We explain what electronic commerce is, what its characteristics and types are. Also, its advantages and disadvantages.
What is electronic commerce?
Electronic commerce, also known as e-commerce, is a type of commerce (purchase and sale of products or services) that occurs through the Internet . This method of buying and selling has recently expanded (due to massive access to the internet) and allows buying and selling through websites , applications or social networks .
Online commerce is usually agile and secure , as long as the product and the user or company that sells it is recognized or trusted. One of the main advantages of this modality is that the user can buy products from anywhere in the world, without having to go to a physical store, and receive their purchases at home or at a delivery point agreed with the seller.
It is considered that electronic commerce continues in constant growth and covers more and more items, among which textiles, food, services, computer science , among many others, stand out.
Some of the characteristics of electronic commerce are:
- It occurs in a virtual space . Online commerce is carried out through virtual platforms, which are accessed through the internet, so that the company or private seller does not need a sales room in which to display the products. This supposes a reduction of costs, by not having living room or rent expenses. For their part, many brands tend to have a physical store and also offer their products on the web.
- It allows the purchase and sale of different types of products and services . Through the internet, the customer can access a wide range of products and services, such as food, books, appliances, cosmetics, clothing, furniture and tableware. However, there are some goods (generally the most expensive, such as a vehicle or a property) that the customer usually knows through the internet, but then makes the purchase personally.
- It fits a wide range of clients . The number of people who make purchases through the web is increasing, so that electronic commerce reaches a large percentage of the population , especially people who have a fluent use of the internet.
- It is agile and comfortable . With electronic commerce it is not necessary for the customer to have to move because the product can be purchased and paid for online and then received by mail at home. This allows you to make purchases quickly and comfortably.
- Use avenues of contact with customers . Although e-commerce does not require physical vendors, it must have a communication channel or channel so that the customer can ask the vendor questions. This contact can occur through the website, email or by phone.
- Accept multiple means of payment . Electronic commerce allows the customer to pay for their purchases with various means of payment such as: bank transfer, credit card and debit card. In many cases, it is not possible to pay for the purchase in cash.
- It allows to extend the geographic limits and schedules . Since the connection to electronic networks is available at home, in offices and on mobile phones, purchases can be made from anywhere and at any time. This allows the seller to attract customers from different geographical points.
- It involves risk of deception . Customers can be scammed when the merchant is unknown, so it is important to do your research before making an electronic purchase. In some cases, it happens that the product is different from the one shown in the photos or that the purchased product is never received. In addition, there is a risk of purchases being made with stolen credit cards.
Origin of electronic commerce
The entire purchase process is done 100% online.
The beginnings of electronic commerce date back to the early 90s , when the internet began to become widespread and to be used as a commercial platform.
One of the pioneers in creating an electronic commerce platform was Jeff Bezos, who founded in 1994, in Seattle, the Amazon company from which he sold books to any part of the world. Amazon quickly became a success by changing the consumption patterns of the population and today sells both books and sporting goods, household appliances, clothing and many other products online.
Another platform that innovated in e-commerce in the mid-1990s was E-bay. This website emerged in 1995, as an auction and sales platform, and is currently available in a large number of countries around the world.
Starting in 2000, more platforms began to emerge that incorporated electronic commerce between consumers , and also between companies and clients, such as Alibaba and Mercado Libre. These platforms make it easy to buy and sell new and used products.
With the development of this type of business, both large companies and SMEs, neighborhood businesses and entrepreneurs began to get involved in this form of sale. Currently a large portion of the population consumes through websites or social networks, which allows sellers to deliver their goods or services to customers around the world.
Types of e-commerce
B2C commerce occurs between a company and a consumer.
Depending on the type of commercial link between the actors, electronic commerce can be:
- B2B e-commerce . It is the type of trade that takes place virtually between two companies and does not involve individual clients. For example: A company that buys supplies from another.
- B2C e-commerce. It is the type of business in which a customer obtains a good or service offered by a certain company. For example: A user who buys an appliance in the online store of a multinational company.
- Electronic commerce B2E . It is the type of trade that occurs between a company and its workers. For example: A company that provides discounts on certain products to its employees.
- C2C e-commerce . It is the type of commerce that occurs when a user no longer uses a product and sells it to others through virtual platforms. For example: A user of a social network sells a piece of furniture that he no longer uses through this platform.
- Electronic commerce C2B . It is the type of business in which a user offers a service or good to a company. For example: A user of a social network offers to give visibility to a brand in their networks.
- B2G e-commerce . It is the type of trade that occurs between a company and a public government body . For example: An agency that designs the website of a public body.
- G2C e-commerce . It is the type of commerce that occurs between the government and private users. For example: A citizen who pays his taxes through the collection agency’s website.
Advantages of e-commerce
There are opportunists who use stolen cards to make purchases online.
Some of the main advantages of electronic commerce are:
- It is one more sales channel.
- It allows to acquire goods or services from any geographical point.
- It is agile and dynamic.
- Reduce costs.
- It allows you to sell and buy at any time.
- Allows buying and selling internationally.
- Allows business expansion.
- Save time.
- It implies a low initial investment in infrastructure.
Disadvantages of e-commerce
Some of the main disadvantages of e-commerce are:
- There is more competition.
- It involves shipping and logistics costs.
- It involves the development of a website or web platform.
- It can lead to a lack of trust in customers.
- You cannot see or test the product before you buy it.
- You can fall for tricks or scams.
The above content published at Collaborative Research Group is for informational and educational purposes only and has been developed by referring reliable sources and recommendations from technology experts. We do not have any contact with official entities nor do we intend to replace the information that they emit.