Electronic Commerce

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What Is E-commerce and Its Types?

E-commerce is the buying and selling of products or services, transaction of funds, meeting buyers, and sellers over the internet. E-commerce is called electronic commerce or internet commerce. E-commerce is built on technological assets such as supply chain management, internet marketing, online transaction processing, data management system, inventory management system. Not just this, e-commerce is powered by live chats, chatbots, or voice assistants. In simple terms, the nature of e-commerce is explained as the execution of business on the online platform using digital gadgets like mobile phones, laptops, tablets, and the internet.

To understand what e-commerce is with an example, consider a scenario wherein you log in to the Amazon website. On this website, you get the chance to interact with the vendor, get information about the product like images, and detailed descriptions in the form of text. If you like the product, you place the order by sharing a delivery address and making the final payment.

E-commerce has specific models based on the type of various parties involved at both ends in any business.

Types of E-commerce with Examples

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Types of E-commerce

  • Business-to-Business (B2B)- is defined as sales of products and services between firms using online resources. Hence, the end consumer is not involved in any transaction. Thus the parties engaged in B2B are wholesalers, retailers or manufacturers, etc.

  • Business-to-Consumer (B2C)- This is self-explanatory. Any company which sells its product to the direct end consumer. Buyers can browse and go through the details of the products and services provided by the seller. Different points include a product image, detailed description, review, etc. Then the buyer places the order, and the company ships the product directly to the consumer. Amazon, Flipkart, Jabong are a typical example of the B2C model.

  • Consumer-to-Consumer (C2C)- As the name suggests, consumers are directly involved in this type of business. There is no company involved in any industry. It can be understood as one consumer sells the personal assets to a different interested consumer. Thus, the type of product could fall in the category like cars, electronic devices, furniture, etc. The famous website working on the C2C model is OLX, Quikr.

  • Consumer-to-Business (C2B)- Last but not least, Consumer to Business is just the opposite of the business to consumer model. In this model, the consumer vends his product or services to the industry. For example, a software engineer creates software and sells it to the company.

Few E-commerce business examples are as follows.

  1. Amazon

  2. Flipkart

  3. eBay

  4. Myntra

  5. OLX

  6. Quikr

Let us read the advantages and disadvantages of e-commerce.

E-commerce and its Benefits

  • E-commerce has eliminated the geographical barrier. Buyer and seller can communicate from any part of the world.

  • E-commerce is the 24*7 available shop, i.e. the website is available at any time for shopping.

  • E-commerce provides fast delivery without much effort from the customer. All the customer complaints and feedback is addressed, which save the time of both customer and the company.

  • The cost of the physical mortar shop is removed. Hence the company enjoys greater profits.


Drawbacks of E-commerce

  • The start-up cost of e-commerce is high. The price involves the hardware and software setup, training cost of the employees.

  • Not all websites get success. Thus, the risk of failure is very high. There are several e-commerce websites, but not every website became successful.

  • Due to interaction in the online medium, miscommunication between customer and company occurs. Any communication gap leads to customer dissatisfaction.

  • Security is the primary concern in e-commerce. A customer makes a payment using net banking or different credit or debit cards. However, there are complaints about personal information like bank details getting leaked, and illegally money is debited from the account.

  • There are also incidents when the shipments are misplaced, or the wrong order is delivered. It brings the customer a feeling of dissatisfaction and anger.

Fun Facts

  • Do you know famous innovator Michael Aldrich invented e-commerce? In 1979, he created online shopping by enabling online transaction processing and dealing between consumers and businesses, or between different companies, which currently is termed as e-commerce.

  • Amazon is the first and biggest online marketplace today, followed by eBay. Apple, Walmart, and The Home Depot are following the ranking order after eBay. However, it is not the first business to start selling online. Pizza Hut, a famous pizza chain, began an online ordering facility for its customers in 1994. So basically, people started ordering pizza online first before requesting an online book through Amazon.

FAQ (Frequently Asked Questions)

Q1 Explain the benefits of having a B2B E-commerce Website.

A1. Ecommerce B2B website aids in more sales with less reach. Brand visibility is high as the RFPs are won by requests based on the SEO. Both inbound and outbound sales could quickly scale the brand. Revenues are also earned for additional equipment and lines. The business could easily be scaled into new geographies and categories. Customer loyalty is won using localized sites. This medium also provided automated customer feedback and review for a new B2B buyer.

Q2 Explain the technical disadvantage of E-commerce?

A2. The prime technical disadvantage of e-commerce is the lack of security of data and systems. Low standards of implementation lead to getting and finding or changing the system rapidly. It is highly dependent on high internet connectivity, which could be a challenge in some places. Existing applications and databases are difficult to be integrated into e-commerce websites. Not just this, there could be hardware limitations where the website could be incompatible to some operating system.