WHAT IS E-COMMERCE?
The basic meaning of e-commerce is the purchasing and selling of goods or services via networks like the Internet. The fact that all trades, contacts, and transactions take place online sets it apart from normal trading.
With e-commerce, clients may make purchases online or use services from the convenience of their homes, eliminating the need for face-to-face interaction or shop visits. They only need to choose the items they want and pay using debit or credit cards, net banking, or any other online payment, and the goods or services will be readily available for them to use immediately.
As the e-commerce industry grows, more and more features are being incorporated into the websites that serve as the exchange platform for online transactions, increasing client confidence and reducing the risk of fraud or scams.
DIFFERENT WAYS TO CONDUCT E-COMMERCE
Different ways or types of e-commerce are emerging with time, some of which are-
B2B (BUSINESS-TO-BUSINESS) COMMERCE: As the name implies, this form of e-commerce entails one enterprise providing its goods and services to other enterprises. For instance, companies that deal with the production and sale of clothing online obtain their raw materials, such as fabric, from other online textile companies.
B2C (business-to-consumer): e-commerce, in which the customer deals directly with the provider of the item or service, is the most widely used type currently accessible. For instance, online stores like Amazon, eBay, JustDial, and others list and sell goods and services to customers directly.
C2B (CONSUMER-TO-BUSINESS): Consumers submit their specifications for a particular good or service, and businesses respond by matching the needs and providing a price. The customer accepts the finest offer offered to them.
IndiaMart, Upwork, and other websites of similar sort are examples.
C2C (CONSUMER-TO-CONSUMER) COMMERCE: Consumers who are currently using or possessing a product offer it for sale on an online marketplace and other consumers who require it accept the price and pay them directly through that platform without the need for a middleman.
For instance, OLX, CarDekho, etc.
CHARACTERISTICS AND ADVANTAGES
Convenient and Time-Saving: E-Commerce allows customers to shop from the online store from the convenience of their homes providing the ease of shopping from anywhere and at any time, saving their time and cost of conveyance.
Wider Reach: Since e-commerce allows shopping for products and services from anywhere. It offers a wider reach as audiences around the world can access the online store.
Cost-Saving: Since an online store does not need any physical outlet, the cost of overheads and running is eliminated. This results in the company’s expenses being reduced, customers paying less, and profits increasing.
Personalized Buying Experience: Businesses recommend products fitting the needs of the customer based on the data collected from their activities on the internet, like search and browsing history. Tracking a consumer’s activity helps in a personalized shopping experience leading to more satisfaction.
Rapid Transactions: Transactions happen at a speedy rate on an online platform, as compared to visiting the store physically and making payments.
GROWTH OF E-COMMERCE IN THE RECENT YEARS: STATISTICS
- In 2021, it is anticipated that global e-commerce revenues would total $4.9 trillion. Source: eMarketer)
- E-commerce made up 19% of all retail sales globally in 2021, and by 2024, it is predicted that this percentage would rise to 21.8%. (Source: Statista)
- E-commerce sales in the US increased by 44% in 2020 to $861 billion. (Source: Digital Commerce 360)
- By 2021, it is anticipated that 72.9% of all e-commerce sales will be made on mobile devices, demonstrating the fast growth of mobile commerce. (Source: Statista)
- With projected net sales of $386 billion in 2020, Amazon will be the largest e-commerce store in the world. (Source: Statista)
- The top three e-commerce product categories in 2020 were electronics, apparel, and health and beauty items. (Source: Digital Commerce 360)
- E-commerce sales are anticipated to exceed $3.5 trillion in the Asia-Pacific area in 2021, with China accounting for the greatest portion. (Source: Aarki)
THREATS AND CHALLENGES
Cyber Threats: E-Commerce websites are prone to cyber attacks resulting in data breaches of many customers including their names, phone numbers, credit card info, etc. which makes them less safe for online transactions.
Shipping Time and Costs: Although online stores do not require one to run a brick-and-mortar outlet of products, however, the shipping of products in time requires a proper shipping system, which may present itself as a challenge, especially when the business is operating on a global level.
Establishing Trust: The e-commerce business runs on the trust of the customer which takes time to be established. Customers may be skeptical towards making purchasing products online and performing online transactions.
Returns and Refund Policies: Effective policies for returns and refunds must be present for the customer so that will be assured of assistance in case of any fraudulent activity which may take a large portion of time.
FUTURE TRENDS AND POSSIBILITIES
Increased use of mobile for e-commerce: Day by day, the number of consumers preferring shopping through their mobile phones has been increasing. Hence, businesses need to optimize their websites to a mobile-friendly version, with a UI as intuitive and easy to navigate as their web store.
Emerging Marketplaces: Besides establishing a store on their own website, many businesses are moving towards selling of their products and services through marketplaces that are already established and trusted by customers. This results in more people being aware of your products and hence more sales without excess marketing costs.
More Personalization: AI and analytics are helping businesses gain more information about their customers, through their behaviors, patterns, and interests, resulting in more personalized recommendations driving more sales.
Importance of sustainability: Customers nowadays prefer businesses that along with providing quality products are working towards saving the environment through ethical practices such as reducing the use of plastic for packaging.
Use of Social Media: Social Media is widely used for marketing purposes with strategies for algorithms to reach a wider section of the audience.
In conclusion, e-commerce is likely to be shaped by new technologies, changing consumer behaviors, and increasing globalization. By staying up-to-date with emerging trends and adapting their strategies accordingly, you can position yourself for long-term success in the e-commerce industry.