Electronic commerce or e-commerce refers to transactions that happen on the internet. When companies or individuals purchase or sell products and services online they’re participating in eCommerce activities. The term”e-commerce” doesn’t mean the selling and buying of goods, but also auctions on the internet, online banks, payments gateways in addition to online ticketing other such activities. It’s a form of commerce or trade that takes place on the internet.
The first step towards online shopping began over 40 years ago, when Electronic Data Interchange (EDI) and teleshopping was introduced around the time of the 1970s. They laid the foundation for modern-day electronic commerce that we see of in the present.
The story of e-commerce has been closely connected to the development that the Internet has had. Shopping online was a possibility after the internet was made available to the general public for the first time in the year 1991. Amazon, Netflix, eBay, Alibaba were some of the first websites to offer eCommerce, established in the mid and late 90s. They began selling goods online. Thousands of businesses have followed this way since then.
The first online transaction completed during 1994 by an man who was named Phil Brandenberger. He utilized his Mastercard to purchase Sting’s Ten Summoners’ Tales over an online platform for $12.48. This transaction set the record for all time and signaled to all the globe that internet transactions are available to eCommerce transactions.
While eCommerce was made available to the general public and expanded the reach of business online but it also contributed to declining sales for numerous offline companies.
TYPES OF E-COMMERCE
As eCommerce develops and evolve, so do the methods it’s carried out. The following are the classic types of e-commerce models:
- B2C or Business To Consumer (B2C) B2C eCommerce is the most well-known e-commerce method. Business to the consumer implies that the sale takes place between a company and a customer. For instance, you can purchase stationary products at an online store. For instance, Ikea, Netflix, Flipkart, Amazon are a handful of companies involved with B2C eCommerce.
- B2B: Business-to-Business (B2B) B2B e-commerce is a term used to describe a business that sells products or services to another company, such as wholesaler and manufacturer or a wholesaler and retailer. Business to business e-commerce does not involve consumers, and typically involves products such as raw materials, software or other products that are incorporated in order to further develop an item. Manufacturers can also offer direct sales to retailers using B2B.
- Direct To Consumer (D2C) Direct to Consumer e-commerce is the most current model of eCommerce. D2C is when a brand sells directly to the consumer without the need of distributors, retailers or wholesaler. Subscriptions are a very popular D2C product, and social selling through platforms like Instagram, Pinterest, Facebook, Snapchat, etc. are well-known as platforms for direct-to consumer.
- Consumer-to-Consumer (C2C) C2C e-commerce is the process of selling products or services to a different consumer. C2C sales are conducted through platforms such as eBay, Etsy, Fivver and others.
- Consumer to Business (C2B) Consumer to business refers to the process where an individual sells their service or products to a business organisation. C2B can include influencers who offer exposure as well as photographers, consultants, freelance writers, and so on.
THE BENEFITS OF E-COMMERCE
Ecommerce provides a variety of advantages. Here are a few of the most popular benefitsthat e-commerce can provide.
1. Global market
People from all over the world can shop easily on online stores. Businesses are no longer confined by geographical boundaries or physical obstacles.
2. Customer experience and personalization
Marketplaces on the internet can build user profiles that permit users to customize the items they offer and provide suggestions for other items that they may find interesting. This enhances customer experience by making them feel more understood at a deeper level, and it helps to increase the loyalty of customers to brands.
Shopping online can be simpler quicker, more efficient, and less time-consuming. It allows customers to shop 24 hours a day, get quick delivery, and simple returns. For instance, Amazon now offers 2 day delivery for Amazon Prime subscriptions.
4. Reduced expenses
Because physical retail stores no longer needed online sellers can open online stores for sale with only minimal initial and operational costs.
5. Large product selection
With eCommerce customers have the option of looking through the wide selection of products to make an informed buying choice. Customers now have a choice to choose from different brands, brands, prices, quality as well as delivery times and more.
THE DRAWBACKS OF E-COMMERCE
1. Security and privacy are major concerns
People are still hesitant to disclose their personal information with an eCommerce website due to the worry of being a victim of fraud, especially for debit and credit card banking transactions made online.
In certain instances, engagement between sellers and consumers is necessary, as when it comes to apparel shopping. For clothing shopping, determining the size or color, fabric and so on of the garments is a challenge.
3. Time to deliver
In eCommerce the time required to deliver the product may vary, and can be longer than anticipated in certain instances. In certain cases it is possible that the item will not arrive. If the item needs will be delivered sooner then you’ll have to be charged an extra fee for express shipping which may not be a good idea in certain instances.