E-Commerce: Development, E-Marketing and Trends

E-Commerce: Development, E-Marketing and Trends

E-Commerce as part of the E-Business-Process

, the development of the Internet rapidly grew up with an enormous speed. Electronic Commerce (E-Commerce) must be seen as a part of the economical process of the Internet-area. It’s the first step of direct communication between users through the Internet. Before this, web sides only were created for presentations of companies or other publishing activities.

After surmounting some barriers, the economical role of the Internet got more and more important. The technical development was the first step to transpose new ideas. The first modems could send and receive less then 10 Kbps. But around 1996, 33.6 Kbps and later, 56k-modems were standard Internet connections. By inventing ISDN and DSL (768 Kbps or more), the technical barrier was taken and this wasn’t the weak point anymore. But also the deregulation of telecommunication companies and the liberalization brought new advantages to consumers: a lot of Internet-providers offered Internet-access by low price. This was the breakthrough of the Internet as mass-media and as a new way of communication for billions of people.

At the beginning, only few people recognized the economical potential of this development. They were the founder for Internet-pioneers like Amazon, eBay or Yahoo. These first Internet-platforms brought offers and demands together – the first E- Commerce-sides were founded. The only problem in this time was the insecure payment for orders through the Internet. Hackers could analyse and filter credit-card-numbers or other private stuff and used it in an illegal way. New secure connection-systems for secret information had to be developed (128 bit SSL) so that customers of eShops or other sides wouldn’t be worried.

Today, the two parts “Business-to-Business” (B2B) and “Business-to-Consumer” (B2C) are the leading-markets of E-Commerce. B2B is the trading between companies on a direct way or through developed E-platforms. This E-market will be future’s fastest growing sector.

Economical E-Commerce-Laws

In the following paragraph 1 , you’ll find some scince-laws for better understanding of the fast growing of E-Business:

• Moores’s Law: The performance of microchips and computer-systems increases exponentially without the increase of the price. That’s the reason for the fast Internet-development.

• Metcalfe’s Law: "The power of the network increases exponentially by the number of computers connected to it. Therefore, every computer added to the network both uses it as a resource while adding resources in a spiral of increasing value and choice."

• Coase’s Theorem: The reasons for the existence of companies are the lower transaction- and coordination-costs that people have in a free market. But with decreasing communication costs and virtual organisations / communities in the Internet, old structures become unnecessary. Companies and old structures have to range among the new communities of E-Business.

• Law of increasing return: The costs in comparison to traditional industries by placing a new digital product are very high, because of a high dominance of fix costs and starting-investments. But after a longer period, the breakeven-point is reached and the profit increases more than proportional; this effect is strengthened by the Internet effect.

Consumer-Trends

At the beginning of the Internet, the typical surfer was a male university-student 2 who was only searching for information. But today, the profile of a surfer has completely changed – the importance of daily Internet use for people is higher than ever before.

1 Rehme (2002, p.18-20)

2 This and the following figures are based on the 13th W3B-inquiry of November 2001

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