What Is Ecommerce?

Electronic commerce, or e-commerce, refers to the use of the Internet at any point during the buying and selling of goods. The term is commonly used to refer to transactions where an actual payment has been made online via a credit card. But e-commerce also involves other online activities such as marketing, distribution and servicing of products over the Internet. Electronic commerce often relies on technologies such as e-mail and enterprise resource planning applications for transaction completion and order fulfilment.

The term e-business is usually interchangeable with e-commerce. However, some definitions treat Electronic commerce as a subset of e-business. In these cases, a clear distinction is made between transactions that involve the exchange of money online and those that don't. A transaction where a payment is made online is defined as e-commerce. And e-business is used to refer to all non-fiscal online transactions that facilitate and support the actual sale.

Electronic commerce can involve commercial activity between different interest groups. These could be business to business (B2B), business to consumer (B2C), business to administration (B2A), business to employee (B2E) or customer to customer (C2C). These classifications can be broken down into further sub-groups. For example, a B2B activity could be a vertical e-marketplace that offers goods or services to businesses within a specific industry segment. Alternatively, it could be a horizontal e-marketplace that offers services to businesses irrespective of industry segment.