E-commerce: types, advantages and characteristics

We explain what electronic commerce is, what its characteristics and types are. Also, its advantages and disadvantages.

What is electronic commerce?

E-commerce, also known as e-commerce, is a type of commerce (buying and selling products or services) that takes place over the InternetThis method of buying and selling has expanded in recent times (due to mass access to the Internet) and allows buying and selling through websites, applications or social networks.

Online commerce It is usually agile and safeas long as the product and the user or company selling it are recognized or trustworthy. One of the main advantages of this modality is that the user can buy products from anywhere in the world, without having to go to a physical store, and receive their purchases at home or at a delivery point agreed with the seller.

E-commerce is considered to continue in constant growth and covers more and more sectors, including textiles, food, services, and IT, among many others.

See also: International Trade

Features of e-commerce

Some of the characteristics of electronic commerce are:

• It occurs in a virtual space. Online commerce is carried out through virtual platforms, which are accessed through the Internet, so the company or private seller does not need a sales room in which to display the products. This means a reduction in costs, as there are no room or rental expenses. For their part, many brands usually have a physical store and also offer their products online.
• It allows the purchase and sale of different types of products and services. Through the Internet, customers can access a wide range of products and services, such as food, books, household appliances, cosmetics, clothing, furniture and tableware. However, there are some goods (generally the most expensive ones, such as a vehicle or property) that customers usually learn about through the Internet, but then make the purchase in person.
• It adapts to a diverse type of clientsThe number of people who make purchases online is increasing, so e-commerce reaches a large percentage of the population, especially people who are fluent in the Internet.
• It is agile and comfortableWith e-commerce, the customer does not need to travel because the product can be purchased and paid for online and then received by mail at home. This allows for quick and convenient purchases.
• Use customer contact channelsAlthough e-commerce does not require physical sellers, it must have a means or channel of communication so that the customer can ask the seller questions. This contact can take place through the website, email or by telephone.
• Accept multiple payment methodsE-commerce allows customers to pay for their purchases using various payment methods such as bank transfer, credit card and debit card. In many cases, it is not possible to pay for the purchase in cash.
• Allows you to extend geographical and time limitsSince electronic network connectivity is available at home, in the office and on mobile phones, purchases can be made from anywhere and at any time. This allows the seller to attract customers from different geographical locations.
• It involves a risk of deception. Customers can become victims of scams when the merchant is not known, so it is important to conduct research before making an electronic purchase. In some cases, it happens that the product is different from the one shown in the photos or that the purchased product is never received. Additionally, there is a risk of purchases being made with stolen credit cards.

Origin of electronic commerce

The beginnings of electronic commerce date back to early 90swhen the Internet began to become widespread and could be used as a commercial platform.

One of the pioneers in creating an electronic commerce platform was Jeff Bezos, who founded the company in 1994 in Seattle. amazon from which he marketed books to all parts of the world. Amazon quickly became a success by changing the consumption patterns of the population and today sells online both books and sporting goods, household appliances, clothing and many other products.

Another platform that innovated in e-commerce in the mid-nineties was E-bay. This website emerged in 1995 as an auction and sales platform and is currently available in a large number of countries around the world.

From 2000 onwards more platforms began to emerge which incorporated e-commerce between consumers, and also between companies and customers, such as Alibaba and Mercado Libre. These platforms facilitate the purchase and sale of new and used products.

With the development of this type of commerce, both large companies and SMEs, local businesses and entrepreneurs began to get involved in this form of sales. Currently, a large portion of the population consumes through websites or social networks, which allows sellers to deliver their goods or services to customers around the world.

Types of e-commerce

Depending on the type of commercial link that exists between the actors, electronic commerce can be:

• B2B e-commerce. It is the type of trade that occurs virtually between two companies and does not involve individual customers. For example: A company that buys supplies from another.
• B2C e-commerce. This is the type of commerce in which a customer obtains a good or service offered by a certain company. For example: A user who buys a household appliance in the online store of a multinational company.
• B2E e-commerce. It is the type of trade that occurs between a company and its employees. For example: A company that offers discounts on certain products to its employees.
• C2C e-commerce. This is the type of commerce that occurs when a user no longer uses a product and sells it to others through virtual platforms. For example: A user of a social network sells a piece of furniture that he no longer uses through this platform.
• C2B eCommerce. It is the type of commerce in which a user offers a service or good to a company. For example: A user of a social network offers to give visibility to a brand on their networks.
• B2G eCommerce. It is the type of commerce that occurs between a company and a public government agency. For example: An agency that designs the website of a public body.
• G2C e-commerce. This is the type of commerce that takes place between the government and private users. For example: A citizen who pays his taxes through the website of the tax collection agency.

Advantages of e-commerce

Some of the main advantages of e-commerce are:

• It is another sales channel.
• It allows you to acquire goods or services from any geographical point.
• It is agile and dynamic.
• Reduce costs.
• Allows you to sell and buy at any time.
• Allows buying and selling internationally.
• Allows business expansion.
• It saves time.
• It involves a low initial investment in infrastructure.

Disadvantages of e-commerce

Some of the main disadvantages of e-commerce are:

• There is greater competition.
• Includes shipping and logistics costs.
• It involves the development of a website or web platform.
• It can create a lack of trust in customers.
• You cannot see or try the product before purchasing.
• You can fall into deception or scams.

Continue with: Open economy

References:

• “What is e-commerce?” at ESERP.
• “Our history” on Ebay.
• “Types of e-commerce” in Tienda Nube.
• “Electronic commerce and the international insertion of Latin America and the Caribbean” at the Inter-American Development Bank.
• “What is e-commerce?” at Visa.