E-commerce and its Basic Framework
We’ll be going through what E-commerce actually means, its facilitators and the latest trends on e-commerce in India. So make sure to read the whole article to understand it better. Let’s Dive In..🌊
What is E-commerce?
E-commerce means an electronic-commerce site, which means the trade of goods and services through the use of electronic media and the Internet. E-commerce is about doing business over the Internet with the help of information technology such as Electronic Data Interchange (EDI). The E-commerce business basically is where a vendor has a website for online sale of goods and / or services, directly to the customer portal. The portal makes use of a digital shopping cart, or your digital shopping cart system, and it allows you to make payments using a credit card, debit card, or EFT (Electronic funds Transfer).
In a more precise manner, we can define E-commerce as the use of electronic communications and digital information processing technology in business transactions to create, transform, and redefine relationships for value creation between or among organizations, and between organizations and individuals
(C. Nisha and G. Sangeeta, 2012).
Primarily there are 4 types of E-commerce:
- Business-to-business (B2B)
- Business to- consumer(B2C)
- Business-to-government (B2G)
- Consumer-to-consumer (C2C)
Now, let’s look at E-commerce Facilitators
i) Internet:
The extensive use of the internet has led to the development of e-commerce. The Internet and smart-phones are indulging or let’s say they have become an integral part of everyone’s life. The Internet is already a source of information, but it has become an essential tool for your shopping, learning, communication, and even get the services of a plumber, a carpenter, a doctor etc., Such as supplies, and are more compact and smart, as the digital and help the platform to better communicate with customers, reducing waste, and supporting green businesses.
ii) Payment Gateways:
A payment gateway is a service provided by a provider of software solutions, e-commerce, credit card authorization for e-commerce, online retail, brick-and-mouse, or traditional brick-and-mortar. Extremely important, which is online business is to pay the routes, which includes credit cards, debit cards, payment processing, online banking, electronic transfers of money. The world is on the move from cash to digital, so there is a need for a payment gateway for a sustainable e-commerce business in the future. Some are already established like the BHIM-UPI etc.
iii) Analytics:
The analytics, is the scientific process in order to change the information/ knowledge into insights in order to make a better decision. The company’s analysts, helping to collect, analyze, and building reports on what their audience does. Since more and more people are using the Internet ,the growing volume of information has forced companies to focus on analytics to understand customer behavior. E-tailor a need to have access to the information in real time, in order to measure the rate of return on the net investment, and optimize the channel of the structure.
iv) Social Media
Companies are increasingly using social media to promote their products and services. The social network, which refers to websites and applications that enable people to communicate and share information over the Internet from a personal computer or mobile phone. Social media has played a major role in the creation of the brand and inform the customers about the various offers. It can also help you get feedback about a product or service. It provides a platform for branding, advertising, events, engagement, word-of-mouth advertising, distribution, etc. Instagram and Facebook are the most popular means of social-media marketing because of their large user base which gives and increase in the reach of the brand.
Hopping onto the Trends driving E-commerce in India ..
Alliance of the Hyper local Market with the Logistics Space
The customers get very prompt next day deliveries. Thus due to this the product will face many challenges such as :- to return the order, higher quality of customer service, and the management of large volumes of deliveries in different areas, which in return has seen an increase in the number of third-party logistics service providers that handle last-mile deliveries. There are a growing number of e-commerce companies which are partnering with third-party suppliers, and logistics service providers in order to cover the low population cities such as that listen in Tier 2 and Tier 3 cities. In addition, the leading e-commerce players need to have their own weapon i.e. their own logistics , in order to improve the end user experience and also to gain control over deliveries.
Rise in the innovative new payment solutions
Cash on Delivery (COD), who has been India’s most popular forms of payment for e-commerce transactions. COD, caused high administrative costs of the e-commerce business. Thus, a new era of digital payment solutions have been developed to solve these problems. In addition to these initiatives, The Government of India has been expanding banking services during the ‘Jan Dhan Yojana’ scheme which has added almost 110 million debit/Credit cards, which had thus provided the customers to have access to electronic payments.
Drastic Increase in Smartphone Adoption
With the Tech Companies launching budget friendly smartphones for every category of buyers, there is a major increase in the use of Smartphone. This subtle increase has indirectly boosted the user base to indulge in Online payments on different E-commerce sites. Without any doubt, Since you’re smart enough we can conclude that the growth in adoption of smart-phones has shoved E-commerce to the very next level.
That’s all for this Article! Stay tuned for more.
In the next Article we’ll be looking at different business models which I have mentioned at the starting of this article.
Till then Stay home, Stay safe.
