E- commerce definition

Electronic commerce is defined as the use of computer networks to complete business transactions.

E-commerce is the use of computer applications communicating over networks to enable buyers and sellers to trade. Examples includes amazon.com, jumia.co.ke, mydawa.co.ke,

 

Categories of e-commerce

Buying, selling and exchanging of information in e-commerce are classified in accordance with networks, buyers and sellers involved in the transaction. They include the following

1. Business to Business (B2B) model
2. Business to consumers (B2C) model
3. Consumers to consumers (C2C) model
4. Business to Government (B2G) model
5. Government to Government (G2G) model
6. Government to Citizen (G2C) model

 

• Business to Business (B2B) model

This type of ecommerce involves transactions between businesses over the internet or other networks. For example a  business transaction between manufactures and supplier or one between a wholesaler and retailer

Business to business is extranet based and is restricted to business associates/ partners.

Example include a small business buying good on Amazon.com and reselling to other customers.

 

• Business to consumers (B2C) model

This type of ecommerce includes internet-based transactions between online merchants or organizations and individual consumers.

Business to consumers is internet based and is not restricted on who can access it.

• Consumers to consumers (C2C) model

Consumers to consumers is internet-based transactions between consumers such as auction sites, jiji.co.ke, auctions in eBay and Facebook market place.

Consumers to consumers is internet based hence access is not restricted. Equally consumers to consumers is facilitated by electronic brokers.

 

• Business to Government (B2G) model

Business to Government is a variant of business to business model. Example include e-citizen platform. These websites are used by government to trade and exchange information with various business organizations. Such platforms are approved by the government to provide a medium to submit application forms to the government.

 

• Government to Government (G2G) model

Government uses B2G model website such as e-citizen website to approach business organizations. Such websites support actions, tenders and application submission facilities.

 

• Government to Citizen (G2C) model

Government uses government to citizen website to approach citizen in general. Such websites support auctions of motor vehicle, machinery or any other material. Government to citizen websites provides services such as registration for birth, marriage or death. Government to citizen websites help to reduce average time for fulfilling people’s requests for various government services.

 

Benefits of e-commerce to consumers

• E-commerce provides customers with a variety of choices especially for shopping purposes hence customers choice is unlimited
• E-commerce enables customers or consumers to interact globally hence create a sense of community.
• E-commerce enables customers to do transactions or shop without time limitations this is because it provides room for 24 hours operation.
• Through e-commerce consumers are able to get customized product and services that meet their tastes and preferences hence promotes customer satisfaction.

Benefits of e-commerce to businesses or organizations

• E-commerce lowers telecommunication costs because the internet is much cheaper than other means of telecommunication.
• E-commerce reduces cost for creating, processing, distributing and retrieving paper -based information. For example, introducing the e-procurement systems, the computer can cut the purchasing and administrating cost
• Through e-commerce a business can monitor inventory levels thus enhance good supply chain management
• Through e-commerce an organization is able to get immediate feedback from consumers thus enable corrective action to be undertaken.
• E-commerce gives small businesses to compete with large companies thus promote growth of industries.
• Organizations can be able to collect consumers data on their tastes and preferences which can help the business in making informed choices on the market trends and projections thus meeting consumers demands.

Disadvantages of E-commerce

• E-commerce’s uses internet where data security and reliability cannot be guaranteed hence risk of breaches of personal data is eminent.
• E-commerce needs specialized e-commerce and web servers in addition to servers which have a very high set up cost thus initial cost of setting up e-commerce site is expensive.
• It is difficult to interface of the internet or some e-commerce web pages hence need for experts to develop who may not be easily available.
• The slow development tools that are still being used with the internet hinders   e-commerce activities
• There is lack of touch of products when buying and can hinder decision making when making purchases of products that you need to touch to decide.
• Internet is expensive and in accessible to those in rural settings and that hinder access to e-commerce platforms.
• Users may not trust using a site they have never interacted with due to fear of being conned more especially for those used to buying items physically hence lead to resistance to use e-commerce.

 

Thanks for reading this article. Have a fruitful day, won’t you!!!