E-commerce: Characteristics, History and Benefits of E-commerce
Imagine that your product can reach part of that great community! Incredible, isn’t it? Cope with this reality. Your company must achieve the digital transformation so that it takes the full benefit of this thriving sector.
In place of that reason, today, we want to help you learn much more about e-commerce, precisely its definition, characteristics, utilities, history, types, and best platforms.
Table of Contents
What is E-commerce?
Electronic commerce is the business model based on the transactions of products and services in electronic media, whether on social networks or websites.
E-commerce is on the rise by leaps and bounds in different corners of the world, and Latin America is a perfect example of this.
At the close of 2022, the expansion of sales through digital channels such as sales management software, POS sales & inventory system could increase by 15.7% in the region, compared to 2019 figures, according to statistics from the World Electronic Commerce Index, cited by América Retail.
It is mainly due to the patent growth of Internet penetration and the use of social networks. And, for example, in the region, there are more than 300 million Facebook users.
Electronic commerce, translated from the English tenure e-commerce, can be distinguished as the economic activity that agrees to the trade of products and services from digital media, such as web pages, mobile applications, and social networks.
Over and done with the virtual network, customers can access various catalogs of services and products anytime and anywhere.
This type of commerce’s relevance is that marketing takes it as a fragment of the sales strategy thanks to its good organization.
The establishment already has web pages and create profiles on social networks to reach a wider audience.
Selling and buying is already a simple task, made possible, of course, by technology, such as mobile devices with access to the Internet.
It deals with selling and buying foodstuffs and services from end to end electronic channels, particularly Internet websites, submissions, and social networks.
To give details about it from a more familiar point of view, we can value it as a procedure in which two or more people reach a commercial agreement (specifically purchase or sale) through digital or electronic means.
Granting it may resemble the first definition, the latter makes it clear that to market electronically. It is not essential to create a sizeable useful store and a consolidated brand on the Internet. In the meantime, a person can complete a simple publication on their social networks or improve an external platform.
Of course, as soon as you want to make this activity a sustainable, profitable, and long-lasting business, it is significant to focus on branding, digital authority, marketing, and many other elements contributing to positioning and exposure.
Also read: Should I Buy or Rent the Company’s IT Equipment?
Characteristics of Electronic Commerce
Although like traditional commerce, its ultimate goal is to generate sales, electronic marketing is undoubtedly very different.
In attendance are many characteristics that differentiate e-commerce from what decades ago we knew as commerce. As well as these are some of them:
An age ago, for a company to generate sales on another continent, it had to be a massive organization, with different branches, collaborators, and a tremendous logistical capacity.
Instead, e-commerce gives everyone who wants to get into its global reach. And it is that customers from any country will be able to enter your virtual store or account in social networks.
You have to develop the right strategies to connect with them.
Speaking of countries, Mexico and Colombia have been one of Latin America’s main ones in terms of virtual stores’ growth.
Do you know what this term means? It refers to that which can be present everywhere at the same time.
Yes, just like e-commerce does. If you wish, a virtual store can serve the public 24 hours a day, regardless of where the user is.
Another feature of e-commerce is that it encourages constant feedback from trades and products.
In seconds, operators can ask questions, comment on products, and even raise complaints.
In the meantime, stores concerned with customer service can respond to any interaction immediately.
We will concentrate on this marketing technique’s practicality for companies and entrepreneurs by the side of this point.
Three things about E-commerce.
1. Increase in Sales Opportunities
Rationally, a business that functions traditionally will meaningfully increase its sales chances if it agrees to take advantage of electronic channels.
On the other hand, brands that are exclusively enthusiastic about this form of commerce have more fantastic opportunities. In the meantime, they have access to a global community of millions of users.
2. Promotion of Innovative Products
In the stock market, the promotion of original products requires a substantial investment in advertising and a massive logistical structure to take it to the right points of sale or suppliers and the production of a sales crew.
That is why plenty of average also small entrepreneurs benefit from e-commerce to offer novel services or items, allowing users to know their specifications and even interact with some of their functionalities before buying them.
3. Brand Recognition
If your business has years of capability, but its brand acknowledgment is very low, you certainly need e-commerce.
Marketing in the broad Internet community and social networks helps a brand go from being “invisible” to being known by many users and market players.
History of E-commerce
To talk approximately the history of electronic commerce, we do not have to go spinal to very distant times. Like several of us, this marketing method is idealistic.
The inauguration of e-commerce is simultaneous to the Internet’s opening for profitable use in the innovative year of 1991.
On the other hand, it was not until 1994 that the first company was born with a massive commitment specifically directed at Cadabra’s electronic channels.
You don’t know her, do you? And this is one of the most successful ventures in history.
No, it is not that you have lived in a bubble in recent years. What takes place is that in 1995 Cadabra changed its name to Amazon (now you know what we are talking about).
Benefits of E-commerce
Unknown quantity you’ve paid attention to this point, you already understand some of the advantages of e-commerce, such as its global reach, ubiquity, and experience.
Though there are many more specific advantages of this marketing method, we will explain 3 of them below.
1. Flexibility and Simplification
To consume a successful virtual store, you will not need hundreds of employees, as long as you have good architecture and technological support.
Also, there are solutions such as Dropshipping, which significantly simplify the online sales process. In the case of this model, it allows electronic businesses to operate without having a stock since it provides a direct link with the supplier.
2. Access to Information
Later we will talk about Digital Marketing and Inbound Marketing, but we will tell you that this strategy is much easier when vented electronically.
The dynamics of e-commerce provide access to valuable information about customer identification, consumption patterns, and market preferences.
Besides, it is straightforward to follow the different metrics and KPIs of e-commerce, including the conversion rate.
3. Lower Investment
In recent years, e-commerce has not only become a source of profitability for big brands. This has also established itself as an outstanding alternative for small and medium entrepreneurs.
It is because it requires much lower investment than traditional commerce.
It saves costs on employee payroll, high-volume inventory, and expenses associated with physical stores’ maintenance and rental.
What Types of Electronic Commerce Exist?
This marketing method is so developed today that it has different types of e-commerce and specific action fields.
Could you take a look at 4 of them?
1. B2B e-commerce
it is e-commerce done business to business, that is, Business to Business (B2B).
Its focus is not directly related to the final consumer but suppliers, retailers, and other intermediaries.
2- E-commerce B2C
Now we are talking about Business to Consumer (B2C) or, in Spanish, business to consumer.
As end-users, we interact with when we request a product or service in one of our favorite virtual stores.
3. E-commerce C2C
C2C stands for Consumer to Consumer (consumer to consumer). It means that this type is nothing more than the migration to the digital realm of garage sales, neighborhood markets, or, simply, direct marketing between two or more individuals.
4. E-commerce G2C
When we refer to the acronym G2C, we speak of the government to the consumer (Government to Consumer).
It covers all those transactions, purchases, and payments that a citizen can carry out before the State’s online systems.
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