ecommerce quick defitinion and ultimate guide ecommerce trends

What is E-Commerce? Quick Definition + The Ultimate Guide 2021

Online purchasing is booming right?! Amazon seems to be taking over the world and Jeff Bezos is set to become the world’s first trillionnaire (more on that further down).

So what exactly is E-Commerce?

E-Commerce Definition

Quick e-commerce definition:

E-Commerce stands for Electronic Commerce.

E-Commerce is the commercial transaction of products and services, made electronically (typically via the internet).

Longer e-commerce Definition:

E (electronic) Commerce (buying and selling) is the process of buying and selling products and services electronically. Most commonly via the internet (World Wide Web)

E-Commerce businesses can include the sale of physical products such as books, as well as digital products including videos, music and software. These products are typically sold via E-Commerce websites and mobile apps.

There are many ways people spell ‘E-Commerce’:

  • E-commerce
  • Ecommerce
  • eCommerce
  • e Commerce
  • E commerce
  • e-Commerce

Whatever the spelling, the meaning is the same 🙂

History of E-Commerce

Commerce (the activity of buying and selling) has vastly changed throughout human history. Our ancestors would trade items such as live stock and tools.

Gold then became standard practice for exchange until modern (physical) money became the most common form of payment for goods and services.

David Chaum introduced the concept of digital money in 1983. This soon opened the door for electronic payments and transfers. The ability to transfer ‘money’ without ever physically handing it over would lead the path for the world of E-Commerce.

The first ‘complete’ E-Commerce transaction took place in 1994, when Dan Kohn sold a Sting CD to a friend in Philadelphia, using his website.

As the internet grew, so did the activity of digital transactions. Now, for many of us around the world, buying and selling online has become part of everyday life.

Current E-Commerce Trends and Statistics in 2021

E-Commerce is one of the fastest growing industries in modern time.

E-Commerce today is bigger than ever and there seems to be no stopping its growth.

In 2019, there were an estimated 1.92 billion E-Commerce buyers worldwide, with 14.1% of retail purchases taking place digitally.

Before the Covid-19 pandemic, experts predicted there would be over 2 billion digital buyers worldwide in 2020. Equal to a quarter of the world’s population.

The coronavirus Covid-19 pandemic forced many industries to move their operations online. Now, E-Commerce is expected to grow even faster than initially predicted.

To give you an idea of the growth rate of E-Commerce:

Experts predict by 2040, 95% of commercial transactions will be made electronically.

Types of E-Commerce products

E-Commerce products can be broken down into 3 core areas:

1. Physical products

A physical product is any item that you can physically touch and is typically shipped to a customer’s home address.

Examples of physical products include sunglasses, a pair of trainers and even a car.

2. Digital products

A digital product is a product in a digital format and is typically transferred to a customer via the internet.

Examples of digital products include PDF eBooks, photos, music and software.

3. Services

A service is work conducted by someone either in person or remotely. The transactions for services can be conducted using E-Commerce.

Examples of services include online personal training, a solicitor’s services, virtual assistants and simply someone’s time.

E-Commerce Models

The 4 most common E-Commerce business models can be broken down into the following:

1. B2C – business to consumer

A B2C transaction is from a business to a consumer. B2C is the most common form of E-Commerce.

Supermarkets, retail stores and Netflix are all examples of companies that conduct B2C E-Commerce.

2. B2B – business to business

A B2B transaction is from a business to another business. Sometimes the buyer is the end user and other times, they can re-sell to a consumer.

Manufacturing companies, web design agencies and business solicitors are all examples of businesses that can conduct B2B transactions.

3. C2C – consumer to consumer

A C2C transaction if from a consumer to another consumer. Typically a business acts as a middle-man between the consumers and in doing so, takes a percentage of the profits.

Consumer auctions, Craigslist and eBay are all examples of C2C transactions.

4. C2B – consumer to business

A C2B transaction is from a consumer to a business. The C2B business model has grown in recent times due to websites, social media and other internet activity.

Paid product reviews and testimonials are examples of C2B transactions.

E-Commerce Platforms

There are 2 main E-Commerce platforms:

  • Websites (online shops/stores)
  • Mobile apps (applications)

Both websites and apps allow the integration of payment processors to enable E-Commerce activity.

E-Commerce websites

There are many software applications available to develop an E-Commerce website.

Some popular E-Commerce website builders include:

WooCommerce was the most popular E-Commerce platform in 2020, with a market share of 28.24% and 3.3 million websites worldwide using the software.


Read more about WooCommerce in our handy “What is WooCommerce?” guide.

E-Commerce mobile Apps (Applications)

E-Commerce mobile apps commonly include an opimised version on the businesses website, to be used on mobile. For example, the amazon app is linked to their website in order to help users purchase products.

However, a stand-alone mobile app can also conduct E-Commerce transactions. For example, the popular gaming app Candy Crush and the ride-hailing app Uber are both examples of application focussed businesses that use E-Commerce payments.

What is E-Commerce? A Recap

So “what is E-Commerce?”

We’ve looked at the e-commerce definition: “The electronic activity of buying and selling (also known as commerce).”

We learnt that David Chaum first introduced the concept of digital money in 1983 and the first complete e-commerce transaction took place in 1994 when Dan Kohn sold a Sting CD.

In 2019, there were an estimated 1.92 billion buyers worldwide and by 2040, 95% of commercial transactions are predicted to take place via e-commerce.

We looked at the 3 core e-commerce product types:

  1. Physical,
  2. Digital
  3. Services

We established the 4 main e-commerce business models:

  • B2C – business to consumer
  • B2B – business to business
  • C2C – consumer to consumer
  • C2B – consumer to business

We learnt that WooCommerce was the most popular e-commerce platform in 2020 with 3.3 million websites worldwide using it and a 28.24% market share.

Frequently Asked Questions about E-Commerce?

P.S. Got a question or think we missed something?

Let us know in the comments. We are continuously looking to update this article with the latest news and e-commerce trends 🙂

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