The History of Trade Routes: From Silk Road to E-Commerce

Economic developments have always been pushed by trade for centuries, shaping the financial landscape, influencing monetary policies and ensuring wealth creation in the mass population. From the Silk Road to the modern digital marketplace, the evolution of trade has made globalisation and immense economic growth possible.

Silk Road, a trade route originating from XI’an, ending at Levant, the silk road was responsible for global trade during the 15th century (Britannica, 2021). Silk went westwards and silver, gold and wool went east. The trade facilitated by the Silk Road also helped establish credit instruments and currency exchange between two great civilizations, Rome and China Dynasties. While the biggest trade was between these two civilizations, many regional economies also benefited during the time, this includes cities such as Baghdad and Samarkand.

During the 15th century to the 18th century, trade saw its first evolution from land-based to maritime trade, influenced by European exploration. Portuguese were the first Europeans that discovered a direct sea route to Asia via the Cape of Good Hope and, subsequently, Southeast Asia led by the portugese explorer, Vasco da Gama (Periasamy, M., 2018). Goods like sugar, tobacco, and silver were introduced into world trade. Hence, economic dominance was sought after by nations through controlled trade policies and colonial exploitation. This time saw its first stock exchange, The Dutch East Asia Company setting the foundation for modern capitalism (The World’s First Stock Exchange, 2020).

The 18th to 19th century, marked a shift in trade and favored more industrialized economies (Findlay, R., 1982). The most prominent economy during the time was England which had many technological advancements in production and transportation. This drastically reduced trade cost and with the help of free trade policies such as British repeal of the Corn Laws in 1846, promoted economic efficiency and increased international trade.

Today, trade is represented by the digital ecosystem, with e-commerce platforms such as Shopee and Amazon, driving global trade transactions. The process of online trade processes is being streamlined by blockchains, artificial intelligence and digital payments. These improved accessibility of businesses to tap into new and rising markets and helped reduce costs for businesses to do trade. In 2021 the global cross border e-commerce market is valued around $785 billion and is projected to reach $7.938 trillion in the year 2030 (Factors, F. , n.d.).

Written by:

Lee Yuan Jun

1st Year Student at Taylor's University,

Bachelor of Business (Honours) in Finance and Economics

References: 

Britannica (2021). Silk Road | Facts, History, & Map. In: Encyclopædia Britannica. [online] Available at: https://www.britannica.com/topic/Silk-Road-trade-route [Accessed: 9 March 2025]‌.

Periasamy, M. (2018). Portuguese trade empire in Asia. [online] www.nlb.gov.sg. Available at: https://www.nlb.gov.sg/main/article-detail?cmsuuid=cf6a17a7-128f-4ba0-a6a3-90d009afe660 [Accessed: 9 March 2025]‌.

The World’s First Stock Exchange. (2020). The World’s First Stock Exchange. [online] Available at: https://www.worldsfirststockexchange.com [Accessed 9 Mar. 2025].

Findlay, R. (1982). Trade and Growth in the Industrial Revolution. Economics in the Long View, [online] pp.178–188. doi:https://doi.org/10.1007/978-1-349-06287-4_11 [Accessed: 9 March 2025]‌.

The Editors of Encyclopedia Britannica (2019). Corn Law | British history. In: Encyclopædia Britannica. [online] Available at: https://www.britannica.com/event/Corn-Law-British-history [Accessed: 9 March 2025]‌.

Factors, F. and (n.d.). Cross-Border B2C E-Commerce Market Size & Share [2030]. [online] Facts and Factors. Available at: https://www.fnfresearch.com/cross-border-b2c-e-commerce-market  [Accessed: 9 March 2025]‌.

Disclaimer:

An AI writing assistant was utilized in ideation of the content. However, all material has been written and reviewed by the author himself.

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