eCommerce – the new kid on the block. It’s been a favourite buzzword in the media, in business and in IT for the past 5 years trending. With moguls like Jeff Bezos and Jack Ma rising to the tail-end of the revenue scale, you can’t help but what to find out more about their business model.
eCommerce is a powerful way of conducting business in this day and age. It utilizes digital platforms to conduct day-to-day commercial transactions. Now, let’s not think of it as just an online store. While that is surely one of the most popular forms of eCommerce which brought Amazon and Ali Baba into power, there are other types of eCommerce businesses.
To put it simply, eCommerce, like eMail, is an electronic business. All transactions happen online, and the buyers and sellers are all online. In any instance where you may have purchased or paid for something online, you have successfully dipped your toes into eCommerce!
eCommerce can be dissected into different categories. Let’s explore it first from the merchant’s perspective. It’s fairly straightforward – there are only 3 types:
I’m not talking about bank products here, more so actual physically stuff. Household items, clothes, books, you name it!
This can include anything from hiring a freelancer from AirTasker to booking a mobile physiotherapist.
With how digitalized financial institutes have become in this day and age, bank products would fall under this category. So would purchasing a course online on a massive open online course platform.
These offerings can then be transacted through different eCommerce business models. These 7 types of business models include:
A perfect example: eBay
You post items, another consumer buys it.
Any major retail which has an online store
Think businesses which make an impact to businesses
This can include recruitment firms or tech firms selling solutions to businesses
Example: It’s when you use the ATO website to file your taxes.
When government bodies purchase digital products or services from businesses
Think when you purchased for a car license test online from an official government website
With this general underpinnings of what makes an eCommerce business, let’s talk about the benefits of it. It has come a long way since the first eCommerce transaction was made in 1994.
The birth and widespread accessibility of the Internet has enabled people from all walks of life participate in eCommerce easily and it has empowered companies to have a whole new stream of revenue through this method of business.
With the immense integration into today’s society, include big names like UberEats and Amazon, it is hard to imagine life without eCommerce. eCommerce has evolved much in the past 10 years, that it has successfully assimilated with social media platforms, giving rise to platforms such as Facebook marketplace.
eCommerce has a year-on-year growth rate of 17.9%, and it is forecasted to be sitting at up to US 4.2 trillion dollars for its retail sector! Apply that financial model globally and agnostically to industries, you can see the potential for huge growth in this space.
Time to connect online and start doing business, digitally!