Electronic Commerce (E-Commerce) - Meaning, Definition, Types

 What is e-commerce (e-commerce)?

The term electronic commerce (electronic commerce) refers to the business model that allows companies and individuals to buy and sell goods and services over the Internet. E-commerce operates in four main market segments and can be conducted via computers, tablets, smartphones, and other smart devices. Almost every product and service imaginable is available through e-commerce transactions, including books, music, plane tickets, and financial services such as stock investing and online banking. As such, it is considered a very disruptive technology.

Hints

E-commerce is the buying and selling of goods and services over the Internet.

It is conducted across computers, tablets, smartphones, and other smart devices.

Almost anything can be purchased through e-commerce today.

It can be an alternative to traditional stores, although some companies choose to keep both.

E-commerce operates in four market segments, including business-to-business, business-to-consumer, consumer-to-consumer, and consumer-to-business.

Understanding e-commerce

As mentioned above, e-commerce is the process of buying and selling tangible products and services over the Internet. It involves more than one party exchanging data or currency to process the transaction. It is part of a larger industry known as e-business (electronic business), which includes all the processes required to run a business online.

E-commerce has helped businesses (especially those of small scale such as small businesses) to reach and establish a broader market presence by providing cheaper and more efficient distribution channels for their products or services. Target (TGT) has supplemented its physical presence with an online store that allows customers to purchase everything from clothing and coffee makers to toothpaste and action figures from the comfort of their homes.

> E-commerce operates in all of the following four major market segments. and that is:

> Business to Business (B2B), which is the direct sale of goods and services between businesses

> Business to Consumer (B2C), which includes sales between businesses and their customers

> Consumer-to-consumer, which allows individuals to sell to each other, usually through a third-party site such as eBay

Consumer to Business, which allows individuals to sell to businesses, such as an artist selling their artwork or licensing it for use by a business

Providing goods and services is not as easy as it might seem. It requires a lot of research about the products and services you want to sell, the market, the audience, the competition, as well as the expected business costs.

Once this is determined, you will need to come up with a name and create a legal structure, such as a corporation. Next, set up an e-commerce site with a payment gateway. For example, a small business owner who runs a fashion store could set up a website to promote his clothes and other related products online and allow customers to make payments with a credit card or through a payment processing service, such as PayPal.

E-commerce can be viewed as a digital version of catalog shopping by mail order.

Special Considerations

E-commerce has changed the way people buy and consume products and services. More and more people are turning to their computers and smart devices to order products, which can be easily delivered to their homes. As such, it has disrupted the retail scene. Amazon and Alibaba have risen in popularity, forcing traditional retailers to make changes to the way they do business.

But this is not all. It should not be overlooked that individual sellers have increasingly engaged in e-commerce transactions through their personal websites. Digital marketplaces like eBay or Etsy act as exchanges where many buyers and sellers come together to do business.

Date

Most of us have bought something online at some point, which means we've been involved in e-commerce. So it goes without saying that eCommerce is everywhere. But very few people know that e-commerce has a history that goes back even before the advent of the Internet.

Electronic commerce actually dates back to the 1960s when businesses used an electronic system called Electronic Data Interchange to facilitate the transmission of documents. But it wasn't until 1994 that the first deal was made. happen or happen This included selling a CD between friends through an online retail website called NetMarket.

The industry has gone through many changes since then, which has resulted in great development. Traditional retailers have been forced to adopt new technology to stay afloat, as the likes of Alibaba, Amazon, eBay, and Etsy have become household names. These companies have created a virtual marketplace for goods and services that consumers can easily access.

New technologies continue to make online shopping easier for people. People can communicate with businesses through smartphones and other devices and download apps to make purchases. The introduction of free shipping, which lowers costs for consumers, also helped increase the popularity of the e-commerce industry.

Also Read: Alibaba Earnings Date 2022

Advantages and disadvantages of electronic commerce.

E-commerce offers consumers the following advantages:

1. Convenience: E-commerce can be done 24 hours a day, seven days a week.

2. Greater selection: Many stores offer a greater variety of products online than their traditional counterparts. Many online-only stores are able to offer consumers exclusive inventory that is not available anywhere else.

But there are also some drawbacks that come with eCommerce websites. The disadvantages include:

1. Limited customer service: If you're shopping for a computer online, you can't just ask an employee to look at the features of a particular model in person. And while some websites allow you to chat with an employee online, this is not a typical practice.

2. No instant gratification: When you buy an item online, you have to wait for it to be shipped to your home or office. However, e-retailers like Amazon make the waiting game less painful by offering same-day delivery as a great option for select products.

3. Untouchable Products: Online images don't necessarily tell the full story of an item, so e-commerce purchases can be unsatisfying when products received don't match consumer expectations. Case in point: An item of clothing may be made of much thinner fabric than its online photo suggests.

Advantages

> fit

> Offers a wide range of goods and services

cons

> Limited customer service

> Lacks instant gratification

> Products cannot be seen or handled until they are delivered

e-commerce example

Amazon is a giant in the field of e-commerce. In fact, it is the largest online retailer in the world and continues to grow. As such, it represents a huge disruption to the retail industry, forcing some major retailers to rethink their strategies and change their approaches.

The company launched its business with an e-commerce-based model of online sales and product delivery. It was founded by Jeff Bezos in 1994 as an online bookstore but has since expanded to include everything from clothing to housewares and appliances to food, beverages, and electronics.

The company's sales increased 38% in 2020 from the previous year to $386.1 billion compared to $280.5 billion in 2019. Amazon's operating income also jumped to $22.9 billion for the fiscal year 2020 from $14.5 billion in 2019. Net income increased from $11.6 billion in 2019 to $21.3 billion by the end of 2020.

The company has also expanded beyond e-commerce, offering cloud storage services, video, and music streaming, and electronic devices (such as Alexa, personal assistant, and Fire TV digital media player).

How do you start an e-commerce business?

Make sure you do your research before you start your business. Figure out the products and services you'll be selling and look at your market, target audience, competition, and expected costs.

Next, come up with a name, choose a business structure, and obtain the necessary documents (taxpayer numbers, licenses, permits if applicable).

Before you start selling, select the platform and design your website (or have someone do it for you).

Remember to keep everything simple at the beginning and make sure you use as many channels as possible to market your business so that it can grow.

What is an e-commerce site?

An e-commerce website is any website that allows you to buy and sell products and services online. Companies like Amazon and Alibaba are examples of e-commerce websites.

What is the difference between e-commerce and e-business?

E-commerce involves buying and selling goods and services over the Internet and is actually just one part of e-business. E-business includes the entire process of running an online business. Simply put, all of this is the activity that happens with an online company.