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The History Of eCommerce & Its Evolution – A Timeline

vijay

Vijay Kumar

Senior Specialist - Marketing @ Shiprocket

December 7, 2023

7 min read

The history of eCommerce goes back to before the internet began. Sounds amusing, right? In the 1960s, companies started using an electronic system called the Electronic Data Interchange (EDI) to enable the transfer of documents.

While it can be said that this is not what eCommerce is in today’s settings, it is worth noting that most things start in some form and go on to become feature-loaded, taking on an expanded appearance. However, it was in the year 1994 that the very first online transaction took place. This involved the sale of a CD between friends through an online retail platform called NetMarket.

The eCommerce industry has changed a lot over time, evolving a great deal. Regular stores had to use new technology to survive because big companies like, Amazon, Flipkart, Myntra, and Snapdeal became very popular. These companies have made an online market where people can easily buy and sell things.

However, the convenience, safety, and user experience of online shopping have improved, and businesses are striving to do so even today. 

What Is eCommerce?

eCommerce is a form of business performed online or over the internet. In other words, when you buy or sell something online or via an electronic medium, it is referred to as electronic commerce, popularly known as eCommerce.

Because of its vast reach and popularity, it has completely changed how entrepreneurs do business and has been adopted by everyone, from small businesses to big giants. But, have you ever thought about how eCommerce started and evolved over the years?

Here’s a clue- It’s on a rising spree!

These predictions about eCommerce will throw some light on its exponential growth since its inception.

  • By this year-end, eCommerce sales all around the world will exceed $650 billion
  • Buyers spend close to 36% of their budget on online shopping

When Was Online Shopping Invented? 

Online shopping was pioneered in 1979 by entrepreneur Michael Aldrich in the United Kingdom. Aldrich was able to connect a modified domestic television to a real-time multi-user transaction processing computer via a telephone line. This was in the market in 1980 and was sold as business-to-business systems purchased by prospective customers in the UK, Ireland and Spain. 

An online bookstore was one of the earliest consumer shopping experiences created by Charles M. Stack in 1992. This online store was founded three years before Amazon was founded in 1994. 

When Was The First Online Transaction?

New York Times issue on August 12, 1994, mentioned that the Internet Is Open and chronicled the sale between two friends of a Sting CD. The Times said, “The team of young cyberspace entrepreneurs celebrated the first retail transaction on the Internet using a readily available version of powerful data encryption software designed to guarantee privacy.” 

Here Is The Timeline Of The History Of eCommerce & Its Evolution

1960-1968- Invention & The Early Days 

The development of the Electronic Data Interchange (EDI) in the 1960s paved the way for electronic commerce. EDI revolutionized traditional ways of sending and receiving documents and allowed a digital data transfer from one computer to another. 

1969: CompuServe, the first significant eCommerce company, is established by Dr. John R. Goltz and Jeffrey Wilkins by utilizing a dial-up connection. This is the first time eCommerce was introduced.

1979: Michael Aldrich invented electronic shopping (he is also considered as founder or inventor of eCommerce). This was done by connecting a transaction-processing computer with a modified TV through a telephone connection. This was done for the transmission of secure data.

1982: The continued growth of technology, particularly in electronics, led to the launch of the first eCommerce platforms by Boston Computer Exchange.

1992: The 90s took the online business to the next level by introducing Book Stacks Unlimited as an online bookstore by Charles M. Stack. It was one of the first online shopping sites created at that time.

1994: Web browser tool introduced by Netscape Navigator by Marc Andreessen and Jim Clark. It was used on the Windows platform.

1995: The year marked the iconic development in the history of eCommerce as Amazon and eBay were launched. Amazon was started by Jeff Bezos, while Pierre Omidyar launched eBay.

1998: PayPal launched the first eCommerce payment system as a tool to make money transfers.

1999: Alibaba started its online shopping platform in 1999 with more than $25 million as capital. Gradually it turned out to be an eCommerce giant.

2000: Google launched the first online advertising tool, Google AdWords, to help retailers utilize the pay-per-click (PPC) context.

2005 to 2009

The four years saw the development of eCommerce in the following ways:

2005: Amazon Prime membership was launched by Amazon to help customers get free two-day shipping at an annual fee.

Etsy was launched in 2005 to enable small and medium-scale retailers to sell goods online. 

2005: Square, Inc., as an app-based service, is launched.

2005: Eddie Machaalani and Mitchell Harper launched BigCommerce as an online storefront platform.

The years experienced massive development in the sphere of eCommerce, such as:

2011: Google launches its online wallet payment app.

2011: One of the earliest moves by Facebook to launch sponsored stories for advertisements.

2014: Apple launched Apple Pay, an online payment application.

2014: Jet.com was launched in 2014 as an online shopping portal.

2017: Instagram introduces shoppable tags- enabling people to sell directly from the social media platform.

And finally, Cyber Monday sales exceeded $6.5 billion.

2017 to present

Significant reforms that have taken place in the eCommerce industry between these years are-

  • Large retailers are pushed to sell online.
  • Small businesses have seen a rise, with local sellers now operating from social media platforms.
  • Operational costs have lowered in the B2B sector.
  • Parcel delivery costs have seen a significant increase with the growing eCommerce industry.
  • Several eCommerce marketplaces have emerged, enabling more sellers to sell online.
  • Logistics has evolved with the introduction of automation tools and artificial intelligence.
  • Social media has become a tool to increase sales and market brands. Sellers also use social media to sell via channels like Facebook and Instagram.
  • The buying habits of customers have significantly changed.
  • The COVID-19 pandemic has impacted purchase decisions, and most users are moving to eCommerce for their purchases.
  • Sellers are adopting an omnichannel selling approach where they want to provide users with a consistent shopping experience across different media and channels.

What Does eCommerce Hold For Us?

eCommerce business offers a potential competitive advantage to retailers and customers. In today’s times, when most people are resorting to online shopping, the present condition of eCommerce looks extremely positive as more people go online with their eCommerce stores, and it is expected to be at its zenith in the coming years.

Conclusion

The journey of eCommerce, from its humble beginnings to the present-day digital marketplace, reflects a remarkable evolution that has reshaped business and consumer interactions. The 1994 milestone, marked by the first online transaction, signalled a turning point, paving the way for giants like Amazon and eBay to emerge.

Over the years, eCommerce has changed a lot, adapting to technological advancements and consumer preferences. The COVID-19 pandemic further accelerated the shift towards eCommerce, with buyers altering their habits and businesses embracing digital strategies.

How can I start my own eCommerce business?

You must have a place where you sell (website, marketplace, social media), an inventory, and means to deliver your products to customers.

Do I need to register my eCommerce business to make transactions?

A service tax registration must be obtained if you want to sell online.

What are the 3 types of e-commerce?

The three major types of eCommerce include Business-to-Business (B2B), Business-to-Consumer (B2C), and Consumer-to-Consumer.

When did eCommerce launch in India?

K Vaitheeswaran started India’s first e-commerce website Fabmart.com back in 1999. Later, the major stepping stone was the inception of Flipkart.

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