Differences Between Traditional Commerce and E-commerce

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.

Comparative Basis

Traditional Commerce

E-commerce

Accessibility options

Limited duration

Always on. 24 x 7 x 365

Inspection by hand

Always possible

Not possible

Scope of operations

Covers a specific geographical area

Covers the world

Business relationship

Linear

Always end-to-end

Time taken for delivery of goods/services

Minimal

Takes time

Transaction processing

Almost always manual

Automatic or manual


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.

Differences Between Traditional Commerce and E-commerce

Here is a condensed list of a face-off between traditional commerce vs E-commerce.

  1. E-commerce is facilitated by technology that is rapidly progressing. It is faceless and efficient. Traditional business involves face-to-face interactions and the exchange of goods or services. Both disciplines accept payments via cash or other digital means.

  2. E-commerce has no boundaries. It is a global phenomenon. For example, if you are searching for a book on Amazon's Indian platform, and you realise that your required book is available only overseas, you have the option to purchase from that specific country.

Unlike E-commerce, traditional commerce has geographic locations. These limitations have enabled the engines of E-commerce to chug far ahead in terms of sales and margins.

  1. In E-commerce, advertisements are digital. Surrogate and third-party advertisements are prevalent. Offline or traditional businesses rely on banners and hoardings, avenues which have been available for centuries. 

  2. E-commerce can boast one-to-one marketing channels, while traditional commerce only has one-way marketing and information flow.

  3. Delivery times of goods or services are a crucial factor. In E-commerce, delivery can, at times, happen on the same day an order is placed. In conventional commerce, however, delivery times are minimal.

  4. E-business offers no personalised experience, as you cannot physically check any goods you are buying. This experience is available only via traditional business.

  5. The chances of 'returns' of goods are higher on E-commerce platforms than in traditional commerce.

Overall, subjectivity bridges differences between traditional commerce and E-commerce. If you are happy with the goods your local stores provide, you will not rush to online websites. If that is not so, E-commerce is your all-weather friend.

To learn more on other related topics of senior secondary commerce stream, you can refer to Vedantu’s official website or app. Our study materials and live interactive classes can help you to iron out your fundamentals and ace your exams. 

FAQ (Frequently Asked Questions)

1. What is E-commerce?

Exchanging goods or services via electronic means and without any physical interface is E-commerce. It has been popularised via the advent of the internet.

2. Will E-commerce Replace Traditional Commerce?

It cannot be said with great certainty. Some people will still prefer traditional commerce over E-commerce. Consumer behaviour dictates which will survive in the long run. Nonetheless, E-commerce has long overshadowed traditional businesses.

3. What are the Advantages of Electronic Commerce Over Traditional Commerce?

Electronic commerce is seamless, end-to-end, providing greater variety and often superior discounts when compared to traditional business avenues. It is also easy to use and provides mobility.