Introduction 

E-commerce elaborated as electronic commerce refers to the buying and selling of goods and services using the internet with the help of networking device. It is screen shopping where a user can buy goods, avail services, initiate payments and even make valuable decisions. It is a phenomena that enables a user to connect and engage with suppliers not only their vicinity, but also overseas. Though it is virtual in nature, with growing speed in people's lives, it is considered as the most viable option to perceive utility in the form of time and effort expectancy (something good like saving time and saving efforts). It involves online transactions covering business organizations, consumers and the government all in several permutations and combinations. Some popular examples of e-commerce are listed below:

1. Online Retail: Online retailers sell products directly to consumers through their websites. Customers can browse products, add items to their cart, and complete the purchase online. Amazon is a well-known example of an online retail platform. Eg. Amazon, Flipkart, Myntra, Ajio Zalando, etc.

2. Online Marketplaces: Online marketplaces connect buyers and sellers, allowing individuals or businesses to connect with each other, list and sell products and services. For example, eBay and OLX enables people to auction or buy new and used items from various sellers.

3. Digital Products and Services: E-commerce is not restricted to merely physical goods. It also includes digital products and services. Be it booking of a seat at a restaurant on Zomato, playing a game on Dream11, listening to music on WYNK  music platform or even getting a medical advise from a health professional on Practo, e-commerce allow users to avail services thereby expanding its scope beyond physical products.

4. Subscription Services Models: E-Commerce involves subscription based business services where users pay a periodical fee for availing services. This fee are recurring in nature and has a period gap, perhaps one week, one month or even one year. A good example can be subscription of Netflix where a user is entitled to pay monthly subscription to continue watching movies and series. Another example can be subscription to Investopedia, an organization that provides training and knowledge to on commerce, trading and investment.

5. Online Travel and Booking: Another major area of e-commerce is towards remote booking of travel space and accommodation. Websites like booking.com facilitate the booking of accommodations, flights, and other travel-related services online. Users can compare options, read reviews, view property images and make reservations through the website / mobile app.

6. Digital Payment Systems: If goods and services can be bought online, then there is surely a provision for making online payments as well. In India with the help of a mobile number and Aadhar, one can create a (Unified Payment Interface) UPI ID through which instant payments can be initiated through payment applications like GPay, BHIM, PayTM, etc. by simply scanning QR code or by entering recipient's mobile phone number. This is also a part of e-commerce as the platform is facilitating monetary settlement against charges and fees.

7. Spiritual and Religious Practice: Every religion plays a vital role in building values in society fousing on community development. Though religious practices are carried out on a regular basis referring sacred texts using special materials at sacred places through knowledgeable priests, e-commerce has bridged the gap between between follower and religion. As of 2023, India's spiritual and religious market is valued to be $ 58 Bn. A good example is epuja, livingfaith, Char Dham Live Darshan and Registration, Islamic Shop, Khalsa Store, etc. 

In summary, e-commerce involves conducting business transactions electronically over the internet. It has evolved to cover a wide range of products and services, making it a fundamental aspect of modern commerce.

Evolution of E-Commerce

1. The Aldrich Innovation: E-commerce has travelled a long way and projects to travel further and further in the future with more capacities, platforms, infrastructure, ease, networking, etc. However, the inception of e-commerce into the world dates back to 1979 when a British merchant named Micheal Aldrich successfully connected television to computer through telephone lines, the system being called as Videotex which enabled smooth and secured transfer of data.

2. The Minitel Era: Minitel is known to be the most successful early e-commerce forms of the 1980s rolled out in France even before the launch of the world wide web. This was also a Videotex online service which helped people to buy online tickets, check share prices, have a mailbox, search dictionary, etc. 

3. The Birth of the World Wide Web: The www i.e. world wide web was invented by Tim Berners Lee in 1991 through the medium of the world's first website CERN (European Organisation for Nuclear Research). This website wasn't e-commerce though, but it facilitated information in outer markets which gave birth to 50 plus websites in the span of 2 years.

4. E-Commerce Giants Steps In: Jeff Bezos stepped in with Amazon in 1994 creating one of the most powerful and influential online platform for business. Netscape Navigator, the most popular web browser introduced Secured Socket Layer (SSL) assuring security in transactions. At the same time, Pizza Hut incorporated online ordering of pizzas through their website. By 1996, products worth $ 1 billion has been sold on the web. 

5. Growth in e-commerce infrastructure: By early 2000s, many nations started believing the scope of e-commerce and started energizing their network infrastructure through lines, cables and wireless forms thereby aiming to provide access internet to people. Companies like Shopify and Magento were launched in 2006 providing web presence and management services to a plethora of clients including services related to payment gateways, web templates and even inventory management tools.

6. The Rise of Mobile Commerce: Off lately in 2000s, mobile phone manufacturing boosted massively and major companies like Nokia, Samsung, Motorola, HTC penetrated various markets. The concept of smart phones was launched powered by Android allowing users to download shopping and payment applications in their mobile phones. 

7. The Boost of Social Media: Social Media has been playing a massive role in building the global e-commerce industry. Various social media sites like Facebook, Instagram, Pintrest, etc. started creating advertising platforms for merchants to get sales and revenue, thereby boosting e-commerce.

8. At Present: Currently, close to 60% of the world's population has access to internet and about 66% having smart phones. This shows there is still a gap which shall be filled in the nearing future. Hence, e-commerce shall prove to be an ever growing industry mainly due to its technological adaptability, hedonic motivation, perceived effort expectancy and perceived utility.

Features of e-commerce

Some of the features of e-commerce are explained below:

1. Online Shopping Magic: Imagine having the entire mall at your fingertips! E-commerce lets you shop for clothes, gadgets, and almost anything online. No need to leave your cozy spot on the couch.

2. Easy-Peasy Payments: Ever wished you could just click and buy? E-commerce makes it happen! With a variety of payment options like cards, digital wallets, or even online banking, paying for your latest purchase is a breeze.

3. No Closing Time Drama: Unlike regular stores that close their doors at a certain hour, e-commerce websites never shut down. Whether it's midnight or noon, you can shop whenever you please.

4. Global Shopping Adventure: E-commerce doesn't believe in borders. You can order unique items from different corners of the world, turning your shopping spree into a global adventure.

5. Safe and Sound Transactions: Worried about the safety of your credit card info? Fear not! E-commerce sites use fancy encryption (like a secret code) to keep your personal details safe and sound.

6. Pocket Shopping with Phones: Picture this: you're lying on your bed, scrolling through your phone, and suddenly, you find the perfect pair of shoes. That's mobile commerce (M-commerce)! Your phone becomes a shopping mall on the go.

7. The Story Behind the Stuff: E-commerce sites don't just show you products; they tell you stories. You get to read about the cool features, see reviews from other shoppers, and make informed choices.

8. Always Open Customer Service: Got a question about your order? E-commerce websites offer customer support around the clock. Whether it's a chat window or a friendly email, help is just a message away.

9. Smart Suggestions: E-commerce sites are like shopping buddies who know your taste. They give you suggestions based on what you've liked before, making your shopping experience more personalized.

10. Track Your Treasure Map: Ever wonder where your package is? E-commerce lets you track your order's journey from the seller's hands to your doorstep. It's like a treasure map for your new goodies.

11. Virtual Window Shopping: Window shopping doesn’t have to be a street activity. With e-commerce, you can browse through endless virtual windows, exploring products without leaving your home.

12. Sharing is Caring: Loved your new purchase? E-commerce sites make it easy to share your finds on social media. Your friends might discover something awesome too which they may share with you!

13. Epic Sales and Discounts: Brace yourself for the sales! E-commerce platforms love treating users with discounts, special offers, and exclusive deals. It's like a perpetual online shopping festival.

14. Easy Returns and Exchanges: Oops, got the wrong size or the wrong product? E-commerce sites usually have hassle-free return policies. Returning or exchanging items is as easy as formula for (a + b)².

Functions of E-commerce

Following are the functions of e-commerce:

1. Product Listing and Management: Involves creating a well-organized online catalog with detailed product information, images, and specifications. Regular updates and efficient categorization enhance the user experience.

2. Website Design and User Experience: Website design goes beyond aesthetics as it includes optimized navigation, ensuring mobile responsiveness, and creating an interface that is simple and easy to use. A positive user experience is crucial for customer satisfaction.

3. Shopping Cart and Checkout Process: The shopping cart functions as a virtual basket where customers can add, review and edit their selected items. The checkout process includes secure payment options and an order confirmation mechanism.

4. Payment Gateway Integration: Securely integrating payment gateways allows customers to make transactions using various methods, such as credit/debit cards, digital wallets or other online payment systems.

5. Order Processing and Fulfillment: From order confirmation to packaging and shipping, this function ensures that customer orders are accurately processed and delivered on time. Efficient order fulfillment contributes to customer satisfaction and loyalty.

6. Inventory Management: Beyond tracking stock levels, inventory management involves optimizing stock for efficient order fulfillment, preventing overselling, and automating restocking processes.

7. Shipping and Logistics: This function coordinates the shipping process, selecting appropriate carriers, determining shipping costs, and providing customers with real-time tracking information for their orders.

8. Customer Account Management: Customer accounts enhance the shopping experience by allowing users to save preferences, track order history, and expedite the checkout process.

9. Customer Relationship Management (CRM): CRM tools help businesses build and maintain relationships with customers through personalized communication, targeted marketing, and understanding customer preferences.

10. Security and Fraud Prevention: Implementing robust security measures, including encryption and secure sockets layer (SSL) protocols, protects customer data and ensures the integrity of online transactions.

11. Analytics and Reporting: Data analytics tools provide insights into customer behavior, site traffic, and sales performance. This information helps businesses make informed decisions and optimize their strategies.

12. Marketing and Promotions: Marketing functions involve creating and implementing strategies to attract customers, such as online advertising, email campaigns, and special promotions to drive sales.

13. Social Media Integration: Integrating with social media platforms allows businesses to leverage the power of social networks for marketing, brand promotion, and customer engagement.

14. Return and Refund Management: Managing returns and processing refunds efficiently contributes to customer satisfaction. Clear return policies and a user-friendly process are essential in this function.

15. Customer Support: Offering multi-channel customer support—such as live chat, email, and phone support—ensures that customers can get assistance promptly, resolving issues and enhancing their overall experience.

Each of these functions plays a crucial role in creating a seamless, secure, and enjoyable online shopping experience for customers, contributing to the success of e-commerce businesses in the digital marketplace.

Scope of E-Commerce

E-commerce has already entered lives of 27% of the world's population as of 2023. This shows an untapped market of 73% which has an open exposure to e-commerce. If 27% buyers can create a market of $ 6.3 Tn, then one should imagine what could be the market size if every individual on planet earth starts buying online. This throws light on the wide and never ending scope offered by the e-commerce industry to merchants, buyers, government and various service providers. 

1. Growth in Business: Online buying and selling is touching lives of millions and will certainly touch more thereby creating tremendous opportunity for businessmen. Currently, even physical shops are connected digitally and are doing business in a dual - online offline model. This means, their visibility is not only restricted to the local market, but goes beyond national due to its digital presence.

2. Agility: E-Commerce caters agility due to the growing logistics industry world wide. This includes forward as well as reverse logistics which plays the most important role in the operation process making e-commerce transactions successful. With growing e-commerce, there is a wide scope for logistics industry which includes warehousing, storing, transportations, handling and management of goods and materials from time to time.

3. Perceived Effort Expectancy: Users buying online are reportedly avoiding stress of physical shopping, decision making, cash handling, adherence to shop timing, non-availability of product, etc. E-commerce makes sure that these stressors are backed off thereby enabling users to perceive effort expectancy, meaning they save efforts. 

4. Dominance: E-commerce is expected to dominate the world mainly due to its characteristics thereby gulping major part of the current retail sector. Denying a few business which requires only physical existence, every organization be it merchandise or service has the ability to serve online. With more number of people making online transactions, this would be an unbeatable market. 

5. Reliability: As e-commerce allows users to trace and track their products through mobile phone applications, this has a tendency to create a sense of relief among the users. One doesn't need to worry about delivery nor return nor cancellation as it can be coordinated with the app itself. This in turn adds trust among the users making them lien towards digital transactions.

6. Payment Industry: E-commerce and payment industry is believed to have a strong correlation. With rising e-commerce transactions, there is a rising number of online payments which is further boosting the banking and fintech industry. This area is highly futuristic as most of the payments in the future will be settled online. 

Business Models in E-Commerce

E-commerce encompasses various models that cater to different business strategies and customer needs. Here are some common e-commerce models:

1. Business-to-Consumer (B2C): B2C is a business model where businesses sell goods or services directly to consumers. This is the most common, popular and ever existing model where businesses target specific audience and sell their products through online platforms. The businessmen here can be manufacturers involved in D2C business or can be a retailer or wholesaler involved in dropshipping / private labelling / white labelling or even print to demand. Examples include online retailers like Ikea, Amazon, Nature's Natural India and various brand websites where consumers buy products.

2. Direct to Consumer (D2C): Direct-to-Consumer (D2C) refers to a business model where manufacturers or brands sell their products directly to consumers without intermediaries like retailers, wholesalers or other middlemen. This approach allows companies to have more control over the entire customer experience, from production to sales and customer service. This also enables the business organization to sell products at less rates as margins for wholesalers and retailers and other selling / distribution costs are eliminated. Study says that 55% of Indian consumers prefer buying products directly from a brand / manufacturer’s website than from retailers and distributors. Example, Bombay Shaving Company, The Moms Company, Loom Solar, Kameez.co, etc.

3. Business-to-Business (B2B): This is a business model where one organization sell products or services to another organization. This involves bulk transactions, individual transactions, software as a service (SaaS), advertising agencies, transportation / delivery services or even ERP, accounting and taxation services. Many software and technology companies design products and software for their clients as per their demand including BPOs and KPOs. Few examples of B2B business models are Google Business, Facebook Business, Indiamart, Genpact, Maxval Tech, etc. 

4. Consumer-to-Consumer (C2C): C2C platforms facilitate transactions between individual consumers. Online marketplaces like eBay and OLX are examples where individuals can buy and sell goods directly to each other.

5. Consumer-to-Business (C2B): This model reverses the traditional B2C model. Here, individuals offer content, products or services to businesses for furtherance of their business. In the recent times, many big companies are appointing freelancers for carrying out certain specific work and also reviwers for promoting brand image and awareness. This is inversely creating opportunities for people to share their thoughts and experience, for which they are paid. It can services related to accounting, tax filing, photography, content editing, blog posting, digital marketing, research reporting, etc. 

6. Government-to-Citizen (G2C): These models involve transactions between businesses or governmental entities and individual citizens. These are portals that are highly controlled and monitored from time to time. These are dynamic websites which enables people to interact and exchange details through an authenticated login. Examples include online tax filing systems or government service portals. Example, PAN Card Application, Income Tax Portal, etc.

7. Subscription-Based Model: Businesses offer goods or services on a subscription basis, where customers pay a recurring fee at regular intervals. Users are given access to the product / service only for a limited period of time. A subscription is subject to renewal depending on the users needs and demand. Examples include Hathway Cable, Airtel Recharge, Jio Fibre, Hotstar, Eduonix, etc. 

8. Drop Shipping: This is an emerging business model where retailers sell goods and services in a contactless form. Here, the retailer doesn't hold or stock the products, neither the retailer would have a dedicated warehouse. Rather, the retailer has high performing network with manufacturers and suppliers who are asked to ship the goods directly to the buyer. In short, drop shippers only act as a liaison between the manufacturer and the buyer. The only point to note is that the buyer places an order with the drop shipper and the drop shipper instructs the manufacturer / supplier to send the goods to the buyer. Money can be paid by the drop shipper either top the drop shipper or the supplier depending on their business terms and conditions.

9. Private Labelling: There are thousands of innovative entrepreneurs in the society but many of them have limited access to resources, thereby crushing their ability to manufacture and produce. Besides this, an organization may not be interested in taking any manufacturing risk and there, they order (un-branded) products from manufacturers, label those products in a private party's / brand name (as per agreement) and list it online for marketing and sales. Such private-label sellers have all the rights to sell the products under a private label as their brand names are usually copyrighted along with design rights (though they are not entitled for Patent rights). This business model involves a good profit margin as acquiring unbranded products from manufacturer is effectively cheap and with minimalistic branding and labelling, the said products can be sold in the market at high premium rates. The global industry for this market is 16.3% and is spearheading in India as well with around 12 to 13%. Some of the key players are Trent (Westside, Zudio, Misbu), Reliance Retail, Pantaloon Retail, Nilgiris Retail, etc. There is another concept of white labelling which is similar to private labelling. They use their brand names and resell generic items purchased from a supplier. 

10. Crowdfunding: Platforms like Kickstarter and Indiegogo allow individuals or businesses to raise funds for their projects by collecting small amounts of money from a large number of people. Contributors often receive early access or special perks related to the project.

11. White-Labeling and Manufacturing: Some e-commerce businesses operate by white-labeling products (rebranding products produced by other manufacturers) or manufacturing their own goods. They sell these products under their own brand name.

These models can often overlap or be combined in various ways depending on the nature of the business and its offerings. Many e-commerce businesses use a combination of models to diversify their revenue streams and reach a broader audience.

Limitations of E-Commerce for Customers

E-commerce has revolutionized the way we shop, offering convenience, selection, and competitive prices. However, despite its numerous advantages, there are also limitations to e-commerce that can hinder both businesses and consumers. Here are some of the key limitations:

1. Security and privacy concerns: Online transactions involve sharing personal and financial information, making them vulnerable to cyberattacks and data breaches. Building trust with customers requires robust security measures and transparent data privacy practices. 

2. Lack of physical touch and try: Unlike brick-and-mortar stores, e-commerce doesn't allow customers to physically examine products before buying. This can lead to issues with size, fit, and quality, resulting in returns and exchanges.

3. Potential for scams and fraud: Online scams and phishing attempts can deter customers from shopping online. Choosing reputable merchants, using secure payment methods, and being cautious about unsolicited offers can minimize risks.

4. Limited product information: Descriptions and photos might not be exhaustive, leading to missing details or hidden flaws. 360° product views, detailed information, and user reviews can help mitigate this.

5. Shipping costs and delays: Delivery fees can add significantly to the overall cost of an online purchase, and unpredictable shipping times can be frustrating for customers. Additionally, issues like damaged goods or lost packages can further complicate the process. 

6. Limited customer service: Online interactions can feel impersonal compared to in-person assistance. While chatbots and FAQs can offer basic support, they may not be able to address complex inquiries or provide personalized recommendations. 

7. Returns and refunds: The return process can be inconvenient and time-consuming, and some stores have restrictive return policies. Clear and easy return policies, free return shipping, and prompt refunds are key to customer satisfaction.

8. Dependence on technology: E-commerce relies heavily on technology, which means website crashes, internet outages, and device compatibility issues can disrupt the shopping experience. 

9. Difficulty comparing products: Directly comparing features and specifications of similar products from different brands can be cumbersome. Advanced search filters and comparison tools can be helpful.

10. Environmental impact: Packaging, transportation and returns all contribute to the environmental footprint of e-commerce. Sustainable practices like eco-friendly packaging and carbon-neutral shipping can help mitigate this impact. 

11. Others:

• Digital divide: Not everyone has access to reliable internet or the necessary devices to participate in e-commerce.

• Product suitability: Not all products are well-suited for online sales, especially those requiring physical inspection or customization.

• Cultural differences: E-commerce practices and expectations can vary across cultures, requiring businesses to adapt their approach accordingly.

• Regulations and taxes: E-commerce businesses must comply with a variety of regulations and taxes, which can be complex and costly.

• High competition: The online marketplace is saturated, making it difficult for new businesses to stand out. Effective marketing and branding strategies are essential.