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How E-commerce Works

Why the Hype?

There is a huge amount of hype that surrounds e-commerce. Given the similarities with mail order commerce, you may be wondering why the hype is so common. Take, for example, the following quotes:

  • "...the estimate of U.S. retail e-commerce sales for the third quarter of 2005, adjusted for seasonal variation and holiday and trading-day differences, but not for price changes, was $22.3 billion, an increase of 5.7 percent (±1.7%) from the second quarter of 2005."-- U.S. Census Bureau
  • "2004 online retail sales rose 23.8 percent to $89 billion, representing 4.6 percent of total retail sales. Including travel, online sales also rose 23.8 percent to $141.4 billion. Online retail sales will reach $109.6 billion [in 2005]. Online sales including travel will rise to $172.4 billion this year." -- Forrester
  • "Online ad growth of 33.7 percent is expected in 2005 to $12.7 billion, raising a previous estimate of $11.5 billion for the year. eMarketer had estimated 2004 ad revenue at $9.5 billion." -- eMarketer

This sort of hype applies to a wide range of products. According to eMarketer the biggest product categories include:

  • Computer products (hardware, software, accessories)
  • Books
  • Music
  • Financial Services
  • Entertainment
  • Home Electronics
  • Apparel
  • Gifts and flowers
  • Travel services
  • Toys
  • Tickets
  • Information