E-commerce vs. Traditional Commerce: A Comparison

As consumer technologies have advanced, societal habits have changed. Even a decade ago, if you had to buy something, you would have to get out of your home, reach your neighbourhood store, collect that item and turn back.

With smartphones in every hand now, and with the presence of some of the biggest global E-commerce platforms in India's retail ecosystem, one of the social habits that have undergone a radical change is the purchasing behaviour.

Presently, most people would instead buy goods online than venture out. The market for E-commerce in India is enormous and expanding almost daily. As the footprints of the internet reach out to smaller villages and hamlets, E-commerce needs of today's business world cannot be overlooked.

Let us analyse both traditional commerce and E-commerce.

Defining Traditional Business

It is the system of buying and selling goods that has reigned supreme for hundreds of thousands of years. The barter system was the first-known form of traditional commerce. Any activity that facilitates the exchange of goods and services against money is traditional commerce.

Once the exchange of goods and services is completed, traditional business is over.

This type of commerce is present across the world. In many poorer nations in South America, Asia and Africa, it is still the only sort of buying and selling recognised and practised.

On a broader note, it entails the customer's visit to a market or a local store, choosing all required goods, ensuring their quality (especially when it comes to perishable goods like food items), paying for them and heading home.

Defining E-commerce

E-commerce, or Electronic Commerce, can be defined only as the exchange of goods and services online, i.e. via the internet. Nowadays, almost all the major E-commerce players serve everything we need – from food items to toiletries – on their platforms. Support, logistics, delivery, bookings, payments and everything else is made via electronic medium. 

There are some sub-types of E-commerce. They are:

• B2B Commerce: When any transaction takes place between two businesses via an electronic medium, it is termed B2B commerce.

• B2C Commerce: When transactions happen over the internet between an organisation and its customers directly, it is termed B2C commerce. It is the most typical type of E-commerce, and it has revolutionised the way people purchase items they need.

• C2C Commerce: When the Internet facilitates transactions between customers only, and no business is involved in any manner, it is C2C commerce. A good example would be people looking to sell their old books. They could easily advertise their wares on any free online platform, and get responses from interested parties.

For Advanced Students: Did you know that Jeff Bezos, the owner of online retailing giant Amazon, started off selling used books in his garage back in the United States? You can read more about how he created an empire online.

For more details on various aspects of E-commerce, visit Vedantu's relevant pages.

Comparing Traditional and E-commerce

Before we begin analysing the many differences between traditional commerce and E-commerce, let us see how they compare against each other.

For simplicity, the comparison has been tabulated.

Attention, Advanced Students: Can you think of any other basis of comparison between E-business vs traditional business? You can start by focusing on customer interaction and service, types of products and its variety, exchange of information between buyers and sellers and returns/refunds.

These will leave you with plenty of options.

Traditional Commerce is the system of buying and selling goods that have been the standard medium for selling and buying goods for hundreds of years. The first known system of commerce is known as the barter system and any activity that facilitates the exchange of goods and services for money is defined as traditional commerce. This form of commerce is prevalent all across the world, and even today in the poorer parts of the world like South America, Asia, and Africa, it is still the most widely accepted model of buying and selling goods.

Electronic Commerce or E-Commerce as it is widely known can be defined only as the purchase of goods and services online, which is via the internet. In recent times, almost all the major E-commerce players serve everything we need – from food items to toiletries and even electronics on their platforms. Support, logistics, delivery, bookings, payments, and everything else is made via electronic medium. 

Difference Between E-Commerce and Traditional Commerce

There are innumerable differences between traditional commerce and E-commerce but to give an objective picture, some of the differences are presented. 

E-commerce is generally facilitated by technology that is rapidly progressing. It is faceless and efficient, i.e. not present in a physical form. But the traditional business involves face-to-face interaction with the customer during the exchange of goods or services. Both the mediums today accept payments via cash or other digital means. There are no boundaries for E-commerce and it is a global phenomenon. So, if you are searching for a book on Amazon's Indian platform, and you find out that your required book is available only overseas, you have the option to purchase from that country. Also, Unlike E-commerce, traditional commerce has physical and geographic locations. These limitations have provided the opportunity for E-commerce to chug far ahead in terms of sales and margins. In the field of E-commerce, all advertisements are digital. Surrogate and third-party advertisements are prevalent. Offline or traditional businesses generally rely on banners and hoardings, avenues that have been available for centuries. E-commerce can also boast one-to-one marketing channels, while traditional commerce only has one-way marketing and information flow.