E-Commerce

E-commerce maybe simply defined as buying and selling of products or service over electronic systems such as the Internet and other computer networks. Sometimes, trading transactions carried over telephone lines and fax machines are also included in the definition of E-commerce. E-commerce is more of a marriage between technology and trade. With increasing use of computers in all walks of life and the convenience associated with it, buyers and sellers have found a new and readily accessible market in the Internet. More than 70% Americans use the Internet on a regular basis for private and/or business use. The biggest advantage of E-commerce is that the site could be something as basic as a catalog page with a phone number. There is no need to setup extensive infrastructure, thus making it more convenient and cost-effective. The operating expenses are much lesser. The reach of the Internet is all over the world. By way of E-commerce, trading has become as simple as a click of the mouse. It is being observed that traditional brick and mortar firms are losing business to online E-commerce sites.

E-commerce maybe segregated into different categories depending on the nature of parties. E-commerce between two or more business establishments is called B2B E-commerce. Contrasting terms are business-to-consumer (B2C) and business-to-government (B2G). B2C transactions involve selling of the end product to the consumers while in B2G transactions are derivatives of B2B in which the Government is the consumer.  The volume of B2B transactions is generally much higher than the others. That is because in any commercial transaction there will be many intermediary B2B for sale of raw materials, etc but there will be only one final B2C transaction. Typical examples of B2C E-commerce are Amazon and Flipkart, the hugely popular online booksellers. These are the most common kind of E-commerce transactions.

Another category of E-commerce transactions is consumer-to-consumer or citizen-to-citizen (C2C). These kinds of transactions are facilitated through some third party. A simple example would be that of an online auction in which the third party website merely acts as an intermediary between the buyer and seller. eBay is the most popular website for such transactions.

Intra-business transactions may also be known as business-to-employee in which the companies cater to their own employees. For instance, if the company offers some employee benefits like insurance policies to their employees.

It can be seen that with the opening up of the option to shop online, trading has become easier and faster. The advantages are manifold both for the buyers and the sellers. However, there is need for better regulation to secure the interests of both parties. The general concerns regarding consumer protection are equally applicable in the virtual world if not more. It has been seen that in developing countries, there is a sense of mistrust with respect to the virtual world since the systems are not very secure and regulation is not strict. Online fraud is rampant. There have been cases of hackers gaining unauthorized entry into online E-commerce websites and stealing confidential information relating to consumers like bank details. Consumers don’t have the chance to inspect the goods before purchase thereby making online purchase even more distrustful. Therefore, it is imperative to address these issues before we can also start relying on the Internet completely for commercial transactions.