enables customers to make a choice and also have control on what they want by enabling them go through the details of products.

1.Investorwords.com., ”E-commerce,”, http://www.investorwords.com/1637/e_commerce.html(August,13’2013)

2.”History of E-commerce,”Commerce-Land,2004, http://www.ecommerce- land.com/history_ecommerce.html(August 13,2013)

The rise of e-commerce and its rapid growth has been contributed by the benefits that accrue to the transacting parties in many ways such as cost reduction. Doing business online reduces logistical problems and thus puts all competing firms at the same level, irrespective of their sizes in terms of transaction costs, such as financial transactions. The cost of having a physical store space, insurance and infrastructure is also reduced since what one needs is the idea, the differentiated product(s) and a well developed web site.3

E-commerce offers exclusive customer service as the customer is able to go through all the products of the seller without having to call the seller hence saving on time and money. This is made possible by use tracking number system and overnight package delivery services.

E-commerce has encouraged teamwork through online communication amongst the various stakeholders of a given company as the stakeholders can easily exchange ideas and information that leads to better outcome of any given undertaking.4

Through e-commerce, customers are able to do instant price comparisons and are also provided with a wide choice due to the larger stock supplies online coupled with the flexibility to shop anytime.

Delivery is also to the advantage of the shoppers because they need not to leave their homes as mostly, the delivery is done at their door steps.

3.”Advantages and Disadvantages of E-commerce,”Manjeet Singh Sawhney,2012, http://www.manjeetss.com/articles/advantagesdisadvantagesecommerce.html

4. Ibid.

However, this technology also has some drawbacks. These drawbacks may be termed as its disadvantages and as such a reason why it has not eventually extinguished physical transactions. These include:

Integrity of the system and data: the hacking of company websites and changing of the available data poses a threat to e-commerce. The menace caused by computer viruses such as storage problems, unnecessary file backups and unnecessary delays leads inefficiencies of this mode of transaction. Most customers also have problems with the authenticity and integrity of the payment process when undertaking online purchase and unless this is guaranteed, fewer sales may be recorded.5

It’s also true that not all products can be purchased online as some need a physical touch or feeling for it to be considered by the buyer. This includes items such as furniture where one may want to sit on it first to feel its comfort or even texture.6

E-commerce can lead to disclosure of competitive advantage of a given company to its rivals as the competitor may obtain business intelligence from its website practice known as web framing.

Concerning the future perspective of e-commerce, a report by Econsultancy foresees a continual growth of e-commerce such as virtual fitting rooms evolution and also mobile and tablet user

5.”Advantages and Disadvantages of E-commerce,”Manjeet Singh Sawhney, 2012, http://www.manjeetss.com/articles/advantagesdisadvantagesecommerce.html6.Ibid.

experience. As per the report, the continued growth of e-commerce will have a positive impact on the on the offline shopping as it will increasingly be used to access the location of the products and services such as best hotels and vacation destinations. This will make stores to be showrooms as they will be used to fulfill the needs of offline shoppers.7

E-commerce is still evolving day by day as technology also improves to a more efficient and effective way of accomplishing our socio-economic activities and with time, most companies will do away with physical structures and concentrate on the virtual way of doing business without much paper documentation.

7.”What actually is the future of E-commerce?,” Creative Jar Ltd, June 11, 2013, http://creative-jar.com/insights/publications/marketing/more-wins-for-e-commerce/Bibliography

”Advantages and Disadvantages of E-commerce,”Manjeet Singh Sawhney,2012,

http://www.manjeetss.com/articles/advantagesdisadvantagesecommerce.html”History of E-commerce,”Commerce-Land,2004, http://www.ecommerce-land.com/history_ecommerce.html Investorwords.com,”E-commerce,” http://www.investorwords.com/1637/e_commerce.html”What actually is the future of E-commerce?,” Creative Jar Ltd, June 11, 2013, http://creative-jar.com/insights/publications/marketing/more-wins-for-e-commerce/