Part 1: Generalities of E-commerce

A. Definition of E-commerce

E-commerce refers to the exchange of goods and services between two entities over computer
networks. E-commerce includes a wide range of information, programs, and resources for
online buyers and sellers. It goes beyond online shopping to include encryption for online
payments.

An e-commerce site and/or platform is used by the majority of businesses with an online
presence. This allows them to manage logistics and fulfillment while conducting online
marketing and sales efforts.

E-commerce therefore includes inter-company relations as well as relations between

companies and administrations and exchanges between companies and consumers (banking
activities are only taken into account for their contribution, through payment systems, to other
transactions commercial).

Over the past five to seven years, the e-commerce industry has been at the forefront of growth
and innovation; and given this, there is no doubt that the future of e-commerce is looking
extremely bright. According to Statista, global e-commerce retail sales are expected to reach
$5.4 trillion by 2022.

The coronavirus epidemic has also greatly contributed to the growth of e-commerce and the
construction of new e-stores. In 2020 alone, global e-commerce rates reached 25.7%, which
could be the biggest increase between 2019 and 2024.
 Figure 1: Retail e-commerce sales worldwide from 2014 to 2025

B. The different types of e-commerce

1. B2C (Business-to-Consumer)

B2C e-commerce encompasses transactions made between a business and a consumer. It is

one of the most widely used sales models in the context of e-commerce. When you buy shoes
from an online shoe retailer, it is a business-to-consumer transaction.
 B2C e-commerce as percentage of GDP in Western Europe from 2017 to 2021

2. B2B (Business-to-Business)

Business-to-business e-commerce refers to sales made between businesses, such as a

manufacturer and a wholesaler or retailer. This type of e-commerce is not consumer-oriented
and only exists between businesses. Most often, B2B sales focus on raw materials or products
that are repackaged or combined before being sold to customers.
 Global B2B e-commerce gross merchandise volume from 2013 to 2019

3. C2C (Consumer-to-Consumer)

One of the first forms of e-commerce is the C2C model. It relates to the sale of products or
services between customers. These include consumer-to-consumer sales relationships like
those seen on eBay or Amazon, for example.

4. C2B (Consumer-to-Business)

The C2B model reverses the traditional e-commerce model C2B means that individual
consumers make their products or services available to commercial buyers.

5. B2A (Business-to-Administration)

This model covers transactions between businesses and government online. An example
would be products and services related to legal documents, social security, etc.

6. C2A (Consumer-to-Administration)
Same idea here, but with consumers selling products or services online to an administration.
The C2A model could include online consulting services for education, online tax
preparation.

Both B2A and C2A focus on improving efficiency in government through the support of new
information and communication technologies.

C. The advantages and disadvantages of an e-commerce site

 The advantages of an e-commerce site

 24 hours accessibility
 The purchase / sale procedure is faster.
 No more geographical limits to reach customers.
 Reduction of operating costs and better quality of services.
 No need for a physical company or point of sale.
 Customers can easily choose products from different suppliers, without physically
moving.

 The disadvantages of an e-commerce site

 Difficult to establish trust with the client

 Greater risk of fraud
  In case of export: constraints in terms of legislation, taxation.
 There is no warranty of product quality.
 Customer loyalty risk
 shopping carts are abandoned

Part 2: the impact of e-commerce

a. The rise of e-commerce markets

 The rise of e-commerce has upset the codes of the retail world. Indeed, the impact of
e.commerce is far from negligible, with a ripple effect on everything from small
business to global enterprise and beyond.
 E-commerce has a significant impact on business costs and productivity. E-commerce
has a chance of being widely adopted due to its simple applications. So, it has a big
impact.
 E-commerce provides the ability to buy and sell products and information over the
Internet and other online services. E-commerce refers to a wide range of online
commercial activities for products and services.
 It transforms the market by altering the business models of companies, shaping the
relationships between market players and contributing to changes in the structure of
the market.
 b. Social impact and growth of e-commerce

The social impact of e-commerce can be measured by satisfaction and trust through the
following factors:

 Greater use of the Internet The fastest growing demographic segment includes
students and young people.
 This segment is the major user of advanced applications and online technologies.
 The growth in the number of internet users has also led to substantial growth in other
digital industries such as e-commerce, mobile commerce and digital advertising.

c. The impact of e-commerce for retailers

 Large retailers are forced to sell online

 For many retailers, the growth of e-commerce has expanded the reach of their brands.
Also, it had a positive impact on their bottom line.
 But for other retailers who have been slow to embrace the online marketplace, the
impact has been felt differently.
 Studies (UNCTAD) show that discount stores and luxury retailers maintain their
position with consumers. However, e-commerce adds to fierce competition for
retailers within the middle tier.
 Studies (UNCTAD) also indicate that department stores in particular have been
affected by the impact of the rise of e-commerce.
 On the other hand, many chain stores are seeing their sales decline. In effect, Amazon
is becoming the consumer source of supply for products traditionally purchased in
department stores.

 E-commerce helps small businesses sell directly to customers

 For many small businesses, adopting e-commerce has been a slow process.
 However, those who have adopted it have discovered that e-commerce can open doors
to new opportunities that were not possible before.
 Gradually, small business owners are launching e-commerce sites. They can thus
diversify their offer, and better adapt to the different possible sales channels.
 Recent studies show that 2 out of 10 SMEs have increased their presence in e-
commerce in the last two years. They also show that 11% of SMEs plan to increase
their efforts in this area over the next year.

d. The impact of e-commerce on businesses

 The rise of e-commerce is impacting retailers on a range of issues, from investments to

store organization and planning.
 Retailers need to be prepared for how quickly this channel will become an important
part of their sales. At the same time, retailers need to understand how digital
commerce will evolve by country and by type of category.
 Western Europe is a great example of how countries and categories move online at
different speeds

 Sustainability.

 Consumers are increasingly aware of the environmental and ethical footprint of their
purchases, including digital purchases and the “real or hidden” impacts and costs of e-
commerce – and consumerism in general.
 From sustainability to excessive packaging, consumers reward merchants who
resonate with their value system.
 Brands and retailers large and small are using digital to appeal to consumer values –
and consumers are increasingly guided by their values and ethics when making
purchasing decisions.
 Societal and environmental impact are increasingly influencing consumer choice, and
digitally savvy brands are leveraging e-commerce to create the visibility and
transparency that customers are looking for.

 Free returns.

 Generous return policies have long been used to increase conversions by reducing
consumer uncertainty. But the growth of e-commerce, free shipping, and free
returns has created a dangerous side effect—the cost of handling returns.
 44% of retailers in the US say margins are heavily impacted by returns handling
and packaging.
  In 2018, Amazon announced it would institute a lifetime ban on "serial returns,"
shoppers who routinely return most of their purchases.

 E-commerce technology.

 "It's a site, it's an app - no, it's both." PWA (progressive web applications) are
changing the way e-commerce and mobile coexist.
 Brands and retailers will start moving sites and apps to a new standard; the
Progressive Web App – a hybrid between sites and applications that combine the
advantages of each and remove the limitations.
 PWA works by shifting the workload to the device, instead of relying on the web
server for every page, layout, click, and image, creating a standard experience
regardless of browser, device type, and the connection.

 Social media is becoming transactional.

 Not just selling leads and traffic, social media platforms are looking to bridge the e-
commerce divide by becoming transactional.
 Users will be able to make purchases without leaving the platform. Social buying is
already standard in China, where 55% of social app users said they buy goods or
services directly on a social app.
 Private messaging services, which are exploding in popularity, are also expected to
become transactional. WhatsApp, Snapchat and Facebook Messenger show
engagement numbers in the billions.
 Retailers will hire their first AI (artificial intelligence) employee

 Retailers must maintain and provide images and videos, catalog descriptions, names,
category-specific metadata (e.g. nutritional information for food products), stock
availability, product matrices (e.g. size ranges), company/brand logos, product ratings
and reviews, pricing and promotions information for all physical SKUs.
 Acquiring this information from suppliers is a time-consuming task, requiring various
methods and significant manual activity. AI-based solutions will increasingly
automate the creation, optimization, classification, translation and syndication of
product content which, combined, have become a must to meet consumer demand for
more product information: Merchants with the most (and best) product information
win the customer.

e. Impact of e-commerce on the economy

 The buying and selling of commodities is the most basic economic transaction, and
any change in this is reflected in the management of the supply chain. Gradually, the
number of consumers buying online has increased with the increase in internet usage.
 Today, a shopper is not limited to a retail store. A list of a thousand products is
accessible in a few clicks.
 The growth of e-commerce has reduced a consumer's search and given them
everything with a single click. Large businesses such as bookstores, furniture stores,
car dealerships can compete in the environment, while smaller businesses have seen
their sales decline.
 Growth in e-commerce sales has enabled exponential growth in the logistics industry
as an e-commerce platform. It also integrates third-party logistics providers like
FedEx, UPS, Blue Dart.
 E-commerce controls demand patterns and technology influences the speed of sales.
The economy is globally affected by e-commerce. In recent days, it has taken some
time to transform the economy of the two dependent countries, but with the sudden
changes in the sales model, the impact is immediate.

f. New jobs are being created, but traditional retail jobs are being reduced

 Jobs related to e-commerce have doubled over the past five years. They thus far
exceed other types of retail in terms of growth.
 However, employment growth in e-commerce is only a small piece of the overall
employment puzzle.
 A few quick facts on the impact of e-commerce on employment:
 Jobs in e-commerce have increased by 334%, or 178,000 more jobs since 2002.
 Most e-commerce jobs are located in medium to large metropolitan areas. Most
ecommerce businesses have four or fewer employees.
 Studies indicate that e-commerce will continue to directly and indirectly create new
jobs. The areas involved will be highly specialized such as the information and
software sectors. They may also relate to the increased demand for productivity.
 On the other hand, improving efficiency, coupled with moving away from traditional
retail, can also lead to job losses or workforce reductions.
 As with any major market change, there are positive and negative impacts on
employment.