Electronic Commerce, also known as E-commerce, is the buying and selling of goods and services over an electronic network. And this is mainly done utilising the internet, as well as the transmission of payments and data. It is possible to conduct business-to-business (B2B), consumer-to-consumer (C2C), business-to-consumer (B2C), and consumer-to-business (C2B) transactions. E-commerce and e-business are often used interchangeably. The transactional procedures involved in electronic shopping or online retail shopping are also referred to as e-tail.
The widespread dependence on e-commerce platforms, such as eBay, Flipkart, and Amazon, has contributed to significant growth in online retail over the past decade. E-commerce accounted for more than 5% of overall retail sales in 2007, and now it accounts for more than 20% of overall retail sales.
Working of E-Commerce
Customers would primarily use their own devices to browse an online store, place orders for products or services powered by the internet, and extract information and data.
As the order is placed, the customer’s web browser will communicate with the server hosting the online store website. The data from the order will be sent to a central computer, known as the order manager, which will then pass it to databases that control inventory levels, a merchant system that maintains payment information via secure payment gateways, and a bank computer before returning it to the order manager. This is done to ensure that the store’s inventory and customer cash are sufficient to complete the order.
The order manager will tell the store’s web server after the order has been validated, and the web server will then show a message informing the customer that their order has been properly processed. For the product or service to be effectively sent to the client, the order manager will submit the order data to the warehouse or fulfilment department. A consumer may receive physical and digital items at this time using the platforms, or have access to a service that may be granted to them.
Platforms that host e-commerce transactions may also include electronic and online marketplaces, such as Flipkart.com or Amazon.com, where sellers can simply sign up. It also includes a software as a service (SaaS) tool that allows customers to rent online store infrastructures or open-source tools that companies can use for managing in-house development.
Types of E-Commerce Platforms
Different types of e-commerce platforms are currently available in the market for consumers, and these include the following:
Business-To-Business (B2B) E-Commerce
Business-to-business transactions (B2B) involve the electronic exchange or supply of products, services, or information between businesses, rather than between businesses and individual consumers. Supply exchange, online directories, and product-based websites are examples of websites that enable businesses to search for services, products, and data or information, while also facilitating transactions via e-procurement interfaces.
This sector is currently growing robustly and competently, providing scope for setting up businesses that serve business consumers and generating a substantial amount of profit and revenue from these endeavours.
It can be further understood as a business selling a good or service to another business, such as a manufacturer and wholesaler or a retailer. Business-to-business e-commerce isn’t aimed at consumers, and it frequently involves items such as software, raw materials, office stationery, machinery, equipment, or combination products. B2B ecommerce enables manufacturers to sell directly to merchants, simplifying the process and making it more efficient.
Business-To-Consumer (B2C) E-Commerce
The part or segment of e-commerce on the internet that deals with retail sales is known as business-to-consumer (B2C). It occurs when companies sell services, products, or a combination of both to customers directly or indirectly. The term gained popularity during the late 1990s, known as the dot-com boom, when online shops and sellers of goods were still a novelty.
Numerous virtual shops and malls offer a wide range of consumer goods on the internet today. The well-used and knowns examples of these sites areFlipkart, Amazon, or e-baywhich dominates the B2C business. And this is also the most common e-commerce model. When you buy a furniture item from an internet merchant, you are dealing with a business-to-consumer transaction.
Consumer-To-Consumer (C2C) E-Commerce
Consumer-to-consumer (C2C) e-commerce is a type of online trading in which individuals exchange items or products, their services, and data or information with one another. These transactions are typically carried out using a third-party service as that would be providing an online platform for the completion of transactions.
C2C systems include online auctions and classified ad placements, with eBay and Craigslist being two of the more popular examples in this segment. The services provided by the company eBay can be understood as a type of e-commerce known as C2B2C, or a consumer-to-business-to-consumer platform. This is mainly due to the fact that the company provides a variety of services.
Thus, we can say that the sale of a good or service to another consumer is referred to as C2C e-commerce. Platforms such as eBay, Fiverr, and others facilitate consumer-to-consumer transactions.
Consumer-To-Business (C2B) E-Commerce
Consumer-to-business (C2B) e-commerce can be understood as the e-commerce setting in which individuals make their goods and services available for firms to bid on and purchase online. This is the contrary and opposite of the standard B2C business paradigm.
A market that sells royalty-free pictures, media, designs, images, and other components, such as iStock, can be taken as a major example of a C2B platform. An employment board is yet another example of this. When an individual sells their services or products to a business, this is known as a consumer-to-business transaction. Influencers, consultants, freelance writers, photographers, and other C2B professionals are included.
Business-To-Administration (B2A) E-Commerce
Business-to-administration (B2A) refers to internet transactions between businesses and government agencies or departments. Many branches of government, notably those related to fiscal matters, legal documents, social security, registrations, and employment, rely on e-services or goods in some way. Businesses can offer these services online. In recent years, increased government investments in e-government capabilities have led to a significant expansion of B2A services.
Consumer-To-Administration (C2A) E-Commerce
The term “consumer-to-administration” (C2A) refers to internet transactions between private consumers and government agencies. The government rarely purchases goods or services from residents; however, they do so frequently in the following areas:
- Education for online lectures or such other services
- Tax filings
- Tax Payments
- Health for making appointments, taking consultations
- Social Security.
Mobile E-Commerce
M-Commerce or the Mobile e-commerceis a fast flourishing and enhancing form of e-commerce that involves online sales transactions conducted by the use or adoption of mobile devices such as smartphones and tablets. Mobile shopping, mobile payments and mobile banking are all examples of m-commerce or mobile commerce. Businesses can utilise mobile chatbots to facilitate e-commerce transactions, enabling customers to conduct transactions with businesses through voice or text interactions.
Examples of E-Commerce
Selling goods and services online is becoming a hot trend today, as people are relying heavily on it. Some of the examples of this e-commerce would include the following:
Retail
This mainly involves selling products directly to consumers without using an intermediary.
Drop shopping
The sale or the supply of goods that are made and delivered to customers by a third-party service and not the direct service.
Digital Products Sales
Items that can be downloaded but must be purchased, such as courses, templates, courses, paraphrasing or converting tools, software, or movies. Software, tools, cloud-based solutions, and digital assets purchases account for a significant portion of ecommerce transactions.
Wholesale
Bulk products are available for purchase. Wholesale items are often sold to a retail entity, which subsequently sells them to the final consumers or customers.
Service Providing
Writing, coaching, training and influencer marketing are examples of online-purchased and paid-for abilities.
Subscription-Based Sales
Customers purchase things or services on a monthly basis through subscription services, which is a prevalent D2C model and here the payment shall also be made on a monthly, quarterly or yearly basis.
Crowdfunding
Sellers can use crowdfunding to raise start-up funds to bring their product to market. The item is made and shipped after a sufficient number of customers have purchased the same.
Benefits of E-Commerce
E-commerce offers numerous benefits that both sellers and users can enjoy. Some of these are listed below:
- Convenience: Shopping online or using e-commerce platforms would make purchases easier, faster, and less time-consuming. And it also makes the same convenient with 24-hour sales, simple returns, and quick shipping,
- Access to the Global Market: Customers from all over the world can shop on e-commerce sites, and as a result, businesses are no longer limited by geography or physical obstacles.
- Personalisation and Enhanced Customer Experience: E-commerce platforms can develop detailed user profiles that allow them to customise the products they see and provide recommendations for other items they might like. This enhances and amplifies the customer experience by making customers feel understood on a personal level, which increases the likelihood of brand loyalty and repeat purchasing.
- Reduced Cost: Digital retailers can build online storefronts with minimal start-up and operating costs, as brick-and-mortar stores are no longer required, which eliminates a significant amount of funds typically spent on setting up an outlet.
Thus, it can be concluded that e-commerce and online shopping have become the new normal in this busy, internet-driven, and technology-driven world. People often find it inconvenient to visit physical stores and spend time fulfilling their purchase requirements. With this, online selling and buying have started gaining importance in every field, which has given prominence to B2B and all other types of e-commerce platforms. Therefore, understanding and adopting this would also take us forward, both as sellers and buyers.
