Electronic Commerce

E-Commerce or Electronic Commerce means buying and

selling of goods, products, or services over the internet. E-
commerce is also known as electronic commerce or internet
commerce. These services provided online over the internet
network. Transaction of money, funds, and data are also
considered as E-commerce. These business transactions can
be done in four ways: Business to Business (B2B), Business
to Customer (B2C), Customer to Customer (C2C),
Customer to Business (C2B).

The standard definition of E-commerce is a commercial

transaction which is happened over the internet. Online
stores like Amazon, Flipkart, Shopify, Myntra, Ebay, Quikr,
Olx are examples of E-commerce websites.
E-Commerce or Electronic Commerce

E-commerce is a popular term for electronic commerce or

even internet commerce. The name is self-explanatory, it is
the meeting of buyers and sellers on the internet. This
involves the transaction of goods and services, the transfer
of funds and the exchange of data.

So when you log into your Amazon and purchase a book,

this is a classic example of an e-commerce transaction. Here
you interact with the seller (Amazon), exchange data in
form of pictures, text, address for delivery etc. and then you
make the payment.
As of now, e-commerce is one of the fastest growing
industries in the global economy.

E-commerce is a new business model that involves

individuals or companies conducting buying and selling
activities on the internet.

Characteristics

Furthermore, the characteristics of e-commerce or

electronic commerce are

 their activities can not be separated from computer

devices, including tablets, smartphones, or laptops.
 E-commerce also provides various services and shops
or merchants just like in the real world.
 Parties who are engaged in e-commerce sell books,
household appliances, kitchen needs, to financial
services and digital banks.
 In several segments, e-commerce was developed to
encourage small-scale businesses such as MSMEs
(Micro, Small & Medium Enterprises) or in our
country.
 Lately, e-commerce is considered the most practical
centre to cut the distribution chain. With e-commerce,
small producers can directly reach consumers without
the need for agents or distributors.
 The specific target market can be reached by merchants
because e-commerce also collects user data. The
system can analyze the items they usually look for and
then recommend other relevant items.

 Large customer reach: E-commerce can help

businesses reach customers in remote areas, and even
internationally.
 Personalization: Businesses can use customer data to
create personalized product recommendations and
marketing campaigns.
  Cost reduction: E-commerce can help businesses
reduce costs by eliminating the need for upkeep of a
physical store.
 Scalability: Scalability is important for e-commerce
sites to contribute to business growth and profitability.
 Convenience: E-commerce allows customers to shop
and make purchases at any time, 24/7.
 Faster buying process: Customers can browse and
buy items more quickly online.

Types of E-Commerce Models

Electronic commerce can be classified into four main

categories. The basis for this simple classification is the
parties that are involved in the transactions. So the four
basic electronic commerce models are as follows,

1. Business to Business

This is Business to Business transactions. Here the

companies are doing business with each other. The
final consumer is not involved. So the online transactions
only involve the manufacturers, wholesalers, retailers etc.

2. Business to Consumer

Business to Consumer. Here the company will sell their

goods and/or services directly to the consumer. The
consumer can browse their websites and look at products,
pictures, read reviews. Then they place their order and the
company ships the goods directly to them. Popular
examples are Amazon, Flipkart, Jabong etc.
3. Consumer to Consumer

Consumer to consumer, where the consumers are in direct

contact with each other. No company is involved. It helps
people sell their personal goods and assets directly to an
interested party. Usually, goods traded are cars, bikes,
electronics etc. OLX, Quikr etc follow this model.

4. Consumer to Business

This is the reverse of B2C, it is a consumer to business. So

the consumer provides a good or some service to
the company. Say for example an IT freelancer who demos
and sells his software to a company. This would be a C2B
transaction.

5.B2G (Business to Government):

 Businesses sell with governments or government
agencies.

6.C2G (Consumer to Government):

Consumers directly sell products or services to

governments or government agencies.

7.G2B (Government to Business):

Governments or government agencies sell products or

services to businesses.

8.G2C (Government to Consumer):

Governments or government agencies directly engage

in sales with individual consumers
Examples of E-Commerce

 Amazon

 Flipkart

 eBay

 Fiverr

 Upwork

 Olx

 Quikr
Advantages of E-Commerce

 E-commerce provides the sellers with a global

reach. They remove the barrier of place
(geography). Now sellers and buyers can meet in the
virtual world, without the hindrance of location.

 Electronic commerce will substantially lower the

transaction cost. It eliminates many fixed costs of
 maintaining brick and mortar shops. This allows the
companies to enjoy a much higher margin of profit.

 It provides quick delivery of goods with very little

effort on part of the customer.

 Customer complaints are also addressed quickly.

It also saves time, energy and effort for both the
consumers and the company.

 One other great advantage is the convenience it

offers. A customer can shop 24×7. The website is
functional at all times, it does not have working
hours like a shop.

 Electronic commerce also allows the customer and

the business to be in touch directly, without any
intermediaries. This allows for
quick communication and transactions. It also gives
a valuable personal touch.
Disadvantages of E-Commerce

 The start-up costs of the e-commerce portal are

very high. The setup of the hardware and the
software, the training cost of employees, the constant
maintenance and upkeep are all quite expensive.

 Although it may seem like a sure thing, the e-

commerce industry has a high risk of failure. Many
companies riding the dot-com wave of the 2000s
have failed miserably. The high risk of failure
remains even today.

 At times, e-commerce can feel impersonal. So it

lacks the warmth of an interpersonal relationship
which is important for many brands and products.
This lack of a personal touch can be a disadvantage
for many types of services and products like interior
designing or the jewellery business.
  Security is another area of concern. Only recently,
we have witnessed many security breaches where the
information of the customers was stolen. Credit card
theft, identity theft etc. remain big concerns with the
customers.

 Then there are also fulfilment problems. Even after

the order is placed there can be problems with
shipping, delivery, mix-ups etc. This leaves the
customers unhappy and dissatisfied.

E-commerce Trends
There are several current trends in e-commerce, including:
 The Rise of Mobile Commerce
One trend is the rise of mobile commerce, as more people
are shopping on their smartphones and tablets. This is
because it is convenient and easy to use, and there are
many apps that make shopping online easier.
 The Emergence of Social Commerce
Another trend is the emergence of social commerce, which
involves buying and selling products through social media
platforms such as Facebook and Twitter. This allows
businesses to reach a large number of potential customers.
 The Growth of E-commerce in Developing
Countries
A third trend is the growth of e-commerce in developing
countries, as more people have access to the internet and
are becoming comfortable with buying goods and services
online. This provides opportunities for businesses to
expand their customer base.

Barriers of eCommerce, Technical and Non Technical

Barriers - Digital Revolution - New Business
Environment
Barriers of eCommerce
Some of the main barriers of ecommerce are listed below;
1.Security
2.Trust and risk
3.Lack of business model
4.Culture
 5.User authentication and lacks of public interest
6.Fraud is also a barrier
7.Slow navigation
8.Change agent to replace an old system with new
system. System is changed when problem is identified
and solution is drafted.
9.Culture is the most important barrier. A developer has
to develop the software according to culture.
Technological Barriers of eCommerce
Some the main Technical Barriers of eCommerce are listed
below;
1.There is a lack of universally accepted standards for
quality a security and reliability.
2.Telecommunication bandwidth is insufficient
especially for mobile commerce.
3.Software development tools are still evolving like
HTML, Java Cript, connected with database, Data base
integration.
4.The internet and electronic commerce with some
existing specially legacy applications and database.
5.Special web servers are needed in addition to the
network servers.
6.Internet connectivity is still expensive and
inconvenient.
7.Order fulfillment of large scale ecommerce requires
automated warehouse.
Non Technological Barriers to eCommerce
1.Some the Non Technical Barriers of eCommerce are
listed below;
2.Security and privacy concerns deter customer from
buying because customer is illiterate regarding the
technology.
3.Lack of trust in eCommerce and is unknown sellers
hinders the buying because of social value.
4.Many legal and public policy issues including taxation
are yet to be resolved because tax varies now.
5.National and international government regulations also
get in the way.
6.It is difficult to measure the some benefits of
ecommerce such as advertisement because measuring
methodologies are not available.
7.Some customers like to feel and touch the product also
some customers are resistant to change from real to
virtual store.
8.People do not yet sufficiently trust paperless and
faceless transactions because of lack of trust and legal
issues.
9.In most cases there is insufficient number that is
critical mass of sellers and buyers which are needed for
profitable e.com operations
10. There is increasing number of fraud on the internet
because of legal issues.
Digital Revolution
An economy that is based on digital technology including
digital electronic communication, computer software’s and
other information and technologies is known as internet
economy or digital economy and web economy. It is a
global platform over which people and organizations
interact, Collaborate and search for information. It includes
the following characteristics;
1.A vast array of digital products.
2.Consumers and firms conducting financial transactions
digitally.
3.Microprocessors and networking capabilities
embedded in physical goods.
New Business Environment
1.Customers are becoming more powerful it is created
due to advancement in science which is occurring at
much accelerated rate.
2.It results in more and more technology
3.Rapid growth in technology results in large variety of
more complex system.
4.It’s a more turbulent environment with more business
problems but definitely with more opportunities. It
involves very strong vigorous competition.
5.There is need for organization to make decisions more
frequently due to competitiveness.