E-commerce is defined as the online transaction of business, connecting a vendor or seller and a purchaser. Diverse products and services are being offered, but it’s foundations is that the interactions, deal sign-ups and the payment processes happen online. According to www.searchcio.techtarget.com, e-commerce can be split into the following:

E-tailing or “virtual storefronts” on Web sites with online catalogues

Use of demographic data through Web contacts

Electronic Data Interchange (EDI)

Business-to-business buying and selling (B2B)

key facet of e-commerce is online shopping. Online shopping was actually started by Michael Aldrich in 1979. E-commerce has gained a foothold in the today’s world. Nearly in every corner of the globe, people have acknowledged the increasing importance of e-commerce. It gave rise to electronic funds transfer, supply chain management, internet marketing, online transaction processing, electronic data interchange (EDI), inventory management systems, and automated data collection systems.

1. Electronic funds transfer – is the computer-based systems that are used to execute electronic financial transactions.

2. Supply chain management – is the management of integrated businesses involved in supplying products and services to consumers.

3. Internet marketing – is simply put, the selling of products over the Internet.

4. Online transaction processing – is used to facilitate and oversee transaction-oriented applications through data entry and processing.

5. Electronic data exchange – this is the transmission of data between companies or organizations over electronic means.

6. Inventory management systems – it is electronically tracking objects or materials over the use of barcodes, or other automatic identification for the inventory of objects.

Electronic commerce conducted among business is most commonly called B2B or business-to-business. Meanwhile, electronic commerce conducted between businesses and consumers is called B2C. E-commerce in reality falls under the umbrella of e-business and also covers data exchange for the facilitation of the financial and payment part of business deals and transactions.