Types of E-Commerce
E-commerce is the use of Internet and the web to transact business but when we focus on digitally enabled commercial transactions between and among organizations and individuals involving information systems under the control of the firm it takes the form of e-business. Nowadays, ‘e’ is gaining momentum and most of the things if not everything is getting digitally enabled. Thus, it becomes very important to clearly draw the line between different types of commerce or business integrated with the ‘e’ factor.
There are mainly five types of e-commerce models:
- Business to Consumer (B2C) – As the name suggests, it is the model involving businesses 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 share in the market but after 1995 its growth was exponential. The basic concept behind this type is that the online retailers and marketers can sell their products to the online consumer by using crystal clear data which is made available via various online marketing tools. E.g. An online pharmacy giving free medical consultation and selling medicines to patients is following B2C model.
- Business to Business (B2B) – It is the largest form of e-commerce involving business of trillions of dollars. In this form, the buyers and sellers are both business entities and do not involve an individual consumer. It is like the manufacturer supplying goods to the retailer or wholesaler. E.g. Dell sells computers and other related accessories online but it is does not manufacture all those products. So, in order to sell those products, it first purchases them from different businesses i.e. the manufacturers of those products.
- Consumer to Consumer (C2C) – It facilitates the online transaction of goods or services between two people. Though there is no visible intermediary involved but the parties cannot carry out the transactions without the platform which is provided by the online market maker such as eBay.
- Peer to Peer (P2P) – Though it is an e-commerce model but it is more than that. It is a technology in itself which helps people to directly share computer files and computer resources without having to go through a central web server. To use this, both sides need to install the required software so that they can communicate on the common platform. This type of e-commerce has quite low revenue generation as from the beginning it has been inclined to the free usage due to which it sometimes got entangled in cyber laws.
- m-Commerce – It refers to the use of mobile devices for conducting the transactions. The mobile device holders can contact each other and can conduct the business. Even the web design and development companies optimize the websites to be viewed correctly on mobile devices.
There are other types of e-commerce business models too like Business to Employee (B2E), Government to Business (G2B) and Government to Citizen (G2C) but in essence they are similar to the above mentioned types. Moreover, it is not necessary that these models are dedicatedly followed in all the online business types. It may be the case that a business is using all the models or only one of them or some of them as per its needs.