What is eCommerce?

Joanna Kurylo
December 14, 2022

So what is eCommerce?

eCommerce, or electronic commerce, is the action of buying and selling goods or services over the internet. According to Investopedia, “Electronic commerce (eCommerce) refers to companies and individuals that buy and sell goods and services over the internet. eCommerce operates in different market segments and can be conducted over computers, tablets, smartphones, and other smart devices.”

If you have ever ordered a pizza from Domino’s, purchased the latest makeup trend on TikTok or Instagram via a livestream, or bought anything off of the 2.5 million retailers online in the USA, then you have already participated in eCommerce.

Today, eCommerce includes everything from large-scale, global enterprises to smaller-scale home-based operations managed by a one or two-person team. In either case, operators utilize their online presence to grow a customer base.

What Is eCommerce: A Brief History

The exact date of eCommerce’s birth is up for debate.  However, it is widely believed that the first bona fide online shopping transaction happened in August of 1994. As eCommerce rose in popularity, merchants saw an uptick in business, with more customers opting for its convenience. Amazon was one of several marketplaces that emerged in 1995, and it was during this period that the term ‘eCommerce’ was first coined.

In the ensuing years, sites like eBay and Amazon began to offer products for sale worldwide. A new golden era of global commerce was made possible by the internet.

Since then, eCommerce technology has evolved rapidly. Advancements in payment processing, customer experiences, customer engagement, and shipping logistics are critical changes within the eCommerce industry that have affected its global adoption rate.

The introduction of smartphones, secure payment gateways, and platforms made it easier to build websites like Shopify.  As a result, online shopping became incredibly convenient and practical. Today it is one of the leading sources of retail sales worldwide.

eCommerce benefits buyers

eCommerce has made shopping more accessible, and more affordable, than ever by enabling people to buy goods and services from the comfort of their homes. A novel concept in its infancy, eCommerce has evolved into  an industry standard for retail sales.

eCommerce saves customers time while allowing businesses to reach a broader, and more global customer base. Consumers now have the power to buy whatever they want,  regardless of location or timing.

eCommerce benefits sellers

Among the most compelling benefits enjoyed by businesses transitioning to eCommerce are lower operational costs and greater long-term savings. Operating an online business is substantially less expensive than running a brick-and-mortar shop. It also has the added advantage of being more flexible and, potentially, efficient.

Starting an eCommerce business does not involve the complex process of finding the perfect physical location for a store, nor the inherent risks of owning one (e.g., theft, damage). By operating online, a business gains access to a larger group of potential customers and the data they provide. eCommerce data can also provide insights into customer product preferences (e.g., ideal shopping time, price-sensitivity level).

Of course, running an eCommerce shop is not 100% risk-free. An eCommerce business deals with risks and challenges related to privacy, security breaches, malware, chargebacks, online returns, customer disputes, and intellectual property.

Different types of eCommerce

While there are several different types of eCommerce, the essential marketing and advertising distinctions are between B2B and B2C.


What is B2B eCommerce? Shopify defines Business-to-business (or B2B) as “selling products and services directly between two businesses.” Wholesale, manufacturers, distributors, and resellers are different types of B2B eCommerce operations. Examples of B2B eCommerce companies include SwagUp, Flipsnack, and Naturebox.


What is B2C eCommerce? According to Shopify, “B2C, short for ‘business-to-consumer,’ is a commerce model between a business and an individual consumer.” This is the type of eCommerce we are all familiar with, and it is by far the most popular. Examples of B2C eCommerce stores include Rothy’s, Allbirds, Bombas, Gymshark, and Steve Madden.

Technological advances in eCommerce

Thanks to technology and creative business approaches, eCommerce is now accessible to virtually everyone. In a matter of moments, just about anybody can go online and acquire almost any item - from food to clothes to electronics.

The Future of eCommerce

eCommerce has transformed how we buy and sell, making it faster and easier for buyers and sellers from all corners of the globe to do business.So now that we've answered the question of "What is eCommerce?" let's ask a different one: What will eCommerce be in the future?

eCommerce companies in 2023 and beyond will have many more tools and resources at their disposal. This will enable them to provide smoother and more personalized buying experiences, smarter product suggestions to their customers and better customer interaction overall. Technologies slated to impact the eCommerce industry include Artificial Intelligence (AI), Virtual Reality, Blockchain, Robotics, and Machine Learning.

eCommerce is projected to grow exponentially into an online-driven economy. Global eCommerce rose from 15% of total retail sales in 2019 to an estimated 22% in 2022.

eCommerce will undeniably have an immense impact on the economy for years to come, drastically reshaping the future landscape.