E-commerce – Definition, Benefits, Challenges


E-commerce is the practice of buying or selling, transfer of funds over the network of electronic network via Internet. The terms e-commerce and e-business are often used interchangeably. The term e-tail is also sometimes used in reference to the transactional processes that make up online retail shopping.

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Nearly every imaginable product and service is available through E-commerce transactions, including books, music, plane tickets, and financial services such as stock investing and online banking. As such, it is considered a very disruptive technology. E-commerce operates in several market segments including business-to-business, business-to-consumer, consumer-to-consumer, and consumer-to-business.

Amazon is a behemoth in the ecommerce space. In fact, it is the world’s largest online retailer and continues to grow. As such, it is a huge disrupter in the retail industry, forcing some major retailers to rethink their strategies and shift their focus.

WTO | Electronic commerce An ecommerce company can sell to customers (B2C), businesses (B2B), or agencies such as the government (B2G). Ecommerce can also be performed by customers who sell to business (C2B), other customers (C2C), or governments (C2G).

There are five essential categories of E-commerce:

  • Business to Business (B2B): B2B is when businesses sell to other businesses. This is typical of stationery stores who sell office equipment in bulk to businesses. Normally B2B companies provide a discounted rate per unit if customers buy in bulk which it is great motivation for offices to avail of.
  • Business to Consumer (B2C): B2C is the most commonly thought of business model where merchants sell to consumers who buy a small amount of produce. A familiar example of the B2C model would be supermarkets where consumers buy their shopping weekly but they wouldn’t normally bulk buy anything.
  • Business to Government (B2G)
  • Consumer to Business (C2B)
  • Consumer to Consumer (C2C): C2C is a relatively new business model where consumers who previously bought something seek to resell this item to another consumer. Through marketplaces like eBay and Craigslist, this can be easy and quite lucrative for selling items that you no longer have a use for.

Some other Forms of E-commerce business are:

  • Affiliate marketing business
  • Google AdWords marketing
  • Online auction selling
  • Web marketing

Benefits of E-commerce

E-comm plays an important role in modern life because of its great advantages and benefits:

1. Location

With ecommerce, consumers can make purchases anywhere without stepping foot out the door, the goods will be delivered to your door. At the same time, sellers do not need to open a brick-and-mortar store to display their products and still reach out to customers globally. All you need is a smartphone or computer with an internet connection.

2. No Timings

Unlike traditional stores are only open from 8 am to 10 pm, with e-comm, consumers can shop at any time they feel convenient. This also helps the seller to increase the number of customers.

3. Savings

To start online selling, you only have to spend low capital and save on rental costs. The price comparisons between similar spaces and products can be pretty easy, making it pocket friendly for both seller as well as buyer.

4. Brand Recognition

Finally (and this is one of the biggest benefits of ecommerce businesses), you get to build your own brand. The brand can become something that really resonates with people. This is a major advantage you have going the ecommerce route over the drop shipping or the Amazon FBA route.

5. Targeted marketing

With access to such a wealth of customer data and an opportunity to keep an eye on customer buying habits as well as the emerging industry trends, eCommerce businesses can stay agile and shape their marketing efforts to provide a better-tailored experience and find more new customers. Just consider for a moment that you have a chance to address thousands of your customers by their first name; that is something already.

Challenges of E-commerce

In addition to the benefits listed above, we can not deny the challenges of ecommerce:

1. Lack of Trust

Different from traditional stores where customers can directly choose before buying, for e-commerce, they often worry about the prestige and quality of products. Therefore, sellers need to focus on building customer trust for their products.

2. Competition

It is quite late to start an import electronics company at the present time because this field is relatively saturated. Large companies with long experience and great economic potential are reliable competitors. So, to compete in this, you have to keep up with technology, trends, as well as make a stand out in the market.

3. Technicalities

People who are just starting out in e-commerce often don’t have IT expertise. However, technology is an extremely important factor, determining the success of e-comm. Therefore, seeking support from companies that specialize in providing ecommerce web development and construction services is the best solution for your store.


E-commerce is just one part of running an ebusiness. While the latter involves the entire process of running a business online, ecommerce simply refers to the sale of goods and services via the internet.