Chapter 2

The history of E-commerce

2.1 EARLY DAYS, RISE & FAME 

E-commerce has a long and interesting history. It began in the 1970s with electronic
data interchange (EDI), which enabled businesses to exchange documents electronically. This
was followed by the development of online banking and shopping systems, such as
CompuServe's Electronic Mall in 1984. The introduction of the World Wide Web around
1990 opened up even more possibilities for e-commerce, allowing companies to create their
own websites where customers could buy products directly from them or through third party
services like eBay and Amazon. 

In 1994, Jeff Bezos founded Amazon as an online bookstore and this was one of the
first successful large-scale implementations of E-Commerce on a global level. Over time,
Amazon expanded its product range significantly and introduced new features such as
customer reviews and recommendations that have become standard today across many
websites offering consumer goods or services. In 1995, eBay launched its auction platform
which revolutionized how people buy products by allowing them access not only to items
listed by retailers but also those offered directly by individual sellers worldwide and it is
something never before seen at such scale within one marketplace environment.

Today’s digital economy is heavily reliant on E-Commerce technologies due these

pioneering efforts over two decades ago.it has grown exponentially since then both in terms
volume transacted globally but also complexity involved due emergence mobile commerce
applications allowing customers purchase goods quickly easily devices, they carry daily their
pockets purses wallets. E-Commerce now accounts for almost 30% all retail sales in most of
countries and continues grow rapidly year indicating importance role plays modern day
society businesses alike.
 EARLY ECOMMERCE TIMELINE

1969 – 1979: INVENTION AND THE EARLY DAYS

COMPUSERVE FOUNDED

1969
The history of eCommerce begins in
Columbus, Ohio with the founding of
the first eCommerce firm,
CompuServe.

They provides Electronic Data

Interchange, orknown as (EDI).

The development of(EDI) is FIRST ONLINE SALE

paved the way for electronic
commerce.
1971
A group of MIT and
Sandford students
create an ARPAnet to
sell Marijuana plants.

Some argues that this is not an

E commerce because the
payment is made offline

ONLINE TRANSACTION
PROCESSING INTRODUCED

1976
Atalla Technovation and
Bunker Ramo
ELECTRONIC SHOPPING
Corporation launch
INVENTED
products for secure
online transaction 1979
processing for financial
institutions. Michael Aldrich created the
term "teleshopping" (distance
shopping), which can be
viewed as online shopping
2.2 E-COMMERCE IN MALAYSIA 

The history of e-commerce in Malaysia dates back to the early 2000s when the
country first began developing its digital infrastructure. This allowed businesses and
individuals to transact electronically, allowing them to buy and sell goods online.
Since then, Malaysia has become one of the most advanced countries in Southeast
Asia for online commerce. Today, it is estimated that over 50% of Malaysians are
actively engaged in some form of e-commerce activity such as shopping or banking
transactions through their mobile devices or computers.

Since its inception, e-commerce has experienced tremendous growth in

Malaysia with an increasing number of merchants offering products and services on
their websites as well as through marketplaces such as Lazada and Shopee which have
become immensely popular among Malaysian consumers due to their convenience
factor coupled with competitive prices offered by these platforms compared against
traditional brick & mortar stores. In addition, more people are taking advantage of
cashless payment options such as GrabPay which allows customers make payments
without having any physical money on hand while also providing a secure platform
for users’ financial information protection from fraudsters or hackers who may target
vulnerable systems connected via internet networks used by many Malaysians today. 

In recent years there have been various initiatives put forward by both
government agencies and private companies that aim at furthering development
within this sector including measures like introducing new regulations around data
privacy laws and launching industry wide campaigns focused on educating consumers
about safe practices when it comes using digital channels. Besides, creating tax
incentives for small business owners selling products/services online and encouraging
collaboration between technology startups & established players are some of
initiatives by government agencies and private companies all aimed at making sure
that Malaysia remains competitive internationally when it comes down to doing
business digitally across borders worldwide.
Figure 2.2 showed a short briefing about timeline E-commerce in Malaysia
2.3 DIFFUSION OF INNOVATION THEORY 

The diffusion of innovation theory is an influential and

widely accepted model that explains how, why, and at what rate
new ideas spread through cultures. Diffusion of Innovation
Theory is widely accepted concept in the field of e-commerce.
This theory explains how new ideas and technologies spread
throughout different markets. It was first proposed by Everett
Rogers in 1962, and has since been used to explain consumer
behaviour when it comes to adopting new products or services
online.
The theory is composed of five stages:

1.Knowledg
e
2.Persuasio
n
3. Decision
Making
4.
Implementation/confir
mation
5.
Reinforcem
ent
In conclusion diffusion innovation theory is an invaluable tool for e-commerce
businesses who wish to understand how customers make decisions when considering
purchasing their products or services online. Lastly, it provides insight into what
factors influence consumer's choice so that businesses can tailor their marketing
 strategies accordingly in order maximize sales potential while also providing better
customer experiences overall
2.3.1 DIFFUSION FROM TRADITIONAL BUSINESS TO ONLINE
The diffusion of traditional business to online has been one of the most significant
trends in recent years. This shift has enabled businesses to reach a wider audience, create
more efficient processes, and increase profitability. As technology continues to evolve and
become more accessible, it is clear that this trend will only continue in the future.

One major benefit of shifting from traditional business models to online ones is
increased accessibility for customers who may not have access or time available for physical
stores. With an e-commerce platform, customers can shop anytime they want from anywhere
with an internet connection which makes it much easier than having a store open at certain
times during the day or week. Additionally, many companies are now offering delivery
services so that customers don’t even have to leave their homes if they want to buy stuffs

Another advantage associated with moving towards digital platforms is cost savings
due both lower overhead costs as well as reduced staffing needs since there isn't any need for
physical locations anymore. Additionally, businesses can save money on marketing by
utilizing social media platforms such as Instagram and Facebook instead of costly print
advertising campaigns. Finally, digital tools provide powerful analytics capabilities allowing
organizations insights into customer behavior which helps them better target their products
and services.

Overall, transitioning from traditional business models into online ones offers
numerous advantages including greater accessibility, cost savings on overhead expenses &
marketing efforts along with valuable data analysis capabilities all resulting in increased
profitability potentials over time
2.4 THE RISE OF E-COMMERCE DURING COVID-19 IN MALAYSIA

In the year 2020, an unexpected breakout of the Coronavirus (COVID-19) pandemic

shocked the world. This virus spread like wildfire across the globe in just three months,
resulting in the greatest disaster in the history of mankind. Death rates surged to 4 million and
are still rising, and a severe economic collapse caused by the pandemic exacerbated the
situation. According to OECD (2020), the rising rates of unemployment and a weakening of
the ringgit relative to the dollar is the most impact for Malaysians.
However, During the COVID-19 pandemic, e-commerce has grown dramatically.
With the closure of mall, supermarkets and stores, consumers have been forced to rely on
online shopping to meet their needs. This shift has created a tremendous opportunity for
businesses that can capitalise on the trend by offering their goods or services via an online
platform. In the view of Raj & Gohain (n.d), he mentioned that the rise of E-commerce
during covid are rely with six components which are lockdown, logistics, advance in
technology, cashless payments, power of social media and National E-Commerce Strategic
Roadmap.
6 COMPONENTS E-COMMERCE GROW IN MALAYSIA DURING COVID 19 :

Since lockdowns forced people to remain indoors

and many stores to close, Malaysians shifted to
Lockdown online shopping for daily necessities.

Logistic People find other job such as Lalamove ,Food Panda

and Grab Food
More household items are being bought online.

Advance in Most Malaysians have a mobile device with internet

access.
Technology This can lead to commercial growth to E-Commerce

Social media is well-known for its ease of

Power of social marketing
For example Chef Khairul Aming, who
media successfully sold Rm 1 million of "sambal" (Spicy
Malaysian Paste) online around the world.
 Malaysia have various of cashless
Cashless payment
Qr code, online transfer,grab pay and

payment many more

National E-
Commerce This is Malaysian government
initiatives aimed at increasing internet
Strategic access in rural areas and improving e-
wallet technologies

Roadmap
Moreover, E-commerce is not only convenient and efficient, but it also offers
customers more options than they would normally find in traditional retail stores. Consumers
can compare prices across different sites quickly, shop from anywhere at any time of day, and
even take advantage of discounts or special promotions offered exclusively online. In
addition, many companies offer free shipping which makes it even easier for customers to get
what they need without having to leave home due to social distancing recommendations put
in place by governments around the world as part of efforts against COVID-19 spread. 

The rapid growth in e-commerce during this period shows no signs of slowing down
anytime soon because more people turning towards digital solutions every day. Besides, there
is plenty of room for innovation within this sector moving forward into 2021 and beyond.
Companies should make sure that they stay ahead of trends if they want to remain
competitive by investing resources into creating secure payment systems, improving
customer service offerings and optimizing delivery times will be essential going forward.