This exponentially, almost all major businesses are available
This paper will discuss about electronic commerce(EC) and different types of EC evaluating in-depth about each type with examples, challenges and solutions. Relationship between various models and businesses are analyzed.
Definition of Electronic Commerce (EC):
EC is the procedure in which organizations and consumers purchase and sell merchandise and services via an electronic medium. EC began in early 90s and has increased exponentially, almost all major businesses are available online today hence there is need for online presence. Almost all types of goods and services can be bought and sold online today. Most popular examples for EC companies are Amazon, Alibaba etc. where goods and services are available. The utilization of the web increased across the globe as it is open medium. Organizations set open doors for cost saving, high income, access to market, and enhancing services through direct access that encourages quick feedback. Customers today can easily access world market via virtual economy online and globalization encourages the international trade (Cudjoe, 2014).
In e-commerce business the attention is on digitally empowered transactions between businesses and individuals. EC incorporates trade among B2C i.e. business and consumers and in addition B2B i.e. business to business exchange. “Organizations utilize the Internet, extranets, or electronic information exchange (EDI) for EC.” (Smith, Unknown) Web based business is currently being utilized in a wide range of business, including manufacturing, retail, and service sector firms. EC has made businesses more dependable and productive which in turn makes EC essential for organizations to stay in global competition.
Below are some of the highlights of EC:
• It is accessible everywhere.
• Web norms are pursued as standard across the board.
• Expenses are decreased, and quality is increased.
• Advertising messages are personalized.
• The customers are included as participants. (Danish et.al., 2014)
Types of EC:
• Consumer to Consumer (C2C)
• Business to Business(B2B)
• Business to Consumer (B2C)
• Business to Government (B2G)
• Mobile Commerce (M Commerce)
Consumer to Consumer (C2C) Model:
In C2C exchanges by and large include items sold via classifieds. Items sold are frequently utilized or pre-owned. Retailers consider C2C to be critical, as the utilization of social media by customers has increased. C2C, is a business plan that encourages trade between private people. Regardless of products or services, this class of online business associates individuals to work with each other using applications like ‘OfferUp’, ‘Letgo’ etc. Most commonly used examples for C2C are eBay and Amazon, these sites also act as B2C (Rivera, 2018). C2C is anticipated to develop and grow in coming years as it is cost efficient; this implies that C2C limits the expense of utilizing intermediaries. This is oldest form of business model even before internet despite C2C boomed on internet (Cudjoe, 2014).
Usually a 3rd party website or application is involved in this type of business model where customers are allowed to post their products or services with a nominal fee or sometimes free, which in turn allows other buys to browse and interact with the seller. This gives advantage to both buyer and seller as they both have access to multiple buyers and sellers. The transactional price is low as sellers put their products on the online applications at lower price instead of renting an actual retail space like a shop or building. As sellers are directly interacting with customers the profit is high as no intermediaries are involved. Disadvantage of this model is the quality of services and goods is not guaranteed and this is also prone to frauds. There is always a risk of information collection like personal details, payment details, trade details etc. (Shandan et, al., 2012).
Business to Business (B2B) Model:
In this model of EC variety of inter-business transactions are included, B2B alludes to business that is led between organizations, as opposed to between an organization and individual customers (Cudjoe, 2014). B2B transactions involved in supply chain management as raw items are purchased and then final product is either sold to end customers (B2C) or other businesses (B2B). With regards to correspondence, B2B alludes to strategies by which representatives from various organizations can associate with each other, for example, through internet-based applications. This kind of correspondence between the representatives is B2B communication. Organization’s web pages enable other interested businesses to find out services and goods offered to start communication. Examples include software services provided by tech companies to banks, insurance firms, automobile industry etc. Similarly, companies providing raw goods like engines, paint etc. to automobile manufacturing companies.
This model needs high level and sophisticated planning in order to be efficient and successful business. B2B transactions depend on organization’s management and their ability to maintain relationship with their clients by communication before, during and after a business transaction. Advertisement also plays an important role in this type of EC. Several challenges in this model include effective communication, demonstration of quality, understanding the needs and specifications of the client, availability of updated technology. These challenges can be addressed with strong sales teams, demos and simulated reality presentations, client specific reach out and demos and keeping up with latest trends in technology makes a B2B company strong and profitable (Finn, 2018).
Business to Consumer (B2C) Model:
Any company or business that sells goods and services via internet to users directly is in B2C model. Amazon is again a best example for B2C, other applications like banking and payment applications are also a B2C model. This is model became immensely popular with the ascent of the web made a radical new B2C business as internet-based business started offering products and services over the web. Currently this model is threatening the old B2C model, i.e. visiting the stores for purchasing goods, recent examples include closure of many retail stores like Toys-R-Us across America.
These business face tough challenges as the range of options available to end user is literally unlimited, price competition, innovation and B2C of EC is not just confined to computers as smart phone and tablet computer usage increased. The business in B2C model can overcome challenges by re-orienting themselves by developing mobile phone and tablet friendly applications, keeping price at market competitive price by outsourcing production and services to cheaper locations, innovative advertisement campaign to capture ever changing consumer tastes and trends. The future of online transactions is digital currency so, B2C should be ready for this shift (Shah, 2017).
Business to Government (B2G) Model:
In this model an organization works with government agencies directly like bidding on public tender projects online. It can be termed as a variation of B2B broadly, here second business being a government. Challenges include slow pace of deals specially in military related procurements and changes in parameters for huge projects like building airports etc. Organizations can overcome challenges by proper planning and by leaving room for changes and improvements during initial stages.
Mobile Commerce (M-Commerce):
M-Commerce includes transaction made via a wireless device like mobile phone, tablet and smart-everything like smart TV, smart car etc. While M-commerce is a subset of EC, it will soon become one of the leading EC model as accessibility and affordability to smart phones with high speed internet is increasing among general population all over the world. As well as internet of things is rapidly expanding, who would have thought that one day a refrigerator could do grocery shopping door delivered for us.
Basic difference between EC and M-Commerce is that M-commerce is better at Reachability, Mobility, Continence, Location and Security (Forbes, 2018). As smart phones make life easier and simpler end users tend to shift towards mobile based transactions and businesses must re-caliber their business models to suit and cash this new trend. Several banking and payment businesses already have their much secure mobile applications like Zelle, Apple pay, Google pay etc.
Internet and latest technologies have enabled a range of benefits of EC to end users and businesses alike with easy access around the clock anywhere. It has helped small, big businesses and individuals alike in conducting their trade online. It also enables consumers to shop sitting at their home or anywhere with a device connected to internet. EC is continuously evolving into different spheres and it will see exponential growth as number of users with mobile internet is skyrocketing across the countries. The challenges posed can be solved with new technologies and government regulations.