What Is Ecommerce? Everything You Need to Know

What is Ecommerce?

It seems like a growing number of business blogs have been talking about ecommerce, but what actually is ecommerce? Ecommerce, also known as electronic commerce, is a business model which involves transactions taking place on the internet. Stores that sell their products online are called ecommerce stores. For example, Amazon.com is one of the most popular stores in the ecommerce industry. In this article you’ll learn the history of ecommerce, ecommerce statistics, platforms, popular ecommerce sites, and more.

History of Ecommerce

The foundation for ecommerce was created in 1979 by Michael Aldrich. He connected his television to a computer using his telephone line. While it was unlike ecommerce as we know it today, his idea sparked the idea for shopping without having to go to a physical store. At the time, most people didn’t own computers. Bill Gates and Steve Jobs popularized computers for the average person. Bill Gates even said that his goal was to put “a computer on every desk and in every home.” Without computers, ecommerce would be remarkably different.

History of Ecommerce

In 1994, Jeff Bezos founded Amazon as an online store selling over one million different books at launch. Amazon would eventually go on to become the most popular online store for consumers to buy any type of products.

By the mid-1990s and early 2000’s, people were adding computers to their home and paving the way for the growth of ecommerce. Companies were accepting checks in the early to mid-1990s as there wasn’t an online payment gateway to transfer funds from customers to businesses. When PayPal was founded in December 1998, it simplified the shopping experience for customers as credit cards were easily accepted.

By 2008, ecommerce sales made up 3.4% of all sales which shows industry growth. In 2014, it was estimated that there was around 12-24 million online stores worldwide.


Ecommerce Statistics

  • By 2020, it is estimated that global ecommerce sales will reach $4.058 trillion, which makes ecommerce a growing and profitable industry to be in.
  • By 2019, the US expects to have 224 million online shoppers, making the US a large audience base to market your online store to.
  • By 2019, the US is estimated to have 162.8 million mobile shoppers. As a result, store owners need to ensure that their websites and ads are mobile-optimized to reach their target audience. According to Business Insider, men (22%) are also considered more likely to buy a product via a mobile device than women (18%).
  • Women tend to shop online more frequently than men. For every $10 spent online, women are spending $6 while men spend $4.
  • Millennials, ages 18-34, tend to spend approximately $2000 online each year making it the generation that does the most online shopping.

Common Types of Ecommerce

  • B2B: The B2B model, business to business, is when a business is selling to other businesses. Alibaba is an example of a B2B business, as their suppliers sells to other businesses. Alibaba prices are extremely low as they’re wholesale prices to allow businesses to make a profit off of their products.
  • B2C: The B2C model, business to consumer, involves businesses selling to consumers. If you decide to open your own online store, you’ll likely be selling to customers instead of businesses. Amazon, Walmart, and Apple are examples of B2C businesses.
  • C2C: The C2C model, consumer to consumer, is when consumers are selling to other consumers. Examples of a C2C business model are eBay, Craigslist and Kijiji. Many of the sellers on those sites aren’t businesses but average consumers selling products they own whether second-hand or new

Ecommerce Platforms

Ecommerce platforms

An ecommerce platform is a software solution that allows businesses to create online stores. The four most popular ecommerce platforms are Shopify, WooCommerce, BigCommerce and Magento.

Shopify was founded in 2004 by Tobias Lutke, Daniel Weinand and Scott Lake. In 2016, Shopify had 377,500 merchants using their platform who made a total of $15.4 billion in gross revenue. Their platform allows store owners to install apps ranging from Oberlo’s AliExpress dropshipping app to Hurrify’s Countdown Timer app. Shopify’s platform is considered the best ecommerce platform with a 10/10 rating.

Ecommerce Platform Shopify

WooCommerce is an ecommerce platform made for WordPress stores. It was officially launched on September 27, 2011 by creators Mike Jolley and James Koster. Their official website claims that it ‘powers over 28% of all online stores.’ WooCommerce is currently being used by over 380,000 online store owners.

In 2009, BigCommerce was founded by programmers Eddie Machaalani and Mitchell Harper who happened to meet in a chat room. BigCommerce users have generated $9 billion in sales. There are currently over 95,000 stores using the BigCommerce platform.

Magento is an open-source platform created by Varien, Inc. It was founded March 31, 2008.

Popular Ecommerce Sites

Popular Ecommerce Websites

  • Amazon: Amazon was founded by Jeff Bezos. According to Alexa, Amazon is currently ranked the 9th most popular website worldwide, and 4th in the United States.
  • Taobao: Taobao was founded by Jack Ma. Globally, it’s ranked 11. In China, it’s ranked 5th.
  • Tmall: Tmall was also founded by Jack Ma. It has a global ranking of 15 and a rank of 4 in China.
  • AliExpress: AliExpress was founded by Jack Ma. It’s currently ranked 40th in the world and 9th in Russia according to Alexa.
  • eBay: eBay was founded by Pierre Omidyar. On Alexa, the ecommerce site is ranked 33 globally, and 9th in the US.
  • Flipkart: Flipkart was founded by Binny Bansal and Sachin Bansal. Alexa has it ranked 147 globally and 9th in India.

Future of Ecommerce

The ecommerce industry is expected to continue growing. According to N Channel, in the US, brick and mortar retailers generate $3.9 trillion in sales while ecommerce generates $294 billion. Over time, ecommerce will continue to take away market share from brick and mortar retailers as it has been doing over the past few years. This is good news for those looking to start online stores as sales will only continue to go up, though competition will also increase in the space.

What is ecommerce? How is it different from a brick and mortar store?

Ecommerce will also likely evolve over the years creating a more augmented or virtual reality experience for shoppers. Stores may eventually include features to help customers ‘virtually’ try on clothing to ensure it fits their shape while allowing them to see what it would look like on. Shoppers may be able to ‘try’ on makeup using their laptop or phone’s camera.

Want to learn more?

Is there anything else you’d like to know more about and wish was included in this article? Let us know in the comments below!

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