E-commerce

E-commerce, or electronic commerce, refers to the buying and selling of goods and services over
the internet. It involves the use of electronic platforms, such as websites, mobile applications,
and social media, to conduct transactions between businesses and consumers or between
businesses. E-commerce has revolutionized the way businesses operate and has created new
opportunities for entrepreneurs and consumers alike.
One of the primary benefits of e-commerce is that it offers a more convenient and efficient way
to conduct business. Consumers can browse and purchase products from the comfort of their
own homes, while businesses can reach a global audience without the need for a physical
storefront. E-commerce has also enabled businesses to streamline their operations by automating
many of the tasks involved in the sales process, such as inventory management, order processing,
and shipping.
E-commerce has continued to grow in popularity and importance, particularly in light of the
COVID-19 pandemic, which has led to a surge in online shopping as people seek to minimize in-
person interactions. As a result, businesses that are able to adapt to the e-commerce landscape are
likely to have a competitive advantage in the years to come.
E-commerce is also known as Electronic Commerce, refers to buying and selling of products or
services over the Internet. Normally e-commerce is used to refer to the sale of physical products
online, but it can also describe any kind of commercial transaction that is facilitated through the
internet. The first-ever online sale was in 1994 when a man sold a CD by the band Sting to his
friend through his website Net Market, an American retail platform. This is the first example of a
consumer buying a product from a business through the World Wide Web or e-commerce as we
commonly know it today. After that e-commerce has evolved to make products easier to discover
and purchase through online retailers and marketplaces. All freelancers, as well as small and
large businesses, have benefited from e-commerce which enables them to sell their goods and
services at a scale that was not possible with traditional offline retail.
Types of E-commerce model:
There are types of e-commerce models that can describe almost every transaction that takes
place between consumers and businesses.
1. Business to Consumer (B2C): When a good or service is sold to an individual consumer
by a business, e.g., we buy a pair of shoes from an online retailer.
2. Business to Business (B2B): When a good or service is sold by a business to another
business, e.g., a software-as-a-service is sold by a business for other businesses to use.
3. Consumer to Consumer (C2C): When a good or service is sold by a consumer to
another consumer, e.g., we sell our old furniture on eBay to another consumer.
4. Consumer to Business (C2B): When a consumer's own products or services is sold to a
business or organization, e.g., an authority offers exposure to their online audience in
exchange for a fee or a photographer licenses their photo for a business to use.
 5. Business-to-government (B2G): In this model, businesses sell products or services to
government agencies through online portals or marketplaces.
6. Government-to-business (G2B): In this model, government agencies sell products or
services to businesses through online portals or marketplaces.
7. Government-to-consumer (G2C): In this model, government agencies provide products
or services directly to consumers through online portals or marketplaces.
Business Application of E-commerce:
 Conversational commerce: e-commerce via chat
 Digital Wallet
 Document automation in supply chain and logistics
 Electronic tickets
 Enterprise content management
 Group buying
 Instant messaging
 Newsgroups
 Online banking
 Online office suites
 Online shopping and order tracking
 Pretail
 Print on demand
 Shopping cart software
 Social networking
 Teleconferencing
 Virtual assistant (artificial intelligence)
 Domestic and international payment systems

Features:
Product catalog: An e-commerce platform should provide an easy way to create and manage a
product catalog, including adding new products, editing existing ones, and categorizing them.
Shopping cart: A shopping cart is a tool that allows customers to add products they want to
purchase and keep track of the items as they continue to browse the website.
Checkout and payment processing: A reliable checkout and payment processing system is
essential for e-commerce success. Customers should be able to complete transactions quickly
and easily using a variety of payment methods.
Shipping and order management: Once a customer places an order, the e-commerce platform
should provide tools to manage the order, including tracking information, shipping options, and
delivery status.
Customer accounts and loyalty programs: Many e-commerce platforms allow customers to
create accounts, which can help businesses build relationships and loyalty. Additionally, loyalty
programs can incentivize repeat purchases and encourage customers to refer others.
Marketing and analytics: An e-commerce platform should offer tools to help businesses market
their products, such as email campaigns and social media integration. Additionally, analytics can
help businesses track customer behaviour, identify trends, and improve their overall strategy.
Mobile optimization: With more people shopping on their mobile devices, it's essential that e-
commerce platforms are mobile-optimized, with a responsive design that provides an optimal
shopping experience on smartphones and tablets.

Advantages of E-commerce:
 E-commerce enables fast and secure shopping.
 It is making digitalized world.
 E-commerce also enables to choose different goods and services according to your
choice.
 It is a simple way of selling and buying products and services.
 E-commerce replaced the paper work as all transactions are through internet today.
 It provides better management system, as it has a centralized database.
 E-commerce via internet covers a large number of customers worldwide.
 E-commerce has several payment modes.
Disadvantages of E-commerce:
 E-commerce has no universal standard for quality and reliability.
 E-commerce works through internet, it is possible that navigation on internet itself may
be slow.
 Strong security is required in e-commerce as all transactions are through internet.
  There is high risk of buying unsatisfactory products through e-commerce.
 It uses public key infrastructure which is not safe.
 Customers also trap in banking fraud which is quite frequent.
 Hackers also try to get access of data or to destroy data in e-commerce.
Uses of E-commerce :
1. Online retail: One of the most well-known uses of e-commerce is online retail, where
businesses sell products directly to consumers through their online store, website, or
mobile app.
2. Digital products and services: E-commerce is also commonly used for the sale of
digital products and services, such as music, e-books, software, and online courses.
3. Business-to-business transactions: E-commerce can be used for B2B transactions,
where businesses sell products or services to other businesses.
4. Online marketplaces: E-commerce marketplaces, such as Amazon and eBay, provide a
platform for businesses and individuals to sell their products to a large audience.
5. Auction sites: Online auction sites, such as eBay, allow users to bid on and purchase
items from other users.
6. Online banking and financial services: E-commerce is used extensively for online
banking and financial services, including payment processing, bill payment, and money
transfers.
7. Online booking and reservations: E-commerce is used for booking and reservations of
flights, hotels, rental cars, and other travel-related services.
8. Food delivery: E-commerce platforms are used for online ordering and delivery of food
from restaurants.
9. Online advertising: E-commerce is also used for online advertising, where businesses
can advertise their products and services to a large audience.
There are many benefits of e-commerce for both businesses and consumers. Some of the
key benefits of e-commerce are:
1. Convenience: E-commerce allows customers to shop from the comfort of their own
homes or wherever they have internet access, making it convenient for them to make
purchases at any time.
2. Global Reach: E-commerce enables businesses to reach a wider audience beyond their
physical locations, allowing them to expand their customer base globally.
3. Cost-Effective: E-commerce eliminates the need for physical storefronts and reduces
overhead costs associated with operating a traditional brick-and-mortar store.
 4. Personalization: E-commerce allows businesses to personalize their offerings based on
customer behavior and preferences, offering a more personalized shopping experience.
5. Easy and Secure Payment: E-commerce provides secure and convenient payment options,
making it easy for customers to make purchases.
6. Data Collection and Analysis: E-commerce provides businesses with the ability to collect
and analyze customer data, enabling them to improve their marketing and sales strategies.
7. 24/7 Availability: E-commerce websites are always available for customers to access,
allowing them to make purchases at any time, even outside of business hours.
8. Overall, e-commerce provides businesses with new opportunities to expand their
customer base, increase sales, and improve customer satisfaction, while also offering
customers greater convenience, access, and flexibility.
What is e-business?
E-business (electronic business) is the conduct of online business processes on the web, internet,
extranet or a combination thereof. These customer-, internal- and management-focused business
processes include buying and selling goods and services, servicing customers, processing
payments, managing production and supply chains, collaborating with business partners, sharing
information, running automated employee services and recruiting employees.
E-business is similar to e-commerce but encompasses much more than online purchasing
transactions. Functions and services range from the development of intranets and extranets to the
provision of e-services over the internet by application service providers. Enterprises conduct e-
business to buy parts and supplies from other companies, collaborate on sales promotions and
conduct joint research.
E-business model origins and evolution
IBM was one of the first companies to use the term e-business in October 1997 when it launched
a thematic campaign to address the confusion many consumers had about internet-based
businesses. The company spent approximately $500 million on an advertising and marketing
campaign to show the value of the e-business model. By 2000, IBM's e-business revenue had
grown to more than $88 billion from $64 billion in 1994, and net income had nearly tripled.
Different types of e-business models
There are several kinds of e-business models, including the following:
 Business-to-consumer (B2C) model. Sellers offer products and services directly to
consumers online, and the buyer purchases them via the internet.
 Business-to-business (B2B) model. Companies use the internet to conduct transactions
with one another. Unlike B2C transactions, B2B transactions usually involve multiple
online transactions at each step of the supply chain.
  Consumer-to-business (C2B) model. Consumers create their own value and demand for
goods and services. Examples include reverse online auctions and airline ticket websites,
such as Priceline and Expedia.
 Consumer-to-consumer (C2C) model. Consumers are buyers and sellers via third party-
facilitated online marketplaces, such as eBay. These models generate revenue through
personal ad fees, charges for memberships and subscriptions, and transaction fees.

Comparing business-to-consumer and business-to-business e-business models

Examples of e-business
E-business encompasses older companies that digitally transformed from legacy processes to
data-centric operations and newer digitally oriented companies. The latter are organizations that
advisory firm Gartner has defined as starting after 1995 with "operating models and capabilities
[that] are based on exploiting internet-era information and digital technologies as a core
competency." Since then, examples of e-business organizations of different shapes and sizes have
flooded the digital landscape:
 Amazon, the world's largest online retailer and marketplace, has used its e-business
model to disrupt and expand into numerous well-established industries, including
publishing and supermarkets.
  Uber and Lyft, both of which built businesses that match drivers with people needing
rides, disrupted the taxi and livery services industries. And, in 2014, Uber went one step
further and expanded its e-business with the launch of a food ordering and delivery
platform, Uber Eats.
 Travel sites, like Expedia, Travelocity and Tripadvisor, enable consumers to research,
plan and book all or pieces of their trips based on personalized criteria, such as price,
consumer ratings and location.
 Schindler Group, a multinational elevator and escalator company founded in 1874, is a
legacy company that incorporated e-business by using internet of things (IoT) and other
technologies to add internet and mobility services to its product offerings.
Advantages of E-Business
1. 24/7 Availability and Global Reach
Unlike traditional brick-and-mortar businesses, e-businesses operate 24/7. Your online store or
service can receive orders, process payments, and provide customer support at any time—serving
clients across time zones.
2. Lower Operational Costs
No rent, fewer staff, and reduced overheads make e-business a cost-effective model. You can
reinvest savings into digital tools, content marketing, or customer acquisition strategies.
3. Scalability Without Borders
Scaling a physical business often requires new locations. E-business platforms scale by
upgrading inventory systems, increasing digital ad spend, or expanding to international shipping
—all without opening new stores.
4. Data-Driven Customer Profiling
You can extract customer insights from website traffic, behavioural data, and campaign
performance to create personalized experiences and optimize conversion—something physical
stores struggle to do effectively.
5. Streamlined Marketing
With SEO, email marketing, and PPC, e-businesses can run hyper-targeted campaigns. You
control the message, audience, and ROI with more precision than traditional advertising.
6. Real-Time Updates
Product launches, sales promotions, or pricing changes can go live instantly. This agility helps
you respond to customer trends and market shifts with minimal friction.
7. Reviews and Social Proof
User-generated reviews build credibility and influence buying decisions—especially in
competitive markets. This allows introverted business owners to build trust without aggressive
sales tactics.

E-business influences just about every aspect of an enterprise, including customer service,
experiences, expectations and transactions.
Types of e-business
Most organizations have at least some e-business capabilities to support their core competencies
and ancillary functions, but the amount of e-business conducted within an enterprise varies.
Some organizations have limited e-business capabilities -- for example, a small business that
processes payments using a mobile payment service but uses no other digital services. On the
other end of the spectrum are those companies whose business model is fully empowered by
electronic and digital services.
Businesses emerging from the fallout of the COVID-19 pandemic are increasingly using digital
services to support a host of functions and capabilities. Those organizations could be classified as
e-commerce entities or fully powered e-businesses but tend to be categorized in traditional terms.
Business and digital authorities still frequently classify e-business as B2B, B2C, C2B and C2C.
Some offer additional classes of e-business, such as business-to-government and business-to-
employee.
Challenges of e-business
 Securing e-business services against increasingly sophisticated cyberthreats.
  Scaling services fast enough to meet demand without jeopardizing performance.
 Evolving technologies fast enough to keep pace with changing market dynamics.
 Finding and training skilled workers to keep pace with advanced technologies.
 Keeping pace with e-business capabilities that, by their electronic nature, are always on.
Additionally, many companies struggle to integrate their siloed data and functions with e-
business services to converge and work seamlessly together.
Security and risks
E-business tactics offer advantages like reaching a wider customer base and faster transactions,
but they also come with associated risks.
E-business creates huge data security risks -- for example, customers are often required to
provide sensitive information, such as contact information and credit card numbers, during e-
business transactions. This information is enticing to hackers and particularly vulnerable to data
breaches, so e-business website owners are responsible for incorporating methods like data
encryption to ensure secure transactions. Failure to ensure data integrity and incorporate
appropriate data security measures can lead to costly fines and the loss of customer brand loyalty.
E-business relies on swift, secure online transactions, so even something as simple as a bad web
hosting service creates a financial risk for companies. Crashed servers and insufficient bandwidth
lead to persistent website downtime and customer dissatisfaction, making it imperative for
organizations to invest in well-known and reliable hosting providers, which, in turn, can drive up
the costs associated with running a successful e-business.
Marketing comes with its own set of risks as well. All types of businesses rely on effective
marketing to drive growth and sales, but online marketing techniques are different from
traditional offline methods. Without an effective marketing campaign specifically tailored to
promote e-business, businesses face a huge financial risk by investing in marketing resources
that don't drive consumer traffic to the transaction websites.
E-businesses are also vulnerable to systemic risk that influences the entire online market
segment. The dot-com crash of 2000 to 2001, for example, began after several e-business
startups went public and were purchased by other e-businesses. Many of these e-businesses had
little cash flow, valued growth more than financial stability and went out of business due to an
unsustainable economic bubble that eventually burst.
E-business vs. e-commerce
E-commerce and e-business are similar but not synonymous. E-commerce narrowly refers to
buying and selling products online, whereas e-business defines a wider range of business
processes, including supply chain management (SCM), electronic order processing and customer
relationship management, designed to help companies operate more effectively and efficiently.
E-commerce therefore should be considered a subset of e-business.
E-commerce describes any part of the business processes associated with online ordering and
purchasing. An e-commerce transaction, for example, is a customer ordering online and picking
up the product at the brick-and-mortar store. By contrast, e-business processes can be handled in-
house through a company's internal network or outsourced to providers that specialize in specific
parts of the transaction.
How to start an e-business
Organizations and businesses should follow these steps when starting an e-business:
1. Identify a niche and business model. Research market trends and consumer demands to
determine a profitable niche. Decide whether the e-business focuses on retail, digital
products, services or B2B commerce.
2. Develop a business plan. Outline key aspects of business operations, such as target
audience, pricing strategy and SCM.
3. Register the business, and obtain necessary licenses. Depending on the jurisdiction, e-
businesses may require legal registration, tax ID numbers and industry-specific permits to
operate legitimately.
4. Choose an e-commerce platform. Select a reliable online platform to facilitate shopping
experiences. Popular choices include hosted services, like Shopify and WooCommerce,
or custom-built websites tailored to specific needs.
5. Source products or services. If a business operates a retail-based e-business, it should
secure suppliers, manufacturers or shipping partners. Service-based companies should
develop clear service packages and pricing structures.
6. Set up payment and security measures. Implement secure payment options, such as
PayPal, Stripe or credit card processing systems. Ensuring compliance with data security
regulations protects both the business and its customers.
7. Optimize website for user experience. An e-business website should provide a good
user and customer experience, including being mobile-friendly, fast-loading and easy to
navigate.
8. Implement digital marketing strategies. Use search engine optimization, social media
marketing and paid advertisements to drive traffic to the e-business.
9. Establish logistics and fulfilment processes. For retail e-businesses, efficient order
fulfilment, shipping options and return policies are essential for customer satisfaction.
10. Monitor performance and scale. Use analytics tools to track sales, customer behaviour
and marketing effectiveness. Continuous improvements and scalability strategies help
sustain long-term growth in the competitive digital commerce landscape.