E-commerce: Definition, Examples, Types & Benefit

According to Statista, over two billion people globally bought at least one product or service online in 2020. This proves that E-commerce has become a favorable outlet for the buying and selling of goods and services. Let’s examine what E-commerce is and explore its advantages and disadvantages!

Definition of E-commerce

Though e-commerce is generally regarded to be just the trading of goods and services online, e-commerce is actually more than that as it involves economic activities and electronic payments along with the trading of goods and services.

E-commerce, also referred to as electronic commerce, is a type of business model in which business transactions are done over the world wide web or over an electronic medium.

E-commerce is not to be confused with e-business, as e-business involves businesses conducting their activities online but e-commerce involves business transactions between buyers and sellers over electronic media.

Currently, different types of goods and services are being regularly exchanged using the different types of e-commerce, with the majority of the world population currently preferring online services to offline services. This has led to e-commerce being termed a disruptive technology.

Examples of e-commerce include dropshipping, crowdfunding, electronic payment, online subscriptions, internet banking, online shopping, and digital transactions. For example, online shopping through Amazon or electronic payment systems like PayPal.

Types of E-commerce

There are four main types of e-commerce, they are:

• Business-to-Consumer (B2C)

• Business-to-Business (B2B)

• Consumer-to-Business (C2B)

• Consumer-to-Consumer (C2C)

E-commerce: Business-to-Consumer (B2C)

B2C is the most common e-commerce model due to the ability of e-commerce businesses to create a direct link to their products or services with consumers electronically. Business-to-consumer involves the direct business transaction between businesses and their consumers over electronic means. It is also considered the retail model of the four e-commerce models.

Examples of companies who practice the B2C e-commerce model include Facebook, Amazon, Walmart, Google, and Alibaba.

E-commerce: Business-to-Business (B2B)

B2B is an e-commerce model where businesses carry out business transactions with other businesses over an electronic means. This e-commerce model is generally appreciated within industries where high-end products or services are produced. These products or services are usually exchanged with other businesses which might then sell directly to consumers or use them in their manufacturing processes.

Business-to-Business e-commerce model examples can be seen in small businesses buying goods from the Amazon marketplace to resell to consumers.

E-commerce: Consumer-to-Business (C2B)

This is the least common e-commerce model, popular mostly among freelancers. This business model involves consumers exchanging their products and/or services directly with a business over an electronic means. Consumer-to-business e-commerce model is the opposite of the business-to-consumer model and it usually does not involve a middleman or a wholesaler.

Examples of the C2B model can be seen in an artist licensing his artwork to a business or social media influencers offering marketing services to brands.

E-commerce: Consumer-to-Consumer (C2C)