What is E-commerce?
E-commerce or electronic commerce is a business model that is a part of economics and traditional commerce, where it lets companies and individuals buy and sell goods and services over the internet.
There are 4 types of e-commerce that operates in the market:
- Business to business (B2B)
- Business to consumer (B2C)
- Consumer to consumer (C2C)
- Consumer to business (C2B)
E-commerce has the following advantages that are:
- Convenient for customers and buyers to sell or buy these 24 x 7.
- Facilitates access to foreign markets.
- Improves exports and production.
- Today, many stores are running on the back of E-commerce or online stores.
Disadvantages of the E-commerce industry are:
- Sometimes, there are Limited customer services available in this industry.
- Online images do not necessarily convey the whole story about things or products, so at some point, it is unsatisfying for consumers.
- Lack of command on delivery services or instant gratification.
Here are some of the impacts of the e-commerce industry in today’s world:
- Market structure:
E-commerce affects the structure of markets, in terms of goods and services, market production, supply chain, production, etc. Socially, it increases the dependencies on the optimal utilization of the available resources in the society.
However, it plays a crucial role in achieving the optimizing allocation of the resources and affects the structure of markets that brings people closer to access to the market of full competition.
- Investment:
E-commerce industry helps in creating new investment opportunities for business-owners and investors and plays an important role in the infrastructure. The continuous spread of e-commerce needs an increase in the production of this sector and directing capital to invest in it to develop the infrastructure of e-commerce to support the national economy.
- Economic growth:
E-commerce affects growth rates and economic variables. It leads to higher standards of living, structuring markets, higher wages, and expanding marketing. Also, increases sales and exports and thus increasing production and growth rates.
The use of modern technological means of trade by states increases the strength of the economy and its growth and is beneficial for the society, health, and education sectors. electronic commerce increases sales and corporate profits, which works to support the economies of countries.
- Capital Market:
The E-commerce industry has a great impact on the capital market because capital flows are exchanged between surplus units, that is the investors, savings and deficit units. In stimulating investment and economic growth, long-term stocks and bonds play an important role.
- Exports:
E-commerce helps to increase the foreign trade among countries, especially exports, helps to get access in the global markets and makes business deals more easier without any commercial or administrative restrictions. It responds to the changes that occur in the consumer’s demand.
Nowadays, E-commerce is increasing trade in services between countries and accounts for over 60% of the world’s total production. It is a process of convergence between producers and consumers and eliminates geographical distances.
If you look at the positive side, then E-commerce also helps reduce the unemployment problem by creating economic or job opportunities for many people especially in the field of information and communications technology. It also helps in providing small or large jobs to people who are disabled and helps them to do work from home. Many women who want to work without having to work outside, can work in the e-commerce sector.
