E-Commerce
Different Types of E-Commerce Transactions
Generally speaking, when we think of e-commerce, we think of an online
commercial transaction between a supplier and a client. However, and
although this idea is right, we can be more specific and actually divide e-
commerce into six major types, all with different characteristics.
There are 6 basic types of e-commerce:
Business-to-Business (B2B)
Business-to-Consumer (B2C)
Consumer-to-Consumer (C2C)
Consumer-to-Business (C2B).
Business-to-Administration (B2A)
Consumer-to-Administration (C2A)
1. Business-to-Business (B2B)
Business-to-Business (B2B) e-commerce encompasses all electronic
transactions of goods or services conducted between companies.
Producers and traditional commerce wholesalers typically operate with
this type of electronic commerce.
Definition: Transactions between two businesses, such as wholesalers
and retailers.
Example: A company buying bulk office supplies from a distributor
like Alibaba or a manufacturer selling raw materials to a factory.
2. Business-to-Consumer (B2C)
The Business-to-Consumer type of e-commerce is distinguished by the
establishment of electronic business relationships between businesses and
final consumers. It corresponds to the retail section of e-commerce, where
traditional retail trade normally operates.
Definition: Transactions between businesses and individual
consumers.
Example: Purchasing products from Amazon, Walmart, or an online
clothing store.
These types of relationships can be easier and more dynamic, but also
more sporadic or discontinued. This type of commerce has developed
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greatly, due to the advent of the web, and there are already many virtual
stores and malls on the Internet, which sell all kinds of consumer goods,
such as computers, software, books, shoes, cars, food, financial products,
digital publications, etc.
When compared to buying retail in traditional commerce, the consumer
usually has more information available in terms of informative content
and there is also a widespread idea that you’ll be buying cheaper, without
jeopardizing an equally personalized customer service, as well as
ensuring quick processing and delivery of your order.
3. Consumer-to-Consumer (C2C)
Consumer-to-Consumer (C2C) type e-commerce encompasses all
electronic transactions of goods or services conducted between
consumers. Generally, these transactions are conducted through a third
party, which provides the online platform where the transactions are
actually carried out.
Definition: Transactions between individual consumers, often
facilitated by third-party platforms.
Example: Selling used items on eBay, Facebook Marketplace, or
Craigslist.
4. Consumer-to-Business (C2B)
In C2B there is a complete reversal of the traditional sense of exchanging
goods. This type of e-commerce is very common in crowdsourcing based
projects. A large number of individuals make their services or products
available for purchase for companies seeking precisely these types of
services or products.
Definition: Transactions where individuals sell goods or services to
businesses.
Example: A freelance graphic designer offering services on Fiverr, or
influencers promoting brands.
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Examples of such practices are the sites where designers present several
proposals for a company logo and where only one of them is selected and
effectively purchased. Another platform that is very common in this type
of commerce are the markets that sell royalty-free photographs, images,
media and design elements, such as iStockphoto.
5. Business-to-Administration (B2A)
This part of e-commerce encompasses all transactions conducted online
between companies and public administration. This is an area that
involves a large amount and a variety of services, particularly in areas
such as fiscal, social security, employment, legal documents and registers,
etc. These types of services have increased considerably in recent years
with investments made in e-government.
6. Consumer-to-Administration (C2A)
The Consumer-to-Administration model encompasses all electronic
transactions conducted between individuals and public administration.
Examples of applications include:
Education – disseminating information, distance learning, etc.
Social Security – through the distribution of information, making
payments, etc.
Taxes – filing tax returns, payments, etc.
Health – appointments, information about illnesses, payment of health
services, etc.
Both models involving Public Administration (B2A and C2A) are strongly
associated to the idea of efficiency and easy usability of the services
provided to citizens by the government, with the support of information
and communication technologies.
7. Business-to-Government (B2G)
Definition: Businesses providing goods and services to government
entities.
Example: A software company selling cybersecurity services to a
government agency.
B2G interactions enable small businesses to access government
contracts and projects, providing avenues for growth, credibility
enhancement, and the potential to deliver high-impact solutions within
the public sector.
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8. Consumer-to-Government (C2G)
Definition: Individuals conducting transactions with government
agencies online.
Example: Paying taxes online, applying for a passport, or paying traffic
fines through a government portal.
Consumers conduct transactions with the government, such as paying
taxes or accessing public services, fostering communication between
consumers and the government
9. Government-to-Business (G2B)
Definition: The government provides services or information to
businesses.
Example: A business applying for a business license or bidding on
government contracts.
The objective of G2B is to reduce burdens on business, provide one-
stop access to information and enable digital communication using the
language of e-business
10. Government-to-Consumer (G2C)
Definition: The government offers services directly to citizens through
digital platforms.
Government-to-Consumer (G2C) is a model where a government sells
goods or services directly to consumers. In this model, the consumer may
need official documents, information, educational services, employment help,
or the ability to vote
Advantages of e-commerce
The main advantage of e-commerce is its ability to reach a global market,
without necessarily implying a large financial investment. The limits of
this type of commerce are not defined geographically, which allows
consumers to make a global choice, obtain the necessary information and
compare offers from all potential suppliers, regardless of their locations.
By allowing direct interaction with the final consumer, e-commerce
shortens the product distribution chain, sometimes even eliminating it
completely. This way, a direct channel between the producer or service
provider and the final user is created, enabling them to offer products and
services that suit the individual preferences of the target market.
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E-commerce allows suppliers to be closer to their customers, resulting in
increased productivity and competitiveness for companies; as a result, the
consumer is benefited with an improvement in quality service, resulting
in greater proximity, as well as a more efficient pre and post-sales support.
With these new forms of electronic commerce, consumers now have
virtual stores that are open 24 hours a day.
Cost reduction is another very important advantage normally associated
with electronic commerce. The more trivial a particular business process
is, the greater the likelihood of its success, resulting in a significant
reduction of transaction costs and, of course, of the prices charged to
customers.
Disadvantages of e-commerce
The main disadvantages associated with e-commerce are the following:
Strong dependence on information and communication technologies
(ICT);
Lack of legislation that adequately regulates the new e-commerce
activities, both nationally and internationally;
Market culture is averse to electronic commerce (customers cannot touch
or try the products);
The users’ loss of privacy, the loss of regions’ and countries’ cultural and
economic identity;
Insecurity in the conduct of online business transactions.
E-commerce transactions can be classified based on the parties involved in the
exchange of goods, services, or information. Below are the main types:
Example: Social security benefits distribution, online voting systems, or
e-filing of taxes.
Key Takeaway
E-commerce is the buying and selling of goods and services over the
internet.
It is conducted over computers, tablets, smartphones, and other smart
devices.
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Almost anything can be purchased through e-commerce today, and it has
lowered the barriers to entry for many types of businesses, such as
retailers.
E-commerce can be a substitute for brick-and-mortar stores, though some
businesses choose to maintain both.
E-commerce operates in several market segments, including business-to-
business, business-to-consumer, consumer-to-consumer, and consumer-
to-business.
