Electronic Commerce

E-Commerce is now the new business hub conducted electronically. This electronic business hub consists of the world market. The buying and selling of products or services, transaction of funds, meeting buyers, and sellers is done over the internet. E-Commerce is called Electronic Commerce or internet Commerce. E Commerce made our life quite easy and smart. 

This study is based on Electronic Commerce or E-commerce. Here we will discuss the types of e-commerce, its benefits and drawbacks added with fun facts will be presented by us. 

Building of E-Commerce - Understand the term with an example

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.

The Example on E-Commerce

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.

More on E-Commerce with Types and Examples

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

E-Commerce is a term used for Electronic Commerce. The name itself is self-explanatory, Electronic Commerce is the transfer of goods and services via Electronic means such as the Internet, telephone, television, and computers. As the number of Internet users grows, e-Commerce will become the primary way to do business. 

Buyers and businesses are affected by e-Commerce. You need the ability to do business over the internet. Everything from food and clothing to entertainment and furniture can be purchased online. 

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.These are business-to-business transactions where the companies are trading with each other and the customers are not involved. Therefore, online transactions only affect manufacturers, wholesalers, retailers, 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 typical examples of the B2C model.Here, the company sells goods and services directly to the customers. The buyers can browse through the company’s website to see products, photos and reviews of the product they want to purchase. Then they place an order and the company sends the goods directly to them. Popular examples are Amazon, Flipkart, Myntra, Nykaa and Jabong. 

• 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 personal assets to a different interested consumer. Thus, the type of product could fall into the category like cars, Electronic devices, furniture, etc. The famous website working on the C2C model is OLX, Quikr.Consumers are in direct contact with each other without any company being involved. It helps people sell their goods and assets directly to stakeholders. Generally, the products that are traded are cars, bicycles, Electronic devices, and so on. OLX, Quikr, etc. follow this model in India. 

• 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. This is the opposite of Business to consumer and is a consumer to business. Consumers provide goods and services to the company. For example, consider an IT freelancer demonstrating your software and selling it to your company or an architect providing his designs 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 shops, 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 time for both customer and the company.

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

• E-Commerce provides sellers with a global reach. They remove the barriers (geography) of the place. Sellers and buyers can now meet in a virtual world without restricting their location enabling direct contact between them.

•  E-Commerce provides quicker buying and selling procedures as the products are just a few clicks away and are available to be browsed through 24//7. This eliminates many of the fixed costs associated with running a physical store allowing companies to get a much higher rate of return. 

• It provides fast delivery of goods for customers with very little effort. Customer complaints are also dealt with quickly as they are online. It also saves time, energy, and hassle for both consumers and businesses. 

• Another big advantage is the convenience it offers. Customers can shop 24 hours a day as the website is available for browsing 24/7. 

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 are successful. 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 being 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.

• The initial Launching cost of an e-Commerce portal is very high because of all the technical hardware and software setup, employee training costs, and regular maintenance and care cost a fortune. 

• The E-Commerce industry is at high risk of failure and we all have watched many companies riding the wave of dot-com in the 2000s have miserably failed, that risk is just as high today.

• E-Commerce lacks the warmth of interpersonal relationships that is important to many brands and products. This lack of personal touch can be detrimental to many types of services and products, such as home decor and jewellery. 

• Security can be tricky when it comes to online business. Stories we hear almost always when there are many security breaches where customer information is stolen. Credit card theft, personal information theft, etc. are still major concerns for customers. 

• Next, there is the issue of fulfillment. Even after ordering, troubles such as shipping, delivery,  and mistakes may occur. It causes dissatisfaction to the company and dissatisfaction with customers as they either return the product or get it exchanged. If some major issue occurs, consumers can even file a complaint against the company. 

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.