The Growth and the Impact of E-Commerce Business

It is rare to find a sector which has experienced such rapid growth in the 21st century as that of e-commerce. Stretching from the embryonic days of the world wide web to today’s ubiquity e-commerce has inevitably changed the business model as well as scales consumers’ behavior and the world economy.

The Evolution of E-Commerce

E-commerce began in the 1970s and is categorized under two segments namely Electronic Data Interchange (EDI) and teleshopping. Although the Internet was established at the end of the previous epoch with the first stage of the development of the World Wide Web in the early 1990s, the ‘true’ period of growth is generally considered to have started from the mid-1990s. Such start-ups as Amazon and eBay, established in 1994 and 1995, became the first movers of what was to turn into a new kind of commercial domain. These platforms leveraged the increasing affordability of the Internet, as this was the first time consumers could directly buy goods and services on the Internet.

Since the term technology is a fluid one it means that e-commerce also grew as a result of the advancement of technology. The latter part of the 2000s was the time when secure online payment systems began to emerge and thus spur the sector again. Mobile commerce, or buying through smartphones and tablets, emerged as the other revolution that paved the way for mobile shopping, encouraging to shop anytime and anyplace. Some of the current advanced technologies like AI, AR, and blockchain are now expanding the frontiers of e-commerce.

The Growth Trajectory

The global growth of e-commerce has been phenomenal and can be described as exponential. Beverly Potter noted that, in its research by eMarketer, the global e-commerce sales hit $4. 28 trillion in 2020 and will exceed $6 trillion by the end of this year. The main reasons behind this growth are technological advancements, which are helping to ease business operations; Globalisation, which is increasing cooperation and trade between countries; growth in living standards due to increased purchasing power; and the increase in the middle-class people around the globe. 38 trillion by 2024. 

This Growth is Driven by Several Factors:

Internet Penetration:
Internet has opened up opportunities of shopping to billions of people because high-speed internet is present almost everywhere.

Mobile Devices:
The use of mobile phones particularly Smart phones has enhanced the convenience to shop anytime, and thereby resulting in more often, and larger quantities.

Convenience:
E-commerce is highly convenient for a consumer as it can shop wherever they are to get the product they want, view and compare prices, read other customers’ feedbacks and get more products than when shopping in a physical store.

Technological Advancements:
AI and machine learning have improved the level of personalisation in e-commerce applications to suit the customers, thus attracting customer attention.

Global Reach:
Geographical boundary is overcome by e-commerce solutions where businesses can expand their audience, and customers are free to access products from all over the world.

Impact on Businesses
Thus, the relations of e-commerce as an idea to the businesses involved are far reaching. They have liberalized the market place so that the small and medium enterprises have been able to challenge the large business entity. Some of the e-commerce platforms useful for entrepreneurs include Shopify and Etsy which assist online business people in creating and expanding their companies with less capital.

In addition, data analytics of e-commerce enable firms to predict consumers’ buying habits, enhance their supply and demand chains, and manage their stocks effectively. The Direct-to-Consumer (D2C) model has also emerged; through which various brands are cutting out the middlemen and getting closer to consumers.

Impact on Consumers

Consumer behavior has, therefore, been dynamism by the introduction of e-commerce. It offers:

Convenience:
With the freedom to shop any time of the day and any time of the year; one does not necessarily have to run around to travel from shop to shop.

Variety:
Consumption of a bigger variety of products and services that may not be available or may be limited in physical stores.

Price Comparison:
Products and services that enable consumers to search the Internet in order to get the most favorable conditions.

Personalization:
Recommendations and advertising that are generated by the use of Artificial Intelligence and that are customized makes the shopping experience more satisfying for the customers.

Enhanced Customer Service:
Customers enjoy the immediate attention from chatbots and AI in customer relations enhancing the customer experience.

Economic and Societal Impact

It forms impacts the economy in several ways due to the arrival of e-commerce. Indeed, it has generated millions of opportunities in forwarding, storage, computer, and support services. Besides, it has given birth to related industries like digital marketing and fintech to mention but a few.

At the social level, the e-commerce has closed the divides by enabling delivery of products and services to those regions that are any way isolated. It has also encouraged the culture of entrepreneurship where business people are in a position to transform their vision into bureaucracies with most ease.

Challenges and the Future

However, e-commerce is not without limitations that include; security risks, legal concerns, and the environment caused by the increased packaging and shipping. Solving these problems can only be done with the help of governments, businesses, and citizens.

Summing up the results of the analysis, one can conclude that the further prospects of e-commerce are rather promising. AI,AR & Blockchain are the technologies which would remain consistent and facilitate evolution in the field of online shopping. Based on these developments, advancements in these technologies will contribute to the improvement of online shopping experience, as well as, enhance security thus boosting the e-commerce business.

In conclusion, There is no doubt that the growth and, hence, the effect of e-commerce are evident. It has brought drastic changes within the business world and has opened new horizons for the businesses as well as consumers. Indeed the role that technology is bound to take charge of e-commerce, and this will enhance the economy and society at large.