Ecommerce or electronic commerce expects to continue growing at a quick rate in coming years. It is the fastest-growing form of commerce in the world.
Ecommerce is an ever-changing area of business since the evolution of the internet.
While there are many articles you can find about ecommerce on the web, there remains a sense of confusion among many. Use of industry words used by experts or readers resisting the recent change may cause this.
This article explains everything you want to know about ecommerce meaning, website, platforms and what makes the business successful.
Ecommerce Meaning
Many have defined ecommerce based on their own understanding of what it is. Every of this definition on the web has given readers’ a view of what ecommerce is about:
Some people see ecommerce as buying and selling of physical and digital products on the web via an electronic device.
Others see it as everything involved in digital/online marketing, connecting, making payments and delivery.
Another sees it as offering services (design, writing, etc) and even after sale support (chat, legal, etc).
You agree that commerce is exchanging goods and services on a large scale across countries. Ecommerce is the electronic medium of this exchange.
Ecommerce is the buying of products (physical or digital) and services over the internet using an electronic device (phones, tablets and computers).
Other definitions you will see are:
Ecommerce Guide defines it as:
Ecommerce, or electronic commerce, refers to transactions conducted via the internet. Every time individuals and companies are buying or selling products and services online, they’re engaging in ecommerce. The term ecommerce also encompasses other activities including online auctions, internet banking, payment gateways, and online ticketing.
Shopify defines ecommerce as
Ecommerce, also known as electronic commerce or internet commerce, refers to the buying and selling of goods or services using the internet, and the transfer of money and data to execute these transactions. Ecommerce is often used to refer to the sale of physical products online, but it can also describe any kind of commercial transaction that is facilitated through the internet.
Oberlo defines ecommerce as
Ecommerce, also known as electronic commerce, is a business model which involves transactions taking place on the internet. Stores that sell their products online are ecommerce stores or businesses.
The three definitions good as long as modern ecommerce is of practice.
Difference Between Digital Marketing, Ecommerce and Ebusiness.
There is a big misconception about what digital marketing, ecommerce and ebusiness means. People use them interchangeably. They may be similar, but not the same.
Ecommerce is the buying of products (physical or digital) and services over the internet using an electronic device (phones, tablets and computers).
Example: When you buy a shirt online, that’s ecommerce.
Digital Marketing is the promoting of business on the internet to achieve a goal. This goal could be to reach more customers, get new leads (customers details) or make more sales.
Example: When you see a sponsored post online, that’s digital marketing.
In 1997, IBM launched a campaign with a focus on eBusiness (electronic business). Ever since then, other companies have embraced the concept, making the term popular.
Ebusiness is doing business on the web beyond buying and selling. It’s the transformation and running of business operations and processes using the internet. This includes marketing, sales, human resource management, and many.
Example: When a company signs contract papers with a company abroad, that’s ebusiness.
Real life example to explain the three.
You saw shirts advert on Facebook. You became interested, clicked, and it redirects to a website. You checked more pictures about the shirts and loved the price you saw.
With no delay, you add the shirt to the cart, checkout and made payment.
The website admin received your details (location, etc.), process it and delivered in days. He then asked you to leave review about the shirts on the website.
You are happy; the company is happy.
Here is the breakdown:
Digital marketing made the advert you saw possible.
Ecommerce handles your shopping experience and ability to pay.
eBusiness is the entire process of running advert, receiving payment and delivery tracking.
When you think of digital marketing, think promotion.
When you think eCommerce, think buying and selling.
When you think eBusiness, think online business process.
That explains it best.
Factors Affecting Ecommerce
There are factors that affect the growth of ecommerce, making it popular in some countries and less known in others. They are:
Governmental Factors:
Do the leaders allow international transaction? What’s the country’s currency rate? Those in political power can affect you setting up ecommerce in a country via business policies, regulations, tax and more.
Technological Factors:
Ecommerce depends on technology to operate. So, it can only go as far as the technology available to the citizens in any country. You should expect consumer embrace ecommerce if they have easy internet access.
Social Factors:
Are the people knowledgeable enough on the use and importance of ecommerce at home and in the workplace?
If they are, how many are they? Countries with high level of education will embrace ecommerce more that their opposite.
Economic Factors:
What is the economic status of the nation? How rich are her citizens? How competitive are businesses in the country? This also determines the rate at which ecommerce grows in any country.
Types of Ecommerce
Ecommerce is buying and selling of products and services on the internet using an electronic device. It has different types popular among businesses. They are:
- Business to business e-commerce (B2B)
- Business to consumer e-commerce (B2C)
- Consumer to consumer e-commerce (C2C)
- Consumer to business e-commerce (C2B)
1). Business to Business Ecommerce (B2B)
When a business sells a good or service to another business. A buyer pays for a shirt on your website using a payment processor company. The payment company operates B2B since they work with your business to help receive payment.
2). Business to Consumer Ecommerce (B2C)
When a business sells a good or service to an individual consumer. In B2C, businesses deal directly with customers. This is the most popular form of ecommerce.
You sell cloth on your website? You offer web design services to clients on your website? You operate business to customers’ ecommerce. You are the business; the people buying are the customers.
3). Consumer to Consumer Ecommerce (C2C)
Have you ever listed any of your unused products for sale on a classified ad website? When an interested buyer calls, you both agreed on an amount and you deliver the products. The business operation between you both is customer to customer ecommerce.
Example: Andtab and Craigslist
4). Consumer to Business Ecommerce (C2B)
When a consumer sells their own products or services to a business or organization. This ecommerce types allows customers lead in their operation with businesses.
Example: An influencer promote a business product for a fee, or a photographer license his photo for a business to use.
Benefits and Importance of Ecommerce
What are the importance of ecommerce? What does it offer? Why do we have to use it? I will share with you how ecommerce is beneficial to you as a business owner.
1). Global Markets
Gone are the days where you can only sell to the people that walked into your shop. Your business is no longer limited by your geographical locations.
With ecommerce, the entire world is your markets. You can sell to anybody anywhere.
2). Reduce Cost
No more expensive shop rents, employees’ salary, and other little expenses. Ecommerce can help you reduce cost and maximize profits.
3). Customization
Before businesses lose sales because their products do not meet customers’ taste.
Example: A customer walks into your fashion store sees a shirt he likes, but only to discover that the cloth is smaller than he wants.
In most cases, the customers walk out without buying, incurring loss to your business.
But because you now operate ecommerce, customers can make pre-order on your website stating the exact shapes, size and colour of shirts he wants and makes payment.
4). Always Open
No more time constraints in business as you can now run your business all day. Customers can shop your products 24 hours a day 7 days week from anywhere in the word.
5). Sell Anything
From physical to digital products and even services, you can sell anything with ecommerce.
Whether you want to sell shoes, online courses or offer web design services, ecommerce is the way to go.
6). Showcase More
One limitation you will face with owning a shop is the amount of space available.
You have plenty of products you want customers to see, but because you have limited space, it forces you to keep the remaining goods in the bag.
When you own ecommerce, you can showcase as many products as you have, bringing you more sales. Add as many products as you want to sell–your only restriction is your inventory.
7). Improved Delivery
Customers love fast delivery. When a customer buys on your website, it immediately sends the order details to the delivery channel for quick processing.
Also, don’t you like the fact that both you and the customers can track a product’s location during delivery? And if you sell digital products, the delivery is immediate.
8). Ship Anywhere
When you set up your shop, you can choose to offer free shipping or flat-rate shipping. Give customers the option of pickup, local delivery or shipping. Restrict options available based on customer location.
9). Easy to Find
Help customers find what they want by adding tags to describe a product. Add attributes like size so customers can search for items most relevant to them.
Let customers sort products by popularity, newness, rating, price or attribute to find the right fit.
Limitations of Ecommerce
As much as ecommerce seems rosy and appealing, it also has its own challenges you should know about.
1). Security Breaches
You have heard repeatedly that there is no 100% security. Ecommerce is not an exception.
Cyber-attacks have been a major problem since the internet. A minor error on your website, hackers can pull down your years of efforts.
You must have heard of websites being hacked, data (customer details) stolen, privacy leaked, credit card fraud and more.
But here is the advantage, it is more easy and quick to recover even if they hack your website than your physical shop broken into.
So, you don’t need to be afraid. All you need is to work with an excellent web designer.
2). Rapid Change
Ecommerce is rapid and ever changing. So, it’s expected you keep up with the pace.
You will face the challenge of integrating new technology with the existing one you are using. You must be open to analyze the current technology and develop a business plan on how it can help scale your business.
As earlier said, all you need do is invest in an excellent web designer.
3). Technology Know How
If you operate in countries with low access to education, you will struggle to succeed with ecommerce.
Customers will find it difficult to know how your business transactions operate. Most out of fear will not want to pay online. Though you can always offer pay on delivery.
Popular Ecommerce Platforms
What are the best ecommerce platforms? In this section, I will share with you popular platforms where you can start an ecommerce business.
1). WooCommerce
Woocommerce is no doubt the most popular among all. It’s an open-source platforms designed to work with WordPress. The good thing about Woocommerce is that it has no limits. You build and add as many products as you want.
Best for: Small businesses that want a cost effective yet powerful ecommerce solution.
2). Shopify
Shopify is popular among small and medium business owners. The interface is friendly and has lots of tons of features, social media integrations, tax calculating and lots of payment gateways.
Best for: Small businesses looking for an all-in-one ecommerce solution with no help of web designers.
3). Magento
Magento is full customizable ecommerce solution used by big companies. It has complete features and company will need to scale into a global business. Magento offers lots of add-ons for user to include more features not in its core.
Best for: Brands looking for a highly customizable ecommerce solution.
Most Popular Ecommerce Sites
1). Amazon
Founded by Jeff Bezos, according to Alexa, it currently ranks Amazon the 14th most popular website worldwide, and 3rd in the United States.
2). Taobao
Taobao was founded by Jack Ma. Globally, it’s ranked 11. In China, it’s ranked 6th.
3). Tmall
Jack Ma founded Tmall. Alexa ranked it as the 15th most popular website in the world and 1st in China.
4). AliExpress
Jack Ma founded AliExpress. It’s currently ranked 40th in the world and 23rd in the United States, according to Alexa.
5). eBay
eBay was founded by Pierre Omidyar. On Alexa, the ecommerce site ranks 33 in the world, and 9th in the US.
6). Flipkart
Binny Bansal and Sachin Bansal founded Flipkart. Alexa has it ranked 147 in the world and 7th in India.
7). Andtab
Andtab was founded by Oluboba Ayodeji. It’s ranks first among fashion classified marketplace in Africa.
Ecommerce Conclusion
Ecommerce is beyond a website or technology. It’s a fresh way of doing business. Be part of it for the profiting of your business.
Rather than fighting the recent change, ask, “How can I start an ecommerce business?”.
