In recent years we have seen the growing trends of online shopping and doing businesses online. Businesses and consumers are getting more profit and value through it. Nowadays almost every business operates online in some way. Some businesses have online shopping models while others have hybrid models where they operate both offline and online.
Even if a business is operating offline it will still have its online presence for attaining other business objectives. The online markets have transformed the traditional markets and business models.
An e-commerce business and e-business sounds similar and are often used interchangeably. They may sound similar but, they are very different terms and represent two different concepts which are closely related to each other.
In this article, I will explain the terms and give a comparison about their differences.
Table of Contents
E-commerce means Electronic commerce. It is the process of buying and selling goods and services online.
The transaction is made through online channels. It includes all the outward-facing processes that involve customers, suppliers and partners like order taking, sales, marketing, delivery, purchasing raw materials and supplies, etc.
There are different types of ecommerce business models which are discussed below briefly.
Business to Consumer (B2C)
In this model, businesses sell their products and services to consumers online like when a customer places an order to buy shoes online.
Business to Business (B2B)
In this model, businesses sell products and services to other businesses. For example, a construction company will have an automated system to place orders to its suppliers for raw materials when inventory levels go beyond a certain level.
Consumer to Consumer (C2C)
Consumers sells products and services to other consumers like a person selling his Television on online selling platform like e-bay.
Consumer to Business (C2B)
In this model a consumer sells their goods and services to businesses like a person working as a freelance graphic designer offer his services to businesses for a fee.
E-business means Electronic business. Electronic business means the facilitation of business through internet and information technology.
It includes e-commerce as well as many other supporting functions of business-like production, inventory management, product development, risk management, finance, knowledge management and human resources. It covers all the aspects of a business not just limited to transactions.
The two types of e-businesses are explained briefly below.
In this model the business is only present in virtual space. Like a bakery that makes cakes and have no physical outlet rather operate from a virtual store and take orders from there.
Brick and click
From the name we can understand that in this model businesses operate from a brick and mortar store and also have an online presence. They operate both from online and offline platforms. For example, a clothing store that has outlets in the city and has online store where customers can view and purchase items.
E-commerce Vs. E-business
Now that we understand both e-commerce and e-business, we can discuss their differences in a tabular form.
- It involves buying and selling of products and services.
- E-commerce is part of E-business.
- It involves monetary transactions.
- It is targeted towards the external functions of business.
- Its approach is extroverted.
- Internet is used for e-commerce.
- It uses a website for its operation.
- It involves the whole business not just limited to buying and selling.
- E-business incorporates e-commerce and many other functions of business.
- It involves monetary and non-monetary transactions.
- It is targeted towards the internal and external functions of business.
- Its approach is ambivert.
- Internet, intranet, and extranet are used for e-business.
- It uses a website as well as other platforms like CRM, HRM, ERP etc.
So from the above table we get a clear picture of the major differences between the both.
E-commerce is an essential part of e-business that is online transactions. But e-business helps businesses in their operations in many ways. A local restaurant doing social media marketing is e-business.
Amazon and E-bay are E-business giants. They have transformed the market. Jeff Bezos is the worlds richest man all due to incorporating a e-business model. So the investment is worthwhile for businesses. It gives better profits and more convenience to all parties involved.
As we have discussed in detail that e-commerce is a part of e-business and both are important to businesses. It all depends on your business goals and strategy whether you just want to do e-commerce or do e-business as well.
Do you want to sell items online? Do you want to improve your brand image and customer relationship? Do you want to improve your efficiency in inventory management?
Make sure to ask such questions to identify your need for that type of business function. Apart from some very small businesses and exceptions all the businesses in today’s market need to incorporate some form of E-business in the business model.