History of eCommerce

A Brief History of Ecommerce Online Shopping – Ecommerce Knowledge

A Brief History of Ecommerce Online Shopping – Ecommerce Knowledge

In today’s modern world everyone loves to do online shopping. But, do you know from where online shopping originated?

The term “ecommerce” refers to the exchange of products and services using electronic means, such as the World Wide Web. It covers various information, technologies, and helpful tools for online shoppers and sellers, such as mobile apps and encrypted payment gateways.

Most enterprises utilize an online shop and/or platform to perform ecommerce marketing and sales activities, as well as manage logistics and fulfillment.

But when and where did it all begin for online shopping?

The Exhaustive History of Online Shopping

Did you know that the concept of purchasing online dates back 40 years?

Although it has significantly evolved from its infancy, electronic commerce has been around for far longer than you may imagine.

Let’s look at the roots of eCommerce and how it grew into the giant, we all know and mostly love today.

When did Online Shopping Started?

As early as the 1960s, companies began using computer networks to conduct business, although the eCommerce used at that time was barely recognizable.

As part of the ARPA (Advanced Research Projects Agency) program, the United States government funded the installation of the first routers in 1968.

In less than a year, ARPANET (the Advanced Research Projects Agency Network) was established to keep the world’s most important communication channels open in the event of a nuclear disaster.

Researchers devised a novel technique for connecting to ARPANET in the subsequent three years through a computer terminal alone.

The combination of IP/TCP (Internet Protocol and Transmission Control Protocol) is commonplace and may be traced back to the original TIP (Terminal Interface Processor).

This innovation facilitated the expansion of the Internet from government facilities and academic research labs to commercial settings.

Companies relied heavily on EDI (Electronic Data Interchange),  a digital information transmission technology that might replace traditional methods like mail and fax for exchanging information and documents.

This innovation allowed data to be transmitted instantly and without human intervention between computers.

In 1979, the ANSI (American National Standards Institute) took action and released a standard for electronically exchanging corporate papers.

It was called ASC X12, and it provided organizations with a dependable standard for the electronic exchange of documents.

Another landmark event of the Internet Era occurred that year, too: the launch of electronic commerce.

E-commerce Timeline Evolution

The advent of eCommerce is inextricably linked to the growth of the internet because online shopping did not become a reality until the general public had access to the internet.

The year 1969, when the Apollo 11 mission landed on the moon, is notable for many reasons; nevertheless, it is also the year that kicks off the eCommerce timeline.

1969- Inception of CompuServe

In the midst of the historic events of 1969, CompuServe, the first eCommerce company, was founded in Columbus, Ohio. This marked the beginning of eCommerce in the United States and the rest of the globe.

The lack of internet means that the corporation must rely on transferring data to its business clients over telephone lines to facilitate computer sharing, known as EDI (Electronic Data Interchange).

1972- Computers Enable the First Ever Online Purchase

You might have heard that the first item sold on the internet was weed, but that’s not entirely accurate.

Students at Stanford University and Massachusetts Institute of Technology utilize Arpanet accounts to buy and sell marijuana, although the transaction still occurs on campus.

Since a computer only makes the process easier, we cannot say that this was “sold via the internet.”

1976- Online Transaction Process Begins

In honor of America’s 200th birthday, companies like Atalla Technovation and Bunker Ramo Corporation have released new tools for banks to conduct safe online transactions.

1979- The Invention of Electronic Shopping

British inventor Michael Aldrich shows off the potential of electronic shopping by hooking up a TV with some extra hardware to a computer that processes transactions via phone line ten years after the launch of CompuServe.

1983- Recognition of Electronic Commerce

The “electronic commerce” topic gets its maiden hearing in the California State Assembly.

Pacific Telesis, MCI Mail, Prodigy, CompuServe, CPUC, and Volcano Telephone all gave testimony.

Later, California adopted the Electronic Commerce Act, which placed new regulations on all systems created “to undertake the acquisition of goods and services via a telecommunications system.”

1984- Launch of CompuServe’s Online Shopping Mall 

In 1984, CompuServe pioneered online shopping by introducing the Electronic Mall, where customers could shop from one hundred different vendors.

1990- Launch of the World Wide Web 

When the first web browser was released, it served as a catalyst for the growth of online shopping by making it easier for people to find exactly what they need and for businesses to expand their customer base.

1994: First Online Secure Transaction Occurs

The release of Netscape 1.0 comes ten years after the debut of the Electronic Mall. Equipped with Secure Sockets Layer protocol, which encrypts data at both ends of an online transaction to ensure its safety.

Several third-party credit card processing services emerge as the internet becomes a commercial platform.

On August 11, 1994, Phil Brandenberger made the first encrypted online purchase when he bought the Sting CD Ten Summoner’s Tales from NetMarket.

1995: Amazon, eBay, and the Online Shopping Business Booms

Web-based marketplaces have become available. Jeff Bezos’s Amazon, created to trade books; this also includes Pierre Omidyar’s AuctionWeb, the forerunner of eBay and the first online auction site.

1998: PayPal debuts

PayPal, which was first released under the name Confinity, was first made available to send and receive financial payments online. By the year 2000, Elon Musk’s had merged with internet banking startup, and marking the beginning of its rapid rise.

1999- E-Commerce Exceeds $150 Billion 

The internet’s allure for instant wealth creation has led to a proliferation of startups. It goes without saying that this era of prosperity cannot continue forever.

2000- Dotcom Crisis and Online Advertisement

Most of the profits achieved since the advent of the internet were lost when the NASDAQ dropped 75% between March 2000 and October 2002 as the market collapsed.

Webvan, an innovative grocery delivery service, is just one of many digital and online companies that have filed for bankruptcy.

AdWords, created by Google during the collapse, allows online retailers to promote their products using brief ad material and clickable links. As a result, PPC (pay-per-click) advertising campaigns by internet stores have taken off.

2005- The Rebirth of eCommerce

Despite the recession, online commerce has made a remarkable recovery, and Cyber Monday’s advent has helped propel online holiday shopping further.

In addition, Amazon established Amazon Prime, which, for a fee, guarantees two-day shipping within the United States to its subscribers and elevates customer expectations for rapid delivery.

There are currently around 142 million Prime subscribers in the US.

2006- A rise in E-Commerce Sites 

Tobias Lütke, Daniel Weinand, and Scott Lake established the modern version of Shopify, which allows business owners to set up online storefronts quickly and easily.

There have been many successful new competitors in the e-commerce platform market, including Magento and BigCommerce.

2012- Era of Virtual Grocery Shopping 

Despite the failure of Webvan and other supermarket delivery services in the past, grocery shopping found its footing with the establishment of Instacart in 2012.

To fulfill online grocery orders, Instacart dispatches shoppers to nearby retailers. Recent refrigerated storage and transportation innovations have made online grocery buying a lucrative industry.

In the same year that Rick Nelson launches his e-commerce fulfillment platform.

The Fulfillment Lab is established as a fulfillment solutions provider to give eCommerce store owners more visibility into their inventory, new options for tailoring their packaging, and other strategies for driving sales.

2017- Unstoppable Ecommerce Growth

E-commerce has soared, bringing in $29.267 trillion worldwide, with B2B transactions accounting for $25.516 trillion and B2C sales accounting for $3.851 trillion.

2020- The COVID-19 Boost

Due to the widespread coronavirus pandemic, many brick-and-mortar businesses have been forced to close, and many people have been confined to their homes.

Online shopping has gained popularity as a means to both satisfy basic needs and stave off boredom.

Statistics from IBM’s US Retail Index show that the epidemic has hastened the transition from brick-and-mortar to online retail by about five years.

The mid-’90s to present: Marketplaces, Payments, and Ecommerce Growth

Large-scale improvements in the Internet’s commercial application occurred in the mid-1990s. Amazon, which began as an online bookstore in 1995, is now the most prominent global retailer.

Approximately 200,000 volumes might be found in a typical brick-and-mortar bookstore.

Since there were no constraints on the number of things Amazon could stock, the company could provide customers with a vastly expanded selection.

Amazon’s selection has grown over the years to include books, DVDs, computers, video games, toys, and even food and furnishings.

The company was an early adopter of internet features, including product ratings and customer feedback. Online product reviews are now widely recognized as one of the most powerful strategies for increasing revenue and gaining loyal customers.

Successful online marketplaces include eBay, which first appeared in 1995 and Etsy, which began operations in 2005 and had $4.97 billion in global goods sales in 2019.

More robust e-commerce platform selections became available to businesses in the late ’90s. The initial version of Miva’s catalog-based e-commerce solution was released in 1997 and saw widespread adoption by the end of the decade.

In 2005, Amazon introduced Amazon Prime, a subscription that, for a set annual price, provided two-day free shipping inside the contiguous United States on all qualified purchases.

The popularity of the membership quickly pushed other retailers to match the service’s speed and low rates.

Advancements in Online Payment Security

The importance of safe and private online interactions became apparent as more and more individuals started conducting business online. The PCI (Payment Card Industry Security Standards Council) was established in 2004 to oversee the implementation of security standards within the payment card industry. The group was established to define, improve, store, disseminate, and put into practice security standards for safeguarding client account information.


Online shopping benefits both shoppers and vendors. More people are starting online purchasing firms, and growth will likely peak in the coming years.


      • What was the first online marketplace?

Boston Computer Exchange opened in 1982 and is often cited as the first online marketplace. It was primarily a website where people could sell their used computers.

Another, more well-known type of retailer debuted with the advent of the Internet.

      • When did online shopping become popular?

Since the mid-1990s, when online retailers like Amazon and Alibaba first appeared, the popularity of these marketplaces has steadily grown. In particular, Amazon’s innovative approach to expansion has been credited with the company’s meteoric rise to prominence and its subsequent unprecedented success.

      • How has online shopping changed the world?

There was formerly a significant divide between the online and offline communities. However, as e-commerce, especially mobile e-commerce, continues to grow in popularity, the lines between the two are quickly blurring.

The internet has had far-reaching effects, one of the earliest being the proliferation of specialty markets. Due to the expansion of online platforms, brick-and-mortar stores are no longer the only focus of retailers’ marketing efforts. This allows retailers to reach a wider audience and give their brand a more personal voice.

      • Which country uses online shopping most?

By the year 2022, 46.3% of China’s retail sales will have been made online, making it the most developed ecommerce market in the world. Online shopping accounts for 36.3% of all retail sales in the UK and 32.2% in South Korea, rounding out the top three countries.

      • What is the most visited online store?

With an estimated 3.2 billion monthly visitors and a turnover of US$131,019 million in 2021, Amazon.com is the industry leader in international e-commerce.