An Introduction to

E-commerce
Dustin Dale P. Aquino
Agenda

At the end of this presentation, the audience must have a general

understanding of the following:
● Definition of E-Commerce
● The 2 major categories of E-Commerce
● E-Commerce Business Models
● Benefits of E-Commerce
● Challenges and Risks in E-Commerce
 The Internet

The internet has revolutionized businesses by expanding their reach

and customer base on a global scale.

It has enabled companies to engage with consumers more effectively,

conduct seamless online transactions, gather valuable data insights,
and leverage digital marketing strategies for enhanced growth and
profitability.
E-Commerce (Electronic Commerce)

The buying and selling of goods or services over the internet.

● Transactions conducted electronically

● No physical presence required (ideally)
● Utilizes online platforms, websites, or apps
● Involves secure payment gateways
● Enables global reach and accessibility
2 Major E-Commerce Categories

1. Business-to-Consumer (B2C) E-commerce:

● In B2C e-commerce, businesses sell products or services directly to

individual consumers.
● Involves online retail stores where customers can browse and purchase
items from a wide range of products.
● Characterized by personalized shopping experiences and various
marketing strategies to attract and retain customers.
2 Major E-Commerce Categories

2. Business-to-Business (B2B) E-commerce:

● Involves transactions between businesses, where one business sells
products or services to another business.
● Facilitates bulk purchases, wholesale transactions, and procurement of
raw materials or components.
● B2B e-commerce platforms streamline the purchasing process,
improving efficiency and reducing costs for businesses.
Other E-Commerce Categories

● Consumer-to-Consumer (C2C) E-commerce

○ Also known as Peer-to-Peer

● Consumer-to-Business (C2B) E-commerce

○ Individuals provide services to businesses

Other E-Commerce Categories

● Business-to-Government (B2G) E-commerce

○ Businesses provide products/services to government

● Government-to-Citizen (G2C) E-commerce

○ Gov’t services made available to citizens through the digital

space
The Process of E-commerce (https://www.legalraasta.com/blog/e-commerce-business/)
E-Commerce Business Models
1. Dropshipping

● Dropshipping is a retail fulfillment method where a store doesn't keep

the products it sells in stock.
● Instead, when a store sells a product, it purchases the item from a third
party and has it shipped directly to the customer.
● The store owner doesn't handle the physical product, reducing inventory
management and upfront costs.
E-Commerce Business Models
2. Subscription-Based Model

● In the subscription-based model, customers pay a recurring fee at

regular intervals to access a product or service.
● Businesses offer subscription plans, such as monthly or annual
subscriptions, providing a continuous revenue stream.
● It fosters customer loyalty and ensures predictable revenue for the
business.
E-Commerce Business Models
3. Peer-to-Peer (P2P) Marketplace

● P2P marketplaces facilitate direct transactions between buyers and

sellers without involvement from the platform in the actual transactions.
● Sellers list their products or services on the platform, and buyers browse
and purchase from them.
● The platform acts as an intermediary, offering a space for sellers to reach
a broader audience.
E-Commerce Business Models
4. Business-to-Consumer (B2C) Retail Model

● B2C retail is the traditional model where businesses sell products or

services directly to individual consumers.
● Customers visit the online store, browse products, add items to their
cart, and complete the purchase through secure payment gateways.
● B2C retail is the most common e-commerce model, encompassing
various industries and product categories.
E-Commerce Business Models
5. Business-to-Business (B2B) E-commerce

● B2B e-commerce involves transactions between businesses, where one

business sells products or services to another business.
● It focuses on fulfilling the needs of business clients, often involving bulk
orders and tailored pricing.
● B2B e-commerce platforms streamline the purchasing process for
businesses, improving efficiency and reducing costs.
E-Commerce Business Models
6. Direct-to-Consumer (D2C) Model

● The D2C model allows manufacturers or producers to sell their products

directly to end consumers without intermediaries like retailers.
● It enables brands to control their distribution, customer experience, and
gather valuable consumer data.
● D2C e-commerce has gained popularity with the rise of online shopping
and digital marketing.
E-Commerce Business Models
7. Affiliate Marketing

● In affiliate marketing, individuals or businesses promote products or

services of other companies and earn a commission on each sale they
generate.
● Affiliates use unique tracking links to drive traffic and sales to the
merchant's website.
● It allows businesses to expand their reach through a network of affiliates
without significant upfront marketing costs.
Benefits of E-Commerce

● Increased Global Reach: E-commerce allows businesses to reach customers worldwide,

breaking geographical barriers and expanding their market reach beyond local
boundaries.
● 24/7 Availability: Online stores operate 24 hours a day, 7 days a week, providing
customers with the flexibility to shop at their convenience, leading to increased sales
and customer satisfaction.
● Cost-Effectiveness: E-commerce eliminates the need for physical storefronts, reducing
overhead costs associated with rent, utilities, and staff, making it a cost-effective option
for businesses.
Benefits of E-Commerce (cont’d)

● Personalized Shopping Experience: E-commerce platforms can collect customer data,

enabling businesses to offer personalized product recommendations and tailored

shopping experiences, enhancing customer engagement and loyalty.

● Efficient Transaction Processing: Online payment gateways enable secure and swift

transactions, streamlining the buying process for customers and reducing manual
efforts for businesses.
Challenges and Risks in E-Commerce

● Cybersecurity Threats: E-commerce faces the risk of cyber attacks, data breaches, and
online fraud, potentially compromising sensitive customer information and damaging a
company's reputation.
● Competition: The digital marketplace is highly competitive, with numerous businesses
vying for customer attention. Standing out among competitors can be challenging for
e-commerce ventures.
● Logistics and Shipping Complexities: Efficient order fulfillment, shipping, and returns
management are crucial in e-commerce. Delays or mishandled deliveries can lead to
customer dissatisfaction and increased operational costs.
Challenges and Risks in E-Commerce (cont’d)

● Customer Trust and Credibility: Building trust with online customers can be
challenging, especially for new or lesser-known e-commerce businesses. Concerns
about product quality, authenticity, and customer service may affect credibility.

● Legal and Regulatory Compliance: E-commerce businesses must adhere to various legal
and regulatory requirements, such as data protection laws, consumer rights, and
taxation, which can vary between countries and regions. Non-compliance can lead to
legal consequences and fines.
Summary

● E-commerce, or electronic commerce, revolutionizes the way businesses

operate and how consumers shop.
● It encompasses various business models, including B2C, B2B, dropshipping,
subscription-based, and more.
● The benefits of e-commerce include global reach, 24/7 availability,
cost-effectiveness, and personalized experiences.
● However, e-commerce also comes with challenges such as cybersecurity
risks, fierce competition, and logistics complexities.
Conclusion

● E-commerce presents immense opportunities for businesses to thrive in the

digital age and access a global customer base.
● Leveraging the right e-commerce model and focusing on customer trust and
experience are vital for success.
● Embracing technological advancements and staying compliant with regulations
will strengthen e-commerce ventures.
● As e-commerce continues to evolve, businesses must adapt and innovate to
remain competitive and meet consumer demands.
● E-commerce's potential for growth and transformation makes it an essential
aspect of modern business strategies.
References
Turban, E., Whiteside, J., King, D., & Outland, J. (2017). Introduction to electronic commerce and
social commerce. Springer.

Taher, G. (2021). E-commerce: advantages and limitations. International Journal of Academic

Research in Accounting Finance and Management Sciences, 11(1), 153-165.

Amit, R., & Zott, C. (2017). Value drivers of e‐commerce business models. Creating value:
Winners in the new business environment, 13-43.

Singh, S., & Singh, N. (2015, October). Internet of Things (IoT): Security challenges, business
opportunities & reference architecture for E-commerce. In 2015 International conference on
green computing and internet of things (ICGCIoT) (pp. 1577-1581). Ieee.