E-commerce

According to Statista, over two billion people globally bought at least one product or service online in 2020. This proves that E-commerce has become a favorable outlet for the buying and selling of goods and services. Let's examine what E-commerce is and explore its advantages and disadvantages!

Definition of E-commerce

Though e-commerce is generally regarded to be just the trading of goods and services online, e-commerce is actually more than that as it involves economic activities and electronic payments along with the trading of goods and services.

E-commerce is not to be confused with e-business, as e-business involves businesses conducting their activities online but e-commerce involves business transactions between buyers and sellers over electronic media.

Currently, different types of goods and services are being regularly exchanged using the different types of e-commerce, with the majority of the world population currently preferring online services to offline services. This has led to e-commerce being termed a disruptive technology.

Types of E-commerce

There are four main types of e-commerce, they are:

• Business-to-Consumer (B2C)

• Business-to-Business (B2B)

• Consumer-to-Business (C2B)

• Consumer-to-Consumer (C2C)

E-commerce: Business-to-Consumer (B2C)

B2C is the most common e-commerce model due to the ability of e-commerce businesses to create a direct link to their products or services with consumers electronically. Business-to-consumer involves the direct business transaction between businesses and their consumers over electronic means. It is also considered the retail model of the four e-commerce models.

E-commerce: Business-to-Business (B2B)

B2B is an e-commerce model where businesses carry out business transactions with other businesses over an electronic means. This e-commerce model is generally appreciated within industries where high-end products or services are produced. These products or services are usually exchanged with other businesses which might then sell directly to consumers or use them in their manufacturing processes.

E-commerce: Consumer-to-Business (C2B)

This is the least common e-commerce model, popular mostly among freelancers. This business model involves consumers exchanging their products and/or services directly with a business over an electronic means. Consumer-to-business e-commerce model is the opposite of the business-to-consumer model and it usually does not involve a middleman or a wholesaler.

E-commerce: Consumer-to-Consumer (C2C)

The consumer-to-consumer e-commerce model is also referred to as the peer-to-peer (P2P) e-commerce business model. This e-commerce model involves the electronic exchange of goods, services, or information between consumers through a third-party platform like eBay or Facebook Marketplace. These third-party platforms are usually referred to as peer-to-peer selling platforms.

C2C is a direct opposite of the consumer-to-business e-commerce model where consumers exchange their products and/or services with a business.

E-commerce benefits

The benefits of the e-commerce industry are currently being experienced around the world among consumers and businesses. These benefits include:

• The large variety and increased amount of different products and services available.

• Diverse methods are available for business transactions.

• The ability for businesses to reach a variety of potential consumers from different countries around the world.

• The ease of putting products and services online.

• The ease of access it provides to business and their consumers.

Advantages of E-commerce

Let's now take a look at some of the advantages of e-commerce.

E-commerce: Ease and speed of access

E-commerce platforms are easily accessible over a mobile phone, laptop, or through other electronic means. They also run quickly unlike physical stores whose speed of service can be affected by the presence of large crowds.

E-commerce: Availability

Most e-commerce platforms are available all day long, giving room to businesses to transact with their customers without a time limit.

E-commerce: Wide range of products and services

The e-commerce industry is littered with a wide range of products and services made available by both businesses and consumers. This improves the chance of easily acquiring a good or service through an online search.

E-commerce: No domestic limitations

The e-commerce industry enables business transactions to be done both locally and internationally without having to move about. This provides an opportunity for businesses to grow and develop a diverse customer base.

E-commerce: Ease of payment

The various electronic payment methods currently made available through e-commerce are easy and secure. Payment methods like online payments, electronic payments, and transfers are all a form of e-commerce.

Shopping with a smartphone, pixabay.com

Disadvantages of E-commerce

Unfortunately, e-commerce also comes with its own set of disadvantages. These may include:

E-commerce: Delivery wait time

Unlike physical stores where a customer gets their product immediately after payment, buying products online requires a certain amount of wait time to get a product delivered.

E-commerce: Security issues

Although these are relatively rare, spam websites can be created to either sell fake or non-existent products or services to customers. Also, these websites can be used to acquire important and personal information about a customer.

E-commerce: The inability to feel products before purchase

An image of a product online can differ from what it looks like offline. This often leads to customers feeling less satisfied upon the receipt of a product.

E-commerce: Limited customer service

E-commerce brands set aside hours during the day to provide customer services, unlike a walk-in store where a customer can easily ask an attendant to clear any confusion they might have.

In conclusion, the growth of the e-commerce industry is rapid and it is becoming popular among businesses and consumers, especially after the events of COVID-19. With big e-commerce brands such as Alibaba, Amazon, electronic payments companies, and many others leading the change, the e-commerce business model is set to be the most accepted business model globally despite the disadvantages it might have.