E-commerce Or E-business

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During the last three decades, the new concept of business has evolved due to the introduction of the internet, providing new business opportunities for commercial organizations and they are being further influenced by user activities of newer applications of the internet. This new concept was named E-Commerce. Electronic commerce refers to the process of conducting commercial transactions electronically on the internet.

E-commerce is the process through which the buying, selling, dealing, ordering, and paying for goods and services are done over the internet. In this type of online commercial transaction, the seller can communicate with the buyer without having a face-to-face interaction.

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Electronic commerce comprises core business processes of buying and selling, goods, services, and information over the internet. Electronic commerce refers to a wide range of online business activities for products and services. It can be explained as the use of electronic communications and digital information processing technology in business transactions to create, transform and redefine relationships for value creation between organizations and individuals. It also provides a platform by which retailers sell and advertise their products and share information on the internet using information technology like EDI (Electronic Data Interchange) by which more and more customers can be attained.

UNESCAP (The United Nations Economic and Social Commission for Asia and the Pacific) has defined e-commerce as ‘the process of using electronic methods and procedures to conduct all forms of business activity. E-commerce is a type of business model, or segment of a larger business model, that enables a firm or individual to conduct business over an electronic network, typically the internet.

It can also be explained as the process by which businesses and consumers sell and buy products and services through an electronic medium.

Kalakota & Whintons defined the term E-commerce in 1997 from different perspectives, which are:

  • Communication perspective – This perspective explains e-commerce as the delivery of information, products, or services payments over telecommunication channels, computer networks.
  • Online – e-commerce provides the capacity of buying and selling products and information through the internet and other online services.
  • Services – through this perspective e-commerce is defined as a tool that addresses the desire of firms, consumers, and management to cut service costs.
  • Business process – this perspective says that e-commerce is the application of technology towards the automation of business transactions.

In other words, e-commerce is an electronic business. It uses computers, the internet, and software to send and receive product specifications and drawings; bids, purchase orders, and invoices to consumers, employees, and the public.


  1. Ubiquitousness
  2. Personalization
  3. Cost reduction
  4. Global reach
  5. interactivity

Models of E-commerce

  1. B2C (Business to consumer) – This concept was first used by Michael Aldrich in 1979, that used television as the primary medium to reach out to consumers. Under this system, a business sells products or services directly to consumers through the internet, e.g. an individual purchases a pair of sneakers through a website of Nike.
  2. B2B (Business to business) – This concept explains that how a business makes transactions with another business. Presently there are 80% of e-commerce of this type of e-commerce, and most experts predict that B2B E-Commerce will continue to grow faster than the B2C segment. There are two components in the B2B segment, which are e-infrastructure and e-market. E-infrastructure consists of logistics, ASPs, outsourcing of functions in the process of e-commerce, auction solution software, content management software, and web-based commerce enablers, etc. while e-market can be simply defined as websites where buyers & sellers interact with each other and conduct transactions. This type of e-commerce is business to business, where entrepreneurial units sell products or services to other companies over the internet e.g. GoDaddy company sells domain names, websites, and hosting services to other business units, oracle and Alibaba is also involved in it.
  3. C2B (Consumer to business) – This type of e-commerce involves consumers selling products or services to businesses. In other words, it involves the commercial transaction between the customer and the business and hiring websites where the business is ready to pay and consumers decide whether to accept. e. g. an individual online survey about a product, for which he is paid.
  4. C2C (Consumer to consumer) – This is the latest concept of e-commerce, introduced recently. This is the type of e-commerce, where consumers sell their products to other consumers online e.g. Quaker and OLX.
  5. B2G (Business to Government) & G2B (Government to Business) – Under this form of e-business use of central or state government websites to exchange the information governed products. For example tax returns etc., are deposited through online governmental websites.

Advantages of E-commerce:

E-commerce has been the emerging business strategy in the era of globalization, with the help of e-commerce managers can see all the affairs of business from one desk and can make quick decisions. The impacts of E-commerce are already appearing in all areas of business, from customer service to new product design. It facilitates new types of information-based business processes for reaching out and interacting with customers such as online advertising and marketing, online order taking, and online customer service.

The benefits of e-commerce can also be understood with the help of the following points:

  1. Reduces the geographical gap
  2. Builds new consumers relationship
  3. Minimizes cost
  4. Creates new markets
  5. Encourages impulse purchasing
  6. Minimises transportation cost
  7. Enables Comparison shopping
  8. Maximizes consumer satisfaction

{If we talk about the future of e-commerce, there are many factors that will significantly contribute to the boom of the e-commerce industry in India, which are:

  • Services to Producers
  • Services to wholesale Distributer
  • Services to customers
  • Services to Retailers and other intermediaries.}

Prospects of E-commerce:

  1. Mobile is the most influential aspect of e-commerce Number of mobile users is growing day by day. Mobile phones are not recommended but it is essential for survival. In future e-commerce site which is mobile friendly will only remain competitive.
  2. Personalization: A key to success Personalization plays a vital role in successful marketing. It is very pleasant for a consumer to get a message that includes your name and what you like. According to the Digital Trends report, 73% of consumers prefer to do business with brands that personalize their shopping experiences. Moreover, 86% said personalization plays an important role in their buying decisions.
  3. Amazon will grow beyond expectation In the future Amazon will grow more than the expectation. The commerce community has wondered surprised whether an entity would be able to top the status that is retained by Walmart. But, it has been done by Amazon. According to Business Insider, Amazon is now bigger than Wal mart. In the end, the small business ultimately defeated Wal mart in the future of eCommerce.
  4. Drones will start delivering packages delivery time is very important for any industry, If delivery time is less, then the customer will be happier. So, in the future companies like Amazon will start delivering packages through drones. Amazon has these small gyrocopter drones that cost a few thousand and required minimal maintenance and are capable of delivering packages up to 80 pounds to metropolitan cities within hours.
  5. Smalltown will capture more share in e-commerce E-Commerce is raising attracting customers from small towns, where people have limited access to the internet but have a high hankering. According to E-Commerce players, these cities have seen a 30% to 50% rise in transactions.

Challenges of E-commerce in India

There are some barriers responsible for the slow growth of e-commerce in India, which are the following;

  1. There exists a highly competitive market for e-commerce.
  2. Most customers wish to try the product first before buying.
  3. There are problems regarding internet speed, reach, and accessibility.
  4. Physical retail is more popular due to customer illiteracy and lack of faith in online business.
  5. Due to a lack of personal interaction with the consumers, problems arise in finding the real consumers.
  6. Hacking system servers, cybersecurity poses a huge threat.
  7. Resistance from new consumers is also faced.

Traditional Commerce E-Commerce

  1. The scope is local or regional Scope is Global
  2. The time required for business transactions is in terms of the week. The time required for business transactions is in terms of minutes and seconds.
  3. Product attributes are selected by the seller. Product attributes are selected by the buyer
  4. Marking focus is related to product position. Marketing focus is related to customer relations.
  5. Asset for traditional business is the location of the shop. Asset to e-commerce is the customer database.
  6. The value proposition is related to the product. The value proposition is related to the product, information, and service.
  7. Mode of payment is physically transfer of money i. e. DD, Cash, Cheque, etc. Mode of payment is electronic i.e. electronic transfer of money using credit cards, digital cash, etc

Government Support to E-commerce

  1. Information technology Act 2000, has been implemented which supports a cyber law regime in the country.
  2. The permission has been granted to private ISPs to set up international gateways.
  3. Initiation of the setting up of the national internet backbone.
  4. The national long-distance service beyond the service area to the private operators has been announced.
  5. The permission of interconnectivity of government & closed users group network.
  6. Establishment of public tele-info center (PTIC) having multimedia capabilities.
  7. 100%, FDI, has been allowed in the b2b model of e-commerce.


It is the buying and selling of goods and services through wireless technology like cellular telephones and personal digital equipment etc. It enables users to access the internet for their transactional activities. Some examples of m-commerce include in-App purchasing, mobile banking, and virtual marketplace apps such as the Amazon mobile app or a digital wallet such as Apple Pay, Android Pay, and Samsung Pay.

The advantages of e-commerce include:

  • Added customer retention by being more easily accessible.
  • More convenience for customers in comparing prices, reading reviews, and making purchases without the need of a desktop computer.
  • Wider variety of products and services.
  • Automates a businesses’ point of customer contact and sales.

Disadvantages of e-commerce include:

  • A poorly executed mobile experience can deter customers from making purchases.
  • Mobile payment options are not available in every geographic location and may not support every type of digital wallet.
  • Businesses must know and comply with tax laws and regulations of all countries they ship to (some businesses will avoid this by only allowing purchases and shipping from their country of origin).



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