4.8 E-commerce

Introduction - features of e-commerce

• E-commerce: buying and selling of goods and services on the Internet.

• The rapid growth of e-commerce is a result of:

  • Global reach: Internet technology reaches across national boundaries and opens up global markets with potentially billions of consumers. Consumers now have access to product details sold by businesses beyond local/national boundaries.

  • Ubiquity: the access to markets and consumer access to business is available at all times and (virtually) all locations. Shopping can take place anywhere and customer convenience increased.

  • Interactivity: Internet allows for two-way communication between the business and the customer. The growth in the use of social media is further enhancing this.

  • Personalization: marketing messages can now be targeted at individual consumers based on their previous spending habits, tastes and interests.

  • Information richness: complex and detailed promotional messages can be delivered by Internet via video, audio and text messages.

  • Universal standards: ease of access to Internet for both businesses and customers owing to the existence of a cheap universal internet system.

Types of e-commerce

• Business to business (B2B): transactions conducted directly between a supplying a business and a purchasing business.

  • Examples:

    • An industrial pump manufacturer is attempting to market and sell its products to an oil and gas producer.

    • A commercial construction company is attempting to market and establish a contract to build out the office space for a law firm.

• Business to consumer (B2C): transactions conducted directly between a company and consumers who are the end-users of its products/services.

  • Example:

    • Amazon

• Consumer to consumer (C2C): business model based on e-commerce that creates a facility that allows consumers to trade with each other (sometimes known as customer to customer).

  • Examples:

    • Amazon Marketplace

    • eBay