At the end of this module you will be able to:

• Know the basics of e-commerce
• Weigh the advantages and disadvantages of e-commerce
• Recognise the main types of e-commerce
• Properly assess business opportunities

• E-commerce is the activity of buying and selling goods or services using the Internet, while m-commerce refers to those transactions done using mobile phones and similar devices.

• The terms e-commerce and m-commerce (or eCommerce and mCommerce respectively) are the result of clipping “e(lectronic)” and “m(obile)” and adding “commerce”. 

• Electronic commerce makes use of technologies such as Internet marketing, data collection and management, supply chain management, and specifically those that facilitate commercial transactions, such as Electronic Data Interchange (EDI) and Electronic Funds Transfer (EFT).

• EDI is the electronic transmission of business information using a standardised format to facilitate transactions without special arrangements. It also includes the exchange of documents such as invoices and data.

• EFT is the automatic exchange or transfer of funds from one account to another via electronic means, either within the same financial institution or across multiple ones.

Advantages:

• Being online enables transactions anywhere, at any time.

• Lowers operational costs, which can be used to improve the quality of service. 

• Simplifying our organisations makes starting and managing a business easier. 

• Quickens and simplifies transactions, enabling new windows of purchase.

• Facilitates finding and choosing desired products and comparing across brands without commuting and moving around physically.

• Eliminates the need for establishing a physical company and its related infrastructure.

Disadvantages:

• Not being there physically prevents customers from assessing product features such as relative weight and size, touch/texture and general feeling of product quality.

• Since its nature makes it susceptible to online fraud (scams, phishing…), e-commerce/m-commerce site users might be harbouring distrust concerning sites, services and payment gateways. 

These are the main types of e-commerce sorted by sender and receiver

• B2B (Business-to-Business)

• B2C (Business-to-Consumer)

• C2B (Consumer-to-Business)

• C2C (Consumer-to-Consumer)

BUSINESS TO BUSINESS (B2B)

A modality that can be either open to all interested parties or restricted to a number of delimited, pre-qualified entities (private electronic market).

Examples of businesses that trade with other businesses are consulting firms that solve problems for other companies or suppliers selling to retailers.

BUSINESS TO CONSUMER (B2C)

Also called direct-to-consumer, it is a model that includes online businesses selling directly to the general public. To do so, sites and apps tend to resemble catalogues and use shopping cart software.

In order to improve customers’ browsing and buying experience, the website/app should have a simple, clean and attractive design. Not everyone is skilled in IT or has enough time/energy to learn.

CONSUMER TO BUSINESS (C2B)

This modality consists of consumers creating value that businesses can make use of. Examples of it would be:

• Businesses posting a project proposal or necessity online. After reviewing it, interested individuals apply for the project and the most suitable offer is chosen. 

• Users including sponsored links in blogs, forums and social media profiles.
    > Sometimes, similar actions are not necessarily paid: e.g., users reviewing products online or posting suggestions for product development or modification. 

C2B help bring together consumers and businesses by giving them a platform to converge evenly.

CONSUMER TO CONSUMER (C2C)

This way of doing business entails customers doing business with each other, with no visible middlemen in the transaction process.

In this case, businesses act as providers of the environment in which the transaction takes place (usually charging a fee), which often takes the form of marketplaces (eBay, Facebook, Vinted) or Internet classifieds boards.

Another important aspect of this modality is C2C marketing: satisfied users generate – highly trusted – product reviews and recommendations for family and friends.

AN EVERCHANGING SCENARIO

This fast-paced development era requires agile entities that can provide customers with the services and products required promptly. 

Also, by using new technologies and approaches, companies are entering new markets: e.g., currently, user data collection and management is having a steadily growing prominence. 

Additionally, the appearance of these unexploited areas provides growth opportunities that, in turn, elicit the appearance of joint ventures to profit from them.

NEW SOURCES OF REVENUE

Currently, digital technologies are the basis of vital business systems, powering production, warehousing, payment, delivery and customer support among others.

These are not only supporting elements but also open a brand new world of opportunities for businesses to develop since the data obtained about customer behaviour can be leveraged into valuable knowledge.

Moreover, this information can be used to adapt systems to these trends on the go, enhancing business operations and decisions.

• E-commerce describes any transaction done on the Internet
• This modality switches physical shops for digital ones, which, though advantageous, also entails some disadvantages
• Adapting to businesses and consumers being either or both the buyer and seller is fundamental for e-commerce
• This new scenario and the management of user-produced data opens new, vast business opportunities