E-commerce (Meaning and Explanation)

We explain what e-commerce or electronic commerce is and its characteristics. In addition, we tell you how the internet revolutionized commerce.

What is the e-commerce?

Electronic commerce, sometimes called e-commerce (from English electronic commerce), consists of the purchase and sale of goods and services through web pages or online digital platforms such as social networks and applications for smartphone. It is one of the economic activities with the greatest impact in the entire world since the popularization of the Internet in the mid-1990s.

Originally, the term e-commerce (written in italics as it is an anglicism) was used for the exchange of data electronically for commercial purposes, but currently also covers the exchange of goods and services through digital means, especially those that link the banking system. traditional (bank accounts, credit and debit cards) with new digital platforms and methodologies (applications, payments through QR code, among others).

The success of electronic commerce in the world has been immensely recognized. In 2020, some 4.2 trillion dollars were invoiced through media e-commerceand that trend is considered on the rise. In Latin America alone, electronic commerce showed a growth of 36.7% in that year. This new commercial reality has had a significant impact on the advertising world and even on everyday reality.

Features of the e-commerce

Broadly speaking, electronic commerce is characterized by the following:

Involves the buying and selling of goods and services, through computer systems and electronic devices connected to the internet. This purchase and sale covers both physical goods and digital goods.
It can be done retail or wholesale and can be adapted to different audiences, environments and needs.
Use email and other forms of online advertising far above traditional advertising media.
Allows customer mobility and internationalization of transactions in a simple and efficient way. In addition, it expands shopping hours to 24 hours a day.
The term is also used e-commerce as a generic name for the web pages through which a store or a company offers its products to the public online whether you also sell them in a physical store, or not.

The internet revolution in commerce

The invention of the internet brought about a major change in almost every area of contemporary life, but its impact on commerce was particularly great. Initially, companies took advantage of the possibility of mass communication of email to resume a practice that in many places had fallen into disuse: catalog sales. The catalog was sent by email, or a link to the online catalog, and the customer could purchase through a phone call or postal mail.

Types of e-commerce

There are different ways to classify the e-commerce. For example, if we look at the type of product offered, we can distinguish between service platforms (digital or not), platforms for physical goods and platforms for digital goods (mostly software).

However, the most useful way to organize electronic commerce is by considering the type of organization or entity that participates in its processes or transactions. In that case we can talk about:

Business to business (B2B). A “business-to-business” model involves transactions between companies or businesses connected through the network.
Business to consumer (B2C). A “business-to-customer” model involves transactions between a company or business and its clientele, usually through official sales portals.
Consumer to business (C2B). A “customer to business” model involves transactions originated in the interest of the customer, who comes to the company to satisfy a need.
Consumer to consumer (C2C). A “client-to-client” model involves transactions between two individuals whose relationship can be facilitated by the service provider company, or direct without involving intermediaries.

Advantages and disadvantages of e-commerce

Ecommerce advantages disadvantages — He *e-commerce* allows operations to be carried out from any geographical location.

Advantages and disadvantages of electronic commerce include:

Advantages of e-commerce	Disadvantages of e-commerce
Greater margin of supply and therefore greater opportunities for the consumer to obtain what they want at an acceptable cost.	It requires an audience with minimal digital education and stable internet access, which can be difficult in certain regions.
Convenience in the acquisition of goods by the consumer, who does not have to leave home or who buys from their smartphone.	It requires traditional companies to invest in web platforms and in jobs that did not exist before (such as community manager and content creator).
It allows direct communication between the clientele and the company, and facilitates new marketing strategies.	It can favor large electronic sales chains over small local businesses.
It reduces operating costs for all parties involved and reduces the time spent on the transaction.
Facilitates access to information by everyone involved.
Allows you to carry out operations from any geographical location.

Examples of e-commerce

Some of the best-known platforms e-commerce in the world they are:

Amazon.com. It is an American retail sales and cloud computing services company, founded in 1994 by Jeff Bezos. It has more than a million employees worldwide and is considered one of the pioneers of the online commercial area.
eBay. It is an auction and electronic commerce portal founded in 1995 by Pierre Omidyar, considered among the pioneers of the e-commerce. With a worldwide operating area and more than 13,300 employees, it is a mandatory reference in the area.
MercadoLibre. It is a multinational company of Argentine origin, founded in 1999 by Marcos Galperin and with operations headquarters in almost all of Latin America. It is dedicated to mediating between online sellers and buyers, to whom it offers its own credit and transaction system called MercadoPago. It is a good example of marketplace digital.
PayPal. It is an American company with global reach that offers its users an electronic payment and money transfer system. With a PayPal account, Internet users can buy goods and services, receive payments and make donations, all without the need for a bank or physical money.

What is a marketplace?

ecommerce marketplace — A *marketplace* It is not dedicated exclusively to a brand or a company.

It is known as marketplace (in English: “market”) to a platform e-commerce that houses a set of different sellers, like a catalog or online shopping center. The marketplaces They stand out from the stores on-line in that they are not dedicated exclusively to a brand or a company, but rather they give the user the possibility, precisely, of feeling in a digital market. Payments and shipments made through a marketplace They usually charge intermediation commissions.

What is needed to create a e-commerce?

To create a e-commerce required:

Create an identity. The first step is to choose the name of our e-commerce, design a logo and purchase a domain (URL address). Then we must hire a hostingthat is, a file storage service to house the contents of the online store. From these four elements, an image can be created and begin to “exist” on the internet.
Establish a content management system (QMS). In order to manage the contents of the store on-lineit takes a Content Management System (CMS), that is, a digital tool that allows you to communicate with the hosting and implement a web design, that is, organize and build the online store. A web design specialist is usually hired to obtain a portal that is functional and visually attractive at the same time.
Shape the e-commerce. Once the templates and store formats are made on-linewe must upload photographs of our products, descriptive texts and everything else that is needed so that the customer can find their way around the store and know what they can buy and what options are available to them. Originality and creativity will be great allies at this stage.
Establish payment methods. Since the idea of the store is to sell, the site will need to offer one or more payment methods to carry out online transactions. The more and more diverse options a virtual business has, the more attractive it will be for its clientele. It is advisable to explore the different intermediary options in this regard, since many charge commissions and are governed by particular rules.
Design a marketing strategy. Just like companies in the physical world, a e-commerce You need to make yourself known to attract your potential clientele, and there are many ways to do it on the Internet. The ideal would be to define an informed marketing strategy and have the help of professionals, in order to take advantage of the resources in the best possible way and capture the attention of the largest number of users.