E-Commerce: Concepts, Types, and Impact on Business

E-Commerce Fundamentals

Definition and Scope of E-Commerce

E-commerce is a transformative concept in modern business, referring to the buying and selling of goods, services, and information through electronic channels, primarily the internet. It enables business transactions to occur electronically, removing the need for physical interactions or geographical limitations.

• Key Activities: Online shopping, online banking, electronic fund transfers, digital marketing, online auctions.

• Benefits: Convenience, efficiency, global connectivity.

• Types of E-Commerce:

  • Pure EC: All activities are digital (e.g., buying an e-book online).

  • Partial EC: At least one activity is digital (e.g., ordering a physical product online).

  • No EC: All activities are physical.

Additional info: E-commerce has become integral to daily life, allowing consumers to purchase products and access services from anywhere.

Types of E-Commerce Organizations

Classification by Business Model

• Brick-and-Mortar: Traditional physical organizations with no EC activities.

• Virtual (Pure-Play): Companies operating exclusively online.

• Click-and-Mortar (Click-and-Brick): Companies combining physical and online operations.

Many traditional companies are transitioning to click-and-mortar models to leverage the advantages of e-commerce.

Growth and Classification of E-Commerce

Trends and Grouping

Online retail sales are increasingly taking market share from traditional retailers. For example, online shopping grew 10% annually during the 2013 holiday season, compared to 2.7% for traditional retail.

• Business-to-Consumer (B2C): Transactions between businesses and individual consumers (e.g., buying a computer from Dell.com).

• Business-to-Business (B2B): Transactions between businesses (e.g., Dell buying parts from suppliers online).

• Consumer-to-Business (C2B): Individuals selling products or services to businesses (e.g., bidding on services via Priceline.com).

• Consumer-to-Consumer (C2C): Individuals selling directly to other individuals (e.g., auctions on eBay, ads on Craigslist).

• E-Government: Government agencies conducting transactions with businesses (G2B), citizens (G2C), or other governments (G2G).

Historical Development of E-Commerce

Early Applications and Technologies

• Electronic Funds Transfer (EFT): Initiated in the 1970s, allowing electronic transfer of money among financial institutions.

• Electronic Data Interchange (EDI): Technology for electronically transferring routine documents, expanding from financial to other types of transactions.

Additional info: The evolution of EC has included the development of e-CRM, m-commerce, social commerce, and e-learning.

Summary Table: Types of E-Commerce

Type	Description	Example
B2C	Business sells to individual consumers	Amazon.com retail sales
B2B	Business sells to other businesses	Dell buying parts from suppliers
C2B	Individuals sell to businesses	Priceline.com bidding
C2C	Individuals sell to other individuals	eBay auctions, Craigslist ads
E-Government	Government transactions with businesses/citizens	Online tax filing, government procurement

Key Benefits of E-Commerce

For Organizations

• Global reach

• Cost reduction

• Supply chain improvements

• 24/7 operations

• Customization and personalization

• Competitive advantage

For Consumers

• Product availability

• Ubiquity

• Self-configuration

• Real-time delivery

• Telecommuting

• Social interaction

Additional info: E-commerce also helps close the digital divide by providing access to services in rural and developing areas.