Ecommerce is a term used for selling and buying products and services over the internet platform. It also referred to as electronic commerce or internet commerce. The first commercial transaction over the internet was made in the year 1994.
Since then, we have come a long way. Nowadays, you name anything or any service that you can’t obtain using the internet.
Ecommerce businesses deal with selling and buy physical goods. For example, you can order your next week’s grocery using Amazon App grocery service, buy insurance, order food, find people to marry, order house cleaning services, find a plumber, buy air or rail tickets. Book movie tickets, and you can also buy digital goods like eBooks. Music, movies, videos, pictures, etc.
In 2019, the percentage of e-commerce transaction is approximately 13.7%, and it is expected that the total percentage of online retail transactions would be 95% by the year 2040.
That means in future almost all the business transaction, whether small or big, will take place online. Therefore, if you are planning to start your own business, then don’t make a mistake to neglect your e-commerce business.
Even if you are in business for a long time, now is the time when you should take your business to another level by taking your business online.
Therefore, you need to learn about different features of the e-commerce business as well as about the different types of e-commerce businesses. There are different types of e-commerce businesses those can be classified based on products and services sold by the e-commerce businesses and based on parties involved in the e-commerce business transactions and also based on the platform used for conducting e-commerce business transactions.
In this article, you will learn about the different types of e-commerce businesses
- Based on parties involved in the e-commerce business.
- Based on merchants sold:
- Based on Platform:
This will help you to establish a better understanding of the e-commerce business.
Types of eCommerce Based on Parties involved in Ecommerce
#1. Business to business (B2B):
The meaning of business to business e-commerce business is clear from its name itself. In a Business, to business (B2B) e-commerce business, the transaction takes place between two businesses. Where a business sells the products or services to another business.
This type of e-commerce business transaction takes place to reduce the business overhead on one business. Take the example of Blake envelopes. This website of this B2B eCommerce business provides you services to design envelopes for your business.
On their website, you will find products classified based on color, style, range, pack size, and types. It is considered one of the best business to business (B2B) website that provides you product that you didn’t think was exciting.
#2. Business to Consumer (B2C):
One of the most popular examples of B2C eCommerce business is Amazon.com, where the company sells products through website and app directly to the end consumers.
#3. Consumer to Consumer eCommerce business:
In this type of eCommerce business, both parties included in a business transaction are consumers which means a consumer is the seller of a product or service, and another consumer is the buyer.
The most famous example of this type of eCommerce business is OLX. To sell a product on OLX platform one is required to make an account on the app or website and post the details like the price of the product, features of the product, and pictures of the product, etc.
Along with the contact details so that the people who want to buy that product can reach you. People can negotiate the price of the product in-person or over the phone and in this way can sell products.
#4. Consumer to Business (C2B):
This type of eCommerce business is the opposite of business to consumer (B2C) type of eCommerce business. In this business, consumers develop products and sell them to businesses or provide their services to businesses. Businesses pay to consumers for their services and products.
This is an example of an innovative type of eCommerce business. Let us understand with the help of a few examples that you might also come across or you might also have participated in.
How often do you read the reviews of a product before you buy it? And how often have you reviewed the product that you have bought online?
There might be a huge difference between the number of both answers. Companies know that people read reviews before they buy products. Therefore, they pay people like you and me to write positive reviews about their product and to give a good rating.
This helps them in the sales of their products and people who write reviews earn money for their services. Similarly, many companies give their new products to people and ask them to provide feedback after using those products in exchange for money or rewards.
#5. Government to Business (G2B):
This type of e-commerce business is where one party involved in the business transaction is government or official authority, and another party involved in the business transaction is business or enterprises.
G2B business takes place when a business uses the products and services sold by the government and pays for them. For example, online businesses are required to pay internet tax for using the internet to sell goods and services and to run their business.
#6. Business to Government (B2G):
This type of eCommerce business takes place when a government entity uses the products or services of a business. This type of business transactions is quite common. For example, when a government entity uses the online platform to promote its cause.
The government uses a popular platform like Facebook, Instagram or Twitter to promote their cause and to reach public or when a government hires a web designer to design their official website or when the government uses internet services provided by a business to run their day to day work.
#7. Consumer to Government (C2G):
This type of eCommerce business takes place between consumer and government where the consumer provides products and services developed by them to the government. We all participate in this type of business transaction in our day to day life.
For example, you are in a consumer to government e-commerce business when you pay income tax or pay for traffic ticket or pay for property tax, etc.
Types of eCommerce business based on what they sell
#1. Retail Stores that sell physical products:
This is the most common type of eCommerce business and was the first type of eCommerce business ever started. The first product sold in 1994 was also a physical product.
These online stores sell products like apparels, cosmetics, electronic stuff, footwears, books, etc. Almost all the products that you can buy from a physical store can be bought from an online store.
There are a few online stores like Amazon, eBay, Flipkart which sells variety of products and there are stores which sell unique products like H&M is a leading brand that sells fashion clothes, Nykaa is an online Indian e-commerce store which sells products related to cosmetic and fashion and there are several examples of stores which sell unique products.
#2. e-commerce stores which sell services:
This type of eCommerce business has become popular recently and growing at a very fast pace. Until recently, no one ever thought that services could also be bought and sold online. You can get online medical consultant, online classes, educators, dietician, trainers, freelancers, and many more such services.
Different ways are using which you can use an online service. For example, if you buy an online course then you get login details using which you can access all the study material related to the course and if you buy online consultation then you pay for each session with the doctor and you use their service by meeting them in person or by getting consultation over phone, and a recent services that have become popular is that you can even book your beautician appointment online and can use their service at the comfort of home and you can get services like house cleaner, plumber, electrician, and even helper.
This type of eCommerce business is growing by leap and bounds. You just to identify what people need and develop a platform to provide that service.
#3. A retail e-commerce business which sells digital products.
This type of eCommerce business is a true form of eCommerce business. The goods sold in this type of e-commerce business are called “e-goods.” These goods can only be bought on a digital platform and can also only be used on a digital device.
A few decades back people were not even aware of this term, and nowadays, it has become part of our lives. One quality which sets this business apart from all other types of business is that the e-goods sold in this type of business can’t be sold in a physical store.
E-goods can only be sold on a digital platform. The example of e goods are eBooks, online courses, digital pictures, graphics, software, operating system, and virtual goods, etc. for example, amazon sells eBooks and platform like Amazon Prime, and Netflix sells entertainment material over digital platforms.
Types of eCommerce based on e-commerce platform
Now let us learn about the e-commerce businesses based on the platforms they are performed. Setting up a business on Facebook and Instagram like the social platform, is a fast-growing segment of the E-Commerce world.
From its name, this type of E-Commerce business quite looks like a brick and mortar storefront except it keeps the pictures of goods rather than the physical goods.
Moreover, a businessman runs his business using the Internet. However, they are required to keep the things they sell and store them in the warehouse until they are sold. An example of this type of e-commerce business is the businesses ran by housewives to sell household products, apparels, accessories, etc.
Using platforms like WhatsApp, Facebook’s Messenger, and other similar platforms. They create a group and add people who are interested in buying the goods that they have to offer and post the pictures of products with their prices on regular basis, and the people who want to purchase those products can place order privately or in the group itself and like other E-Commerce businesses products are shipped to the addresses provided by the customers using the shipping services.
This type of e-commerce business is quite popular among small businesspeople. They offer products too small group of people and make a small profit. Because of this reason, people run this type of e-commerce business as a side business which can give them an extra income.
Based on the platform where people run their businesses, e-Commerce businesses can be named differently. For example, E-Commerce business which sells products using the Facebook platform can be referred to as f-commerce and e-commerce business which is run using a mobile phone can be referred to as m-commerce.
Even though these are not very popular terms in the business world at present, but these terms are becoming popular with the increasing number of transactions on these platforms and lower cost of setting up a business.
Another reason behind the popularity of this type of e-commerce business is that people spend most of their times on social media, and it has become a great platform to reach them and to influence them.
Because of this reason, many established brands are also taking their business to these platforms to attract more and more customers and to expand their businesses without much expenditure.
E-commerce businesses are the booming trend in the business world. If you are an old player in the business world or you are just starting to work on your innovative business idea. Don’t forget to spend duly time over how to take your business online and reach a wider audience.
I hope this article will have helped you to learn about the different types of e-commerce businesses. You can choose a type which suits your business and the products and services that you are offering.