In 1991, when the Internet became available for commercial use, e-business and e-commerce companies started to pop up. Thirty years later, global retail e-commerce sales reached 4.891 trillion US dollars. In 2021, 2.14 billion people worldwide will buy goods or order services online.
The rapid growth of e-business vs. e-commerce models is triggered by the spread of the Internet. The changing buying patterns of consumers who are more likely to buy something online is another factor.
Since e-business and e-commerce are extremely powerful today, it’s important to differentiate them. Even though e-business vs. e-commerce has a lot in common, the differences are significant. That’s why below, we will compare and contrast e-business vs. e-commerce companies and what they do.
What is E-business?
An e-business is any company that operates online. It has a website that promotes products and services, uses a CRM to communicate with customers, and integrates other digital solutions to run business operations.
To better differentiate between e-business vs. e-commerce, consider the main characteristics of e-businesses.
- Online niche as a medium. Online niche is what turns an ordinary business into an e-business. All e-businesses rely on the Internet and their web resources to offer their products or services. They also use web resources to promote their brand and engage more customers who can later place an order online or buy the promoted products in an offline store.
- Website. E-business cannot exist without a website. Although many businesses have web resources, for online businesses, websites are much more important. They enable companies to perform many core tasks, like customer reach, marketing, and support.
- Online communication. E-businesses communicate with customers through multiple web channels. They place contact information on the website and provide support via social media profiles, emails, websites charts, and other online touchpoints.
A real estate agency that conducts business offline but allows customers to view and book different properties on their website is an e-business company. People can leave a request, communicate with a real estate agent, and then decide to view the booked property. Real estate agents use a CRM to view the received requests, filter them, and respond to customers. They may also use other software solutions to track free properties, demand, finances, and other metrics.
What is E-commerce?
E-commerce is a business model for selling products and services on the web. Customers can place an order, make a payment, and arrange the shipment through a website. Only order pickup or delivery happens offline. When e-commerce businesses offer services, they are also highly digitized.
E-commerce businesses fall into several types: B2B, B2C, C2C, and C2B. Whereas B2B e-commerce companies conduct online transactions and communication between two businesses, B2C e-commerce connects businesses to the final customer. C2C ensures digital transactions between two customers (e.g., eBay web auction marketplace). Consumer to Business (C2B) enables consumers to create products that businesses may be interested in (e.g., logos).
This way, e-commerce companies share the following characteristics:
- All the processes happen online. Customers can find products, place an order, complete the payment, and follow the shipment through the website.
- They usually have no offline branches. Even though some e-commerce companies combine online sales with offline, the majority don’t have brick-and-mortar stores.
- 24/7 online support. E-commerce companies enable consumers to get support at any time.
Ecommerce Business Examples
An e-commerce corporation that sells electronics, cars, collectibles, health & beauty, and all other products. It’s a company offering B2C and C2C services.
It’s a B2C store of a renowned American technology company that serves as an official place to buy original Apple products.
A Chinese company uniting three web stores, Taobao, Tmall, and Alibaba.com. It directly connects suppliers and buyers across the globe through the B2B platform.
A digital platform enables businesses, individual sellers, and manufacturers to sell products to Amazon at a wholesale rate. Later, Amazon markets them and offers to buyers.
A US multinational retail corporation that owns a chain of discount department stores, grocery stores, hypermarkets, and an online marketplace selling basic goods.
Key Differences Between E-business and E-commerce
Now, let’s talk about the main differences between e-business vs. e-commerce companies. E-business refers to any business activity carried out online. E-commerce is mainly about providing services and products through web marketplaces.
|Definition||Running business operations using the Internet||Trading of products and services online|
|Structure||More complex and extensive||Simpler|
|Limited to monetary transactions||Not limited to monetary transactions||Limited to monetary transactions|
|Software required||Website, CRM, ERP, etc.||Website, application|
|Offline/Online balance||May involve both offline and online interactions with customers||Focus on online customer interactions|
|Internet use||Internet, intranet, and extranet||Only Internet|
|ICT use||Uses information and communication technology to make its business processes faster and more efficient||Uses information and communication technology to enable business relationships between consumers and suppliers|
Generally, there is no sharp line between e-business and e-commerce companies since many of their characteristics overlap. The main point is how a company operates. If you only promote, sell, allow placing an order, and paying online, you are an e-commerce company. If you do other business activities online, you run an e-business.
The Advantages of E-business vs. E-commerce
These two models prevail in the modern business world. Web resources allow companies to reach a broader target audience and make their services more convenient to use. E-business and e-commerce also have some other valid advantages listed below for each model.
Advantages of E-business
First of all, e-business allows companies to interact with potential and existing customers through multiple channels. The focus shifts from offline touchpoints to online interactions that are more effective. Companies become less dependent on a physical location and can offer their products and solutions worldwide.
The high level of business processes automation is another tangible advantage of transforming a company to e-business. A business needs to adopt multiple software solutions to operate online, including a website, CRM, and ERP successfully. Despite being expensive to implement, they quickly pay off and make the company more profitable.
Advantages of E-commerce
E-commerce is one of the cheapest methods to start a business. You can build a basic website with a website builder and start selling products or services. An offline store would require more investment and effort to open. However, since you conduct your business digitally, you also remain more flexible and agile.
In e-commerce, you can better tailor the offer to your target audience, simplifying customer engagement and retention. In addition, big data collected about buyers on the launched web store allows learning their preferences and purchasing habits.
E-commerce is a subset of e-business. Whereas e-business signifies a company that runs operations online, e-commerce is solely associated with online stores. To make your company truly e-business, you will need to implement more profound changes.
Overall, both models require the use of web resources to run a business. However, they also have many significant advantages like profitability and efficiency higher than in traditional business models.