Topics: Electronic commerce, Business-to-business, Economics Pages: 5 (1279 words) Published: January 12, 2014

The Economic and Social Impact of E-commerce

By Daniel Karam


2. BODY –

a. Understanding E-commerce:
a.i. Definition

a.ii. Types

b. E-Commerce’s Impact on economy:

b.i. GDP Growth

b.ii. E-Commerce in developing countries

c. E-Commerce’s Impact on society:


Electronic commerce has had large economic effects in the last twenty years. Internet commerce has changed the face of businesses forever. In this study we are going to look over the basic features and types of e-commerce and see how it affect economy by enhancing the productivity growth worldwide and how it has created opportunities for developing countries. The impact of e-commerce on developing countries could be even stronger than that on the developed ones.

E-commerce has grown largely popular over the last 15 years and it has affected our lives rather positively. We use it for online shopping, banking, payment systems and many more .The use of electronic commerce has made a huge impact on the way our economy functions now-a-days and on how we live socially as well and it has the power to alter economic activities and the social environment.

Understanding E-commerce :
Electronic commerce is a new way of conducting business. It is generally the process of buying goods and product over the internet. These digitally enabled commercial transactions take place between and among organizations and individuals. Some of its unique features is that its available to everyone with an internet connection so its potential market size is equal to the size of the online population of the world (Global reach).It ranges from businesses receiving orders via their website through to automates systems to control the supply chain from the initial customer contact right through to management of suppliers. The number of individuals online in the United States increased to 175 million in2005, up from 170 million in 2004 (The total population of the United States is about 300 million.) (E-Marketer, Inc., 2005 b; U.S. Census Bureau, 2005).

In traditional commerce, a marketplace is a physical place you visit in order to transact. E-commerce is characterized by its ubiquity: it is available just about everywhere, at all times. It liberates the market from being restricted to a physical space and makes it possible to shop from your desktop, at home, at work, or even from your car, using mobile commerce. (Pearsons, Introduction to e-commerce, chapter 1, “The revolution is just beginning”)

The different types of e-commerce:
There are different types of e-commerce, most of the time we distinguish these different by the nature of the market relationship “who is selling to whom”. First of all, one of the most common types is Business-to-Consumer (B2C) in which online businesses attempt to reach individual consumers. Even though B2C is comparatively small ($140–$170 billion in 2005), it has grown exponentially since 1995, and is the type of e-commerce that most consumers are likely to encounter. (Pearsons, Introduction to e-commerce, chapter 1, “The revolution is just beginning”) Second of all it is one of the largest form of e-commerce and it is called Business-to-Business (B2B) and it constitutes online businesses selling to other businesses. There was an estimated $13 trillion in business-to-business exchanges of all kinds, online and offline, in 2002, suggesting that B2B e-commerce has significant growth potential (eMarketer, Inc., 2003). Thirdly is the Consumer-to-Consumer (C2C) which provides a way for consumers to sell their product to each other of course with the help on a online market such as eBay. These three types are the most commonly used ways to conduct electronic transactions. But there are some more like mobile commerce...

References: (OECD (2000) “E-commerce impact on society”, chapter 4, p.151)
(Lumpkin and Dess, “E-Business Strategies and Business Models”)
(Woodall P. (2000) Survey, “Knowledge is power “The Economist p.27-32 )
(eMarketer, Inc., 2003)
(E-Marketer, Inc., 2005 b; U.S. Census Bureau, 2005)
(Pearsons, Introduction to e-commerce, chapter 1, “The revolution is just beginning”)
(Parliament of the Commonwealth of Australia (1998),“Internet Commerce: To Buy or Not to Buy?”, report 360, May.)
(OECD (1996b), Technology, Productivity and Job Creation, Paris.)
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