E-commerce means major commercial activities such as buying, selling, exchanging products or services and information through internet networks. According to the definition of the World Trade Organization, we can define it as follows: production, distribution, marketing, sale or distribution of goods and services by electronic means.
With the advancement of technology and communication, e-commerce is recognized as an effective solution for selling goods and services. In this article, the definition, characteristics, and role of digital marketing in e-commerce will be discussed.
Of course, e-commerce is completely different from internet business. Because e-commerce refers to buying and selling online. But internet business is more related to doing all kinds of transactions on the web platform. E-commerce is more for the benefit of customers who can easily purchase products online.
With the advancement of technology and communication, e-commerce is recognized as an effective way to sell goods and services around the world. This includes online stores, internet marketing, international buying and selling and many other activities. In this article, the history, definition of characteristics and the role of digital marketing in e-commerce will be discussed.
History of e-commerce
E-commerce as a method of selling goods over the Internet started in the 1970s. At that time, salespeople used email to send invoices and orders to customers. In 1980, the business took shape as it is known today. In the 1990s, with the advent of the web, e-commerce became more widespread and the first store websites were created. At 1995, Amazon was launched as one of the largest online stores in the world. In 2000, with the rapid growth of the Internet and new technologies, e-commerce became one of the most important sales methods. In the following decades, with the advancement of cryptographic technologies, electronic payment and the development of mobile technologies, this type of business was exhibited in a more dynamic and advanced form.
Features of e-commerce
E-commerce has many features that distinguish it from traditional business. Some of these features include:
Easy access to customers worldwide.
Reducing costs and time needed to sell goods.
The possibility of accepting electronic payments and increasing financial security.
Ability to store and process data related to customers and sales.
Ability to use digital marketing tools to attract new customers and improve customer experience.
Advantages of e-commerce
E-commerce has advantages for both businesses and customers, which we will examine below.
Advantages of e-commerce for businesses
E-commerce is very useful for businesses. In this way, businesses can reach their customers all over the world and reduce the high costs they have to pay for selling goods in traditional stores. Also, the possibility of accepting electronic payments and increasing financial security is also very important for businesses. Also, it is possible for sellers that a customer wants a product or service at any time and in any place, which expands the sales scope of a business.
Advantages of e-commerce for customers
Considering the benefits that e-commerce has for businesses, customers also benefit from this process. With easy access to products and services around the world, customers can take advantage of products available in other regions, benefit from competitive prices, and explore more products for purchase. Also, electronic payment and increased financial security also give customers more confidence in the online store.
Disadvantages of e-commerce
As e-commerce has good advantages, it also has disadvantages, which we will review some of them below.
Disadvantages of e-commerce for businesses
This type of business makes the seller unable to fully serve his customers. Also, with complete reliance on electronic devices, if there is a problem in the sales system, it means closing the business.
Disadvantages of e-commerce for customers
In this type of business, the customer cannot use the service of the seller. Also, he cannot touch the product closely and be sure to choose it. Because the customer receives the purchased product late, he cannot be fully satisfied with this type of purchase.
In the following article, we will examine the types of electronic commerce, their advantages and disadvantages, as well as examine their types and places of use.
Types of e-commerce
B2B (Business-to-Business)
In this type of business, businesses trade goods and services with each other, which include electronic or automotive companies, as well as food industries that trade goods and services with other companies.
B2C (Business-to-Consumer)
In this type of business, businesses interact directly with their customers and sell goods directly to their customers. A simple example of this type of business is online stores such as Amazon, linkedin, instagram, eBay, and Digikala, which trade goods directly with customers.
One of the advantages of this type of business is that sales costs and sales volume have an inverse relationship. That is, as the sales costs decrease, the amount of sales increases. Also, this type of sale makes it easier for customers to buy, which also increases the number of customers.
Among the disadvantages of this type of business, it can be mentioned that in this method, in addition to fierce competition, a very high capital is needed to start a business.
C2C(Consumer-to-Consumer)
In this type of business, customers trade goods and services directly with each other. Websites such as Divar, Basalam, Torob, etc. are examples that allow people to sell their products.
The benefits of this business are as follows: reducing costs for buyers and sellers, increasing the choice of buyers, increasing competition and product quality.
Also, among the disadvantages of this type of business, we can mention the need for trust between the buyer and the seller, the risk of payment and receiving payment, and the need for the ability to manage and sell the product.
C2B(Consumer-to-Business)
The definition of this type of e-commerce is that customers offer their services and goods to businesses, an example of which is freelance businesses where people can provide services to other companies and businesses.
Increasing competition between companies to attract customers, increasing customer choices, reducing marketing costs for companies are among the benefits of this type of business.
Also, its disadvantages include the need to identify customers with high paying ability, the need for trust between the company and the customer.
B2G(Business-to-Government)
As can be seen from the name of this type of business, this type of business is such that businesses provide services to governments. For example, companies that provide services such as website design, supply of goods and services, and consulting to governments can be cited.
Among the benefits of this type of business, we can mention increasing sales to governments, increasing competition between companies, and reducing marketing costs for companies.
Also, the need to comply with government laws and regulations, the need for companies to be known as reliable suppliers, is also one of the disadvantages of this type of e-commerce.
Today, e-commerce activities are in the form of 4 items that were mentioned first, and it should be noted that e-commerce in B2G mode is less functional than other types of business.
G2C(Government -to- Consumer)
Another type of e-commerce is where governments or government organizations sell goods, services or facilities to people. A clear and simple example of this type of e-commerce is the tenders that have been held and people can get the item that has been put up for tender by participating and winning in these tenders.
Generating income for governments and organizations and creating suitable opportunities as well as creating opportunities for fair competition for citizens are among the advantages of this business model.
This e-commerce model also has disadvantages. Among them, we can mention the need for very high capital and also the possibility of failure.
Now with all these definitions that have been said, we can divide and define e-commerce into two basic types:
Indirect: It means online ordering of goods, whether tangible or intangible, in which delivery of goods or services online is not possible.
Direct: In this case, the two parties to the transaction have the ability to exchange goods or services electronically and online using electronic devices.
Tips for success in e-commerce
To be successful in e-commerce, you can achieve your ultimate goal by following a few simple tricks. Stay with us to continue to review these tricks.
- Achieving complete knowledge of customers and the target community
- Detailed planning but different from other competitors
- Using suitable software or platforms compatible with e-commerce
- Exposure of best-selling goods or services
- Colorful presence in the eyes of customers
Digital marketing in e-commerce
Digital marketing is one of the most effective and well-known solutions for attracting customers in e-commerce. This method of various tools such as Google ads, social network ads, marketing emails and SEO can easily attract customers and provide a new transaction experience for the buyer or seller. Another role that digital marketing plays in e-commerce is increasing customer conversion rates. In this way, by benefiting from methods such as web page optimization testing and also reducing undesirable values, it increases the conversion rate of customers.
As a result, e-commerce is growing and expanding as an effective solution for selling goods and services. Due to the benefits it offers to businesses and customers, it is gaining more and more place in global markets day by day. By using digital marketing methods, businesses can easily attract new customers and provide a better shopping experience to existing customers. Also, by taking advantage of new technologies and improving business processes, this type of business will become a growing industry in the future. We at Amood Group are ready to serve you with the help of experienced professionals. You can contact us for a free consultation.
