How eCommerce Works: Your Initiation to Digital Commerce

eCommerce is an area of the economy in which advertising, promotion, trade, and financial transactions are carried directly on the Internet.

As the world continues to evolve every day, buying and selling goods and services online has become more popular. Its simple and convenient nature has led people to choose online shopping as their go-to destinat out ion for shopping. Even though some people are aware of online shopping from a buyer's perspective and some recognize it from a business's perspective, most people are keen on learning about this thoroughly in a comprehensive way. So let's begin our eCommerce learning journey.

Traditional Commerce Vs. eCommerce

eCommerce allows businesses to reach a global customer base of billions, while traditional commerce is limited to a local or regional market.

As we all know, the standard way of commerce is the exchange of products and services between two or more people. This involves buying and selling goods with a specific value in direct engagement between the seller and the customer. The concept of commerce originated from the barter system, where products were exchanged for other goods. Over time, this practice evolved to include using the currency for trade instead of solely relying on goods.

Traditional commerce occurs through face-to-face interactions, with sellers showcasing their products in physical stores. However, after the invention of the Internet and its increasing influence on people's lives, a new form of commerce emerged, commonly known as eCommerce. This system changed how products and services were exchanged by facilitating online transactions. eCommerce enabled the buying and selling goods and services over the Internet, eliminating the need for in-person interactions and brick-and-mortar stores.

Introduction to eCommerce

eCommerce buyers have the advantage of accessing a vast range of products and services from different sellers and brands, all with just a few clicks.

Therefore, eCommerce, also known as electronic commerce or Internet commerce, can be introduced as the process of buying and selling goods or services over the Internet. Typically, these activities occur on the Internet through online stores, which can take the form of websites and desktop or mobile apps. These stores provide buyers with a catalog of products or services, allowing them to view and electronically purchase items with a smartphone, laptop, or tab. Amazon, Flipkart, Myntra, eBay, Quikr, and Olx are examples of eCommerce stores.

To better understand what eCommerce is, imagine a person who loves baking decides to sell homemade cookies online. They create a website where they showcase their different cookie flavors with pictures and descriptions. Then, customers can visit their website, browse it, and buy cookies to their liking. Or, take someone who is skilled at offering virtual yoga classes. They create a website describing the types of classes they offer, such as beginner-friendly sessions or advanced sessions. Then, the visitors to the website can view the class schedule, choose a class that fits their preferences, book a spot, and join the class. That is eCommerce in simple terms.

Characteristics of eCommerce

eCommerce platforms operate 24 hours a day, 7 days a week, allowing customers to shop at their convenience.

01. Operates through the Internet

eCommerce relies on the Internet as its primary medium for conducting business. Online platforms, such as websites and mobile apps, function as the interface between businesses and customers. Sellers add their products and list them on their site, and the buyers go online, search for the products they want, browse the eCommerce sites, and buy the products using their smartphone or another device. All transactions, communication, and interactions occur digitally, allowing for efficient and convenient online shopping experiences.

02. No Geographical Boundaries

As eCommerce operates on the Internet, it breaks the boundaries of location and allows sellers to sell to customers all around the world. Unlike regular stores that can only serve people in specific places, online shops can reach anyone with internet access. This global reach helps businesses expand their market and trade internationally. A company's customers can match the world's population thanks to eCommerce.

03. Non-Cash Payments are Involved

eCommerce uses different payment methods that don't include cash. While paying with cash when the product is delivered is possible sometimes, most online transactions use digital payment methods. These include using credit or debit cards, transferring money from a bank account, using electronic wallets, or using payment services like PayPal. Non-cash payments make buying and selling things online easier and safer for businesses and customers. It helps transactions happen quickly and with trust.

04. No Personal Interactions  

Unlike traditional selling, where customers can physically interact with salespeople or touch and feel products before purchasing, eCommerce lacks face-to-face personal interactions. Customers rely on product descriptions, images, reviews, and customer support channels to gather information and make purchase decisions. While this may be seen as a drawback for some, detailed product information and virtual experiences bridge the gap.

05. Delivery Takes Time

eCommerce typically involves shipping and delivering products, which can take more time depending on various factors such as location, shipping method, and product availability. Unlike purchasing from a physical store where customers can immediately take possession of their items, eCommerce requires customers to wait for the delivery. However, with the development of delivery services, many eCommerce companies have optimized delivery times to provide faster product delivery for customers.