History and Evolution of E-commerce

Electronic Commerce is defined as the process of buying, selling, transferring, or exchanging products, services, and information via computer networks.

History and Evolution of E Commerce

In 1960s Electronic Data Interchange (EDI) was invented and it is used to transfer data between different companies which use networks in its earlier stage, such as VANs or the Internet. Later on, the technology evolved to Electronic Funds Transfer (EFT).

EFT is used to provide for electronic payments and collections. Funds could be transferred electronically online from one to another without using any existence of paper money. Because of this, EFT can help the users to save on administrative costs, increase efficiency, simplify bookkeeping, and enhance stronger security.

EDI and EFT gave an opportunity for users to exchange their business information and operate various types of electronic transactions. The ability to use such technologies appeared in the late 1970s and such technologies allow all the business companies to send their commercial documentation to each other electronically.

In the 1980s, e-commerce has grown rapidly when the credit cards, automated teller machines (ATM) and telephone banking using online services have developed and accepted by the public. Besides this, the airline reservation system like Sabre in the USA and Travicom in the UK also facilitate the development of e-commerce. The other important steps for the rapid growth of e-commerce are the first online shopping site that was invented in the UK in 1979 by Michael Aldrich and the online shopping website was used extensively particularly by many of the auto manufacturers.

From 1990 onwards, e-commerce was used widely including enterprise resource planning systems (ERP), data mining and data warehousing. In 1991, the first online information marketplace, including online consulting and another pre-Internet online system were being introduced. But, the commercial enterprise on the Internet was strictly prohibited. E- commerce started to be used widely in 1991 when the Internet was available for commercial use to the public.


In 1992, the development of Mosaic web-browser contributes an important step for the development of e-commerce. This web browser was given in the form of a browser which can be downloaded and it was named as Netscape. This web browser was further broadened on the scope and possibility of electronic commercial transaction.

In 2000, a major merger between AOL and Time Warner contributed another important step for the development of E-Commerce. By the end of 2000, there is an increasing number of European and American business companies that start to offer their services through the World Wide Web. Then people began to associate a word "e-commerce" with the ability of purchasing various goods and services through the Internet by using the secure protocols and electronic payment services.

In 2004, the term Web 2.0 was introduced by O’Reilly Media which refers to the second-generation of Internet-based services that enables people to collect and share information online with new methods such as networking sites, wikis, communication tools and folksonomies. Many researchers predicted that the booming of e-commerce will become more and more popular in future which will also generate large revenues to the companies.