Have you been using eCommerce and eBusiness interchangeably? Have you ever wondered what the difference is? Well to say the least, there is a world of difference between eCommerce and eBusiness! Read on to know.
Until a few decades back, a computer was a luxury in any household. And until about 15 years back, booking tickets required you to either go to a physical store hours or days in advance to skip a long queue or spend extra money by going through a travel agent.
But in 2008, the 2G spectrum was allocated to mobile networks in India. Now though the landscape is a lot different, the past 10-12 years particularly saw an accelerated surge in technological advancements.
Technology now facilitates a simple, fast, and efficient lifestyle. For consumers, there’s nothing one can’t avail from the comfort of home! For businesses, technology has enabled much wider audiences. And this is where words like eCommerce and eBusiness become relevant.
While many use these words interchangeably, very few understand the difference. From a technical viewpoint, there are many differences. So, what are these differences? Let’s check them out!
Difference Between eCommerce and eBusiness
Wikipedia defines eCommerce or Electronic Commerce as the activity of electronically buying or selling products over online services. eCommerce only focuses on the online transactional activities of a business making it a subset of the more expansive term – eBusiness.
The concept of eCommerce revolves around two major components –
- The commercial activity between buyers and sellers involves the buying and selling of products and services, which includes the exchange of paperless transactional data and the online transfer of money and funds.
- Online and Digital Services – The more obvious component and the reason for the term to exist, the idea of eCommerce is powered by the internet, and history showcases a similar parallel graph to the rapid development of digital technology and the impressive growth of eCommerce.
As technology advances, so does the potential of eCommerce. And with them together, you get an efficient concept that has changed not only the business and marketing landscapes but also transformed lifestyles at an individual level.
It is through the accessibility of eCommerce platforms that anyone around the world can buy or even sell any product or service through their own digital devices.
Even though the functionality of eCommerce activities involves several complicated back-end processes, the major working centres around a platform such as a website or an online store and the use of it to order a product. In a procedural viewpoint, a customer accesses an eCommerce website and places an order for a particular product.
During the placing of the order, the customer is required to complete the payment of the product which finalizes the order. The order is then notified to the store hosting the website and from then on the store follows its routine protocol of delivering the product or service to the destined customer.
Different eCommerce Types
With transactions being a significant component of eCommerce, it has to be noted that it is not always a business-to-customer transaction. There are numerous models solely based around the different parties involved in eCommerce activities and below are 4 of the most common types:
B2B stands for Business to Business which simply put is the electronic transfer of goods between two businesses. Surprisingly, much of eCommerce involves business-to-business transactions. From product partnerships and collaborations between two businesses to the more common stocking and restocking of product supply between businesses or manufacturers or retailers, these are some ways in which businesses come together to make online commercial transactions.
The more well-known model of Business to Customer involves businesses selling products and services over an online platform directly to the customer. A good example is that of Amazon, but nowadays, there are a plethora of online portals and stores that follow this model. Every business, at least post-pandemic, is aiming to strengthen its online presence with the objective to reach a much larger audience directly.
C2C or Customer to Customer transaction refers to the trade and exchange of products and services between private individuals in an online environment. The transaction is done through a third-party platform be it a website or a mobile application that allows consumers to put up products for sale. Common examples of these platforms are OLX and eBay.
A complete opposite of the B2C model, the C2B or Customer to Business model is a new and interesting concept that offers individuals a base to sell their product or service to a business. While the transaction can be done directly between the individual and business or through a third party website like Upwork or Fiverr, the idea revolves around showcasing your skills and talent by posting products like photographs, graphics, designs or a mobile application or software; with the hope that a business may look to purchase.
Activities done under eCommerce
- Ordering a product online
- Online payment of the product including taxes
- Delivery of the product or service
- Online customer service
eBusiness or Electronic Business, also known as online business is any business activity an organization or company conducts over an online service. While eCommerce focuses on only the commercial transactions between different entities, eBusiness covers all the prospects involved in business management and development.
Everything from the purchase of raw materials to manufacturing to inventory management to marketing to buying and selling products is all done through global and even private network services. Here, not only the internet comes in handy but also private networks like extranet and intranet. This is mainly due to the vastness of the various activities under eBusiness.
While the term and the concept were introduced in the late 1990s, the implementation of this concept only truly materialized in the last decade. The rapid developments in information and communication technology that offered easy-to-use and effective alternatives to the exhaustive traditional business management systems allowed businesses to venture into an all-electronic and digital landscape.
Different eBusiness Types
The types of eBusiness models reflect upon how the business is run and operated. The two major models are ‘Brick & Click’ and ‘Pure Click’ which centres around the strategy of running business activities online.
Brick & Click
The term Brick & Click originates from the traditional and physical ‘Brick & Mortar’ business model. While the brick & mortar model showered significance to only the physical practice of performing various business activities, the brick & click model combines physical and online operations in the overall business strategy.
An example of the combination of both the physical and online resources would be having a physical retail store and also an eCommerce-based online store. When lockdowns were imposed, many physical businesses had to halt physical transactions and we’re pushed into installing the brick & click model. Their adaptation has now allowed customers the flexibility to choose between two channels and ultimately help build and grow their brand.
Pure click businesses are those businesses that operate solely over an online platform. These businesses, since their launches, have looked to function only on the online spectrum. All the activities from manufacturing to management to marketing to sales are all conducted over a public or private network.
One particular area where the pure click model lacks convenience is the fact that businesses will have to spend a good amount of time and money on marketing and product awareness campaigns to grab the attention of interested customers from an already vast digital audience.
Activities done under eBusiness
- Setting up an online store
- Procuring raw materials
- Management of inventory and resources
- Marketing and product awareness
- Buying and selling products
- Monetary transactions
- Shipping and delivery
- Customer support
Now that we have touched upon both eCommerce and eBusiness as a whole, including their concept and functionality it would have given you an idea of why these two terms should be looked at differently. But if you are still not so sure, the table below should give you a much clear and concise view of the differences between the two.
For a layman looking into an online business, it is important to understand why eCommerce and eBusiness are seen as the same term and concept. eCommerce is outward, front-end, and highly noticeable while eBusiness also includes front-end work; it generally gets overshadowed by the back-end business procedures that include management, marketing, and strategizing.
As many businesses and companies even post-pandemic look to digitally transform and instil online mechanisms in their business systems, to open up various opportunities, it is of utmost importance to understand what term means what, and through this article, we hope to have given you a differential understanding between eCommerce and eBusiness.