What is eCommerce?
The terminology eCommerce pertains to the internet-based transactions that deal with buying and selling goods and services. eCommerce pertains to any deals or transactions involving online payments and the online delivery of services and products.
- Virtual Store: This is the online equivalent of a physical retail outlet where a seller displays and sells products and services.
- Online Marketplace: This is an intermediary that, for a fee, connects buyers and sellers for a particular transaction. Amazon is an example of an online marketplace.
- Social Media: All social media platforms are adding ways to sell to their users and build a marketplace.
How Does eCommerce Work?
The basis of eCommerce is that the customer is physically removed from the storefront, and the transaction is made in a virtual environment. These are the steps most commonly associated with the eCommerce transaction cycle.
According to GMI Research, the Saudi Arabia E-Commerce Market size is estimated to reach USD 41.3 billion in 2032
Browsing and Selection
A customer, on their computer, smartphone, or tablet, accesses an eCommerce website or an app that they have intended to visit. The site enables the user to browse through the categories of products, view information on the products, and compare differing products and their features.
Adding to Cart
A user can add to their collection of desired purchases when they come across an item they want to buy. Just like in a physical store, where a shopping cart holds an items, it acts as a holding place for all the intended items to buy when they come to the point of purchase.
Checkout and Payment
The final step after shopping is the checkout. Customers provide their Shipping details, Payment methods like credit and debit cards, and Digital wallets. Blocked Payment Gateways to ensure no one can process the payment.
Order Processing
Order confirmed: the order is received and processed by the eCommerce business. This can be inventory control, order inventory, packing the order, and/or creating a shipping label.
Fulfillment and Delivery
The seller may opt to pack the items themselves when fulfilling the order, or use a third party. Customers can monitor the order status as their shipment via an assigned tracking number.
Returns and Customer Service
Returns, exchanges, and customer service questions can be just as important to eCommerce businesses, as they can mean the difference to a customer in how they feel about a business. This is all about the customer and goes a long way in creating a successful business.
Types of eCommerce
Business-to- Consumer (B2C)
In B2C eCommerce, businesses sell directly to individual customers. Some well-known examples are Amazon, eBay, and several online retail stores for clothing, electronics, and other goods.
Business-to-Business (B2B)
In B2B eCommerce, a business sells its products or services to other businesses. This might include selling any products or services leaving a business worthwhile, such as raw materials, office supplies, and even marketing software. B2B transactions are often more complex, larger in volume, and have longer sales cycles.
Consumer-to-Consumer (C2C)
In a C2C marketplace, individual customers sell directly to each other. C2C transactions are enabled by online marketplaces such as Facebook Marketplace, where users can sell used clothing, furniture, and other items.
Consumer-to-Business (C2B)
In this model, individual customers offer goods or services for sale to businesses. Examples include freelance selling platforms like Upwork or Fiverr, where users can offer their writing, design, or programming, and other services to businesses.
Social Commerce
Social commerce involves the buying and selling of products or services through social media. Businesses can establish shops and have eCommerce functions on their social media, allowing customers to browse and buy products on the social media platform. Examples include Facebook Marketplace and Instagram Shops.
Marketplaces
eCommerce marketplaces allow buyers and sellers to conduct transactional deals with and among each other. Such platforms may focus on specific groups of products or may have a wider focus. Amazon and eBay are case studies of this.