What is Electronic commerce or E-commerce?
You come across this term many times. In fact, you do E-commerce every day. You shop online, pay bills online, and stream your favorite movie online. So, indirectly you are carrying out E-commerce every day. E-commerce is buying and selling products and/or services over the Internet. So, what are the Advantages of E-commerce in the 21st Century? Let’s find out.
Traditionally, we need to go to a shop for buying products like groceries, food, medicines, and so on. As the internet spread across the world, people started buying and selling these products on the internet. In 1979, Michel Aldrich demonstrated the first online shopping system and the journey of today’s e-commerce began. Besides, there are many advantages of e-commerce.
In simple terms, E-commerce involves a virtual shop where you buy or sell goods over the world wide web. As a result, now you can buy or sell a product from almost anywhere in the world. It’s actually bringing international trade closer and convenient than ever before. In traditional commerce, this was difficult.
Broad categories and types of E-commerce
E-commerce is a very broad term. In today’s world, its scope keeps on increasing. However, we need to categorize it in order to make it more simple. Mainly, there are three types of merchants. The first type of merchant sells physical goods and delivers to your home after payment. The second type sells services online. The example includes online consulting and a BPO. The third type sells digital products such as cloud hosting, online ERP systems. Or it could be a service that streams music and movies online. Thus, the third type of merchant sells the products mainly in electronic format.
We can categorize the type of electronic commerce by involving parties in the transaction. B2B is the ‘Business to Business’ e-commerce transaction. In this type, the transaction happens between two businesses online. B2C is ‘Business to Consumer’. Most of the online stores like Walmart and Amazon fit into this category. C2C is the ‘Consumer to Consumer’ transaction. In this, one consumer sells the product to another consumer thru’ e-commerce platform. An example of this type of platform is OLX. Nowadays, many popular traditional businesses also use e-commerce. The advantages of e-commerce weigh far more over its disadvantages.
Additionally, C2B (Consumer to Business) is also a rising electronic commerce platform. In this type, crowdfunding mostly occurs for a particular product before its production. In this case, the consumer pays for it even before the product comes into existence. G2B and B2G is the type of e-commerce where the online transaction takes place between a ‘Government to Business’ and vice versa. The last type is C2G where the Consumer pays for Government services such as renewal of licenses or payment of government fees online.
Platforms and marketplaces: Advantages of E-commerce
E-commerce platforms help to achieve seamless online selling and buying experience for merchants and consumers alike. Magento is one of the leading Electronic commerce platform followed by Woo-commerce. E-commerce platforms make it easy for anyone to sell online.
The online marketplaces have a different kind of functioning. The online market place is nothing but a website that doesn’t own the inventory. Hence, it is just a platform between merchants and consumers. These marketplaces give various services to merchants and consumers in order to facilitate the transaction. So, online marketplaces are just intermediaries and work on commission & advertisements. The most popular is Amazon and Alibaba.
Top 5 Advantages of E-commerce:
1. It keeps the business running 24/7:
E-commerce brings world trade closer. Electronic commerce works irrespective of place and time. So, your shop is open 24/7. People can buy the product at their convenient time and when they need it.
2. It empowers you to make informed decisions: Advantages of E-commerce
In addition, electronic commerce also brings more transparency and more choice to consumers. Any merchant and manufacturer won’t be able to cheat the consumers. Importantly, it is very easy to compare and make the right decisions. Consumers can make informed decisions based on reviews, ratings, and feedback.
3. It saves time, money & energy:
It is convenient. Instead of going to the shop for buying the product, the product comes to your home. Thus, it’s more convenient and time-saving.
4. It increases the quality of service:
Advantages of E-commerce
Furthermore, the quality of service drastically improves as there is immense competition between merchants. Consumer feedback has more importance than ever before.
5. It brings transparency & competitive pricing:
The consumer gets the product at a lower price as compared to traditional commerce as there are no middlemen in e-commerce. It’s easy for the merchants as they don’t need to find consumers for a product. Instead, the consumers come to them virtually to buy the product.
In conclusion, E-commerce has changed the way we buy products and use them. It has a big impact on the transport and supply chain industry. Electronic Commerce also creates lots of new opportunities and it is the only way forward in the retail space.