In the early days of the internet, it was restricted mostly to academic and research purposes. Although there were uses of technology such as Electronic Funds Transfer (EFT) and Electronic Data Interchange (EDI), the use of the internet for commercial purposes was not widespread due to the inability of the general public to appropriately use it. In the early 90's after the invention of the World Wide Web browser by Tim Berners-Lee, use of it by the general public and the business community gradually grew. By the end of the decade, many companies in America and Europe had a presence in the web that facilitated online sales.
The information revolution helped by the revolution in the telecommunications and institutional innovations had at first promised to change the nature of the market completely. The primary role of the market as a mere place the meeting of sellers and buyers is facilitated has now been revolutionized by the effect of the information revolution by its supportive role. Instead of intermediaries of large scale or numerous middlemen being involved, information technology has enabled quick transfer of information and other supportive services needed for the transfer of goods and services. The Internet and its enabled technologies (especially electronic commerce) have caused the costs of many kinds of market interactions to plummet (Saloner, Garth, & Borenstein, 2001). Traditional players who had a monopoly or a near monopoly on various services for information and fund transfer are realising that the internet has significantly reduced barriers to entry for new players who would like to provide the same, additional or better services at a reduced price. A large number of start-ups have formed wherever there is a possibility of challenging a traditional firm that is trying to resist the innovations that improves the efficiency or effectiveness of existing processes. This has led to existing companies having to quickly adapt to rapidly changing technological trends. The alternative would have been to let the new competitors grow strong enough to take the business away from existing businesses. An example here that can be quoted is that of Google in advertising medium. Many existing advertisers during the early 90's were not far sighted enough to foresee the use of World Wide Web as a medium that would dominate how average consumers would gather information with regard to their day to day and special needs. Therefore many existing advertising and technology companies did not pay enough attention or work on developing their abilities to expand internet search related advertising. A prime example of a major technology company that fell short of their potential in this field is none other than Microsoft, the main provider of operating software. Microsoft was complacent when Google entered the search business, even though they had access to the large initial market of Windows PC users and their default browser, which usually was the Internet Explorer which was also provided by Microsoft. This complacency of Microsoft and other major technical and media firms led to the rapid growth of Google to a stage where it could defend itself successfully against the existing players.
A main component of e-commerce is Business to Consumer (B2C) selling and transactions. This means where the firms directly deal with the consumer public to sell their particular services or products. The phenomenon of B2C e-commerce, which is an area for the development of B2C transactions, has become increasingly important and has attracted significant attention from business practitioners as well as scholars (Melian-Alzola & Padron-Robaina, 2007). Business-to-consumer (B2C) e-commerce and online retail sales reached $175 billion in 2007 and are predicted to reach $204 billion in 2008, $235.4 billion in 2009, $267.8 billion in 2010, $301 billion in 2011, and $334.7 billion in 2012 (Tangpong, Islam, & Lertpittayapoom, 2009). As the day to day high street commerce makes up a large segment of the trading activities that existed traditionally, the importance of their transition in to e-commerce medium is a significant event. An example would be the traditional way of selling books by high street shops, where customers can go and open individual books and read them before making a purchase. This gives the opportunity to the customer to purchase the book immediately if it suits him or her. However, the sale of books have been moving rapidly to online e-commerce sites such as Amazon where paper copies of books are available at a much lower price than most high street retail shops. The difference is usually due to the reduced costs associated with not needing to maintain stocks of various and a wide range of books at many geographical locations as is the case with high street shops. Instead, Amazon has the opportunity to maintain large stocks at a single location that is usually in a locality where the land, labour and other associated fixed and variable costs are much cheaper than high street locations where the costs are at a premium. Therefore the online sellers can pass on these savings to their customers in the form of reduced book prices. In addition, e-commerce sites like Amazon can provide additional services at low overall costs due to the use of internet as the main communication medium with the consumers. The prime example of this would the facility provided to publish and maintain reviews of books available for sale that is taken from other customers that have already purchased and read the book. The costs associated with encouraging reviewing among customers are extremely small. However the value to the potential customer by having the ability to see a number of reviews on a book that gives individual opinions of different other readers is highly useful in deciding whether to go ahead and purchase the product. This real life reviews contrasts with preselected reviews by professional book reviewers that is usually quoted on the covers of the hard copies of the books that can be read at a high street book store in that a large number of reviews by readers would cover most aspects with regard to the book and would tend to provide a more balanced view of the contents of the book when taken as a whole. Therefore we can see this potential advantage and cost advantages as benefits brought on the customers due to the use of e-commerce.
However it is a mistake to assume that all aspects brought on by the use of e-commerce are beneficial to the customers and sellers. The increasing use of the web and related technologies as increased the avenues available for potential criminals to steal information that needs to be held confidential between the official parties involved in any specific transaction. The use of credit and debit card and other online payment methods has substantially increased the effort expended by those with criminal intent to find ways to illegally acquire and steal money. Various hacking techniques and tools have been developed to infiltrate customer computers and also to break through the defences of companies that store customer information. There is also the spamming related marketing that is used to try to sell products by sending large number of (usually) improperly acquired email addresses. The use of e-commerce has led to people being more willing to submit their personal and payment information online without properly validating the requester of this information is the genuine site they believe it to be, or a site that genuinely attempt to provide the product or service that the customer expects without any other fraudulent intentions.
Overall we can conclude that there have been many beneficial aspects to both the consumers and to companies that have adapted to this changing landscape. It is essential for companies to try to maximize their sales potential with attempts to reach their customers online. They can also provide many additional benefits along with lower overall cost per product to the customer, if proper ecommerce techniques are adopted. However it is vital that proper security considerations are incorporated in to current systems to minimize the potential for harm by those with criminal intent. With the growth of ecommerce, it is important that the average customer become more web savvy and adapt proper precautionary techniques as a defence against these attacks.
