What Is the Difference Between E-Commerce and E-Business?
When you’re getting into this business, it’s important to know the intricacies of it – and not being able to differentiate e-commerce and e-business definitely isn’t going to impress anyone. This is why many people wonder what’s the difference between e-commerce and e-business?
Buying and selling things on the internet is known as e-commerce. E-business, on the other hand, isn’t limited to those two activities, as all business activities conducted on the internet are considered e-business. Whatever kind of business you’re conducting, if it’s online – it’s e-business.
In this article, we’ll be taking a look at the basics of internet business, clearly defining e-commerce, e-business, and the difference between them. Let’s get started.
What Is E-Commerce?
E-commerce stands for electronic commerce, the process of buying and selling through the internet. Unlike physical retail, in e-commerce, there is no need for the buyer(s) and the seller(s) to meet in person. In its basic form, it involves placing orders and making payments online.
E-commerce sales can include every element of a sale: ordering a product, paying for a product, and having it delivered. It might also involve only part of the process. Not all orders have to be delivered directly to the customer. The option many stores have is to pick up the product at the store. You order whatever you need online, but it’s picked up at the store. This option exists because sometimes the delivery can be too expensive. This also befalls within the compounds of e-commerce.
E-commerce history begins with the first-ever online sale, which took place on August 11th, 1994, when a man sold a Sting CD (Sting, the band, not the frontman for The Police) to his friend through his website NetMarket. This was the first time anyone has ever purchased anything through the World Wide Web.
Since then, e-commerce has evolved and is making products more available than ever, to the point where you can purchase anything just by using your fingerprint.
All sides of the business have profited massively from e-commerce: independent freelancers, small businesses, and large corporations. E-commerce has enabled them to sell their goods and services on a scale that simply wasn’t there before e-commerce.
E-commerce has become so powerful that the sales are projected to reach $27 trillion (that’s $27 000 000 000 000 if you needed it put into perspective) by the end of 2020.
There are several types of e-commerce
1. Business to Customer (B2C)
This type of e-commerce encompasses transactions made between a business and a consumer. This is the most familiar kind of e-commerce, something that we’re all used to. This is the establishment of the electronic business relationship between the seller to final customers. Due to the development of the internet and website, B2C has developed greatly too, and now you can easily find various kinds of online stores on the internet.
Due to the development of this specific part of e-commerce, you’re now available to purchase virtually anything online. It may not be the safest or the most morally okay sort of transaction, but thanks to this type of e-commerce development, you can buy a lot of illegal things on the dark web, including weapons.
2. Business to Business (B2B)
Similar to the prior example, this type of e-commerce includes all kinds of electronic transactions of services and/or products that happened between two businesses or companies. Whenever a retailer automatically resupplies their shelves with a product – that’s B2B ecommerce. A good example of this is an online business selling video production services for other businesses to use in their marketing campaigns.
3. Consumer to Consumer (C2C)
This is one of the earliest forms of e-commerce, and it relates to the sale of products or services between consumers. An example of this is selling your furniture, records, clothes, etc. online.
4. Consumer to Business (C2B)
This is an interesting business model, one where the final users or the customers create a product or service that a company uses to complete their business process or gain a competitive advantage.
These are most often sites where someone offers their services publicly, and any company is free to use their service if they need it. For example content writers offering to create content for a blog.
5. Business to Administration (B2A)
This covers the transactions made between online businesses and administrations. These would be products and services related to legal documents. This also covers any kind of transaction that’s carried out between a business and the government with the internet as their medium.
6. Consumer to Administration (C2A)
This is the form of e-commerce in which consumers do dealing with administration. For example, online tax preparation, or anything including taxes, education, health, and social security.
E-commerce can take many shapes, so it’s normal that there are different forms of e-commerce:
Retail – the sale of a product by a business directly to a customer without any intermediary.
Wholesale – the sale of products in bulk, often to a retailer that then sells them directly to consumers.
Dropshipping – the sale of a product, which is manufactured and shipped to the consumer by a third party.
Crowdfunding – the collection of money from consumers in advance of a product being available in order to raise the startup capital necessary to bring it to market.
Subscription – the automatic recurring purchase of a product or service on a regular basis until the subscriber chooses to cancel.
Physical products – any tangible good that requires inventory to be replenished and orders to be physically shipped to customers as sales are made.
Digital products – downloadable digital goods, templates, and courses, or media that must be purchased for consumption or licensed for use.
Services – a skill or set of skills provided in exchange for compensation. The service provider’s time can be purchased for a fee.
Something that should definitely be noted when speaking about e-commerce is COVID-19. The pandemic has driven e-commerce growth through the roof! The pandemic pushed online consumers to their limits, as it was the safest way for purchase. By May of 2020, e-commerce transactions reached $82.5 billion — a 77% increase from 2019. It would have taken four to six years to reach that number looking at traditional year-over-year increases.
The thing is – a whole lot of people have admitted that they’ll probably continue buying online, even after this whole pandemic is over. The main reason this wasn’t the most common practice already is that there’s a traditionalist, age-old stigma that buying online is unsafe.
And this is sometimes true, without a doubt, there are many unverified sites which are massive risks. But buying from verified sites (which is basically any serious, professional business) is completely safe, and Coronavirus has helped us see that and has taken a massive part in revolutionizing retail.
What Is E-Business?
E-business, or electronic business, is the conduct of business processes on the internet. This doesn’t mean buying and selling exclusively, like e-commerce. This also includes servicing customers, processing payments, managing production control, collaborating with business partners, sharing information, running automated employee services, recruiting, and more.
E-business isn’t restricted to a certain range of functions and services, it’s rather ranged from the development of intranets and extranets to the provision of e-services over the internet. Companies are constantly revolving around the internet, and not just for reasons that I’ve mentioned before, regarding COVID-19. Corporations are constantly rethinking the way they’re using the internet, and e-business is conducted in order to buy supplies from other companies, collaborate on sales, and conduct joint research.
This means that with the growth of e-business, new challenges have arisen. Consumers now expect businesses to offer self-service options for conducting transactions; they expect personalized experiences; and they want speedy, secure interactions. And similar to that, changes are regularly made on the legal front: new laws and best practices for keeping electronic data secure have been instated.
With this, it’s crucial to beware of hackers. Even though the internet has advanced massively in this regard, hackers have done that too. E-businesses have adopted stringent security protocols and tools, including encryption and digital certificates, to protect against hackers, fraud, and theft.
E-business has drastically changed how any sort of organization functioned. Businesses, nonprofits, government agencies – e-business allows them to operate more efficiently, lowering costs, and raising productivity. Electronic invoicing, automated billing, and digital payment systems decrease the time workers must devote to these tasks, which many businesses handled manually just a few decades ago – these are all very good examples of e-business.
This allows businesses to either assign their workers with more important tasks – or simply decrease the number of employees and save money that way.
The internet has improved our communication capabilities massively. Electronic communication systems, such as email, video conferencing, and online collaboration platforms that incorporate the dynamics of social media. This naturally saves companies a lot of money (as they don’t need to pay for trips to attend meetings) and a lot of time (since they don’t have to take those trips).
Different kinds of e-business face different challenges, but there are some challenges that unite all e-businesses.
The primary concern for all e-businesses is security, naturally. Cyberattacks aren’t at all uncommon, and businesses are vulnerable to them, regardless of their size. Hackers have shown that they’re able to successfully gain access to sites with military-grade protection installed. That’s why businesses have to actively invest time and money in cybersecurity.
It’s also important for businesses to evolve their technologies fast enough to keep pace with changing market dynamics. It’s obvious that the internet has forced us to evolve quickly, and business got much faster. This can only condition that evolution itself becomes quicker – modern businesses have got to be able to adapt to this pace.
The core components of e-business are information, communication, and transaction. Business partners use digital networks (i.e. public or private communication networks) to conduct business processes using innovative technologies to improve efficiency.
E-procurement is particularly important for e-business. That’s the electronic sourcing of products and services by companies, focused on reducing costs and effort.
Another key area that’s of particular interest for e-businesses is online stores (which may remind you more of e-commerce). This is the electronic sale of products and services via appropriate platforms.
Online marketplaces are the final of the three key areas important for e-business. These marketplaces are in fact utilizing electronic commerce via digital networks, connecting the buyers and suppliers of products and services.
There are also two further areas of e-business, online communities, and online companies.
What Is the Difference Between E-Commerce and E-Business?
Firstly, e-commerce is an integral part of e-business. When business is completely carried out through the internet as a medium (sales included), then that’s a great example of the integration of e-commerce and e-business.
E-Commerce includes any kind of business transaction which relates to money, but e-Business includes monetary and allied activities. E-Commerce needs the internet to be able to connect with the rest of the world. E-Business can use more than that. Other than the internet, it also can take advantage of intranet and extranet to be able to connect with the parties.
E-commerce is just one potential piece of e-business. E-business is any business that incorporates online technologies into the business model, and that could be something as simple as a physical store using social media marketing to bring in more customers. E-commerce is just the sales department of an e-business.
Also, an e-commerce business refers to a company that offers an online monetary transaction process, while e-business refers to any business that includes online technology of some sort in its business model. That means exactly what I’ve explained early on – e-commerce is a part of e-business.
The main benefactor of e-commerce is the customer who is provided with the means of making purchases online. On the other hand, the main benefactor of e-business can be the customer as well as business partners, suppliers, and so on. The most important relationship within e-commerce is the relationship towards the buyer, while the most important relationship within e-business doesn’t exist. It’s important for businesses to keep a healthy relationship with business partners, suppliers, so on.
E-commerce is restricted to the internet, e-business can be conducted on the internet, intranet, and/or extranet. A company can be considered an e-business even if it only uses online technology within the organization.
E-commerce is especially important for e-business when it comes to Business to Business commerce. This way, businesses can merge and interact more efficiently. This type of e-commerce often involves transactions like restocking necessary supplies, and very often it will be automated. This is a very applicable example of how e-commerce is an integral part of e-business and it’s absolutely useful.
| X | E-business | E-commerce |
| Differences | Conducted on the Internet, intranet, and the extranet A complete integration of business on the internet A business using technology for any part of its business | Conducted only on the internet One of e-businesses’ integral parts, but not individual A business using the internet for monetary transactions |
It’s important to understand that there is no competition between e-commerce and e-business, but it’s important to understand the differences in order to appropriately impact your business model design.
Employing e-commerce and e-business will reduce the money and time you have to invest in your business. Taking your business online eliminates costs and makes your business hours more flexible.
This way, you’re able to reach your customers faster and in a more efficient way. Taking into account the current state of things with the global pandemic, it’s absolutely crucial for every business to adapt to conducting business online.