History of E-Commerce

(Amazon.com)

Subject: E-Bussiness
Submitted To: Mr. Jahanzaib Ismat Malhi
Submitted By: Qamar Fahim Khan
Roll No. MBAE 2017-116

Institute of Business Administration (IBA)

University of Punjab,
Lahore.

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 The History of Ecommerce
(Amazon.com)

By definition, ecommerce or electronic commerce, is the buying and selling

of products or services via the Internet. For many Americans, ecommerce is
something we participate in on a daily basis, like online bill payment or purchasing
from an e-tailer.

Nowadays the thought of living without ecommerce seems unfathomable,

complicated and an inconvenience to many. It wasn’t until only a few decades ago
that the idea of ecommerce had even appeared.

History of ecommerce dates back to the invention of the very old notion of
"sell and buy", electricity, cables, computers, modems, and the Internet.
Ecommerce became possible in 1991 when the Internet was opened to commercial
use. Since that date thousands of businesses have taken up residence at web sites.
It continues to grow with new technologies, innovations, and thousands of
businesses entering the online market each year. Electronic Data Interchanges and
teleshopping in the 1970s paved the way for the modern day ecommerce store.

Online shopping was invented and pioneered in 1979 by Michael Aldrich in

the United Kingdom. He connected a modified domestic television via a telephone
line to a real-time multi-user transaction processing computer. The system was
marketed beginning in 1980 and offered mainly business-to-business systems that
were sold in the UK, Ireland, and Spain. One the earliest consumer shopping
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experiences was Book Stacks Unlimited, an online bookstore created by Charles M.
Stack in 1992. Stack’s store began as a dial-up bulletin board two years before
Amazon was founded by Jeff Bezos. In 1994, Book Stacks Unlimited moved to the
Internet as Books.com and was eventually acquired by Barnes & Noble.

The first online transaction was, by some reports, marijuana sold by Stanford
students to MIT students via the Arpanet account at their artificial intelligence lab
in 1972. However, the first online shopping transaction on the Internet took place
some 22 years later. With the headline “The Internet is Open”, the August 12, 1994,
issue of New York Times chronicled the sale between two friends of a Sting CD. The
Times said, “The team of young cyberspace entrepreneurs celebrated what was
apparently the first retail transaction on the Internet using a readily available
version of powerful data encryption software designed to guarantee privacy.”

The history of ecommerce is closely intertwined with the history of the

internet. Online shopping only became possible when the internet was opened to
the public in 1991. Amazon.com was the first ecommerce sites in the US to start
selling products online and thousands of businesses have followed since.

Amazon.com

Amazon.com, Inc. is one of the most famous ecommerce companies and is

located in Seattle, Washington (USA). Amazon.com, Inc., doing business as Amazon
is a multinational technology company focusing in e-commerce, cloud computing,
and artificial intelligence in Seattle, Washington. It is one of the Big Four or "Four

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Horsemen" of technology along with Google, Apple and Facebook due to its market
capitalization, disruptive innovation, brand equity and hyper-competitive
application process.

Amazon is the most valuable public company in the world ahead of Apple
and Alphabet. It is the largest e-commerce marketplace and cloud computing
platform in the world as measured by revenue and market capitalization.

It was founded in July 5, 1994 by Jeff Bezos and was one of the first American
ecommerce companies to sell products over the Internet. After the dot-com
collapse Amazon lost its position as a successful business model, however, in 2003
the company made its first annual profit which was the first step to the further
development.

At the outset Amazon.com was considered as an online bookstore, but in

time it extended a variety of goods by adding electronics, software, DVDs, video
games, music CDs, MP3s, apparel, footwear, health products, video
downloads/streaming, audiobook downloads/streaming furniture, food, toys, and
jewelry etc. The company also owns a publishing arm, Amazon Publishing, a film
and television studio, Amazon Studios, produces consumer electronics lines
including Kindle e-readers, Fire tablets, Fire TV, and Echo devices, and is the world's
largest provider of cloud infrastructure services (IaaS and PaaS) through its AWS
subsidiary. Amazon has separate retail websites for some countries and also offers
international shipping of some of its products to certain other countries. 100
million people subscribe to Amazon Prime. The original name of the company was
Cadabra.com, but shortly after it become popular in the Internet Bezos decided to
rename his business "Amazon" after the world's most voluminous river. In 1999

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Jeff Bezos was entitled as the Person of the Year by Time Magazine in recognition
of the company's success. Although the company's main headquarters is located in
the USA, WA, Amazon has set up separate websites in other economically
developed countries such as the United Kingdom, Canada, France, Germany, Japan,
and China. The company supports and operates retail web sites for many famous
businesses, including Marks & Spencer, Lacoste, the NBA, Bebe Stores, Target, etc.
nowadays the company gets about 40% of its sales from affiliates and third party
sellers who list and sell goods on the web site. In 2008 Amazon penetrated into the
cinema and is currently sponsoring the film "The Stolen Child" with 20th Century
Fox.

Amazon is the largest Internet company by revenue in the world and the
second largest employer in the United States. In 2015, Amazon surpassed Walmart
as the most valuable retailer in the United States by market capitalization. In 2017,
Amazon acquired Whole Foods Market for $13.4 billion, which vastly increased
Amazon's presence as a brick-and-mortar retailer. The acquisition was interpreted
by some as a direct attempt to challenge Walmart's traditional retail stores

Amazon startup began with its founder’s own savings, loan from bank and
family. It began as a destination to buy books, and eventually other media. It then
offered marketplace services for online retailers and/or individuals, while
simultaneously selling other physical goods for homes, offices, cars, and beyond.
The company is a giant in the online retails with tremendous product range and
they make every possible attempt to customize the buyer experience.

After 1996, Amazon received extra investment of $1 million from venture

capital. Amazon did not rely solely on its internal strength to conquer the market.

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Eventually, Amazon went public on NASDAQ in May 1997, Amazon acknowledged
that only the stock market would be able to provide the kind of financing it was
looking for. Today the shares are valued at approximately $268. In 2001 the stock
price plunged to just $5.97 with the dotcom crash. Amazon managed to survive this
industry challenge period, though had to close two warehouses and lay off 15% of
their staff in the process. The company finally turned a profit in late 2001 despite
the dotcom crisis. Even when profitable, Amazon have never declared or paid cash
dividends on common stock, opting instead to retain all future earnings to finance
future growth.

The convenience, safety, and user experience of ecommerce have improved

exponentially since its inception.

History Summary:

In 1994, Bezos incorporated Amazon. In May 1997, the organization went

public. The company began selling music and videos in 1998, at which time it began
operations internationally by acquiring online sellers of books in United Kingdom
and Germany. The following year, the organization also sold video games,
consumer electronics, home-improvement items, software, games and toys in
addition to other items.

In 2002, the corporation started Amazon Web Services (AWS), which

provided data on Web site popularity, Internet traffic patterns and other statistics
for marketers and developers. In 2006, the organization grew its AWS portfolio

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when Elastic Compute Cloud (EC2), which rents computer processing power as well
as Simple Storage Service (S3), that rents data storage via the Internet, were made
available. That same year, the company started Fulfillment by Amazon which
managed the inventory of individuals and small companies selling their belongings
through the company internet site. In 2012, Amazon bought Kiva Systems to
automate its inventory-management business, purchasing Market supermarket
chain five years later in 2017

Customers, Products and Services:

Amazon is simply the ultimate hub for selling merchandise on the Web, it lets
almost anyone sell almost anything using its platform. Since 2000, customer can
also find goods listed by third-party sellers to individuals or small companies and
retailers like Target and Toys 'R Us, used goods, refurbished goods and auctions.

The embedded marketing techniques that Amazon employs to personalize

shopper experience are probably the best example of the company's overall
approach to sales by knowing its consumers very well. Customer experience good
deals when they visit Amazon.com, from special offers and featured products to
some customized recommendations to attract personal shoppers. Amazon is also
able to lead the industry as it has been sensitive to the macro environment changes
throughout the world, by trending of consumer buying behavior and keeping track
with fast development of technology in every business aspect.

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 Amazon. com's product lines available at its website include several media
(books, DVDs, music CDs, videotapes and software), apparel, baby products,
consumer electronics, beauty products, gourmet food, groceries, health and
personal-care items, industrial & scientific supplies, kitchen items, jewelry,
watches, lawn and garden items, musical instruments, sporting goods, tools,
automotive items and toys & games.

Multilevel Strategy:

Amazon employs a multi-level e-commerce strategy. Amazon started by

focusing on business-to-consumer relationships between itself and its customers
and business-to-business relationships between itself and its suppliers and then
moved to facilitate customer-to-customer with the Amazon marketplace which
acts as an intermediary to facilitate transactions. The company lets anyone sell
nearly anything using its platform. In addition to an affiliate program that lets
anyone post-Amazon links and earn a commission on click-through sales, there is
now a program which lets those affiliates build entire websites based on Amazon's
platform

Finances:

Amazon.com is primarily a retail site with a sales revenue model; Amazon

takes a small percentage of the sale price of each item that is sold through its
website while also allowing companies to advertise their products by paying to be

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listed as featured products. As of 2018, Amazon.com is ranked 8th on the Fortune
500 rankings of the largest United States corporations by total revenue.

For the fiscal year 2017, Amazon reported earnings of US$3.03 billion, with
an annual revenue of US$177.866 billion, an increase of 30.8% over the previous
fiscal cycle. Since 2007 sales increased from 14.835 billion to 177.866 billion, thanks
to continued business expansion. Amazon's market capitalization was valued at
over US$803 billion in early November 2018.

Websites:

The domain amazon.com attracted at least 615 million visitors annually by

2008. Amazon attracts over 130 million customers to its US website per month by
the start of 2016. The company has also invested heavily on a massive amount of
server capacity for its website, especially to handle the excessive traffic during the
December Christmas holiday season.

Results generated by Amazon's search engine are partly determined by

promotional fees.

Amazon's localized storefronts, which differ in selection and prices, are

differentiated by top-level domain and country code.