Electronic commerce (also referred to as EC, e-commerce or ecommerce) consists primarily of the distributing, buying, selling, marketing, and servicing of promotional products or services over electronic systems such as the Internet and other computer networks. The information technology industry might see it as an electronic business application aimed at commercial transactions. It can involve electronic funds transfer, supply chain management, e-marketing, online marketing, online transaction processing, electronic data interchange (EDI), automated inventory management systems, and automated data collection systems. It typically uses electronic communications technology such as the Internet, extranets, e-mail, e-books, databases, catalogues and mobile phones.

The meaning of the term 'electronic commerce' has changed over the last 30 years. Originally, 'electronic commerce' meant the facilitation of commercial transactions electronically, usually using technology like Electronic Data Interchange (EDI) and Electronic Funds Transfer (EFT), where both were introduced in the late 1970s, for example, to send commercial documents like purchase orders or invoices electronically. The 'electronic' or 'e' in ecommerce or e-business refers to the technology/systems; the 'commerce' refers to be traditional business models. ecommerce is defined as the complete set of processes that support commercial/business activities on a network. In the 1970s and 1980s, this would also have involved information analysis. The growth and acceptance of credit cards, Automated Teller Machines (ATM) and telephone banking in the 1980s were also forms of ecommerce. However, from the 1990s onwards, this would include enterprise resource planning systems (ERP), data mining and data warehousing. In the 'dot com' era, it came to include activities more precisely termed 'Web commerce' -- the purchase of goods and services over the World Wide Web via secure servers (note HTTPS, a special server protocol which encrypts confidential ordering data for customer protection) with e-shopping carts and with electronic payment services, like credit card payment authorizations. Today, it encompasses a very wide range of business activities and processes, from e-banking to offshore manufacturing to e-logistics. The ever growing dependence of modern industries on electronically enabled business processes gave impetus to the growth and development of supporting systems. This includes backend systems, applications and middleware. Examples are broadband and fiber-optic networks, supply-chain modules, material planning modules, customer relationship modules, inventory control systems and financial accounting/corporate finance modules. When the Web first became well-known among the general public in 1994, many journalists and pundits forecast that ecommerce would soon become a major economic sector. However, it took about four years for security protocols (like HTTPS) to become sufficiently developed and widely deployed. Subsequently, between 1998 and 2000, a substantial number of businesses in the United States and Western Europe developed rudimentary Web sites. The evolution of ecommerce in the early 2000s onwards saw multinational (MNCs) or transnational (TNCs) companies establishing regional shared services centers, regional data centers and regional call centers. Today, this is not only a crucial part of a company's long-term corporate strategy in cost containment, but also in maintaining and winning market share in a borderless, global marketplace

In many cases, an ecommerce company will survive not only based on its product, but by having a competent management team, good post-sales services, well-organized business structure, network infrastructure and a secured, well-designed website. Such factors include:

- Sufficient work done in market research and analysis. e-commerce is not exempt from good business planning and the fundamental laws of supply and demand. Business failure is as much a reality in e-commerce as in any other form of business.

- A good management team armed with good and sound information technology strategy. A company's IT strategy should be a part of the business re-design process.

- Providing an easy and secured way for customers to effect transactions. Credit cards are the most popular means of sending payments on the internet, accounting for 90% of online purchases. In the past, card numbers were transferred securely between the customer and merchant through independent payment gateways. Such independent payment gateways are still used by most small and home businesses. Most merchants today process credit card transactions on site through arrangements made with commercial banks or credit cards companies.

- Providing reliability and security. Parallel servers, hardware redundancy, fail-safe technology, information encryption, and firewalls can enhance this requirement.

- Providing a 360-degree view of the customer relationship, defined as ensuring that all employees, suppliers, and partners have a complete view, and the same view, of the customer. However, customers may not appreciate the big brother experience.

- Constructing a commercially sound business model. If this key success factor had appeared in textbooks in 2000, many of the dot-coms might not have gone into bankruptcy.

- Engineering an electronic value chain in which one focuses on a 'limited' number of core competencies the opposite of a one-stop shop. (Electronic stores or estore can appear either specialist or generalist if properly programmed.)

- Operating on or near the cutting edge of technology and staying there as technology changes (but remembering that the fundamentals of commerce remain indifferent to technology).

- Setting up an organization of sufficient alertness and agility to respond quickly to any changes in the economic, social and physical environment.

- Providing an attractive website. The tasteful use of colour, graphics, animation, photographs, fonts, and white-space percentage may aid success in this respect.

- Streamlining business processes, possibly through re-engineering and information technologies.

- Providing complete understanding of the promotional products or services offered, which not only includes complete product information, but also sound advisors and selectors.

Naturally, the ecommerce vendor must also perform such mundane tasks as being truthful about its product and its availability, shipping reliably, and handling complaints promptly and effectively. A unique property of the Internet environment is that individual customers have access to far more information about the seller than they would find in a brick-and-mortar situation