Introduction to E-commerce
Electronic commerce or E-commerce is the procedure of conducting transactions
between the business entities and the customers electronically, especially over a
network (Internet). This includes anything from acquiring and vending goods or services
over the electronic media to transferring money or effecting an electronic payment or
even distance online banking. This word has become popular in the late 90s of the past
century; however, it took shape in the late 1980s and early 1990s.
Key Examples Include:
Online Shopping: A company sets up an online storefront for browsing and buying;
Amazon is a world-renowned example.
Electronic Payment: online gateways that permit secure payment methods eliminate
certain inefficiencies and safety risks traditionally involved with payments.
Online Auctions: eBay is an interactive price-discovery mechanism for consumers.
Internet Banking: It enables consumers to complete non-branch banking transactions.
Online Ticketing: They simplify buying tickets for traveling, attending events, and
entertaining oneself without having to wait in long queues.
Types of e-commerce
Based on the nature of the participants in transactions, e-commerce could be classified
as follows:
1. Business-to-business (B2B): Where transactions are carried on between businesses-
for example, to include manufacturers selling to retailers. These transactions are usually
of large scale volume and have complex flows.
2. Business to consumer (B2C): Business that sells directly to individual consumers.
The channel through which they conduct their selling is through online retailing. Amazon
is an example of this. Through this channel, there is no physical store needed to sell but
the logistics for delivery must run well.
3. Consumer-to-Consumer (C2C): They are the platforms such as eBay where
individuals trade among themselves. The Internet has almost revived this form of
commerce which was non-existent.
4. Consumer-to-Business (C2B): Consumers offer goods or services to businesses.
Such as freelancers bidding on projects, or individuals selling services like their
photography.
Additional variations are:
Business-to-Employee (B2E): Here, businesses offer exclusive products or services to
employees.
Government Related transactions: Business to Government (B2G) transactions or
Government to Citizen (G2C), or what the government calls Citizen to Government
(C2G) transactions. These can be seen in cases like payment for taxes or public
procurement.
Classification of e-commerce by good and platform
Physical goods: These are books, gadgets, and furniture, all of which require actual
delivery logistics.
Digital goods: These are software, e-books, and music that can be instantly delivered
online.
Services: include online ticket booking, insurance, and consultation services.
E-commerce transactions can also be classified by platforms like:
-M-commerce: mobile commerce, which uses mobile phones to transact.
-F-commerce: Facebook commerce, where sales use social media to rope in
customers.
Advantages of E-commerce
Thus, e-commerce provides numerous advantages which include:
Globalisation: It charges a business to access its customers anywhere and everywhere
without needing a physical store.
Time Efficient: 24/7 transaction; never closed like the traditional form of retailing.
Cost Reduction: Operations in this manner are streamlined and overhead costs are
reduced lowering the costs.
Convenience: Shopping, banking, and getting other services done without leaving the
house.
Real-time Operations: More and more exchanges happening in real-time create better
inventory, pricing, and satisfaction for customers.
E-Commerce in Business-to-Business
It is the largest segment by transaction volume, perhaps the better-known B2C
segment, but on the whole, it is neglected in most areas except for manufacturing,
wholesaling, and freight industries.
Some significant benefits include:
1. Procurement Optimization: With an automated tracking of inventory level and a
trigger for orders, delivery can be on time and stock overhead can be avoided.
2. Streamlined Channel Management: Integrated system for the real-time sales and
inventory monitoring of various agents, affiliates, and distributors.
3. The Better Order Fulfilment: Logistics platform development enables businesses
to satisfy customers’ needs for delivery speed and accuracy.
The Working of B2B E-commerce
The ecosystem under B2B has different modes of engaging in business for all the
parties involved:
Buyers – Big buyers set up a portal where prospective suppliers can bid for the order
contract.
Sellers – Sellers put a portal on display showing their products for buyers who wish to
make an order based on what they see.
Marketplaces – Intermediaries like Alibaba are coming up to source buyers and sellers
and thus would enable smaller companies to trade across boundaries seamlessly.
Conclusion
The very process of businesses established in e-commerce no longer functions the
same way they directly interacted with customers. Evaluating the different forms, types,
platforms, and models is essential for analyzing corporate strategy to make informed
decisions. Among other categories, B2B e-commerce could be a strong driver of any
economy, providing significant operational and financial benefits. As technology
advances, specialized forms of e-commerce such as M-commerce and F-commerce are
expected to develop, opening wider avenues of e-commerce globally.
