Electronic commerce and electronic business (E-Commerce and E-Business) are the two modes that shifted from traditional business practices to quick and easy online E-Business transactions. The shift toward online transactions has given a whole new dimension to businesses. Although these terms are used interchangeably, there is a difference between E-Commerce and E-Business. In this article, we have explained the meaning of these two terms and highlighted the differences between E-Commerce and E-Business.
Did you know? Amazon is the largest E-Commerce company in the world, with a net worth of $1136.94 Billion as of July 2022.
E-Commerce vs E-Business
E-Commerce and E-Business are two different terms with different meanings. While E-Business has a broader sense and covers all business activities done through electronic mode, E-Commerce is used for online transactions or buying or selling goods and services via the web. For more clarity, we have explained both these terms:
What is E-Commerce?
The transactions you perform in your day-to-day life using the internet on your smartphones or computers constitute E-Commerce. For example, buying and selling goods and services from online shopping sites, online ticket booking, online payment, etc., are included in E-Commerce activities. Some common E-Commerce sites are Amazon, Flipkart, Myntra, and more.
In E-Commerce, Business to Consumer (B2C) is the most relevant business model. The Business to Consumer (B2C) model of E-Commerce covers the following transactions:
1. Direct selling: Direct selling is when the companies directly sell their products to the end consumer through their website.
2. Online intermediaries: These companies provide an online platform to bring together the consumers and the sellers. Ola, Uber, and Swiggy are some examples of online intermediaries.
3. Advertising: Consumers give information about products and services through websites. Consumers are targeted through these advertisements.
4. Community-based model: In this model, companies make money from targeting consumers by displaying ads on their social media pages per their area of interest, geographical location and other factors.
5. Fee-based model: The companies provide entertainment shows, web series, movies and information on online platforms to the consumers for fee or subscription charges.
Also Read: What are the Types of E-Commerce
What is E-Business?
E-Business is a wider term as compared to E-Commerce. E-Commerce is a subset of E-Business. E-Business includes all business activities conducted through the web or the internet. Online educational platforms, supply chain management, e-mail marketing, buying and selling goods and services, online gaming sites, monetary transactions, etc., are E-Businesses.
To put it simply, if you have a business and have an online presence such that you can sell your goods or services through a website, procure raw materials online, manage your internal and external processes online, and make and accept online payments, you are doing E-Business.
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The Main Models of E-Business and Ecommerce:
1. Business to Business or B2B -
In this model, one business provides goods or services to the other business by coordinating through electronic modes. The suppliers and vendors connect through the internet; placing orders, sharing information and tenders, details of stock-in-transit, payments and other communication are made through electronic modes via the internet or web.
2. Business to Customers or B2C -
In this model, the companies directly sell their products or services to the end consumer through online modes. Online shopping is one example of a B2C business model. It also includes marketing, promotion, selling and buying goods and services between the customers and the businesses or firms.
Small businesses have many benefits from this business model. The lower cost of running business activities and wide base of customer reach are the main benefits.
3. Intra B commerce:
This business model is used among the departments or branches of the same firm or business. The business uses this business model to coordinate and conduct its internal processes more efficiently through the intranet. The business's intranet or local communication networks help them manage its internal operations efficiently. The enterprises use intranet communication channels to facilitate the flow and exchange of information and data among their different departments and branches.
The electronic mode of conducting and managing business operations helps businesses perform their best without any delay in exchanging information due to geographical limitations.
4. Consumer to Consumer or C2C:
The transactions and communication occur among consumers over the internet. eBay and OLX are examples of this type of business model. The seller of the goods finds the potential buyers through websites. This business model is mostly used for buying and selling used or second-hand goods among the customers, such as second-hand books, vehicles, furniture, etc.
Also Read: Top Multi-Millionaire Business Ideas One Must Know!
Difference between E-Commerce and E-Business:
Let us distinguish between E-Commerce and E-Business in a tabular form for a precise understanding:
|
Point of difference |
E-Commerce |
E-Business |
|
1. Meaning |
It refers to the commercial transactions that take place between the firm and its customers and suppliers. It mainly includes buying and selling goods and services, making or accepting online payments and other online transactions you perform using the internet. |
It refers to all the business activities carried out by a firm or a company using electronic modes over the internet or web services. |
|
2. Superset vs subset |
It is a subset of E-Business. |
It is a superset of E-Commerce. E-Business includes all E-Commerce activities, and other activities conducted online by the firms to manage the business operations such as inventory management, accounting and finance, human resource management, etc. |
|
3. Resources |
It requires the internet and websites. |
It requires multiple resources like multiple websites, Customer Relationship Management (CRM) systems, ERPs, etc. |
|
4. Business models |
E-Commerce is more relevant in the Business to Consumer or B2C model. |
It is more relevant in the Business to Business or (B2-B) and Intra Business model. |
|
5. Internet |
E-Commerce requires the use of the internet only. |
E-Business requires the use of the internet, extranet and intranet as well. |
|
6. Business process |
E-Commerce covers the outward business processes or transactions between the firm and its customers or suppliers. |
It covers internal and external business processes of the business that it performs through electronic modes. |
|
7. Transactions |
It is generally confined to buying and selling goods and services online. |
Apart from buying and selling goods and services online, E-Business includes all activities that mark the online presence of a business, such as procurement of raw material, inventory management, supply chain management, accounting and other activities undertaken by the business over the internet. |
|
8. Scope |
It is a narrower concept and has a limited scope. |
It is a broader concept and has unlimited scope. |
|
9. Example |
Examples of E-Commerce sites: are Amazon, Flipkart, Myntra, Big Basket, eBay, etc., |
The example of E-Business includes E-Commerce sites and e-procurement, e-bidding, e-delivery, e-communication and other sites. |
Benefits of E-Commerce and E-Business:
These modes of business benefit both the business organisation and the consumers. The benefits are summarised as under
|
To business organisation: |
|
|
To consumers: |
|
Also Read: Top Work From Home Business Ideas for Housewives 2023
Conclusion:
There is a clear difference between E-Commerce and E-Business; however, both are interrelated and support big and small businesses. You must visit the store, office or shop to get the desired product and service. There were geographical limitations and limited choices, and it took a lot of time and effort to procure the goods or services per your requirement. With the emergence of E-Commerce, shopping has become more convenient, faster and easier. This shift has created a win-win situation for both the businesses as well as the consumers. E-Commerce and E-Business are the emerging modes of business; continuously evolving and reshaping the business world.
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