E-commerce, or e-commerce, is a sphere of the economy when trade and financial transactions are carried out on the Internet. In simple terms, any transaction made from an electronic device connected to the network. An analogue of a shopping center, but with a large assortment and comfort: you can visit it without leaving your home.
The digital economy is gaining momentum every month: about 8 billion people inhabit our planet, while 7 billion devices are connected to the Internet. Experts” forecasts for 2022 promise the growth of Internet connections to 50 billion devices – data provided by the research company Juniper Research. Now e-commerce has taken over a solid part of the global financial market.
The conclusion suggests itself: with the growth of Internet penetration, only those companies that have their own mastered niche in the digital world will be competitive.
What else is e-commerce?
There are five main areas:
Money transfers from electronic wallets and cards through payment systems on the Internet.
Information sites: webinars, coaching, training.
How it works?
- Online shopping is one of the main niches in e-commerce. Using this example, consider the algorithm:
- The client selects a product in the catalog online, from a laptop or smartphone.The request from the server goes to the administrator, or to the automated order processing system.
- The availability of the product in the warehouse is checked against the database. Or a request is sent to the supplier about the delivery time of the products. The information is then passed on to the buyer.
- The client pays for the purchase through an electronic payment system.
- The buyer is notified of a successful transaction.
- The application is forwarded to the warehouse, where the parcel is prepared for the buyer.
- Logistics works, the order leaves for the client.
- The customer receives an e-mail or SMS stating that the goods are in transit.
- Everything is simple and transparent.
Let”s look at what kind of online trading happens in more detail.
Main types of e-commerce
E-commerce falls into several well-established categories. These are the ones that we most often meet in everyday life:
С2С (Consumer-to-Consumer). Consumer-to-consumer scheme. An example is the OLX marketplace, eBay, and the like, where a person, even if he is not an entrepreneur, can put up something for sale.
B2B (Business-to-Business). Business-to-business scheme. It is characterized by the sale of wholesale lots of goods from the manufacturer to the dealer. The dealer gives the product to small wholesale online stores, from where it goes to the end consumer. Actually, this is the third main category of e-trade.
B2C (Business-to-Consumer), “business-to-consumer”. Payments between an online store and a customer, buying training courses from registered experts, renting software – any retail transaction between legal entities and individuals.
E2E (Exchange-to-Exchange), “exchange-to-exchange”. On the Internet, the term E2E is used to refer to the exchange of information or transactions between websites, which themselves serve as exchanges or brokers for the exchange of goods and services between businesses. A simple example: a transaction from an electronic wallet to a bank card. E2E can be thought of as a form of B2B.
G2C (Government-to-Citizens), “government-to-citizens”. This includes paying taxes, utilities, licenses, and so on. Also, citizens receive the necessary state information, which can no longer be called e-commerce.
There are other schemes, mostly, these are narrow branches of the already listed categories.
Benefits of e-commerce
The main, but far from the only, plus of online commerce in the absence of geographic restrictions. Collaboration with logistics companies will help reach an audience on a global scale.
When a brand becomes popular, the logo is recognizable, the business gets new users through word of mouth: people share links on social networks to interesting products, good prices or USP (unique selling proposition). Thus, the Internet helps bring shareware customers.
Shop equipment, hiring staff, renting premises – all this is for offline trading. You can forget about these costs on the Internet.
Finding the target audience has become easier – people like to gather in interest groups on social networks, on thematic forums and sites.
The price of goods in an online store is often lower than in offline stores. This is due to the reduction in the chain of intermediaries between the supplier and the customer, and a decrease in maintenance costs.
Pros of e-commerce for organizations:
The quality of customer service is growing.
Business processes become faster, more efficient and simpler.
Much less paperwork.
The productivity of the organization is increased: the process starts when a request from the client comes in – not later, not earlier, without unnecessary actions and delays.