History of E-Business/E-commerce

In history, the evolution of e-business (electronic business) is found in the early 1900s as simple, when text-based websites offered product information. For the first time internet was made available for commercial purposes. Websites were allowed to use the internet for business transactions. In history, the evolution of e-commerce (electronic commerce) can be founded in 1969 when the first e-commerce company CompuServe, USA was established.

E-commerce is the subset of e-business and e-business is the superset. E-commerce and E-business are frequently used interchangeably. Since then the evolution of e-commerce took place.

Here, we will understand the history/evolution of e-business and e-commerce from the beginning to today – how they are going.

1. 1960’s: CompuServe Founded/EDI was Discovered

Amidst the landmark events of 1969, the history of eCommerce in the USA – and the world – begins in Columbus, Ohio with the launch of CompuServe, the first eCommerce company. Because there’s no internet, the company provides computer sharing services to businesses by sending data through phone lines (known as Electronic Data Interchange, or EDI).

EDI is the electronic interchange of business information using a standardized format – a process that allows one company to send information to another company electronically rather than with paper.

2. 1972: Computers Facilitate the First Online Sale

The first online sale was of marijuana, but this is only partially true. While Stanford University and MIT students do use an Arpanet account to make a marijuana sale, money and product still exchange hands in person. So, while a computer facilitates the transaction, it’s not truly “sold over the internet.”

3. 1976: Online Transaction Processing Introduced

As the nation celebrates its bicentennial, Atalla Technovation and Bunker Ramo Corporation introduce products designed for secure online transaction processing, intended for financial institutions.

4. 1979: Electronic Shopping Invented

Ten years after the founding of CompuServe, British inventor Michael Aldrich demonstrates how electronic shopping could work by connecting a modified television to a transaction-processing computer via a telephone line.

5. 1983: Electronic Commerce Acknowledged

California State Assembly holds its first hearing on “electronic commerce.” Testifying are CPUC, MCI Mail, Prodigy, CompuServe, Volcano Telephone, and Pacific Telesis. A year later, California’s Electronic Commerce Act would pass, imposing certain requirements on systems designed “to conduct the purchase of goods and services via a telecommunications network.”

And, this was the year date January 1, 1983, the internet was invented. Prior to this, the various computer networks did not have a standard way to communicate with each other.

6. 1984: CompuServe Opens the Electronic Mall

One of the first examples of online retail, CompuServe introduces the Electronic Mall in 1984, allowing its users to purchase products from approximately 100 different merchants.

7. 1989: World Wide Web Launches

Tim Berners-Lee, a British scientist, invented the World Wide Web (WWW) in 1989 while working at CERN. The first web browser launches, which will be a catalyst for online shopping as the internet users can quickly find what they’re looking for and retailers can reach a broader audience.

8. 1994: The First Secure Online Transaction is Made

A full ten years after the launch of the Electronic Mall, Netscape 1.0 was released. Featuring
a protocol called Secure Socket Layer (SSL), it keeps both the sending and receiving side of online transactions secure through encryption. A number of third-party credit card processing companies launched shortly after as the internet becomes a truly commercial medium.

The first-ever secure online transaction using encryption takes place on August 11, 1994, when Phil Branden Berger purchases the Sting CD Ten Summoners’ Tales through NetMarket, as reported in the New York Times story “Attention Shoppers: Internet is Open.”

9. 1995: Amazon, eBay, and the Online Marketplace Boom

Online marketplaces begin opening up. This includes Jeff Bezos’ Amazon (1994), initially designed for selling books, and Pierre Omidyar’s Auction Web, the first online auction site which would soon become known as eBay (1995).

10. 1996: Electronic Business (e-business) Was Coined

The term “e-business” was coined by IBM’s marketing and Internet team in 1996.

11. 1998: PayPal Launches

Originally introduced as Confinity, PayPal debuts as a money transfer tool. By 2000, it would merge with Elon Musk’s online banking company and mark its rise in popularity.

12. 1999: Global eCommerce reaches $150 Billion

Start-ups proliferate, with entrepreneurs being seduced by the get-rich-quick promise of the internet. Of course, the good times won’t last forever.

13. 2000: The Dotcom Burst and Online Advertising

The bubble bursts with the NASDAQ falling 75% from March 2000 to October 2002,
erasing most of the gains made since the internet took off. Many online and technology
entities declare bankruptcy, including Webvan, an early grocery delivery service.

Despite the burst, Google AdWords is introduced as a way for eCommerce companies to advertise through short-text ad copy and display URLs. Pay-per-click (PPC) advertising efforts of online retailers take off.

14. 2005: eCommerce Made a Comeback

E-Commerce bounces back from the burst big time, and Cyber Monday (the Monday after Black Friday) is introduced to boost online holiday purchases. In addition, Amazon launches Amazon Prime, giving members free 2-day shipping within the United States and making expedited shipping a consumer expectation. Today, there are approximately 142 million Prime members in the United States.

15. 2006: Online Shopping Platforms Increase

Shopify, as we know it today, is founded by Tobias Lütke, Daniel Weinand, and Scott Lake, making it easy for merchants to create online stores. Many other eCommerce platforms, such as Magento and BigCommerce, quickly enter the space and made a name for themselves.

16. 2012: Food Shopping Goes Virtual

Though the aforementioned Webvan and other grocery delivery services failed or struggled in the past, food shopping finally finds its groove in 2012, with the founding of Instacart. Instacart sends shoppers to local stores to pick out groceries that consumers order online. Today, with advances in cold warehousing and delivery, online food shopping is big business.

Also in 2012, fulfillment solutions provider The Fulfilment Lab is founded by Rick Nelson, giving eCommerce business owners further insight into their inventory, new methods of customizing, packaging, and more ways to increase sales.

17. 2017: E-commerce Remains Unstoppable

As brick-and-mortar sales decline, global e-commerce transactions soar, generating $29.267 trillion, including $25.516 trillion for B2B transactions and $3.851 trillion for B2C sales.

18. 2020: The COVID-19 Boost

The coronavirus pandemic forces many physical stores to close their doors, and lockdowns keep many citizens quarantined at home. To purchase essentials and combat boredom, people embrace online shopping. According to data from IBM’s U.S. Retail Index, the pandemic accelerated the shift away from physical stores to digital shopping by roughly five years.

And, the history of e-business/e-commerce shows that the trend of doing business online is never going to stop. Its growth today is seen as tremendous.