---
meta: 
  date: false
  reading_time: false
title: "E-commerce"
date: 2023-10-05
description: "The practice of advertising and selling goods and services over the internet."
tags: ["E-commerce", "Digital Economy", "Internet Business"]
---

## Background

E-commerce stands for electronic commerce. It signifies the practice of advertising and selling goods and services over the internet. The ever-increasing capability of the internet to reach global audiences means that e-commerce has rapidly become established as a norm in both B2C (Business to Consumer) and B2B (Business to Business) sectors.

## Historical Context

E-commerce has its roots in the development of the internet and electronic data interchange (EDI), which started in the 1970s. The 1990s witnessed significant growth in commercial internet usage, and the creation of publicly accessible web technologies led to the rise of entrepreneurial ventures such as Amazon and eBay.

## Definitions and Concepts

E-commerce refers to transactions conducted online, encompassing an array of business models including B2C (Business to Consumer), B2B (Business to Business), C2C (Consumer to Consumer), and C2B (Consumer to Business). It includes several key elements such as:

- **Online Retailing**: Direct consumer purchases via platforms or online marketplaces.
- **Digital Marketing**: Promotion of products and services through electronic media.
- **Supply Chain Management**: Quantitative and qualitative management of operations from production to delivery.
- **Electronic Payments**: Financial transactions conducted electronically.

## Major Analytical Frameworks

### Classical Economics

Although Classical Economics doesn't explicitly reference e-commerce, principles like market efficiency and competitive advantage can be extrapolated to evaluate the efficiency brought about in the marketplace by e-commerce.

### Neoclassical Economics

Neoclassical Economics analyzes e-commerce through the lens of price mechanism, consumer preference, and market equilibrium. Online marketplaces aid in these principles by providing vast selections and lower prices through increased competition.

### Keynesian Economics

E-commerce can be considered within Keynesian frameworks in terms of aggregate demand and employment stimulation. Increased consumer spending via online channels can spur economic activity and demand for delivery networks.

### Marxian Economics

Marxian analysis would critique e-commerce by identifying issues of labor exploitation, the monopolistic trends of Big Tech, and effects on small businesses. This critique can explore power imbalances within digital trade.

### Institutional Economics

Institutional economics considers the role of legal, social, and political institutions. E-commerce flourishes due to changes in regulatory regimes, advancements in cyber laws, and the evolution of digital governance standards.

### Behavioral Economics

Behavioral Economics delves into how e-commerce interfaces can exploit cognitive biases. Techniques such as urgency messaging and personalized recommendations influence consumer behavior significantly.

### Post-Keynesian Economics

Post-Keynesian economics looks at e-commerce in terms of income distribution and the dynamics of the digital economy. It considers the displacement of traditional retail with online sales.

### Austrian Economics

Austrian economists might analyze e-commerce based on marginal utility and entrepreneurial dynamism. E-commerce epitomizes Ludwig von Mises' and Friedrich Hayek's essentials of value creation through spontaneous order and information dissemination.

### Development Economics

E-commerce is significant in development economics as a driver of growth in developing nations. It brings about educational platforms, employment opportunities, and an emerging virtual economy even in remote areas.

### Monetarism

Monetarists would focus on the impact of digital transactions on money supply and velocity. Growth in e-payments and cryptos plays a critical role in influencing fiscal policies.

## Comparative Analysis

Comparative analysis of e-commerce sectors across different economies reveals disparities in adoption, regulatory environments, and consumer readiness. Developed markets such as North America and Western Europe lead, while regions like Africa and Latin America show potential but face infrastructural barriers.

## Case Studies

Notable case studies include the expansion of Amazon, Alibaba, and the rise of Shopify as an e-commerce platform provider. Also significant are regional success stories such as Jumia in Africa.

## Suggested Books for Further Studies

1. *The Everything Store: Jeff Bezos and the Age of Amazon* by Brad Stone
2. *Alibaba: The House That Jack Ma Built* by Duncan Clark
3. *Platform Revolution* by Geoffrey G. Parker, Marshall W. Van Alstyne, and Sangeet Paul Choudary
4. *Hooked: How to Build Habit-Forming Products* by Nir Eyal

## Related Terms with Definitions

- **Digital Marketing**: Techniques for promoting products or services through digital channels.
- **Online Marketplace**: Digital platforms facilitating buying and selling from multiple vendors.
- **Electronic Payments**: Financial transactions conducted electronically over the internet.
- **Supply Chain Management (SCM)**: The management of the flow of goods and services.