Electronic Commerce | Types, Benefits, Limitations of E-commerce

Electronic Commerce (E-Commerce)

E-commerce is the process of buying, selling and exchanging of goods, services and information or the transmitting of funds or data, over an electronic network, primarily the Internet. It covers a range of different types of businesses, from consumer based retail sites, through auction or music sites, to business exchanges trading goods and services between corporations. It is currently one of the most important aspects of the Internet to emerge. E-commerce allows consumers to electronically exchange goods and services with no barriers of time or distance. These business transactions occur business-to-business, business-to-consumer, consumer-to-consumer or consumer-to-business. The terms e-commerce and e-business are often used interchangeably.

source: pexels

Types of E-Commerce:

 • Business-to-Business Commerce (B2B):

 B2B refers to electronic commerce between businesses rather than between a business and a consumer. B2B businesses often deal with hundreds or even thousands of other businesses, either as customers or suppliers.

• Collaborative Commerce (c-commerce)

 In C-commerce, business partners collaborate electronically. Such collaboration frequently occurs between and among business partners along the supply chain.

 • Business-to-Consumer (B2C)

 B2C is distinguished by the establishment of electronic business relationships between businesses and final consumers. It corresponds to the retail section of e-commerce, where traditional retail trade normally operates.

• Consumers-to-Business (C2B)

 In C2B there is a complete reversal of the traditional sense of exchanging goods. This type of e-commerce is very common in crowd sourcing based projects. A large number of individuals make their services or products available for purchase for companies seeking precisely these types of services or products.

• Consumer-to-Consumer (C2C)

 C2C e-commerce encompasses all electronic transactions of goods or services conducted between consumers. Generally, these transactions are conducted through a third party, which provides the online platform where the transactions are actually carried out.

• Intra business (intra organizational) commerce

 In such e-commerce an organization uses e-commerce internally to improve its operations. Business to its employees (B2E) is special case of such e-commerce.

• Government-to-Citizens (G2C)

 In this e-commerce, the government provides services to its citizens via e-commerce technologies. Government can also do business with other governments (G2G) as well as with businesses (G2B).


• Mobile Commerce (m-Commerce)

         When e-commerce is done in a wireless environment, e.g. cell phones to access internet, such E-commerce are known as m-commerce.

Benefits of E-commerce

Benefits of E-commerce To organizations

• It helps in expanding company's marketplace to national and international markets.
• Enables companies to procure material and services from other companies, rapidly and at less cost.
• Shortens marketing distribution channels, making products cheaper and vendors' profits higher.
• Decreases cost of creating, processing, distributing, storing and retrieving information by digitizing process.
• Lowers telecommunication costs.
• Helps small businesses compete against large companies.

Benefits of E-commerce To customers

 • It frequently provides less expensive products and services.
• It provides more choices to consumers.
• Enables customers to shop or make other transactions 24 hours a day, from almost any location.
• Delivers relevant and detailed information in seconds.
• Makes electronic auctions possible.
• Allows consumers to interact in electronic communities and to exchange ideas and compare experiences.

Benefits of E-commerce To society

• Enables individuals to work at home and do less travelling.
• Increases living standard of People.
• Enables people in developing countries and rural areas to enjoy products and services that are otherwise not available.
• Facilitates delivery of public services, reducing distribution cost and chance of fraud.

Limitations of e-commerce

Technical Limitations

• Lack of universally accepted standards for quality, security and reliability.
• Insufficient telecommunication bandwidth.
• Still evolving software development tools.
• Difficulties in integrating internet and e-commerce software with some existing applications and databases.
• Need for special web servers in addition to network servers.
• Expensive and inconvenient internet accessibility for many would-be users.


Non-technical Limitations
• Unresolved legal issues.
• Lack of national and international government regulations and industry standards.
• Lack of mature methodologies for measuring benefits of and justifying e-commerce.
• Customer resistance to changing from a real to a virtual store. People do not yet sufficiently trust paperless, faceless transactions.
• Perception that e-commerce is expensive and unsecured.
• An insufficient number of sellers and buyers exist for profitable e-commerce operations.