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E-Commerce ANS

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What is E- Commerce?

Discuss the meaning of E-commerce, definition of E-commerce,


history of E-Commerce, models of E-commerce.
Introduction: -
The word E- Commerce means ‘Electronic Commerce’. “E” stands for Electronic and
Commerce means business. E-Commerce means all business activities are done with the use
of electronic media, mainly computer network. In simple words, electronic commerce means
buying and selling of goods and services over the World Wide Web.
Meaning of E-Commerce: -
The term electronic commerce itself suggests the meaning. Simply, we can say that
it is an electronic method of business. In it almost all of the business activities are done with
help of electronic media. Companies develop websites for online selling with unique
characteristics.
Definition of E-Commerce: -
➢ “E-Commerce provides the capability of buying and selling products, services
and information on the internet and via other online services.”
➢ “The conducting of business communication and transactions over networks.”
➢ “Electronic Commerce is a business model that lets firm and individual buy
and sell things over internet.”

History of E-Commerce
To understand e-commerce, we should look at its history. In this electronic era, the way
of business and commercial transaction has changed. E-commerce was introduced about 40
years ago in its different form. The August 12, 1994 is the day when New York Times
published the news “Internet is Open.” The emergence of e-commerce started in the early
1970s with the earliest example of Electronic Funds Transfer. Then another technology,
Electronic Data Interchange was started. It helps to collect the data of the customers
electronically. It broke the traditional method of communication on paper such as purchase
orders and invoices. It also stopped the old method of mailing and faxing documents by a
digital transfer of data from one computer to another. It also provides transaction exchange
from suppliers to the customers. With the progress of internet technology and a highly
developed global internet community, e-commerce is growing faster. During 1990s, internet
was opened for commercial use. It was also the period when users started to participate in
World Wide Web. Due to the fast development of WWW networks, e-commerce and the peer
business competitions, a large number of dot-comes and internet start-ups appeared. Amazon
was one of the first e-commerce sites in the US to start selling products and services online.

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Integrated with the commercialization of the internet, web invention and PC networks; these
three important factors made electronics commerce possible and successful. These three work
collaboratively in order to break a dramatic change in business models. Countless growth
with the help of new technologies, improvements in internet connectivity, high security with
payment gateways have brought a great revolution in the history of e-commerce.

Business models (types) of E-Commerce / types of E-Commerce


There are different types of e-commerce. It is classified according to its use and the
users. Its types are based on the transactions done by the business organizations and
customers.

1. Business to Business (B2B):


Business-to-business (B2B), also called B-to-B, is a form of transaction between businesses.
The term was popular during the dot-com boom of the late 1990s. In B2B form of e-
commerce, the buying and selling takes place only between two business parties without the
involvement of customers. One business is connected with manufacturing and the other is
called wholesaler. One business brings the products and services from another business and
then sell out to the consumer under their brand name. Business-to-business stands in contrast
to business-to-consumer (B2C) and business-to-government (B2G) transactions. In India
Alibaba, IndiaMART, TradeIndia and Amazon Business have adopted B2B model for
business. One can buy products in wholesale price from another business and sell it to the
customers under their brand name.

2. Business to Consumer (B2C):


The B2C model is one of the widely used tools in the e-commerce industry. B2C stands for
Business-to-consumer. The pattern is very simple and easy. In this form consumer directly
deals with the marketer. It refers to a business done between a business and an individual
customer. It is the best example of online retail model. In this model, the companies sell out
products directly from a business to the end user (Consumer). Consumer searches on the
website about the product he wants to buy. He selects the product online and the dealer sends
it to the consumer. It is completely opposite to B2B model where two businesses exchange
goods and services in wholesale mode. The term B2C is applied to any business transaction
where the customer receives goods and services from the particular company online in retail
price.

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3. Customer to customer (C2C)
Customer to customer (C2C) is a business model where customers can trade with each
other, especially in an online environment. There are two ways for trading: one is auction and
the other is classified advertisement. It is an innovative way in which a customer sells his old
products or goods to other customer by using any suitable website. C2C marketing has
become more popular and reliable with development of technology such as internet and smart
phones. There are companies such as Amazone, Quicker, OLX, Ali Express, and Amazon
Marketplace etc.

4. Consumer - to - Business
C2B stands for Consumer-to-Business. Consumer-to-business, or C2B, is a type of business
model where the end consumers create products and services which are consumed by
businesses and organizations. C2B is used to describe a business model where consumers
deliver value to a business. Internet and social media play a very important role for this
model. In C2B, the companies typically pay for the product or service. For example, an IT
engineer can develop website for a company and demands fixed amount for that.

5. Business to Government (B2G):


Business-to-government (B2G) is also known as business-to-administration (B2A), refers
to trade between the business sector as a supplier and a government body as a customer. It
refers to the business relationship of a company with a government. It commonly refers to the
products, services or information online. We also call B2A which stands for business-to-
administration. For example, companies install rooftop solar panels for homes with subsidies
provided by the state or central government.

Advantages of E-Commerce:
Advantages to Business:

▪ Businessman can save the various costs such as the rent of the office or shop or stock room,
the facilities, the utility bills, insurance, and salary for your staff.
▪ Ecommerce takes the advantage of more advanced level of marketing technologies – digital
marketing.
▪ There is no space for human errors. As we know all the business activities are running
through the proper system.

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▪ E-commerce bridges the gap between local sellers and global audiences. Thus, it helps them
in widening their reach across the global market.
▪ In e-commerce buyer and seller contact each other directly. So, the expanse of mediator (third
party) is saved. Thus, administrative cost is lessened. Ultimately it benefits the consumers.
▪ Internet is connected with the world. So, if the firm has its own website, there can get orders
from any corner of the world. Thus, it provides global market.
▪ Through global markets, consumers buy the product. So, there is a growth in overall selling
and get more profit.
▪ E-commerce does not require expensive showrooms and offices. There is no need of large
stock. So, it is possible to do business with less capital.
▪ In commerce there are expensive marketing and advertisement for newly launched products.
In e-commerce it can be done on website which is costless.
▪ Businessman can open his online stores for 24/7.
▪ E-commerce can attend millions of customers at a time and can save man power.

Advantages to Consumers:
➢ Consumers can get detailed information about the product and can analyze and compare with
other products of the company.
➢ Consumers have more options available for selection on websites.
➢ We can compare the prices of different products of different companies and can choose better
option.
➢ We can do shopping at any time sitting at home. So, there is no need for outdoor shopping
and wasting time and money.
➢ Consumer can deal with the foreign companies as well. So, through e-commerce it is easier to
buy and use foreign products.
➢ We can also choose the company which offers maximum benefits and services during and
after purchasing.
➢ Customers can buy any product at any time and at any place as online stores are open for
24/7.
➢ In E-Commerce we can return your products at a time.
➢ We can exchange or replace items easily with maximum benefits.

Disadvantages:
• Buyers and sellers do not meet personally. So, there may be a chance of cheating.

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• We cannot the check available items physically. So, there may be a chance of providing
material of lower quality.
• When we buy products, there is no any policy of replacing or returning material in some
companies.
• Consumer has doubt that the party will not send material after receiving money.
• Some items are hard to buy online. It is difficult to select correct item.
• E-commerce is limited only to the higher classes of society because expensive facilities like
computer and internet are required.
• A customer needs to register at the website to complete an order. Due to the cyber-crimes,
most of the customers don’t register by adding personal information.
• E-commerce is not for illiterate person as it requires knowledge of computer.
• E-commerce is not secure because of cyber-crime and virus attacks.
• In e-commerce the products may be lower and cheaper in quality.

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