Meaning of E-Commerce:

The fast and dramatic changes in information technology, especially in last one decade, has given a new concept of marketing in which buyer and seller do not see each other face to face nor see the goods physically; the whole transaction is carried out with the help of ‘online’ communication. The entire deal is carried out with the help of a computer – telecommunication and networking with associated hardware.

In e-commerce, the internet provides information about goods and services “It is” a way of conducting imaging and executing business transactions and services through elec­tronic media and networking in computers and communication networks, websites, e-mail has resorted.

Customers know about goods and services sitting at home. The manufacturers, distributors, suppliers and services providers let the consumers know about their product quality, price, size, color, etc. through multi-colored catalogs on the website. The consumers can ‘surface various web sites and compare their relative prices, quality characteristic, features, etc.

These details can be obtained from suppliers around the globe. The websites are available besides for goods for direct selling, context selling, financial and other services such as hospitals, education, training, advertise­ments, property, entertainment, product demonstrations, bill payment, exchange and all other ser­vices which one can think of.

The types of selling through the use of the internet and other electronic devices can be of the following types:

1. Business to Business (B2B):


This implies selling by one business manufacturer to other business manufactures, trade, wholesalers or retailers. In India as yet most of the e-commerce is B2B. The number of companies like TELCO, IBM, C1TI BANK, BHEL, ESSAR, TVS, MARUTI, BAJAJ, and many others is doing B2B.

2. Business to Consumer (B2C):

When a business sells to customers/consumers it is called B2C and is most important from our point of view. The products include items sold in departmental stores, chemist shops, grocery stores, books, stationery, clothes, vegetables, fruits and what not.  Many service sectors are adopting this mode.

3. Consumer to Consumer (C2C):

Under this system when some consumer wants to dispose of his old items, he can take the help of selling through the internet. But this type of e-commerce is not very common at least in India and the business is negligible.

4. Business to Government (B2G):

Business house or on individual business has to file income tax and sales tax returns and various types of other returns. As yet this requires the filing of return in respective office and applies for approval in the concerned office. But now many countries allow this type of activity through e-mail/e-commerce. However, as yet this is not being done in India.

E-mail network:

E-commerce requires the visit of the website, selection of products, select a payment mode, a realization of money (which is done before dispatch) and dispatch of goods.

The process may be depicted as under:

A. Visit the website:

Selection of a product

Selection of payment mode

1. Credit card

2. E-banking

3. VP/courier (who collects the payment at the time of delivery, but this is discouraged.

4. Placement of order through e-mail

5. Realization of money.

Dispatch to the customer can be online or through courier.

In order that consumers may visit a particular website, sellers have to advertise about their website so that consumers may visit the website. The consumer decides which websites have to be visited and after getting the information from various sites he makes a choice and decides which one should be purchased. He then places an order intimating the mode of payment which is generally through credit card or e-banking and advice the bank where he has a credit card to debit the amount to his account.

After the seller realizes the amount for the goods order he dispatches the goods. In most cases, the whole process takes a couple of minutes and goods reaches the consumer within half an hour to one hour if he is a local consumer, it is claimed so by sellers. It’s time also depends on the distance between the seller and the customer as well as the availability of products.

e commerce

The advantage to Consumers:

The consumer has a number of advantages and convenience and therefore the system is becoming popular.

1. The consumer has a wider choice not from his town or country but also around the globe unless there are import restrictions.

2. Customized or personalized products and services. For instance, if some lady wants a bra of the exact size, her size can be measured through the internet and stored and she will be supplied bra of her requirement.

3. In case of purchase, one is not required to go from store to store to see the products to collect their details, prices, etc. Sitting at home he gets all the required information and that too very fast without spending much time.

4. There is absolute flexibility of time, place and distance is no hurdle; one can open the site any time day or night to get details, there is no problem of shops/stores opening/closing hours. The website can be opened at any time. In physical sales place and distance is also a problem which is no problem in e-commerce because one can see sites all over the world without moving out of the house.

5. It helps to globalize retail trading. One can buy things without geographical boundaries.

6. Exports to final consumers are possible through e-commerce, not only-just sales but procure­ment, accounts, logistics product development and other related services are also possible through e-commerce

7. The net enables suppliers to introduce and promote new markets and new products to meet the needs of individual buyers.

8. The consumer is better informed about products, prices, etc and therefore can make a better choice.


1. The biggest disadvantage of e-commerce is that one is not able to see and feel the product.

2. Since consumers are not able to feel and touch the products and therefore business is on trust and as yet business is largely limited to travel, automobiles, PC’s, services, books, and CD’s entertain­ment.


3. There is a big problem with online payment. It is with regard to time and legality of order to complete the transaction. As yet a satisfactory system of payment has not been developed by banks and financial institutions in a large number of countries.

4. The electronic signatures acceptance has been legalized by a large number of countries but still, many more have to take steps in this direction. Further, there are great chances of fraud in-spite of all the precautions.

5. The. E-commerce requires a large investment to build a brand image on the internet which is esti­mated around us$ 100 million or around Rs. 500 crores which can be invested only by big players. Thus small suppliers cannot get business through the internet.

6. The market is restricted to high income and educated population who own and know the use of the internet. Thus in poor, illiterate or less educated countries, it has limited access.

7. The consumer has a number of problems. He has to search internet/websites information on the internet, make the purchased domain and the payment. There are difficulties in searching, surfing, browsing and wandering around the internet which costs both time and money.

8. The privacy of the consumer is adversely affected especially in the matter of accounts; he is required to tell his credit card number to supplier or e-banker.


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