Commerce is normally associated with the buying and selling of items. Traditionally, commerce is one of the oldest activities of human beings and the concept of traders selling and buying items is a part of history. Normally the activity of commerce/trade is supposed that the buyer and the seller as well as the items of trade are available at one place. This brings us to the concept of markets which is a common place where the buyers and sellers meet along with their products. Money is also an essential part of the market place. Though commerce started and to some extent continues even today with the barter system, where both the seller and the buyer exchange their respective items, to make the entire activity flexible, the concept of money is an essential component. Originally money, in a mutually acceptable form is also a part of market place with the advent of time, the concept also changed the term commerce extended to beyond the concept of items and today includes buying and selling of products, information as well as information and knowledge. The concept of single merchants and traders has extended to the concept of organizations, business houses, service providers and several levels of consumers. Though the scope of commerce has broadened, it is still possible to apply the basic concepts of commerce’s and trading to the transactions of these days. Further, to take care of the concept of money, we have several concepts of banking, various methods of representing and transferring money like cheques, MOUs, Drafts etc. as also the concept of different currencies, their equalities, trade restrictions, concept of taxes etc. however, over the years there is a continued effort to improve the efficiency of trading, cut costs, sped up the operations and also to make the entire operation trouble free.

The advent of computers brought in another dimension to the situation, originally computers were used mainly for calculations and scientific applications. At that time, they were mainly calculators to speed up as well as make error free calculations. Subsequently, when the cost of the memories started going down drastically, computers were being used to store information in terms of files. An easier and faster calculation was avoided. This resulted not only in faster calculation, but also made it error free. Further, with floppy disks and magnetic tapes being available, it was possible to transfer the data and files from one computer to another- say from one office of the company to the other office or from the sellers computers to the buyers computer etc.


The growth of computer networks, however, changed the entire scenario to a different magnitude all together, with the concept of connecting computers by transmission of media, the need for physical data transfer through floppy disks etc. was avoided. Thus, people sitting in different cities and even countries, could transmit and share data. This meant that the entire information about buying, selling, costs, taxes and all such associated details are available and also can be transmitted across to the various persons involved at almost zero costs. This revolutionized the scenario of trading and commerce and can be called the beginning of e-commerce.

The matters improved further, with the concept of the world wide web and the internet, the number of web users increased manifold and the cost of getting connected crashed. This, coupled with several changes in banking and other systems, made the entire set of e-commerce operations available even to the individual and small time users, apart from the large companies and organizations.

Definitely, the key element of e-commerce is information processing. Given a suitable scenario and infrastructure, every stage of commerce, except of course production of goods and their physical delivery can be automated. The tasks that can be automated include information gathering, processing manipulation and information distribution. Broadly speaking the following categories came under e-commerce :

  1. Transactions between supplier/a shopkeeper and a buyer or between two companies over a public network like the service provider network (like ISP). With suitable encryption of data and security for transaction, entire operation of selling/buying and settlement of accounts can be automated.
  2. Transactions with the trading partners or between the officers of the company located at different locations.
  3. Information gathering needed for market research.
  4. Information processing for decision making at different levels of management.
  5. Information manipulation for operations and supply chain management.
  6. Maintenance of records needed for legal purposes, including taxation, legal suits etc.
  7. Transactions for information distributions to different retailers, customers etc. including advertising, sales and marketing.

 You can also note that, these transactions, apart from being important in themselves also affect other transactions. For example, data gathering affects information management, advertising affects market research etc. the use of computers in these areas not only make the operations quicker, but also error free and provides for consolidated approach towards the problem.

It is not that the concept of e-commerce I totally without side effects. The very nature of the concept that is revolutionary makes it difficult for the users to understand fully the various issues involved. There are several areas of security, safety against fraud etc., the concept of legal acceptance that are yet to be solved. Also since the internet knows no national boundaries, the concepts become more complex, since what is legal in one country may not be so in another. There is also the concepts of taxation and state controls that needs to be solved.

In spite of all this, the growth of e-commerce and web-commerce has been phenomenal in all countries across the globe and is likely to only increase in coming years.


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