E-commerce

E-commerce, or electronic commerce, refers to the buying and selling of goods

and services over the internet. It involves the use of electronic platforms, such
as websites, mobile applications, and social media, to conduct transactions
between businesses and consumers or between businesses. E-commerce has
revolutionized the way businesses operate and has created new opportunities
for entrepreneurs and consumers alike.

One of the primary benefits of e-commerce is that it offers a more convenient

and efficient way to conduct business. Consumers can browse and purchase
products from the comfort of their own homes, while businesses can reach a
global audience without the need for a physical storefront. E-commerce has
also enabled businesses to streamline their operations by automating many of
the tasks involved in the sales process, such as inventory management, order
processing, and shipping.

E-commerce has continued to grow in popularity and importance, particularly

in light of the COVID-19 pandemic, which has led to a surge in online shopping
as people seek to minimize in-person interactions. As a result, businesses that
are able to adapt to the e-commerce landscape are likely to have a competitive
advantage in the years to come.
E-commerce is also known as Electronic Commerce, refers to buying and
selling of products or services over the Internet. Normally e-commerce is used
to refer to the sale of physical products online, but it can also describe any
kind of commercial transaction that is facilitated through the internet. The
first-ever online sale was in 1994 when a man sold a CD by the band Sting to
his friend through his website Net Market, an American retail platform. This is
the first example of a consumer buying a product from a business through the
World Wide Web or e-commerce as we commonly know it today. After that e-
commerce has evolved to make products easier to discover and purchase
through online retailers and marketplaces. All freelancers, as well as small and
large businesses, have benefited from e-commerce which enables them to sell
their goods and services at a scale that was not possible with traditional offline
retail.

Types of E-commerce model:

There are types of e-commerce models that can describe almost every
transaction that takes place between consumers and businesses.
1. Business to Consumer (B2C): When a good or service is sold to an
individual consumer by a business, e.g., we buy a pair of shoes from an
online retailer.
2. Business to Business (B2B): When a good or service is sold by a business
to another business, e.g., a software-as-a-service is sold by a business for
other businesses to use.
3. Consumer to Consumer (C2C): When a good or service is sold by a
consumer to another consumer, e.g., we sell our old furniture on eBay to
another consumer.
4. Consumer to Business (C2B): When a consumer’s own products or
services is sold to a business or organization, e.g., an authority offers
exposure to their online audience in exchange for a fee or a photographer
licenses their photo for a business to use.
5. Business-to-government (B2G): In this model, businesses sell products
or services to government agencies through online portals or
marketplaces.
6. Government-to-business (G2B): In this model, government agencies sell
products or services to businesses through online portals or marketplaces.
7. Government-to-consumer (G2C): In this model, government agencies
provide products or services directly to consumers through online portals
or marketplaces.
Business Application of E-commerce:
• Conversational commerce: e-commerce via chat
• Digital Wallet
• Document automation in supply chain and logistics
• Electronic tickets
• Enterprise content management
• Group buying
• Instant messaging
• Newsgroups
• Online banking
• Online office suites
• Online shopping and order tracking
• Pretail
• Print on demand
• Shopping cart software
• Social networking
• Teleconferencing
• Virtual assistant (artificial intelligence)
• Domestic and international payment systems

Features:

Product catalog: An e-commerce platform should provide an easy way to

create and manage a product catalog, including adding new products, editing
existing ones, and categorizing them.
Shopping cart: A shopping cart is a tool that allows customers to add
products they want to purchase and keep track of the items as they continue
to browse the website.
Checkout and payment processing: A reliable checkout and payment
processing system is essential for e-commerce success. Customers should be
able to complete transactions quickly and easily using a variety of payment
methods.
Shipping and order management: Once a customer places an order, the e-
commerce platform should provide tools to manage the order, including
tracking information, shipping options, and delivery status.
Customer accounts and loyalty programs: Many e-commerce platforms
allow customers to create accounts, which can help businesses build
relationships and loyalty. Additionally, loyalty programs can incentivize
repeat purchases and encourage customers to refer others.
Marketing and analytics: An e-commerce platform should offer tools to help
businesses market their products, such as email campaigns and social media
integration. Additionally, analytics can help businesses track customer
behavior, identify trends, and improve their overall strategy.
Mobile optimization: With more people shopping on their mobile devices,
it’s essential that e-commerce platforms are mobile-optimized, with a
responsive design that provides an optimal shopping experience on
smartphones and tablets.

Advantages of E-commerce:
• E-commerce enables fast and secure shopping.
• It is making digitalized world.
• E-commerce also enables to choose different goods and services according
to your choice.
• It is a simple way of selling and buying products and services.
• E-commerce replaced the paper work as all transactions are through
internet today.
• It provides better management system, as it has a centralized database.
• E-commerce via internet covers a large number of customers worldwide.
• E-commerce has several payment modes.
Disadvantages of E-commerce:
• E-commerce has no universal standard for quality and reliability.
• E-commerce works through internet, it is possible that navigation on
internet itself may be slow.
• Strong security is required in e-commerce as all transactions are through
internet.
• There is high risk of buying unsatisfactory products through e-commerce.
• It uses public key infrastructure which is not safe.
• Customers also trap in banking fraud which is quite frequent.
• Hackers also try to get access of data or to destroy data in e-commerce.
Uses of E-commerce :
1. Online retail: One of the most well-known uses of e-commerce is online
retail, where businesses sell products directly to consumers through their
online store, website, or mobile app.
2. Digital products and services: E-commerce is also commonly used for the
sale of digital products and services, such as music, e-books, software, and
online courses.
3. Business-to-business transactions: E-commerce can be used for B2B
transactions, where businesses sell products or services to other
businesses.
4. Online marketplaces: E-commerce marketplaces, such as Amazon and
eBay, provide a platform for businesses and individuals to sell their
products to a large audience.
5. Auction sites: Online auction sites, such as eBay, allow users to bid on and
purchase items from other users.
6. Online banking and financial services: E-commerce is used extensively
for online banking and financial services, including payment processing,
bill payment, and money transfers.
7. Online booking and reservations: E-commerce is used for booking and
reservations of flights, hotels, rental cars, and other travel-related services.
8. Food delivery: E-commerce platforms are used for online ordering and
delivery of food from restaurants.
9. Online advertising: E-commerce is also used for online advertising, where
businesses can advertise their products and services to a large audience.
There are many benefits of e-commerce for both businesses and
consumers. Some of the key benefits of e-commerce are:
1. Convenience: E-commerce allows customers to shop from the comfort of
their own homes or wherever they have internet access, making it
convenient for them to make purchases at any time.
2. Global Reach: E-commerce enables businesses to reach a wider audience
beyond their physical locations, allowing them to expand their customer
base globally.
3. Cost-Effective: E-commerce eliminates the need for physical storefronts
and reduces overhead costs associated with operating a traditional brick-
and-mortar store.
4. Personalization: E-commerce allows businesses to personalize their
offerings based on customer behavior and preferences, offering a more
personalized shopping experience.
5. Easy and Secure Payment: E-commerce provides secure and convenient
payment options, making it easy for customers to make purchases.
6. Data Collection and Analysis: E-commerce provides businesses with the
ability to collect and analyze customer data, enabling them to improve their
marketing and sales strategies.
7. 24/7 Availability: E-commerce websites are always available for
customers to access, allowing them to make purchases at any time, even
outside of business hours.
8. Overall, e-commerce provides businesses with new opportunities to
expand their customer base, increase sales, and improve customer
satisfaction, while also offering customers greater convenience, access, and
flexibility.
Traditional Commerce v/s E-Commerce

Sr. No. Traditional Commerce E-Commerce

Information sharing is made easy via

Heavy dependency on information electronic communication channels
1
exchange from person to person. making little dependency on person to
person information exchange.

Communication or transaction can be

Communication/ transaction are
done in asynchronous way. Electronics
done in synchronous way. Manual
2 system automatically handles when to
intervention is required for each
pass communication to required person or
communication or transaction.
do the transactions.

It is difficult to establish and

A uniform strategy can be easily
3 maintain standard practices in
established and maintain in e-commerce.
traditional commerce.

Communications of business In e-Commerce or Electronic Market,

4
depends upon individual skills. there is no human intervention.

Unavailability of a uniform
E-Commerce website provides user a
platform as traditional commerce
5 platform where al l information is
depends heavily on personal
available at one place.
communication.

No uniform platform for

E-Commerce provides a universal
information sharing as it depends
6 platform to support commercial /
heavily on personal
business activities across the globe.
communication.
 E-Commerce - Advantages
E-Commerce advantages can be broadly classified in three major categories −

• Advantages to Organizations
• Advantages to Consumers
• Advantages to Society

Advantages to Organizations
• Using e-commerce, organizations can expand their market to national
and international markets with minimum capital investment. An
organization can easily locate more customers, best suppliers, and
suitable business partners across the globe.
• E-commerce helps organizations to reduce the cost to create process,
distribute, retrieve and manage the paper based information by digitizing
the information.
• E-commerce improves the brand image of the company.
• E-commerce helps organization to provide better customer services.
• E-commerce helps to simplify the business processes and makes them
faster and efficient.
• E-commerce reduces the paper work.
 • E-commerce increases the productivity of organizations. It supports
"pull" type supply management. In "pull" type supply management, a
business process starts when a request comes from a customer and it
uses just-in-time manufacturing way.
Advantages to Customers
• It provides 24x7 support. Customers can enquire about a product or
service and place orders anytime, anywhere from any location.
• E-commerce application provides users with more options and quicker
delivery of products.
• E-commerce application provides users with more options to compare
and select the cheaper and better options.
• A customer can put review comments about a product and can see what
others are buying, or see the review comments of other customers before
making a final purchase.
• E-commerce provides options of virtual auctions.
• It provides readily available information. A customer can see the relevant
detailed information within seconds, rather than waiting for days or
weeks.
• E-Commerce increases the competition among organizations and as a
result, organizations provides substantial discounts to customers.
Advantages to Society
• Customers need not travel to shop a product, thus less traffic on road and
low air pollution.
• E-commerce helps in reducing the cost of products, so less affluent people
can also afford the products.
• E-commerce has enabled rural areas to access services and products,
which are otherwise not available to them.
• E-commerce helps the government to deliver public services such as
healthcare, education, social services at a reduced cost and in an
improved manner.
 The Driving Forces of E-Commerce
Online businesses have been thriving in recent years. In the United States alone,
statistics indicate that online sales will exceed $740 billion by 2023.
Considering how work and social life is time-consuming, most Americans have
found online shopping favorable.
There are a variety of factors that come into play and determine the growth rate
of e-commerce. The effects of readily available fast internet, secure payment
methods, and low prices in online stores are some of the determinants. With a
better, cheaper technology cropping every day, the future of e-commerce is
even brighter.
Let us delve into the economics behind e-commerce and explain what drives
the online business.
Driving Forces of E-commerce
The growth of e-commerce is subject to several technological, economic, and
social factors, including:
Increased Variety of Payment Methods
The tremendous growth of online payment platforms is among the forces
propagating online sales. On the frontline of these platforms is the digital
currency, including cryptocurrency, which makes trade possible even with the
difference in exchange rates. The wide range of payment options makes more
people opt for online shopping.
Growth of Data Analysis
The growing number of internet users allows easy collection of valuable data
about e-commerce customers. Afterward, companies use Data Science and AI-
powered tools to analyze the data, which gives them insights on how to shape
their future approaches to direct-to-consumer retail as well as offline
marketing.
Through data analysis, online B2C companies can predict purchases. They can
even manipulate customer behavior to make them buy goods they have never
used.
New Advertising Methods
The revolution of online advertisement is one of the forces driving e-commerce.
While, in the past, companies would have to part with a considerable amount
of money, this is not the case today. A regular e-commerce company can pursue
SEO and get exposure almost for free.
E-commerce companies also get cheap advertising through social media. They
can create an engaging post, boost it at a low cost, and draw customers to
themselves.
Third-Party Logistics
The success of the online business supply chain wholly depends on logistics.
Even after creating an efficient packing system, an online business would thrive
without delivering to customers on time. The presence of delivery companies
for hire means that online shops don't have to invest in an otherwise expensive
logistics department, thereby allowing them to thrive with minimal capital.
In the United States, 80% of online shoppers opine that two factors affect their
decision to buy: the shipping rate and the delivery time. Given its importance,
it's reasonable to conclude that third-party logistics will play a huge role in the
future of direct-to-consumer retail.
Reduced Prices
Price is a determinant of demand, and is, therefore, a dominant force behind e-
commerce. Customers are bargain hunters that never want to pay more than
they should. E-commerce vendors know this, and they implement pricing
strategies to drive their businesses forward.
The low prices provided by online shops aren't just tools to lure customers in
an online shop. The go on to increase the profits of e-commerce companies,
their market share, and conversion rates. With more cash coming in, online
shops thrive and expand.
Competing in E-commerce
E-commerce is a product of myriad forces. Online shops can take note of what
determines the growth trends of online shopping. They can then sample out the
factors they can apply to their businesses and give themselves an edge.