Characteristics of E-Commerce

Nowadays, E-Commerce is the buzz word. Although it is omnipresent we never realise its importance primarily because different names know it. People do site promotion, SEO, affiliate marketing, and many other things, but the goal is the same, i.e. to get clients and sell the products or services of the company. ‘E’ is just a medium to transact online. I will be listing some peculiar features of e-commerce which makes it considerably appreciable.


In traditional commerce, a marketplace is a physical place we visit to transact. For example, television and radio are typically directed to motivating the customer to go someplace to make a purchase. E-commerce is ubiquitous, meaning that it is available just about everywhere at all times. It liberates the market from being restricted to a physical space and makes it possible to shop from your desktop. The result is called a market space.

From a consumer point of view, ubiquity reduces transaction costs – the cost of participating in a market. To transact, it is no longer necessary that you spend time and money travelling to a market. At a broader level, the ubiquity of e-commerce lowers the cognitive energy required to complete a task.

Global Reach

E-commerce technology permits commercial transactions to cross-cultural and national boundaries far more conveniently and effectively as compared to traditional commerce. As a result, the potential market size for e-commerce merchants is roughly equal to the size of the world’s online population.

Universal Standards

One strikingly unusual feature of e-commerce technologies is that the technical standards of the Internet and therefore, the technical standards for conducting e-commerce are universal standards, i.e. they are shared by all the nations around the world.


Unlike any of the industrial technologies of the twentieth century, with the possible exception of the telephone, e-commerce technologies are interactive, meaning they allow for two-way communication between merchants and consumer.

Information Density and Richness

The Internet vastly increases information density. It is the total amount and quality of information available to all market participants, consumers and merchants. E-commerce technologies reduce information collection, storage, communication and processing costs. At the same time, these technologies increase the accuracy and timeliness of information greatly, making information more useful and important than ever. As a result, information becomes plentiful, cheaper and of higher quality. Information richness refers to the complexity and content of a message.


E-commerce technologies permit customisation. Merchants can target their marketing messages to specific individuals by adjusting the message to a person’s name, interests and past purchases. The technology also permits customisation. Merchants can change the product or service based on user’s preferences or prior behaviour.

E-commerce technologies make it possible for merchants to know much more about consumers and use this information more effectively than ever before. Online merchants can use this information to develop new information asymmetries, enhance their ability to brand products, charge premium prices for high-quality service and segment the market into an endless number of subgroups, each receiving a different amount.

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