e-commerce: Meaning, Characteristics, Advantage and Disadvantage
The term “e-commerce,” or electronic commerce, refers to the online purchasing and selling of goods and services. Electronic or internet commerce are other names for e-commerce. These services are offered online via a network of computers. Data, finances, and money transactions are all categorized as e-commerce. There are four possible methods to conduct these commercial transactions: business-to-business (B2B), business-to-customer (B2C), customer-to-business (C2B), and business-to-business (B2B). Conventionally, e-commerce is defined as any business transaction conducted over the internet. E-commerce websites include Amazon, Flipkart, Shopify, Myntra, Ebay, Quikr, and Olx, among other online retailers. Global retail e-commerce is expected to reach $27 trillion by 2020.
The word “e-commerce” is often used to refer to online or electronic trade. The term should be obvious—it refers to the online marketplace where buyers and sellers connect. This includes the exchange of data, the movement of payments, and the transaction of products and services.
Thus, logging onto Amazon and making a book purchase is a prime example of an online buy. Here, you communicate with the vendor (Amazon), exchanging information in the form of text, images, shipping addresses, and other details before completing the payment.
Features of Electronic Commerce
The following characteristics of e-commerce:
(i) Electronic business tools are used in commerce, or the pursuit of profit.
(ii) When doing business, one’s exterior attention is on the other party.
(iii) The majority of the transactions go via automated processing.
(iv) Makes use of a variety of business support services, including online directories and interorganizational email.
E-commerce Examples
Flipkart and Amazon
eBay Participant
Upwork
Olx Quikr
Benefits of online shopping
Through e-commerce, businesses may access a worldwide audience. They eliminate the geographical barrier of location. Now, geography is no longer a barrier to the virtual meeting of buyers and sellers.
The cost of transactions will be significantly reduced via electronic commerce. Numerous fixed expenses associated with operating physical and mortar stores are eliminated. As a result, the enterprises are able to enjoy a much bigger profit margin.
It offers prompt delivery of products with little effort required from the client. Additionally, customer problems are handled promptly. Additionally, it saves the business and its customers time, effort, and energy.
The convenience it provides is yet another fantastic benefit. Customers are able to shop around-the-clock. Unlike a store, the website is always operational. It has no set hours of operation.
Additionally, electronic commerce enables direct communication between the company and its customers without the need for middlemen. This makes transactions and communication speedy. It also adds a priceless sense of individuality.
The drawbacks of online shopping
The e-commerce platform has extremely high start-up expenses. The expense of setting up the technology and software, hiring new staff, providing ongoing maintenance, and upkeep are all high.
The likelihood of failure in the e-commerce business is rather significant, despite its seeming certainty. Numerous businesses that capitalized on the 2000s dot-com boom have collapsed spectacularly. The likelihood of failure is still quite high.
E-commerce might seem impersonal at times. As a result, it lacks the warmth of a human connection, which is crucial for many goods and companies. The absence of a personalized touch might provide a drawback for many services and goods, such as jewelry design and home design.
Another area of worry is security. We have just lately become aware of many security breaches in which client information was pilfered. Identity theft and credit card fraud are still major worries for consumers.
There are also issues with fulfillment. Issues with shipment, delivery, confusion, etc. may arise even after the purchase is made. Customers are angry and unsatisfied as a result.
e-commerce types Models
There are four primary classifications for electronic commerce. The parties engaged in the transactions serve as the foundation for this straightforward categorization. The following are the four fundamental models of electronic commerce:
Commercial to Commercial
These are exchanges between businesses. Here, the businesses are transacting with one another. There is no involvement with the end user. Thus, the only parties involved in internet transactions are manufacturers, wholesalers, merchants, etc.
From Business to Consumer
From Business to Customer. Here, the business will deal directly with the customer to offer them products and/or services. Customers may peruse their websites to examine merchandise, images, and reviews. After that, customers make their purchase, and the business sends the products straight to them. Notable instances are Amazon, Flipkart, Jabong, and so on.
From Consumer to Consumer
consumer to consumer: a situation in which customers interact directly with one another. There is no business involved. It assists individuals in selling their personal belongings and assets to a buyer directly. Typically, vehicles such as motorcycles, automobiles, and gadgets are swapped. Apps like Quikr and OLX use this paradigm.
Consumer to Business: This is a consumer to business relationship, which is the opposite of B2C. Thus, the customer gives the business an item or a service. Consider an independent IT consultant who pitches and sells products to a business. This exchange would be C2B.