What is E-Commerce? Know All Types and Benefits!

ecommerce

Thanks to the internet, technological developments have given rise to new opportunities in business. Ecommerce is one of them. However, do you know what e-commerce is?

Will this business benefit you? How is the development in Indonesia? We’ll cover everything here, from what e-commerce is to the development of e-commerce in Indonesia.

What is E-commerce?

Electronic commerce or e-commerce is all buying and selling activities carried out through electronic media. Although the facilities include television and telephone, now e-commerce is more often done through the internet.

Because of this understanding of e-commerce, there are misunderstandings about e-commerce and marketplaces. The term e-commerce is used to describe all transactions that use electronic media.

Marketplace itself is one of the e-commerce models, where it functions as an intermediary between sellers and buyers. Sellers who trade on the marketplace only need to serve purchases. All other activities such as website management are already taken care of by the platform. Sites like Shopee and Lazada are two examples of marketplaces.

Has the question of what is e-commerce been answered? If so, let’s move on to the next discussion, namely the types of e-commerce.

Types of E-Commerce

You may think that online commerce only occurs between sellers and buyers. However, e-commerce is actually divided into six groups, namely:

  • Business to business (B2B) — A type of e-commerce in which a company sells products or services to other companies. In this e-commerce model, buyers usually order goods in large quantities. An example is a company that buys office supplies from a manufacturer.
  • Business to consumer (B2C) — In this type of e-commerce, a company sells products or services to consumers. In general, customers in B2C e-commerce only retail. If you have ever bought from an online store, this activity falls into this category.
  • Consumer to consumer (C2C) — Have you ever sold used goods to other people who need them via the internet? These activities are included in this type of e-commerce. In other words, C2C is an online transaction between two individuals.
  • Consumer to business (C2B) — In contrast to B2C, C2B e-commerce is a scenario where someone sells a product or service to a company. A graphic designer, for example, offers and sells his logo to a food business.
  • Business to public administration (B2A) — This e-commerce model is similar to B2B, but the actors are businesses and government agencies. An example of B2A is a website creation service for an online administration system.
  • Consumer to public administration (C2A) — This type of e-commerce works like C2B. However, transactions are carried out by individuals and government agencies. E-commerce with the C2A model is rarely found in Indonesia. The types of transactions that occur are usually in the form of services.

What are the Benefits of E-Commerce?

The development of the e-commerce industry in Indonesia is very fast. With so many online business people, you must be wondering, what are the benefits of e-commerce? Here are some of the advantages that you can get:

  • Broad reach — As a conventional store owner, you can only reach shoppers from the same area. It’s different if you have an e-commerce website. The first benefit of e-commerce, buyers from all over the country can make transactions at your store.
  • Not limited by time — Stores in the real world can operate 24 hours a day, but the costs to support them will be enormous. Through the internet, shoppers can still access and buy from stores even if you are fast asleep. The benefits of e commerce on this one are certainly very helpful for all of us.
  • Lower costs — The operating costs of online stalls are very low compared to building stores. At least, you don’t have to think about employee salaries, building rent, and electricity costs.
  • No need to stock yourself — In the ecommerce industry, you can become a dropshipper. This marketing technique allows you to sell without having stock. When the order comes, you just forward it to the manufacturer of the desired item. To understand more about the dropshipping business.
  • Ease of managing transactions and shipping — By having an online store, you don’t have to worry about how to transact and ship goods. Now there are various electronic payment services that are carried out via the internet. In addition, consignments can be tracked online.
  • You can learn customer habits — Running an online business without understanding customer behavior is a waste of your investment. Currently, there are many analytical tools that can be used to study your online store data, such as Google Analytics.
  • Work from anywhere — As mentioned earlier, one of the benefits of e-commerce is that it can be accessed anytime. Therefore, you can run it from anywhere as long as you have an adequate device and internet connection.

Want to Sell Online? Don’t Forget to Create a Website

Now you can easily start an ecommerce business. There are at least three tools that can be used to sell online, namely online marketplaces (such as Tokopedia and Bukalapak), their own website, and social media.

Marketplace and social media are certainly the easier way. To get started, you just need to create an account and set up your booth. In fact, there are no operational costs that you need to spend upfront.

However, even if this method is not wrong, having a website that represents your store or business is still important. Why? Check out the explanation below!

Build credibility

Social media or marketplace is indeed an online storefront that is easy to use. However, there aren’t many ways to introduce yourself on either platform. Most likely, you can only make a short description of the product or service being offered.

It’s different if your business has a separate website. With a website, you have the freedom to determine the design and features of your online store. For example, you can create a booth display that is more concise and easy for buyers to understand.

Additionally, a Verisign study showed that 84 percent of consumers agree that online merchants who have websites are more trustworthy than those who only sell on social media. Therefore, you need to have a website to market your brand.

What’s more, 77 percent of potential buyers read product reviews online — and your site is a great place to feature them.

Improve service to buyers

Marketplace and social media have chat or message features that can be accessed at any time. However, managing incoming messages can be messy if you already have a lot of people who want to communicate with you. Of course you don’t want to forget to reply to a question from a potential buyer.

To overcome this problem, you need a website that has a chat or ticketing feature that is more qualified and organized.

Your Brand is Easier to Find Through Search Engines

Research conducted by GE Capital Retail Bank shows that 81 percent of people research products with a search engine before making a purchase. In addition, 60 percent of shoppers visit an ecommerce site they find on a search engine, before finally deciding to buy.

Judging from these facts, of course selling through the marketplace or social media does not promise enough brand publication. Instead of using an intermediary platform, you should trade independently with an ecommerce website.

Many Competitors Have Websites

Business competition on the internet is very tough, especially if the goods or services you sell are also offered by many other parties.

While you are still trading through the marketplace, many competitors have strengthened their brand with online store sites.

Plus, you need to remember that potential buyers are now using search engines to find trusted brands. Before the competition gets tougher, it’s a good idea to start using a website to market your business.

Creating a Website is Easy and Cheap

Many people think that starting a website is not easy. In fact, the process is not as complicated as imagined.

Before building your first online store site, all you need to do is buy a hosting service and a domain. Both do not require large funds. You can get hosting starting from IDR 10,000 per month and domains starting from IDR 14,000 per month.

Conclusion

E-commerce is all buying and selling transactions carried out via the internet. Based on the perpetrators, there are six types of e-commerce businesses, including business to business and business to consumer.

In Indonesia, this industry is being loved and will continue to grow rapidly, as projected by McKinsey & Company in 2018.

In addition, e-commerce offers many advantages over conventional stores. For example, you are not limited by place and time to run an online store website.

Currently, there are also various platforms to support e-commerce businesses, including online marketplaces and social media. However, you are encouraged to also have a website that represents the professionalism of your brand. What’s more, websites are easy to build and chances are that your competitors already have them.

Hopefully this article about what e-commerce is, the benefits of e-commerce, and the types of e-commerce is useful for you.

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