Evolution of Market — Class 11 Entrepreneurship Notes (CBSE)

What is a Market?

Market

The word 'market' is derived from the Latin word 'mercatus' meaning merchandise, ware, traffic, trade or a place where business is conducted.

Remember the Market Scene?

Remember the days of Junior School, when the one often repeated topic for essay writing as well as for drawing and painting activity used to be a “Market Scene”. A variety of depictions shown with mostly one common opinion of holding a market area as a busy, noisy, crowded place, with several shops, hotels, cafeterias, all beautifully decorated; hawkers and peddlers shouting on the top of their voices to attract customers.With the passage of time, the difference can be now realized from words describing markets as being more sophisticated, neat and clean, with decked up showrooms piled with variety and display making choice difficult, centrally air conditioned, elegant ambience.The markets of Dubai, Hong Kong, Singapore, Bangkok are world renowned; Bombay's Big Bazaars, Sector 17 of Chandigarh, Connaught Place or Chandni Chowk at Delhi are the places which visitors include on their sight-seeing tours.World across and almost all age groups are familiar with the term ‘Market’ in some way or the other. Some relate to them as shopping areas adjacent to their houses, some as Marts, Malls and Mansions, Lanes or Sectors, Big Bazaars or Super Markets etc. But the question still remains: “ARE THESE AREAS ONLY THE MARKET?” or is there something else.

Market in your own life: the Sunday sabzi mandi outside your colony, the Big Bazaar at the mall, and the Amazon app on your phone are all markets — they just look different. When your mother bargains with the vegetable vendor, both of you are participating in a market. So is the school canteen when it sells you a ₹15 samosa.

Historical Perspective

In olden days, buying and selling was done by coming together at periodical fairs held at specific places on particular dates. In the days of the barter system, the exchange was of goods with goods only. Then, the invention of money as a means of exchange revolutionized the market system.

Markets are responsible for making the economy strong and stable. The market in itself is a very dynamic concept and has been steadily acquiring greater dynamism and robustness. Ever since its evolution, different authors have tried defining it differently — it has grown and changed over time, and the process is still in progress.

Evolution of Market Concepts — Three Eras

Hover a card to read the textbook definition. Click it to open the real-life example.

“At every point where a specific commodity is concentrated for sale a market is found.”— American Market Association

•Place — goods are brought to a specific place and buyers reach those places.
•Different markets for different commodities — a vegetable market, a food grains market, and so on.

Real-life example:

Your neighbourhood sabzi mandi is a textbook traditional market — vegetables are brought to one spot and buyers walk in. Notice that vegetables and grains are sold in separate markets, exactly as the traditional concept says.

“The term market is not any particular place in which things are bought and sold but the whole of any region where buyers and sellers are in such free intercourse with one another that the price of the same goods tend to equality easily and quickly.”— Carnot

•Market is not restricted to a particular place but to a region.
•Buyers and sellers have free access to one another.
•Accessibility enables the forces of demand and supply to operate and determine competitive prices.
•Drivers of change: quantity, quality, variety of products, competition, consumer awareness and consumer protection laws.

Real-life example:

Onion prices in Lasalgaon mandi (Maharashtra) and Azadpur mandi (Delhi) move together — traders shift stock between regions until prices across the region equalise. That is a region-based market at work.

“Markets are people with money to spend and desire to spend it.”— DYDDY

•People having money and the desire to spend it are taken as the market.
•A market cannot exist without people’s willingness to buy and sell.
•E-business means carrying on business activities, both industrial and commercial, through a computer network — the Internet. Wherever the reach of the internet can go, that place has become the probable market.

Real-life example:

Zomato owns no physical market — it owns an app. You have the money and the desire for biryani; the app is the market. Negative example: Blockbuster saw the market as its stores, not as people who wanted to watch movies at home. Netflix saw the people, and Blockbuster was gone by 2010.

Clark and Clark:“In fact, for most commodities, the market must not be thought as a geographical meeting place but as any getting together of buyers and sellers in person by mail, telephone, telegraph or by any other means of communication.” Notice how this 20th-century definition had already predicted today's app-based markets.

E-Business vs. E-Commerce

E-Business vs. E-Commerce
Aspect	E-Business	E-Commerce
Meaning	Conduct of industry, trade and commerce using computer networks (Internet)	Electronic communication among enterprises including customers, suppliers, business partners, government organizations and financial institutions
Scope	Wide — covers e-commerce plus production, product development, accounting, finance, HR management etc.	Narrow — revolves around buying and selling products and services over the Internet
Focus	All business functions conducted digitally	Buyer-seller transactions online

The internet users can now order goods, receive their delivery and make their payment while at home, on the internet.

Where does Zomato fit? Buying a meal on the app is e-commerce. But Zomato also runs digital restaurant onboarding, delivery logistics, payroll and accounting — that full digital operation is e-business. Every e-commerce is e-business, but not every e-business is e-commerce. The same logic applies when a stationery shop near your school starts taking orders on WhatsApp.

Key Takeaways

The word market comes from the Latin mercatus — merchandise, ware, traffic, trade or a place where business is conducted.
Markets evolved through three eras: place-based traditional markets, region-based markets (Carnot), and people-oriented digital markets (DYDDY).
Barter needed a double coincidence of wants; the invention of money removed that limitation and revolutionised the market system.
E-business is wider than e-commerce — e-commerce is only the buying-and-selling part of a fully digital business.
So what? Every app on your phone — Swiggy, Amazon, Myntra — is a market you carry in your pocket. When you sell your old textbooks on OLX, you are a market participant, not just a shopper.