What Is Electronic Commerce (E-commerce)?
Electronic commerce (e-commerce) refers to companies and individuals that buy and sell goods and services over the internet. E-commerce operates in different types of market segments and can be conducted over computers, tablets, smartphones, and other smart devices. Nearly every imaginable product and service is available through e-commerce transactions, including books, music, plane tickets, and financial services such as stock investing and online banking. As such, it is considered a very disruptive technology.
Key Takeaways
- E-commerce is the buying and selling of goods and services over the internet.
- It is conducted over computers, tablets, smartphones, and other smart devices.
- Almost anything can be purchased through e-commerce today, which makes e-commerce highly competitive.
- It can be a substitute for brick-and-mortar stores, though some businesses choose to maintain both.
- E-commerce operates in several market segments including business-to-business, business-to-consumer, consumer-to-consumer, and consumer-to-business.
Understanding E-commerce
As noted above, e-commerce is the process of buying and selling tangible products and services online. It involves more than one party along with the exchange of data or currency to process a transaction. It is part of the greater industry that is known as electronic business (e-business), which involves all of the processes required to run a company online. 1 2 Shopify. “Ecommerce.”
E-commerce has helped businesses (especially those with a narrow reach like small businesses) gain access to and establish a wider market presence by providing cheaper and more efficient distribution channels for their products or services. Target (TGT) supplemented its brick-and-mortar presence with an online store that allows customers to purchase everything from clothes and coffeemakers to toothpaste and action figures right from their homes.
Providing goods and services isn’t as easy as it may seem. It requires a lot of research about the products and services you wish to sell, the market, audience, competition, as well as expected business costs.
