E-Commerce refers to the purchase and sales of goods and/or services, transmitting of funds or data through electronic channels such as internet. From books and music to financial services and plane tickets can be offered via e-commerce. The terms e-commerce and e-business are often used interchangeably. It draws on technologies such as mobile commerce, Internet marketing, supply chain management, electronic funds transfer, online transaction processing, electronic data interchange (EDI), inventory management systems, and automated data collection systems. It may also use variety of applications such as email, online catalogs and shopping cards.
- Business to business activities(buying and selling)
- To send out e-newsletters to subscribers
- Online shopping websites and order tracking
- Online market place- Selling of goods from business-to-consumer or consumer-to-consumer
- Business-to-business electronic data interchange
- Pay bill through online banking or e-banking and trading purposes
- Engaging in pretail for launching new products and services
When you purchase a good or service online, you are participating in e-commerce. It is providing a cheaper and more efficient distribution chain for their products and services. There are six principal categories of e-commerce;
This involves companies doing business with each other i.e. both participants are businesses. It is largest thus volume and value of B2B can be huge. This type of e-commerce is mainly used by producers and commerce wholesalers.
It provides direct selling through online (shopping cart software) without any human interaction. Consumer has more information available about all the products and ensuring quick processing and delivery of the order.
This is the most popular platform that enables all electronic transactions of goods and services conducted between consumers. For the transaction there involve a third party, which provide the online platform.
A large number of consumers post a project with a set budget online and multiple companies bid for winning the project. The consumer selects the company which will provide their requirements.
This involves a large number amount and variety of services. It enables all transaction conducted online between companies and public administration. The services include fiscal, social security, employment, legal documents and register, etc. which have increased considerably in recent years.
It enables all transaction conducted between individuals and public administration. Education, social security, taxes, health etc. are the main application involved.
Advantages of e-commerce
- It can take place 24/7 and faster selling and buying procedure as well as easy to find products.
- Without implying a large financial investment, it can reach a global market (wiser array of products).
- Information available about all the products and ensuring quick processing and delivery of the order (shorten the product distribution chain).
- Lower operational cost and better quality of services. There is a significant reduction of transaction costs and of the prices charged to customers.
- There is no geographic limitation and customers can select products from different providers.
Disadvantages of e-commerce
There are some disadvantages of e-commerce; anyone can easily start a business, there is no legislation that regulates the new e-commerce activities. Also there is no ability to touch and see the product which may be leads to dissatisfaction when the product is different than expected. And there is insecurity in online business transaction.