What is E-commerce?
The meaning and scope of electronic commerce.
5-mark Exam Answer
E-commerce is the use of the Internet, the Web, and mobile apps and browsers to transact business. According to Laudon and Traver, it is more formally defined as digitally enabled commercial transactions between and among organizations and individuals.
- 1.Digitally enabled transactions
- 2.Commercial transactions involve an exchange of value
- 3.Three building blocks: Internet, Web, mobile platform
- 4.Internet and Web are distinct
- 5.Synonymous with digital commerce
E-commerce involves the use of the Internet, the World Wide Web, and mobile apps and browsers running on mobile devices to transact business. More formally, it can be defined as digitally enabled commercial transactions between and among organizations and individuals.
Each component of the definition is important. Digitally enabled transactions include all transactions mediated by digital technology, mainly those occurring over the Internet, the Web, or via mobile devices. Commercial transactions involve the exchange of value (e.g., money) across organizational or individual boundaries in return for products and services.
The exchange-of-value criterion defines the limit of e-commerce: without an exchange of value, no commerce occurs. This is what separates e-commerce from purely informational digital activity.
The Internet is a worldwide network of computer networks, while the Web is one of the Internet's most popular services, providing access to billions of web pages. The mobile platform (smartphones and tablets) is the newest addition and has become the primary client for accessing e-commerce.
When a consumer uses the Amazon app on a smartphone to order a book and pays by credit card, value is exchanged across the consumer-to-merchant boundary over a digitally enabled channel — this is e-commerce.
E-commerce, in short, is digitally enabled commercial exchange of value, built on the Internet, Web, and mobile platform, and is the foundation of the modern digital economy.
The exam interface follows the university paper pattern: Section A & B carry 5-mark questions; Section C carries objective questions.