What is E-commerce?

E-commerce refers to the purchasing and distributing goods or services over the internet and the movement of money and data to complete these purchases. E-commerce is the online selling of physical goods, but it may also refer to any business activity enabled by the internet

The global e-commerce industry was worth USD 9.09 trillion in 2019 and is forecast to expand at a 14.7 per cent compound annual growth rate (CAGR) from 2020 to 2027. The growing internet penetration is increasing the global mobile user population. Digital entertainment, travel and recreation, financial services, and e-tailing, among other items, include a range of e-commerce solutions accessible to internet-accessing users that are gaining popularity as internet use grows. As a result, consumer technical understanding projects positively affect business development, which has led to advances in 4G and 5G technologies.


According to Statista, retail e-commerce transactions worldwide totalled 4.28 trillion US dollars in 2020, with e-commerce profits forecast to exceed 5.4 trillion US dollars in 2022, making online shopping one of the most popular online activities in the world.

Furthermore, due to the current COVID-19 pandemic, shoppers’ demand for online shopping is growing as brick-and-mortar stores shut. The pandemic has had a relevant impact on significant economies such as the United States, China, India, and Italy. As a result, the apparent consumer effect appears in regions such as Europe and North America. According to Emarsys and GoodData data, revenue earned is up 37%, and orders are up 54% in the United States since January. However, the lack of technological infrastructure deployment in rural areas such as India, China, and Brazil might hinder demand expansion.

E-commerce has changed the way people do business in India. The Indian e-commerce industry will cross $200 billion by 2026, up from $38.5 billion in 2017. A rise in internet and mobile penetration has fueled much of the industry’s growth. The number of internet connections in India might reach 760 million by August 2020, thanks to the ‘Digital India’ initiative. 61% of total internet connections were in urban areas, with 97% of broadband connections.

How does e-commerce work?

Online businesses operate on the same premises as traditional brick-and-mortar stores. On a larger scale, the whole e-commerce process is divided into five major components or job processes:

  • Taking Orders – Receiving Orders is the first step, in which customers position orders through the e-commerce platform (website or online portal), and the seller records them.
  • Order Processing – A company’s e-commerce website should have a simple mechanism in place so that customers visiting the site can place an order. The second stage involves processing and completing all of the order’s data. The order then moves for shipment.
  • Transport – Transportation is the last stage of the distribution process. If you have the fundamentals right and you run your e-commerce company correctly, you will undoubtedly benefit. Always keep in mind that good strategic strategy and delivery are the keys to running an excellent online shop.
  • After Sales Service – Customers have to be taken care of their needs both before and after the transaction. Customers may have questions about product functionality which the website might not have mentioned. They may have reservations about customization and accessories. Customers may have concerns about using, maintaining, or upgrading the goods or services they have already bought after the sale.
  • Reverse Logistics – There is no certainty that the result of the shipment process will be error-free. If products get lost, or workers cease to work for some time, or if the incorrect product is shipped, the e-commerce vendor must maintain the movement of products in the opposite direction, a process known as reverse logistics, in which shipments flow from the buyer to the seller.

Types Of E-commerce

1. Business-to-Business (B2B) -This type of e-commerce includes all electronic exchanges of products or services between businesses. Producers and conventional commerce wholesalers use this method of electronic trading.

2. Business-to-Consumer (B2C) – The formation of electronic trading relationships between companies and final customers distinguishes Business-to-Consumer e-commerce. It refers to the shopping section of e-commerce, where conventional retail trading usually takes place.
These kinds of partnerships can be smoother and more complex, but they can also be intermittent or terminated. Because of the growth of the internet, this form of trade has expanded dramatically.
In contrast to purchasing retail in conventional commerce, the buyer typically has more details accessible in terms of insight. There is often a common belief that you would be buying cheaper without sacrificing similarly tailored customer care and ensuring your order’s fast processing and distribution.

3. Consumer-to-Consumer (C2C) – This refers to all electronic purchases of products or services between customers. In most cases, these transactions are carried out by a third party, which provides the web portal on which the transactions are carried out.

4. Consumer-to-Business (C2B) – The conventional sense of trading products is reversed in C2B. This form of e-commerce is popular in crowdsourcing ventures. A significant number of people sell their services or goods for sale to customers who are directly looking for certain kinds of services or products.

5. Business-to-Administration (B2A) – This category of e-commerce includes all internet purchases between businesses and government agencies. This is a broad and diverse range of resources, especially in economic, social security, housing, legal documents and registers, and so on. With investments in e-government, these forms of programs have grown significantly in recent years.

6. Consumer-to-Administration (C2A) – The Consumer-to-Administration model includes all electronic purchases between individuals and government agencies.

Below are few examples of applications:
Education entails disseminating knowledge, distance learning, and so on.
Taxes – filing tax returns, making deposits, and so forth.
Health – visits, sickness records, charge for health care, and so on.

Both public administration models (B2A and C2A) are closely correlated with the concept of reliability and ease of use of government services offered to people through information and communication technology.

Benefits Of E-commerce

1. Faster purchasing process – Customers can save time while looking for what they want. They can quickly search through a large number of things at once and purchase anything they want. Customers can discover items that are available in physical shops far away from them or not available in their region as they search online.
With many shoppers, this is where e-commerce comes in handy. They go online, check for an object, receive a swift response, and purchase it in the same amount of time.
The benefits of e-business include choosing from a wide variety of options and getting the order fulfilled. Searching for an object, reading the summary, and adding it to your cart all take very little time. Finally, the customer is delighted because he now has the item and did not drive far.

2. Establishment of a store and the listing of products – When a customer searches for an object, they see a product listing. This is one benefit of e-commerce for the vendor. The advantage of this online company is that you can personalize your product listings after you create them. What’s the better part? It takes little time to make a listing; all you need is your product name or codes such as EAN, UPC, ISBN, or ASIN.

Sellers may have many photographs, a summary, a product type, a price, a shipping fee, and a delivery date. As a result, you can tell the consumer a lot about the item in just one move. Creating your listing demonstrates to customers what you have.
Customizing listings makes them more desirable and appealing. The vendor has total power over customization; he may list available deals, discounts, etc. Other benefits of e-business product listing include the fact that it is both free and quick to set up.
Finally, the listing is available online 24 hours a day, seven days a week, meaning the buyer can see the item wherever he wants. Sellers have the option of adding several listings or deleting sold-out pieces.

3. Cost-cutting – Cost-saving is one of the essential benefits of e-commerce to businesses that hold sellers active in online selling. Many vendors would spend a lot of money to keep their physical shop open. They will have to incur additional upfront costs such as leasing, maintenance, store construction, inventory, etc. Even after investing in services, inventory, repairs, and labour, sellers do not earn the required income and ROI.
A vendor can save money on store repairs by using an e-commerce store. As compared to a physical store, an e-commerce store is less expensive and needs less investment.
This is an excellent opportunity for individual and small-scale vendors who want to make money but lack the necessary start-up funding.

4. Low-cost advertisements and marketing – Business owners do not need to spend a lot of money on advertising their products. There are many inexpensive and fast ways to sell online in the world of e-commerce. Sellers can show off their goods on e-commerce marketplaces because they are visual platforms. Amazon vendors, for example, may use Advertising resources to provide animations, infographics, and high-resolution images.

Many e-commerce marketplaces have consumer analysis platforms for assessing consumers. This is typically a tab that displays all incoming, unshipped, delivered, cancelled, and returned orders.

5. Consumer adaptability – One significant benefit of e-commerce for businesses is the ability of sellers to offer convenience to consumers. One noteworthy aspect is that the goods and services are available 24 hours a day, seven days a week. As a result, the seller will deliver his item at any time and from any place.

Customers are still present on an e-commerce marketplace; they are most likely to visit for repeat orders online due to the conveniences they get. These benefits include free shipping (usually with a minimum cart value), express order fulfilment, offers and discounts, and membership benefits.
They also have recommendations on the items they purchase. Good ratings result in two additional e-commerce rewards. One is that the amount of favourable reviews influences shoppers’ interest in your shop. The other advantage is that it will assist you in identifying your best-selling pieces.

Sellers will use this consumer versatility to increase their sales. They will sell with confidence on an online marketplace, and they know there will be plenty of customers.

6. Price and product contrast – Sellers in e-commerce will compare goods using software or on their own. Pricing and product contrast provides them with a clear understanding of the commodity options available and the regular prices if product demand is not met.
Online comparison is quicker and includes more items – It saves time by making this comparison, and all data are available on the shopping platform. In a physical market, vendors can not have access to too much data – they have a clearer understanding of their inventory. People are more optimistic about buying as they see a large number of things available for purchase.

7. No reach limitations – A vendor with a physical store may be limited in his/ her ability to attract a certain number of customers. Customers’ homes may be shipped to, although there could be distance limits. Several e-commerce platforms have their distribution and fulfilment systems.
Reaching out to more buyers will help sellers who need to broaden their market to find new customers. It is valid for all online-only dealers and others who have a physical shop.
Online-only retailers can save money on shipping while ensuring customer satisfaction. Sellers with a physical shop start marketing to local customers.

8. Improved response time to buyer/market demands – When you start selling online, any connection is more accessible. E-commerce marketplaces provide you with a more effective logistics or distribution system. Responsive logistics ensures that the buyer’s order is fulfilled quickly. Product exchanges are another benefit that customers get – you either repay the fees or have a substitute.
Consider this e-commerce example: if a customer discovers that an item is out of stock, he can pick the ‘Notify Me’ option, which notifies him when the object is ready for purchase again. It also tells sellers that they must restock that piece. Merchants will quickly build discounts and promotions. Offers draw buyers, which increases the likelihood of making further profits. E-commerce sellers can prepare and use coupons whenever they choose, and they can also tailor those discounts to their store.

9. Various payment options – Buyers love personalization, and the same is so when it comes to billing for their orders. E-commerce marketplaces accept a range of payment options, including UPI, cash on arrival, pay-later credit, EMIs on credit or debit card, net banking, and card on delivery.

Cart recovery: This is a significant advantage in e-commerce. A customer can hit the checkout page but do not complete the transaction. You will contact customers via phone messaging or email when their purchases are complete.

There is a catch: customers can only use one payment method per request. This decision gets influenced by the order size, ease of payment, and cash or credit card availability. The buyers would no longer have to pass on a possible selling offer due to a lack of available payment methods.

Impact Of E-commerce

  • Impacts on Direct Marketing –E-commerce improves product and service marketing by allowing for direct, information-rich, and engaging interaction with consumers. It also provides for direct consumer interaction and bidirectional coordination. When opposed to non-electronic distribution, the expense of sending information to consumers over the internet results in significant savings for senders. The time it takes to produce digitized goods and services can be reduced to seconds. E-commerce allows for the customization of goods and services that enables superior customer service. Taking orders from customers online will vastly enhance the process.
  • Impact on organization – Rapid advances in e-commerce would push firms to rapidly adapt to emerging technologies and provide them with resources to experiment with new goods, services, and processes. Innovations necessitate new operational methods. The upheaval created by these developments generates new possibilities and dangers and pushes us to rethink work, professions, and wages. Staff in the modern age would need to be very adaptable. Few will have genuinely stable careers in the conventional context, and everyone will need to be ready and able to read continually, adjust, make choices, and stick by them. E-commerce enables the development of new goods as well as the customization of current products in novel ways. Such changes can reshape the missions and operations of organizations.
  • Impact on Manufacturing – Finance, marketing, and other operating processes and corporate associates and consumers are also involved in the manufacturing systems. Orders taken from consumers are informed to designers and the manufacturing floor in seconds using web-based ERP systems. In some instances, the production cycle time is reduced by 50% or more, mainly where production operates in a different country from where the designers and engineers are based.
  • Impact on Finance – E-commerce necessitates specialized financial and accounting programs. For electronic trading, conventional payment schemes are unreliable or inefficient. The use of modern payment technologies, such as electronic currency, is problematic because it includes regulatory problems and international standards conventions. Nonetheless, electronic cash is undoubtedly on the way, and that will transform online transactions. In several respects, electronic money, which currencies or other commodities can back, constitutes the most crucial currency revolution since gold replaced cowry shells. Its plurality and pluralism are suitable for the internet.
  • Impact on Supply chain management – Shippers, freight forwarders, and trucking companies may use e-commerce to streamline paper handling without conventional document distribution systems’ monetary and time expenses. Companies can minimize costs, increase data quality, streamline business operations, accelerate business cycles, and improve customer experience using e-commerce. By avoiding the need to re-key or reformat records, ocean carriers and their trading partners will share bill of lading orders, freight invoices, cargo status messages, motor carrier shipping instructions, and other documents with greater consistency and efficiency. E-commerce can provide companies with greater flexibility in managing the increasingly complex flow of goods and information among enterprises, their suppliers, and their customers. Users can build an account and collect real-time updates about freight shipments via e-commerce. Freight auditing means that each freight bill tests for authenticity on time. As a result, the chance of overpayment gets reduced significantly, as is the need for endless hours of paperwork or a third-party auditing company.  Paperwork minimizes, and the shipping department would be more effective as a result. Shipments get monitored, and evidence of delivery can be received quickly. A company’s transit costs and efficiency can be analyzed, allowing the customer to seek better prices and increase quality.

The prospect of e-commerce is hard to forecast, as it is rapidly changing. However, here are some of the shifts we are observing. E-commerce companies are aiming to replicate the in-person shopping experience by making their websites more personalized. By delivering orders to consumers, drones would be able to replace delivery staff. By 2020, the speech will account for 50% of all web searches. By next year, online e-commerce revenues are about to hit $4.8 trillion. Social networking outlets play an essential part in our lives now, and companies will move their ads to social media sites to attract a wider audience. When AI programs advance, the assistants may be able to handle several activities. Minimalistic packaging can help to minimize waste by using more recycled products or using fewer materials in general. E-commerce is a continually evolving and upgrading environment as innovations advance and businesses fight for a bigger slice of the pie.

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