eCommerce or electronic commerce is a platform for buyers and sellers to buy or sell products, including goods or services, through the internet. Also, the transfer of money and data to execute these transactions is done through electronic mediums over the internet.
Types of eCommerce:
There are various models in eCommerce markets like
- B2B or Business to Business
All transactions take place between two businesses, i.e., wholesale transactions. Some examples of B2B are Naukri, indeed, where businesses receive recruitment services and Shopify.
- B2C or Business to Customer
This is the most common type of eCommerce between consumers and businesses, where the companies make retail sales to the final consumer. Classic examples of B2C are Amazon and Flipkart.
- C2C or Customer to Customer
In C2C, consumers make their products or services available to each other. eCommerce merely provides a platform for consumers to connect. Examples of these are Rapido or eBay.
- C2B or Consumer to Business
This is the reverse of B2C, where a large number of consumers make their products or services available to businesses. E.g., Websites that sell royalty-free or copyrighted photographs.
- B2G or Business to Government
Under the B2G model, Business Entities provide goods or services to agencies or administrations of government entities. B2G is very similar to a B2B relationship. B2G eCommerce companies often include services like online tenders, providing specific functions as required. One example of B2G can be Infosys that provided website-building services to the government.
- C2G or Customer to Government
The best example of C2G is declaring and payments of taxes along with returns filed by the public to the government.
Advantages of eCommerce
Since the digitalisation and globalisation of the economy and the increase in discretionary spending, eCommerce has gained immense popularity. Some benefits of eCommerce are:
- No geographical or time barriers to trade as products or services are accessible to people over the internet at any time
- Decreased capital expenditure as warehousing and brick-and-mortar costs are reduced
- Return policies for products, pre and post-support, and reduced transaction costs are all attractive in boosting eCommerce sales
Disadvantages of eCommerce
Despite the advantages, there are also disadvantages to eCommerce transactions:
- The biggest disadvantage is data privacy. Most of these transactions involve online payments, so the threat to private data is higher. Issues like hacking can potentially cause loss to both businesses and consumers
- There is also the consumer behavior pattern where products especially like clothes and personal care items where consumers require the products to be seen and physically felt. Hence why many eCommerce and D2C (Direct to Consumer) players also have an omnichannel presence (Eg: Lenskart)
- Too much dependence on the internet and technologies like firewalls, etc. can hamper the use of eCommerce. There are also issues like traffic causing website crashes which cause huge potential business losses due to downtime
- Extremely competitive and crowded market space. eCommerce is gaining significant popularity due to its ease to both customers and business owners. But due to the high competition, some websites are lost among the others.
