Types of e-commerce
Electronic commerce is the use of the Internet and the web to conduct business transactions, but when we focus on digitally enabled business transactions between organizations and individuals involving information systems under the control of the business, it takes the form of electronic commerce. Today ‘e’ is gaining momentum and most if not everything is becoming digitally enabled. Therefore, it becomes very important to clearly draw the line between the different types of trade or businesses integrated with the ‘e’ factor.
There are mainly five types of e-commerce models:
1. Business to consumer (B2C) – As its name indicates, it is the model that involves companies and consumers. This is the most common e-commerce segment. In this model, online businesses sell to individual consumers. When B2C started, it had a small market share, but after 1995 its growth was exponential. The basic concept behind this type is that online sellers and retailers can sell their products to the online consumer by using crisp data that is available through various online marketing tools. For example, an online pharmacy that provides free medical consultations and sells drugs to patients follows the B2C model.
2. Business to Business (B2B) – It is the largest form of e-commerce involving multi-billion dollar businesses. In this way, the buyers and sellers are business entities and do not involve an individual consumer. It is as if the manufacturer supplies goods to the retailer or wholesaler. For example, Dell sells computers and other related accessories online, but it doesn’t make all of those products. So, in order to sell those products, you first buy them from different businesses, i.e. the manufacturers of those products.
3. Consumer to Consumer (C2C) – Facilitates the online transaction of goods or services between two people. Although there is no visible middleman involved, the parties cannot carry out the transactions without the platform provided by the online market maker such as eBay.
4. Peer to Peer (P2P) – Although it is an e-commerce model, but it is more than that. It is a technology in itself that helps people directly share files and computing resources without going through a central web server. To use this, both parties must install the required software so that they can communicate on the common platform. This type of electronic commerce has a fairly low income generation since from the beginning it has been inclined towards free use, which is why it sometimes became entangled in cyber laws.
5. mobile commerce – Refers to the use of mobile devices to carry out transactions. Mobile device holders can contact each other and conduct business. Even web design and development companies optimize websites to display correctly on mobile devices.
There are other types of e-commerce business models as well, such as Business to Employee (B2E), Government to Business (G2B), and Government to Citizen (G2C), but in essence they are similar to the types mentioned above. Furthermore, these models do not need to be followed diligently in all types of online businesses. It may be the case that a company is using all the models or only one of them or some of them according to their needs.