What is Ecommerce (E-commerce)

E-commerce can be defined in many ways, but the gist of the term is the exchange of information across electronic networks.

In its broader sense it can encompass e-mail and fax. However, narrow, 'transactional' definitions focus on online trading - the buying and selling of goods and services over electronic networks, whether between businesses or between businesses and consumers.

E-commerce is also used to describe how electronic networks are being harnessed to make efficiencies in the way information is processed within or between businesses. This is sometimes known as 'e-business'. Broader process e-commerce issues will be covered in future UK online for business guides. This guide focuses on the narrower transactional definition of e-commerce, or e trading, especially on how firms can use the Internet to help market and sell their goods and services.

E-commerce is still growing at a tremendous rate - with much more forecast.

E-commerce is bringing far-reaching changes to the ways we do business and is set to revolutionise supply chains as high-tech 'pioneers' prove that the Internet is more cost-effective than traditional channels for making purchases.

Some of these pioneers are big, well-known companies - Dell Computers and Amazon.com, for example. But many others, and far smaller, companies are finding considerable success in online trading.

The proportion of businesses with access to the Internet is now 98 per cent in the UK, up from 90 per cent in 2000. In the UK, 80 per cent of all businesses now have web sites, up from 66 per cent last year.

In the last year, the absolute number of businesses trading online in the UK has grown from 450,000 to 540,000 - an increase of 20 per cent, and a jump entirely due to the large number of micro businesses now trading online.

In all the countries studied, there had been growth during the last year in the proportion of businesses that enabled their customers to order online and in the proportion that enabled their customers to pay online.

These statistics show that e-commerce is fast becoming a sales channel to rival traditional methods - and not only for the larger players.