E-COMMERCE
The process of buying and selling products and services over the Internet is known as e-commerce or electronic commerce. Products purchased and sold through e-commerce are tangible. E-commerce provides access to nearly every product and service conceivable. Smart gadgets like computers, tablets, smartphones, and others are used to perform e-commerce operations. It includes more than one participant, as well as the exchange of data or payment, to complete or process a transaction. There are four major market categories or segments in which e-commerce operates and conducts:
- Business-to-Business (B2B);
- Business-to-Consumer (B2C);
- Consumer-to-Consumer (C2C);
- Consumer-to-Business (C2B);
Business-to-Business (B2B):
It is the selling of products and services directly between businesses.
Business-to-Consumer (B2C):
It includes sales between businesses and their customers/consumers.
Consumer-to-Consumer (C2C):
It enables individuals to sell to one another, typically via a third-party site such as eBay.
Consumer-to-Business (C2B):
It allows individuals to sell to businesses, like an artist selling or licensing their artwork for corporate usage.
HOW TO CREATE AN E-COMMERCE BUSINESS:
The selling and purchasing of goods and services online are not as easy as they may appear. It necessitates extensive research about the products and services you want to sell, the target audience, the market, competition, and expected business costs. Upon ascertaining it, you need to choose a name and establish a legal structure, such as a company or corporation and get the required paperwork/documentation (licenses, taxpayer numbers, and permits in case they apply) done. Next, create an e-commerce site or have someone else do it for you. Then, design an e-commerce website with a payment gateway. A payment gateway is a technology that allows merchants to receive debit or credit card payments from clients. The term refers to physical card-reading devices found in physical (brick-and-mortar) retail stores and the payment processing portals found in online stores. There are also payment gateways that allow you to pay with cryptocurrencies like Bitcoin. To explain this further, consider an example of a small businessman who is an owner of a cosmetic shop. He can create a website to promote his clothing and other relevant items online and allow clients to pay with a credit card or through a payment processing service like PayPal.
E-COMMERCE HAS REVOLUTIONIZED BUSINESS:
Ecommerce has radically changed the way people shop for and use products and services. People are now turning to their computers and smart devices to place orders for goods that are delivered quickly to their homes. As a result, e-commerce has caused significant disruption in the retail landscape, compelling traditional retailers to change and upgrade the way they do business. Take the examples of Amazon and Walmart, which have gained immense popularity recently and are generating heaps of revenue through their e-commerce platforms. That’s not all, though. More and more individual sellers have increasingly engaged in e-commerce transactions through their websites. Digital marketplaces such as Etsy, eBay, and Facebook Marketplace act as exchanges where large numbers of buyers and sellers execute their business.
ADVANTAGES OF E-COMMERCE
There is a multitude of benefits associated with e-commerce over traditional retail, a few of which are below:
- EXTENSIVE AND WIDER PRODUCTS SELECTION:
Many stores sell a broader range of products online than they offer in their physical location counterparts (brick-and-mortar).
- AVAILABILITY AND CONVENIENCE:
E-commerce facilitates sellers and buyers by being available 24 hours a day, seven days a week. E-commerce websites can run round the clock. Resultantly, the number of orders received by the merchant increases. An “always open” store is more convenient from the customer’s perspective.
- REDUCED COSTS:
The reduced cost is one of the noteworthy benefits of e-commerce. Customers might benefit from some of these lowered costs in the form of decreased or discounted prices of the products.
- BEYOND GEOGRAPHICAL BOUNDARIES:
If you have a physical store, the geographic region you may serve is limited. But the entire world becomes your playground when you have an e-commerce website. Furthermore, the introduction of e-commerce on mobile devices has removed any remaining geographical restrictions.
- TRAVEL TIME AND COST ELIMINATION:
Before the advent of e-commerce, customers frequently traveled considerable distances to visit their chosen physical store. But with e-commerce, they can now virtually visit the same store with only a few mouse clicks.
- TARGETED AND RELEVANT COMMUNICATION:
An e-commerce merchant can get a lot of information about its customers by using the data that a customer supplies in the registration form and by placing cookies on the customer’s computer.
- AMPLE INFORMATION ABOUT PRODUCTS:
In a physical store, the amount of information that can be shown or displayed is limited. It’s difficult to train employees to respond to customers who need information from many product lines. But with e-commerce websites, the additional information easily becomes available to customers, most of which is provided by vendors and is free of cost to create or maintain.
DISADVANTAGES OF E-COMMERCE:
Although, e-commerce has a plethora of advantages for both sellers and buyers, it has some disadvantages as well including:
- While shopping online, the customer cannot simply ask an employee to demonstrate a particular product’s features in person. And although some websites offer the option to chat online with a staff member, this is not a common practice. Thus, e-commerce has limited customer service.
- E-commerce lacks instant gratification. For example, when a customer places an order online, he must wait for it to be delivered to his home or workplace. However, there are some online retailers that offer same-day delivery as a premium option for a limited number of products.
- While shopping online, the customer is unable to touch and handle the products in person until they are delivered Because online images do not often convey the full story about an item, e-commerce purchases might be unsatisfactory if the things obtained or received do not meet customer expectations. As an example, a piece of clothing may be made of tawdry fabric than its online image suggests.
THE FUTURE OF E-COMMERCE: Prospering and Thriving:
In retrospect, go back to the 2019 pandemic-hit world that confined over 7.5 billion people to their homes, depriving the employees of their jobs at physical workplaces and stores. From office meetings to seminars, classes, and even doctor’s visits, occurred virtually. One prime effect was on how we shopped. Traditional brick-and-mortar stores plunged into recession due to the Covid-induced restrictions and lockdowns. Covid-19 resulted in the mass closures of the physical retailers, referred to as the “Retail Apocalypse”. As per a report by Business Insider,“In 2020, more than 8,300 US stores closed, following 9,300 in 2019”. Hence, Covid-19 wreaked havoc on brick and mortar retailers. (Meisenzahl, News, 2021)
Contrary to this, the online shopping witnessed an acute rise during the pandemic. The COVID-19 pandemic made online orders soar since 2019. Take the example of “Amazon: The Online Giant” whose profits increased nearly 200% since the start of the pandemic. As per a New York Times study, “Amazon reported a near 200-percent rise in profits, accelerated by much of North America’s swift shift to exclusively online shopping. Amazon’s sales were US$96.1 billion, up 37% from 2019, with profits rising to a jaw-dropping US$6.3 billion”. The pandemic hasn’t only increased the company’s profits, it also sped up its expansion. Amazon expanded its infrastructure by 50% in 2020, adding more than 250,000 employees in the process. Amazon now employs more than one million workers throughout the world for the first time in the company’s history. (Takefman, 2021)
While the pandemic put physical shops to closure, Jeff Bezos, the founder of Amazon, had watched his net worth skyrocket. According to numbers from USA Today, Bezos’ net worth in March 2020 was US$113 billion. As of November, the 56-year-old CEO is valued at over US$203 billion. (Takefman, 2021)
The bottom line of the aforementioned discussion is to conclude that business is profitable only when it becomes pandemic-friendly, i.e., it does not deprive employees of their jobs by confining them to the physical stores nor does it disappoint the ever-ready-to-shop customers. During the pandemic and the post-pandemic times, online retailers have generated stupefying profits and gains which substantiates the notion that the future of e-commerce is flourishing, booming, and roaring.
Writer: Hira Ejaz