Electronic Commerce, also known as commercial transactions conducted electronically on the internet is a new way for consumers to obtain goods without having to leave the house. Online shopping has increased throughout the years and continues to do so. Major e-commerce such as Amazon, EBay and Groupon have succeeded in the industry. Amazon has dominated as one of the best e-commerce around. Amazon started out as a bookstore but have made its way up the ladder and is now capable of selling anything and everything. Amazon’s competitive advantage starts with great customer service. Amazon’s cheap prices, convenience and acquisition of many other companies are all strategic advantages. In our research for e-commerce, we focused on Amazon as an example of the e-commerce industry. E-commerce has made business processes more reliable and efficient. Participating in e-commerce is essential for businesses to be able to market their products and services in the global marketplace. In a study conducted to survey consumers’ use of online shopping, findings conclude that e-commerce is an easier way to target your market as advertising is done much online. It has become a valuable medium for communicating with target markets. Online advertising allows the use of the Internet for the express purpose of delivering marketing messages. “Online advertising has grown steadily regardless of downturns in the economy. It is expected to grow by 16 percent in 2011, boosting its share of all advertising to slightly more than 15 percent,” (Smith, 2008). Advertising message could also effectively increase customers’ purchasing probability and enhance the image of product and services (Wei & Yue, 2015).
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Evolution of Amazon
Before we begin going in detail of the e-commerce Amazon and its global trends, opportunities and challenges, Amazon’s evolution is like no other and as a model e-commerce this is where Amazon all began. As mentioned before, by the end of 1995, CEO Jeff Bezos had started his online bookstore which opened its first remote distribution center and added one-click ordering to speed checkout and lower the number of abandoned orders. By 1998, Jeff expanded to include sales of music and DVD/video. By 1999, he began sales of home improvement products, such as software, video games and gift items. By early 2000, he opened its marketplace to enable third-party orders. Such as an alliance with Toys ‘R’ Us and offered its first free shipping offer on orders greater than $100. The same year he also launched its first overseas operations, in Japan. By 2004, Amazon started selling everything, as Jeff Bezos had hoped for since the beginning. 2005 was the mark of the Amazon Prime, which gave consumers benefits and would eventually include free shipping and music, video, and e-book perks. In 2007, Amazon launched the Kindle e-reader and by 2008 acquired Audible.com, Fabric.com, and AbeBooks (Sherman, 2015). Zappos.com was acquired in 2009 where Amazon also announced a textbook trade-in program. By 2014, the Fire TV device was introduced to add streaming services to TVs, Prime Music, 3D printed products store and Fire Phone. Bezos then even bought the Washington Post. In 2015, Amazon hired Woody Allen to create his first TV series and began producing movies for theaters. The one-hour delivery from local stores in selected areas was introduced as well. Today, Amazon’s capability is endless, with new products coming out left and right and the quickest innovation around, Amazon has surpassed Walmart as most valuable retailer in the U.S. by market capitalization and partnerships established.
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