E-commerce - The Future Of Trade
The word e-commerce is the abbreviation of Electronic Commerce
. It is also known as electronic marketing, and involves buying and selling of products and services through the means of an electronic system, such as, the Internet. In its simplest form, e-commerce performs the work of commerce electronically.With the widespread use of the Internet, the amount of trade carried electronically has grown to substantial levels. E-commerce is usually the sales aspect of e-business. It also contains exchange of data, which helps facilitate the payment and financing ways of business transactions.
Segments of E-commerce
E-commerce is not constrained to limited groups. It can be among many groups and hence, there are not one or two types of e-commerce, but plenty of them, such as, Business-to-Business (B2B), Business to consumer (B2C), Peer-to-Peer (P2P), Consumer to consumer (C2C) and m-commerce.
1. Business-to-Business (B2B): This is one of the biggest forms of e-commerce, which has a business turnover of trillions of dollars. As the name itself indicates, in B2B, both the buyers as well as the sellers are business entities. It doesn't include an individual consumer. In business to business, the manufacturer supplies goods to the wholesaler or to the retailer. For instance, say a leading computer giant sells computers and associated accessories on the Internet, but it doesn't manufacture all the products. Hence, in order to sell these products, it first buys them from various other businesses such as the manufacturers.
2. Business to Consumer (B2C): It is a type of e-commerce, which involves businesses and consumers. It is one of the most common segments of e-commerce. As you can make out from the name, here, online services sell their products or services to individual consumers. In this segment, marketers and online retailers can sell their products or services to online consumers with the help of a transparent data made available to consumers by them through the means of different online marketing techniques. This segment of e-commerce has grown exponentially since the mid-90s.
3. Peer-to-Peer (P2P): It is more than a segment of e-commerce; it is a technology in its own sense. In Peer to peer, people can directly share computer resources and computer files sans any central web server. The only requisite is both the sides need to install the required software to communicate on the same fence. Because of its free usage ability, cyber laws have grappled it.
4. Consumer-to-Consumer (C2C): In this, the online transaction of goods and services takes place between two people. Though it does not contain any visible intermediary, parties cannot carry out a transaction without a base provided by some or other online marketer.
5. M-Commerce: In this segment, mobile devices are used to conduct transactions. The mobile device holders contact each other and carry out their business transactions.
Apart from these, there are also various other segments of e-commerce such as Government to Business (G2B), Government to Citizen (G2C) and Business to Employee (B2E). However, all of these are almost very much similar to the above-mentioned segments in functioning.
Advantages of E-commerce
E-commerce provides huge advantages to business entities as well as consumers. Some of them are as follows:
Ability to do business 24x7 and 365 days a year: The systems of e-commerce operate 24 hours a day, 7 days a week and 365 days a year. People can log on to Internet at any point in time, and buy and sell anything just by a click of mouse. Hence, it provides tremendous exposure to any business.
Tap the world market: Internet is used globally, and hence, it is possible to do business with any person or business that has access to Internet. Through e-commerce, even small local businesses can market and sell their products at an international level.
Chance for reducing costs: The Internet has made shopping of products and services easier and cheaper. Through online research, people can recognize the original manufacturers of some of the goods, and can bypass wholesalers and obtain goods at a much lower price. As far as businesses are concerned, e-commerce helps business entities to reduce their costs related to processing, marketing, information, customer care, inventory management and others.
Limitations of E-Commerce
E-commerce also has its own inherent and technological limitations. Due to these limitations, many people still doubt the credibility of e-commerce and hence, refrain themselves from using this system which has revolutionized the way businesses are carried out. These include lack of security, delay in reaching of goods, troublesome and tedious refunding processes and so on.
However, considering the advantages of e-commerce, it has the potential to score over its limitations. As technology is an ever evolving process, there is no doubt that e-commerce is going to evolve itself for the better in the near future, and will offer even more benefits than it currently provides to both, business entities as well as consumers.
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