E-Commerce: Meaning, Definition, Difference, Models

What is E-Commerce?

Electronic or E-commerce includes all forms of business transactions, such as the purchase of goods or services, undertaken through electronic means, such as telephones, televisions, computers, and the Internet.

In simple terms, e-commerce is selling of products on the net. It encompasses the use of technology, process of management practices that enhance organizational competitiveness through the strategic use of electronic information. Any process related to the core business activities of buying and selling of physical/electronic goods and services through an electronic medium falls in the domain of electronic commerce.

---

Definition of E-Commerce

Electronic Commerce (E-Commerce) is where business transactions take place via telecommunications networks, especially the Internet.

E. Turban

E-commerce describes the buying and selling of products, services, and information via computer networks, including the Internet.

Getuplearn.com

E-commerce, ecommerce, or electronic commerce is defined as the conduct of a financial transaction by electronic means.

IACSIT

---

Difference Between E-commerce and Traditional Commerce

The advantage of electronic commerce includes the ability of one site to offer a wider selection of titles than even the largest physical bookstore, can be more important than the conventional bookstore, namely the facility to browse. Major difference between traditional and electronic commerce are listed below:

Traditional Commerce	E-Commerce
Heavy dependency on information exchange from person to person.	Information sharing is made easy via electronic communication channels making little dependency on person to person information exchange.
Communication/ transaction are done in synchronous way. Manual intervention is required for each communication or transaction.	Communication or transaction can be done in asynchronous way. Electronics system automatically handles when to pass communication to required person or do the transactions.
It is difficult to establish and maintain standard practices in traditional commerce.	A uniform strategy can be easily established and maintain in e-commerce.
Communications of business depends upon individual skills.	In E-Commerce or Electronic Market, there is no human intervention.
Unavailability of a uniform platform, as traditional commerce depends heavily on personal communication.	An e-Commerce website provides the user a platform where all information is available at one place.
No uniform platform for information sharing, as it depends heavily on personal communication.	E-Commerce provides a universal platform to support commercial / business activities across the globe.

---

Types of E-Commerce Models

Based on many factors like who is seller and who is buyer, what is being sold or bought, where it is being sold or bought, and how they’re completing the transaction etc. an e-commerce business may have a different model. Basically, depending only on the parties involved in the transaction, there are four types of e-commerce models:

1. Business-to-Consumer (B2C)
2. Business-to-Business (B2B)
3. Consumer to Consumer (C2C)
4. Peer-to-Peer (P2P)

Business-to-Consumer (B2C)

This is the most widely used model of e-commerce. It involves a business house (a seller) selling its products or services through an online interface to an online buyer.

Some very popular websites like Flipkart, Amazon, etc. fall in this model as they are ones where a retailer sells directly to a consumer. The B2C model also includes services such as online banking, travel services, and health information.

Business-to-Business (B2B)

Business-to-business (B2B) model of e-commerce refers to a situation where a transaction occurs between a buyer and seller and both are business houses, i.e. the buyer in this case is not an end user. Rather, the buyer will use the product is some way to produce/sell his product.

Sometimes in the B2B model, business transactions may exist between virtual offices of different companies, neither of which may have any physical existence.

In such cases, business is conducted only through the Internet For example, www.amazon.com is an online bookstore selling books online of actually published by many publishers like Techmedia, O’Reilly, Premier Press etc. Similarly, wholesalers like subsidiaries of Alibaba and IndiaMART typically sell B2B.

Consumer to Consumer (C2C)

C2C model involves direct transaction between end consumers only. Here, a consumer sells directly to another consumer. There are many e-commerce websites built on this model, like Olx.com, eBay.com, Quicker.com and bazee.com which are common examples of websites that provide a consumer to advertise and sell his products online to another consumer.

This model of e-commerce is actually the modern and advanced version of the classified advertising section of a local newspaper or physically going to an auction site. C2C e-commerce is another convenient method for consumers to buy and sell their products without getting in their cars and driving to a store.

A consumer acting as seller may upload pictures of the product he wishes to sell along with some description of the product along with his contact details. Another consumer acting as buyer may visit the website, may like the product, and may contact the seller.

Peer-to-Peer (P2P)

Peer-to-peer (P2P) e-commerce communities can be seen as truly distributed online web applications in which peers or members communicate directly with one another to exchange some information, to distribute tasks among them, or execute transactions.

Such models can be implemented either on the top of a Peer to Peer network or using a conventional client-server platform. Person-to-person (Peer to Peer) online auction sites such as Quickr.com, eBay.com etc. and many business-to-business (B2B) services like some supply-chain-management networks are examples of P2P communities built on top of a client server computing architecture.

---

FAQ’s Section