Gone are the days when online shopping was new and exciting. Since the start of the internet, the eCommerce industry has experienced tremendous growth from an unknown territory to a trillion-dollar industry, with companies like eBay and Amazon at the forefront of it all.
eCommerce statistics from KommandoTech reveal that worldwide digital buyers have reached a total of 1.92 billion people. It goes further to tell us that China is leading the way as the world’s largest eCommerce nation with about $740 billion in the eCommerce market.
New online stores keep popping up every day as more and more people begin embracing the convenience of online shopping. This has resulted in experts predicting that the current number of digital buyers should increase to 2.14 billion by 2021.
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Research shows that currently, eCommerce sales make up for 14.1% of all global retail sales, and that number should rise to 22% by 2023. Also, experts believe that eCommerce sales will make up for 95% of all transactions both offline and online by 2040.
But, what exactly is eCommerce? What benefits does it bring to the market, and why is it becoming the most preferred choice of shopping for most people? Read on to find out.
What Is eCommerce?
According to Oberlo, eCommerce refers to any form of business transaction conducted online. It involves the buying and selling of products and services online.
The most popular form of eCommerce is online shopping, but it is important to note that eCommerce is not just about online shopping for products alone. Any purchase made through the internet, be it hiring the services of a professional, internet banking, or buying products is considered eCommerce.
With the help of the internet and advanced tech, eCommerce is now widely accepted due to the level of convenience and security that it provides in carrying out our day to day business transactions. With eCommerce, buyers and sellers are now able to do a whole lot of work, without having to leave the comfort of their home.
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All eCommerce transactions are generally classified into four categories:
Business to Business (B2B)
In a B2B model of eCommerce, you will find that businesses are selling their products or services in bulk to other businesses. Often, the buyers in a B2B eCommerce model are the end-users, but you can also find that buyers in a B2B model sometimes resell to consumers.
A recent study by Google in 2014 found out that the millennial generation makes up nearly half of all B2B researchers in the world. A typical B2B store can be any of the following – office furniture supply companies, cloud and document hosting companies, software companies, etc.
Business to Consumer (B2C)
A B2C model of eCommerce involves businesses selling their products or services directly to consumers. It is the model with the biggest market. Think of any online purchase that you have ever made, and you have got yourself a B2C transaction.
Big eCommerce brands like Alibaba, Amazon and the rest carry out most of their transactions as B2C, but can also perform operations as B2B.
Consumer to Consumer (C2C)
C2C is a less popular eCommerce model compared to B2B and B2C models, but it is not relatively new.
A C2C model of eCommerce involves end-users selling their items (either used and unused) to fellow consumers on platforms specialized for C2C transactions. An excellent example of this type of platform is eBay.
Consumer to Business (C2B)
The C2B model of eCommerce involves individuals selling their products or services to businesses. Examples of the C2B model include freelance platforms like Fiverr and UpWork, influencer marketing, and affiliate marketing.
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Benefits of eCommerce
Global reach for businesses
A typical brick-and-mortar store will always be limited to its geographical location. In contrast, an eCommerce store provides businesses with the opportunity to reach out to customers all around the world via the internet.
Ability to scale-up fast
A typical brick-and-mortar store would require you to rent a new space or expand an existing one if you wish to scale up. Sometimes, you would also need to employ more hands to accommodate the incoming flow of orders.
With eCommerce, scaling up has little or nothing to do with your storage space. Also, the handling of orders can easily be automated using the required tools.
Low cost of operation
eCommerce businesses don’t have to worry about paying employees, hiring staff, renting an office space, or paying for utility bills.
Online stores, like a dropshipping business, can easily be set up and maintained with a meager budget and no staff.
Online businesses are always open 24/7. For customers, this is a huge plus because it allows them to make a purchase at any point in time without having to leave their comfort zone. This also provides a huge opportunity for marketers to make more sales because most traditional stores are never open 24/7.
Better customer tracking analytics
With the right tools like Google Analytics, marketers can easily track customer behavior to know what works and doesn’t. This will, in turn, lead to higher conversion and increased sales for online businesses.
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Exposure to more product information and reviews
eCommerce provides customers with more information about a product and offers a platform to view the reviews of others who have used the same product in the past. This way, customers can easily search through various platforms on the internet to get information about a product before making a purchase, thereby leading to a better buying decision.
With brick-and-mortar stores, on the other hand, a customer is only exposed to information provided by the salesperson in charge.
There is absolutely no doubt about how far eCommerce has come since its early days. Today, it has become a part of our everyday lives, and our preferred means of doing business.
The traditional way of doing business is outdated and limited. eCommerce provides a wide range of opportunities and cheaper means to reach out to potential customers around the globe.
From the low cost of operation to 24/7 services, eCommerce is taking over retail businesses.
With a degree in transport and traffic engineering, Miljkovic is a digital marketing expert, financial enthusiast, and entrepreneur extraordinaire. He takes joy in analyzing economic trends and translating them into engaging articles. He is a fitness and nutrition expert who loves spending his free time cooking for friends, playing basketball, and playing his favorite 90s tunes.