Introduction to E-Commerce

The term e-commerce was coined back in the 1960s, with the rise of electronic commerce – the

buying and selling of goods through the transmission of data – which was made possible by the

introduction of the electronic data interchange. Fast forward fifty years and e-commerce has

changed the way in which society sells goods and services.

E-commerce has become one of the most popular methods of making money online and an

attractive opportunity for investors.

What is E-Commerce?

‘E-commerce’ and ‘online shopping’ are often used interchangeably but at its core e-commerce

is much broader than this – it embodies a concept for doing business online, incorporating a

multitude of different services e.g. making online payments, booking flights etc.

E-commerce has experienced rapid growth since its humble beginnings with e-commerce sales

projected to grow to 599.2 billion USD by 2024. The COVID-19 outbreak saw e-commerce sales

spike 25% in March 2020 alone. The power of e-commerce should not be underestimated as it

continues to pervade everyday life and present significant opportunities for small, medium, and

large businesses and online investors. You don’t need to look far to see the potential of e-

commerce businesses. Amazon, for example, which set the standard for customer-orientated

websites as well as a lean supply chain, is selling over 4000 items a minute from SMBs alone.

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Why Do People Buy ‘Online’?

Lower Prices: Managing an online storefront is far cheaper than an offline, brick-and-

mortar store. Typically, less staff are required to manage an online shop as web-based

management systems enable owners to automate inventory management and warehousing

is not necessarily required (as we discuss later). As such, e-commerce business owners can

afford to pass operational cost savings on to consumers (in the form of product or service

discounts) whilst protecting their overall margin. Furthermore, with the rise of price

comparison websites, consumers have more transparency with regard to prices and are

able to shop around, typically purchasing from online outlets instead.

1 Accessibility and Convenience: Unlike many offline stores, consumers can access e-

commerce websites 24 hours a day. Customers can read about services, browse products

and place orders whenever they wish. In that sense, online shopping is extremely

convenient and gives the consumer more control. Furthermore, those living in more

remote areas are able to order from their home at a touch of a button, saving them time

traveling to a shopping center.

2 Wider Choice: For the past twenty years, the growth of online shopping has to a large

extent been based on increased choice. With an almost endless choice of brands and

products to choose from, consumers are not limited by the availability of specific

products in their local town, city or country. Items can be sourced and shipped

globally. Interestingly, one recent study found that consumers are actually starting to

become frustrated by e-commerce sites that offer too much choice. Whichever way you

look at it though, more choice has likely been a good thing over the long term.

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Naturally, e-commerce has significant benefits for the consumer, but it has also been useful for

businesses too. Next, we look at some of the reasons why businesses have been quick to race into

space.

Why Do Businesses Sell ‘Online’?

1. Higher Margins: Setup costs and ongoing operational costs such as rent, heating,

electricity, warehousing (if operating a drop-ship model) and inventory management are

often significantly reduced or otherwise eliminated. Further, customer service and other

administrative tasks can be automated or outsourced at a relatively low cost. As

such, higher margins can usually be achieved when selling via an online store compared

to operating an offline business.

2. Scalability: With a brick-and-mortar business, the owner is often limited by the number

of people who can physically be in the store at any one time. There is no limit when

trading online. Running an e-commerce business means tapping into a truly global

market. Furthermore, online platforms enable rapid scaling. With the emergence of social

media and content marketing as well as the option of generating traffic and conversions

through pay-per-click (PPC), expanding into new regions or markets can happen quickly.

A great example of this in practice is Choxi, a business that experienced 1,023% growth

in revenue in just one year.

3. Consumer Insight / Technology: E-commerce businesses typically collate a tremendous

amount of customer data. With every element of consumer behaviour being tracked, e-

commerce business owners can understand, tweak and improve the customer shopping

experience for customers – making data-led decisions to increase conversion rates and

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 sales. With technology rapidly evolving, it is important that online retailers use tools such

as Google Analytics correctly to understand their customers’ buying habits,

unlocking insight from this data presents a unique advantage, not available to offline

stores. Those who leverage the right systems and technology can see their businesses

grow extremely quickly.

Types of e-commerce

Business-to-business (B2B) e-commerce refers to the electronic exchange of products, services

or information between businesses rather than between businesses and consumers. Examples

include online directories and product and supply exchange websites that let businesses search

for products, services and information and initiate transactions through e-procurement interfaces.

A Forrester report published in 2018 predicted that by 2023, B2B e-commerce will reach $1.8

trillion dollars and account for 17% of U.S. B2B sales.

Business-to-consumer (B2C) is the retail part of e-commerce on the internet. It is when

businesses sell products, services or information directly to consumers. The term was popular

during the dot-com boom of the late 1990s, when online retailers and sellers of goods were a

novelty.

Today, there are innumerable virtual stores and malls on the internet selling all types of

consumer goods. Amazon is the most recognized example of these sites. It dominates the B2C

market.

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Consumer-to-consumer (C2C) is a type of e-commerce in which consumers trade products,

services and information with each other online. These transactions are generally conducted

through a third party that provides an online platform on which the transactions are carried out.

Online auctions and classified advertisements are two examples of C2C platforms. EBay and

Craigslist are two well-known examples of these platforms. Because eBay is a business, this

form of e-commerce could also be called C2B2C -- consumer-to-business-to-consumer.

Platforms like Facebook marketplace and Depop -- a fashion reselling platform -- also enable

C2C transactions.

Consumer-to-business (C2B) is a type of e-commerce in which consumers make their products

and services available online for companies to bid on and purchase. This is the opposite of the

traditional commerce model of B2C.

A popular example of a C2B platform is a market that sells royalty-free photographs, images,

media and design elements, such as iStock. Another example would be a job board.

Business-to-administration (B2A) refers to transactions conducted online between companies

and public administration or government bodies. Many branches of government are dependent

on various types of e-services or products. These products and services often pertain to legal

documents, registers, social security, fiscal data and employment. Businesses can supply these

electronically. B2A services have grown considerably in recent years as investments have been

made in e-government capabilities.

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Consumer-to-administration (C2A) refers to transactions conducted online between consumers

and public administration or government bodies. The government rarely buys products or

services from individuals, but individuals frequently use electronic means in the following areas:

 Social security. Distributing information and making payments.

 Taxes. Filing tax returns and making payments.

 Health. Making appointments, providing test results and information about

health conditions, and making health services payments.

Mobile e-commerce (m-commerce) refers to online sales transactions using mobile devices,

such as smartphones and tablets. It includes mobile shopping, banking and payments.

Mobile chatbots facilitate m-commerce, letting consumers complete transactions via voice or text

conversations.

Advantages and disadvantages of e-commerce

Benefits of e-commerce include its around-the-clock availability, the speed of access, the wide

availability of goods and services, easy accessibility and international reach.

 Availability. Aside from outages and scheduled maintenance, e-commerce sites are

available 24/7, enabling visitors to browse and shop at any time. Brick-and-mortar

businesses tend to open for a fixed number of hours and may even close entirely on

certain days.

 Speed of access. While shoppers in a physical store can be slowed by crowds, e-

commerce sites run quickly, which is determined by compute

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 and bandwidth considerations on both the consumer device and the e-commerce site.

Product and shopping cart pages load in a few seconds or less. An e-commerce

transaction can comprise a few clicks and take less than five minutes.

 Wide availability. Amazon's first slogan was "Earth's Biggest Bookstore." It could

make this claim because it was an e-commerce site and not a physical store that had

to stock each book on its shelves. E-commerce enables brands to make a wide array

of products available, which are then shipped from a warehouse or various

warehouses after a purchase is made. Customers will likely have more success

finding what they want.

 Easy accessibility. Customers shopping a physical store may have difficulty locating

a particular product. Website visitors can browse product category pages in real time

and use the site's search feature to find the product immediately.

 International reach. Brick-and-mortar businesses sell to customers who physically

visit their stores. With e-commerce, businesses can sell to anyone who can access the

web. E-commerce has the potential to extend a business's customer base.

 Lower cost. Pure play e-commerce businesses avoid the costs of running physical

stores, such as rent, inventory and cashiers. They may incur shipping and warehouse

costs, however.

 Personalization and product recommendations. E-commerce sites can track a

visitor's browse, search and purchase history. They can use this data to present

personalized product recommendations and obtain insights about target markets.

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 Examples include the sections of Amazon product pages labeled "Frequently bought

together" and "Customers who viewed this item also viewed."

The perceived disadvantages of e-commerce include sometimes limited customer service,

consumers not being able to see or touch a product prior to purchase and the wait time for

product shipping.

 Limited customer service. If customers have a question or issue in a physical store,

they can see a clerk, cashier or store manager for help. In an e-commerce store,

customer service can be limited: The site may only provide support during certain

hours, and its online service options may be difficult to navigate or not answer a

specific question.

 Limited product experience. Viewing images on a webpage can provide a good

sense about a product, but it's different from experiencing the product directly, such

as playing a guitar, assessing the picture quality of a television or trying on a shirt or

dress. E-commerce consumers can end up buying products that differ from their

expectations and have to be returned. In some cases, the customer must pay to ship a

returned item back to the retailer. Augmented reality technology is expected to

improve customers' ability to examine and test e-commerce products.

 Wait time. In a store, customers pay for a product and go home with it. With e-

commerce, customers must wait for the product to be shipped to them. Although

shipping windows are decreasing as next-day and even same-day delivery becomes

common, it's not instantaneous.

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  Security. Skilled hackers can create authentic-looking websites that claim to sell

well-known products. Instead, the site sends customers fake or imitation versions of

those products -- or simply steals credit card information. Legitimate e-commerce

sites also carry risk, especially when customers store their credit card information

with the retailer to make future purchases easier. If the retailer's site is hacked, threat

actors may steal that credit card information. A data breach can also lead to a

damaged retailer reputation.

E-commerce applications

Many retail e-commerce apps use online marketing techniques to get customers to use the

platform. These include email, online catalogs and shopping carts, Electronic Data Interchange

(EDI), file transfer protocol, web services and mobile applications.

These approaches are used in B2C and B2B activities, as well as other types of outreach. They

include emailing targeted ads and e-newsletters to subscribers and sending SMS texts to mobile

devices. Sending unsolicited emails and texts is generally considered spam. More companies

now try to entice consumers online, using tools such as digital coupons, social media

marketing and targeted advertisements.

Another area of focus for e-commerce companies is security. Developers and admins should

consider consumer data privacy and security, data governance-related regulatory compliance

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mandates, personally identifiable information privacy rules and information protection protocols

when developing e-commerce systems and applications. Some security features are added during

the design of an application, while others must be continually updated to address evolving threats

and new vulnerabilities.

E-commerce platforms and vendors

An e-commerce platform is a tool that is used to manage an e-commerce business. E-commerce

platform options range in size from ones for small businesses to large enterprises. These e-

commerce platforms include online marketplaces such as Amazon and eBay, that simply require

signing up for user accounts and little to no IT implementation.

Another e-commerce platform model is SaaS, where store owners subscribe to a service where

they essentially rent space in a cloud-hosted service. This approach does not require in-house

development or on-premises infrastructure. Other e-commerce platforms include open source

platforms that require a hosting environment -- cloud or on premises -- or complete manual

implementation and maintenance.

A few examples of e-commerce marketplace platforms include the following:

 Alibaba

 Amazon

 Chewy

 eBay

 Etsy

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  Overstock

 Newegg

 Rakuten

 Walmart Marketplace

 Wayfair

Vendors offering e-commerce platform services for clients hosting their own online store sites

include the following:

 BigCommerce

 Ecwid

 Magento

 Oracle NetSuite Commerce

 Salesforce Commerce Cloud (B2B and B2C options)

 Shopify

 Squarespace

 WooCommerce

Government regulations for e-commerce

In the United States, the Federal Trade Commission (FTC) and the Payment Card Industry (PCI)

Security Standards Council are among the primary agencies that regulate e-commerce activities.

The FTC monitors activities such as online advertising, content marketing and customer privacy.

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The PCI Security Standards Council develops standards and rules, including PCI Data Security

Standard compliance, which outlines procedures for the proper handling and storage of

consumers' financial data.

To ensure the security, privacy and effectiveness of e-commerce, businesses should authenticate

business transactions, control access to resources such as webpages for registered or selected

users, encrypt communications and implement security technologies, such as Secure Sockets

Layer and two-factor authentication.

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 Electronic Payment System (EPS)

Payments services are critical drivers of financial inclusion. In developing countries, they are

often the first point of entry for consumers into formal financial services. Globally competitive

electronic payment services (EPS) technology provides individuals, especially those in lower-

income and remote segments of society, with easier, cheaper, and safer access to financial

services. One of the notable features that determine the success of an e-commerce store is the

seamlessness of transactions. Multiple factors are responsible to ensure successful payments on a

website/app – a crucial one being the availability of your customers’ preferred payment options.

The increase in online shopping has led to the introduction of several e payment systems and it is

important that every e-commerce business includes them for hassle-free payments.

This article throws light on the different types of e payment systems and the role of a payment

gateway in enabling them for your online store.

What are the different types of E payment systems?

Here is a look at the various e payment systems used by buyers when shopping at an online store.

Credit cards

A credit card which is usually offered by banks allows users to borrow funds and make

transactions within a pre-approved credit limit.

Customers usually prefer using a credit card because they can purchase anything without having

to pay immediately. The amount is added to their monthly bill and can be cleared on the due date

or even converted into an EMI.

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The number of credit card holders in India has increased from 29 million in March 2017 to 62

million in March 2021.

Credit cards are widely utilised for e-commerce transactions due to their secure features and ease

of use. Enabling credit card payments on your website can help your customer shop without

having to worry about paying upfront.

Debit cards

Unlike credit cards, debit cards can be availed easily without any prerequisites related to

eligibility or documentation. Usually, everyone who opens a bank account is issued a free debit

card making it one of the important payment systems to include on your website.

In the financial year 2021, there were over four billion transactions made via debit cards across

India. This is estimated to rise up to over eight billion transactions in the financial year 2026.

Offering debit card payments on your ecommerce store is crucial for your business to be able to

reach a bigger audience who might not be tech-savvy or have access to other modes of e

payments.

Smart cards

Smart cards appear like credit/debit cards but have a microprocessor that stores your customer’s

personal information and can be used for online transactions by adding money to it. The amount

is deducted based on the usage and the user can reload from the bank account based on their

requirements.

Smart cards are not a popular method of e payment system in India however, it is advisable to

include the option at your store to make it favourable for users who prefer this e payment system.

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E-wallets

E-wallets act just like physical wallets except that all the cards and money are virtually stored.

They help with instant payments and quick checkouts while purchasing on the internet.

The estimated value of mobile wallet transactions in the financial year 2021 across India was

over 1.5 trillion Indian rupees. Rising smartphone penetration along with increasing competition

in the domestic market can be attributed to the growing value.

E-wallets are fairly advanced versions of e payments and users can add money to their wallets

through credit/debit cards, net banking or using UPI.

India has seen a rise in the number of e-wallet companies offering incentives to their users such

as cashbacks and discounts to encourage them to transact more and more through e-wallets.

Net banking

Transactions done through net banking help users pay online directly from their bank account.

Customers can access their bank account online through their user-id and password and proceed

to make the transaction.

However, owing to other quick and convenient methods of payment, net banking does not enjoy

high popularity among the e payment options. It is a payment method to turn to if other methods

are unavailable or not functional – nevertheless, an important part of the e payment systems.

Buy Now Pay Later

Buy Now Pay Later (BNPL) is a popular method of payment among young buyers who prefer

easy access to credit that simplifies payments for them. BNPL is similar to a credit card where

the consumer can pay the bill amount at a later date however, this e payment system is much

easier to access without any stringent verifications or checks.

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The BNPL payment adoption is expected to record a CAGR of 54.3% during 2022-2028. The

BNPL Gross Merchandise Value in the country will increase from US$ 3656.3 million in 2021 to

reach US$ 93509.1 million by 2028.

Businesses offering the BNPL e payment system can help the tech-savvy audience shop faster

and without any complicated steps or processes.

How does a payment gateway enable e payments

Your online e-commerce store requires a payment gateway to enable all the above-mentioned e

payment systems.

A payment gateway helps merchants accept online payments through several complex steps that

it manages effectively to process transactions within minutes.

It is not feasible for an online store to handle multiple e payment systems without a robust and

reliable payment gateway. Whether you are a newly launched e-commerce website or an

established shopping platform, seamless payments are an important aspect for all businesses.

Paytm Payment Gateway is preferred by startups and enterprises across the country to ensure

smooth transactions on their website and app. The payment gateway offers unique features and

advanced tech infrastructure.

Here’s how Paytm Payment Gateway enables different types of e payment systems for

businesses

Multiple payment options: With options such as credit cards, debit cards and net banking

Paytm Payment Gateway supports 100+ payment sources. Your customers can also use the

Paytm Wallet and Paytm Postpaid for payments.

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Quick integration: Paytm Payment Gateway’s onboarding process is completely online. The

powerful APIs and custom SDKs activate digital payments on your website/app with minimum

documentation.

International payments: Paytm Payment Gateway lets merchants accept payments in 100+

currencies without the need for separate API integration. This feature is very helpful when you

plan to expand and target a global audience.

Industry best success rates: Paytm Payment Gateway has 250mn+ saved cards, 100mn+ saved

bank accounts and 15mn UPI IDs that ease the checkout experience for customers while

reducing the transaction time and increasing success rates.

Conclusion

India has seen a meteoric rise in e-commerce as more and more people prefer shopping online.

The advancements in tech have also made it easier and more convenient to purchase goods on

the internet. E payments are a part of this revolution and have transformed the shopping

experience for customers.

Every online business must strive to make transactions seamless for their customers by ensuring

that their preferred method of payment is offered on the website/app. Paytm Payment Gateway

simplifies this process for a business by offering maximum e payment methods for easy and

instant online payments.

E-commerce will expand and thrive if electronic payments and the services that make them

possible are permitted to reach their global potential. As set out above, a wide range of barriers to

EPS exist in both developing and developed countries that prevent consumers, businesses of all

sizes, and governments from securing the full benefits of EPS and e-commerce. These barriers

are enabled by inadequate WTO commitments on EPS.

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 .E-Marketing

E-marketing is an advertising discipline that includes all marketing activities conducted by a

business online using an electronic device or the internet. Other names for this type of marketing

include internet marketing, online marketing, digital marketing or web marketing. Within this

framework, a business uses modern media and technologies to attract new customers, keep

current customers and build a brand identity. There are many online tools a business can use for

e-marketing based on your business goals, products, capacity and target market.

Why is e-marketing important?

It's important to have an effective e-marketing plan in place for your business to keep up with

growth and changes in your customers' technology use. Here are some other reasons e-marketing

is so important:

Online customers

People search the internet daily to find a variety of information about businesses, products and

services. E-marketing is valuable as it allows you to reach and target those people who are

already using electronic devices and the internet to interact with companies.

Alternative communication channels

E-marketing helps you communicate better with your target audience. Reaching customers

through digital marketing channels makes finding your contact information simple. Browsers can

then call, chat, message or email your business with questions right from their devices. When

you reply, you start t wo-way communication, which builds relationships and helps your

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audience see your company as a valuable source of information. This may help non-customers

become clients.

Personalized marketing and customized experiences

People who find your business online may contact your company for different reasons. E-

marketing enables you to personalize your advertising strategies and create customized

experiences that target your audience's best interests. Personalized e-marketing helps you deliver

a better experience for new leads, which can convert them into loyal customers.

Quality traffic

When used effectively, e-marketing can help you reach the right leads at the right time and drive

them to your website or online store. You can get very precise with your targeting, ensuring you

reach people you know are interested in your business. E- marketing allows you to target leads

by demographic information, hobbies, interests and spending habits.

Brand visibility

E-marketing tools and strategies allow you to increase your brand's visibility and make people

more familiar with your business. When people interact with a business or brand repeatedly, it

begins to feel comfortable and familiar. People are more likely to choose a business they're used

to when making a purchase. Leads can also access your business website and social media

channels at all times, significantly increasing your visibility.

Campaign Variety

With e-marketing, you can run multiple marketing campaigns through various channels at once,

maximizing your reach. The internet gives businesses the capacity to take on lots of customers

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and still provide a quality experience. Most business websites can handle many customers and

multiple transactions simultaneously, which allows you to grow your business quickly.

Types of e-marketing

Here are 11 cost-effective e-marketing strategies you can use to market your business online:

1. Search engine optimization (SEO)

Search engine optimization, or SEO, involves structuring or editing your website to improve its

placement in search results for free. The goal of SEO is to get search engines to rank your

website as high in the results as possible for specific keywords or phrases. Additionally, you're

trying to train the search engines to recommend your content as a solution to a user

query.

SEO uses on-page factors like design structure, user experience and content as well as off-page

factors like backlinks and social shares to communicate with the search engine program and

provide information about the site's purpose. Well-executed SEO helps businesses reach their

target audience and rank above competitors in search results, which can lead to attracting more

customers and increased sales.

2. Email marketing

Email marketing involves creating a subscriber list or database of targeted prospects and then marketing

a product or service to them via email. Email marketers can specifically target segments of those email

lists and craft tailored correspondences to increase conversions.

3 Influencer marketing

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Influencers are individuals with a large social media following who promote products or services for a

fee. Influencer marketing takes place when a company contact one of these people and creates a

partnership. The influencer receives monetary compensation or products and services in exchange for

creating or sharing content about a specific business with their followers.

4 Affiliate Marketing

Affiliate marketing is an e-marketing strategy involving three parties: the product owner, the

affiliate marketer and the end consumer. Affiliate marketers select a product and then promote it

for the owner using blogs, videos or advertisements. The consumer can buy the product online,

using a link supplied by the affiliate, usually at a discounted price. The affiliate marketer can get

paid a predetermined commission on each sale.

5 Reputation marketing

Reputation marketing is an e-marketing strategy that uses social media and customer review platforms

to boost a business's reputation and increase sales. With more people taking part in online shopping

since the invention of the internet, online reviews and referrals have become a source of product

endorsement and recommendations for consumers. Reputation marketing involves building a brand's

image by encouraging customers to post positive reviews on specific platforms and social media.

6 Video marketing

Video marketing uses moving media to raise awareness, increase engagement and drive sales on digital

and social channels. It overlaps with content marketing and plays a significant role in e-marketing,

allowing businesses to reach their audience with a different medium. Video marketing is a very effective

way to capture the attention and emotions of your target audience and promote your product or service.

7 Instant messaging marketing

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Instant messaging marketing allows businesses to reach their target audience promptly and

effectively. This marketing strategy uses real-time chat platforms for customer support, to

promote special offers and send notices. This type of marketing gives customers another option

for communicating immediately with a customer service representative rather than calling a

phone number or communicating in an email chain.

8. Content marketing

Content marketing is the creation and distribution of free, informative content. The focus of this

type of marketing is on communicating information with customers rather than selling a product.

Businesses aim to attract and keep a specific target audience by providing valuable, consistent

knowledge. Content marketing can be one of the best e-marketing types for a business website

because search engines rank websites based on the information on each page. The more high-

quality content you have on your website, the more opportunities you have to appear in search

results, making it easier for people to find your business or product.

9. Conversion rate optimization (CRO)

Conversion rate optimization, or CRO, can play a significant role in the overall success of any

internet marketing strategy. It is the process of increasing the percentage of website visitors who

take a desired action, known as a conversion. What counts as a conversion differs from business

to business and could be anything from completing a form to making a purchase. It is possible

that in every step a customer takes toward a conversion, some will abandon the process. CRO

aims to reduce the number of customers lost by understanding how they experience a website,

what actions they take and what is preventing them from taking the next step toward a

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conversion. With this data, CRO specialists can optimize the website to maximize conversions at

each stage

10. Social media marketing (SMM)

Social media marketing is the use of social media platforms to promote a business and connect

with customers. It is a cost-effective form of marketing because most social media platforms

allow businesses to create profiles for free. SMM experts use social media marketing not just for

sales, but also to build brands. This method can be effective to increase engagement, build

relationships, compile market research, showcase products and celebrate

Achievements of an organization.

10. Pay-per-click (PPC) advertising

Pay-per-click (PPC) advertising is an e-marketing strategy that helps businesses gain site visitors

and sell more products or services by paying for advertising space on search engines and other

websites. When used properly, this strategy can increase traffic to a specific site or page. Pay-

per-click advertising allows you to pay as you go, only when someone clicks on your

advertisement.

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 Mobile commerce
In recent years, surely you’ve heard online business entrepreneurs whispering about the term

mobile commerce, or m-commerce at least a few times. You may be asking yourself the

question: What’s the difference between eCommerce and m-commerce? Are they the same

thing? Is there anything good about m-commerce that I can apply to my eCommerce store? All

will be answered in this article. We’ll provide industry definition, benefits, and relevant

technologies for you to enter the world of m-commerce.

What is mobile commerce?

Mobile commerce is defined as the use of wireless devices like mobile phones or tablets to

perform commercial activities, including:

 Product sales and purchases

 Online transactions

 Bill payment

 Online banking

Differences between eCommerce and m-commerce

Believe it or not, it is frustrating to learn a new concept but your mind automatically associates it

with a seemingly similar concept. Let us start with distinguishing these two concepts before

focusing on m-commerce.

By definition, eCommerce is a general term for commercial activities on the internet. These

activities focus on trading goods and services with related components including:

 Information

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  Communication

 Negotiation

 Transaction

 Payment

 Logistic

Among these components, communication plays a central role in trading. CNBC forecasts that

72.6% of internet users worldwide will only access the website with mobile devices before 2025.

With that increasing trend, communication is more and more dependent on mobile devices.

Mobile devices are expected to be the main access channel to your customers. Therefore, mobile

commerce, also known as m-commerce or m-commerce, was born as an inevitable variation of

eCommerce. In other words, it is a subset of eCommerce. The key difference is that, while

eCommerce focuses on the overall shopping experience on the internet, m-commerce focuses

on the customer’s shopping journey on mobile devices.

Indeed, m-commerce is the future of eCommerce, gradually replacing each other. Sometimes, we

can even hear people say “mobile eCommerce” in combination. Therefore, distinguishing these

two concepts is not as important as understanding that m-commerce aims at increasing

customer’s experience on mobile devices for higher mobile conversion rate and revenue. It’s a

trend you can’t ignore if you have an online business.

Now you know the concept. It’s time to dive deeper into m-commerce. How does mobile

commerce enhance efficiency?

Mobile commerce advantages and disadvantages

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Understanding the advantages and disadvantages of mobile commerce is an integral part of

critical thinking to see the aspects that can turn challenges into opportunities.

M-commerce pros

Wide coverage

With an increasingly large and dominant user base, m-commerce expands potential sales

opportunities by connecting with them online via mobile devices.

Insightful customer data

Mobile commerce can collect consumer data and gain better insights into the customer journey.

With brick-and-mortar retail, the customers come to the store, make a purchase, and leave. Very

few details are noted and saved for statistics and analysis, like why they buy.

With mobile commerce, businesses connect with your customers from the moment they visit

your stores, consider the products, and make a purchase. These are all valuable signals, from

purchase intent to an order.

Right timing

Mobile commerce allows businesses to reach customers at the right time, rather than every time.

Ad technology based on demographics or geographies can help you connect with customers in

the moment before they decide to make a purchase, increasing the likelihood of completing a

purchase.

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Fast browsing and transactions

Time is money, so businesses look for ways to help customers get a faster and more convenient

buying experience. Offering faster transactions to your customers is the biggest benefit and one

of the driving forces behind the growth of mobile commerce.

With mobile commerce, shopping applications have faster processing speed than traditional

websites. Or if you can’t invest to build apps yet, you can also consider an advanced technology

called PWA storefront that turns your website into an app-like interface with outstanding

features, including:

 Easy installation

 Add to home screen

 Push notifications

 Full responsiveness

 Offline work mode

 Self-updates

 Security

Better user experience with faster speed leads to a huge increase in online sales through mobile

devices.

Complementary to brick-and-mortar stores

Mobile commerce benefits not only the sales from online stores but also the brick-and-mortar.

There are still many customers who come directly to your store, choose an item but still want to

see more online reviews about the products. Or vice versa, they use their mobile device to

explore products, customize colors and sizes, and check stock availability of items at nearby

stores.

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In short, mobile commerce helps retailers and brands drive sales in both online and brick-and-

mortar stores by reaching a broader and more diverse set of customers.

Whether you are launching a new product or trying to reach a new market, it is clear that mobile

commerce offers significant competitive advantages for retailers. The access and customer data

that mobile commerce can provide is a great source of information for expanding market share.

M-commerce cons

Highly competitive marketplace

In recent years, many companies have shifted their focus to investment and success in mobile

commerce. If you start today, you’ll meet thousands of existing competitors along the way. As a

store owner, you need to find a clearly targeted market or a niche market to have a competitive

advantage.

Ad fraud risk

Ad fraud is always the biggest prejudice in mobile commerce. Meanwhile, the majority of

businesses are not well prepared to deal with this risk. According to HuffPost, more than 60% of

marketers confess that they don’t have any preparation to block out fraud on mobile marketing.

Businesses should ensure their compliance with MRC (Media Rating Council)

and TAG (Trustworthy Accountability Group) standards. This is the first step to showing your

customers that you are aware of mobile ad fraud and are working to take steps to head off it.

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Customer privacy

When customers allow you more access to their data, m-commerce businesses take on a greater

responsibility to protect personal information. You must ensure that your company and any of

your partners adhere to strict user protection terms. Then, make it transparent to your customers

about what and how their data is shared, collected, and stored.

Not personalized connection

Online shopping and mobile commerce are still considered low-personality. Therefore,

commerce businesses are still trying harder to connect with their customers. Giving consumers a

personalized message or reward based on their date of birth and preferences are some of the

suggestions for creating a greater sense of belonging and appreciation.

To address the limitations, mobile commerce should be seen as an enhancement to the traditional

shopping journey, not a replacement. One of the best ways to deal with both the pros and cons of

mobile commerce is by building a mobile-first site or shopping mobile app so you can connect

with consumers and stand out from your competitors.

Your mobile site and app give you the opportunity to gain access to important customer purchase

data, from which to choose the right timing and messaging for your customers. Data is also an

important component when you want to scale your business and find new markets.

Mobile commerce case studies

With such compelling benefits, let’s take a look at some mobile eCommerce examples to reflect

on how brands are applying this technology to their businesses.

Zappos mobile commerce

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Zappos gives customers more reasons to love Zappos by combining mobile with personal

customer service for easy shopping.

In 2014, Zappos launched an enhanced mobile app focused on personalized experience. Its

superior features include:

 Ask Zappos: This assists online shoppers in finding products. When the app users

try on a pair of heels or a friend’s lipstick that they like, they can simply do so in 3

ways:

o Snap a quick picture and upload it to Zappos Ask

o Instagram with the #AskZappos hashtag

o Send email or SMS directly

o Then, the Ask Zappos team will research and respond to the customers

with the result of suggested places, prices, and directions.

 Handover: This feature is available from iOS 8 and above. It allows users to shop

seamlessly between their Apple devices, start searching on iPhone, then continue on

MacBook or iPad right where they paused.

 Original card reader: This feature saves customers from having to re-enter all their

credit card numbers. Moreover, it does not store payment and card information on

customer’s mobile devices so it’s safer and more secure. Their credit card

information won’t be stolen even if they lose their phone.

Curated collections: Everyone is busy so this feature is about convenience and simplicity.

These collections are curated by Glance, featuring Zappos stylists. This team will aggregate the

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best products from the mobile-friendly web app and create collections based on upcoming events

such as holidays or the latest trends, and partly based on purchase history and customer

preferences. Customers can purchase all or part of the suggested products from this collection.

According to Sensor Tower, the Zappos app has 40,000 downloads per month to deliver not only

shoes but also happiness and WOW shopping service to customers.

Kohl’s mobile commerce

Determined to be “the most engaging retailer in the US”, Kohl’s has set sights on the

omnichannel shopping experience. To do that, Kohl’s is focused on making its shopping

experience easier than ever, whether in-store or online in an engaging and personalized way.

They redesigned their mobile commerce site to optimize the online shopping process for both

online and brick-and-mortar customers. It becomes a true convergence of physical commerce

and m-commerce, including:

 Omnichannel capability: customers can purchase on mobile devices, and have

delivery tracking on their desktops, or choose a preferable location to pick up at a

convenient time.

 Various mobile payment options: Besides Apple Pay, Kohl’s is currently

developing their own digital mobile wallets (Kohl’s Pay). Unlike other mobile

payment options that use contactless NFC, Kohl’s Pay allows users to use their

mobile camera to scan a QR code and complete the payment.

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This mobile commerce transformation is the right step towards the future and is timely in the

context of social distancing, which makes Kohl’s a great success:

 Conversion rates increased significantly and 50% of all traffic comes from mobile

devices.

 BOPIS (Buy online, pick up in-store) alone has increased the engagement rate with

store traffic, always above 20%.

 Online sales increased from an average of 24% of total sales in 2019 to 60% in the

wake of the COVID-19 pandemic.

Mobile commerce trends

Google has come up with interesting mobile commerce stats:

 51% of users prefer to use mobile apps for shopping or browsing on mobile devices.

 63% of smartphone users prefer to purchase on mobile sites or apps that offer

personalized recommendations for products based on their interest.

Thus, you should have relevant technologies to prepare for the proliferation of mobile

commerce. Here are 7 m-commerce trends that will dominate in 2021:

 Mobile apps and progressive web apps (PWAs)

 One-click ordering

 Social commerce

 Voice commerce

 Mobile chatbots

 VR & AR

 Mobile payments

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Conclusion
You don’t need someone to persuade you about the importance of mobile commerce. Maybe in

the present, you are browsing this article on your mobile phone or shopping through mobile

every day. Let’s think about the data and figures we mentioned in this article. Numbers never lie,

you can use them as POC (proof of concept) if you’re advocating for other stakeholders in your

company about the benefits of mobile commerce.

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 Virtual Organization

A virtual organization is an operation where all members of the company work in different

geographic locations while appearing as a single unit. It uses computers, software, phones and

other technology to work together and converse in real-time, despite any physical distance. It's

important for virtual organizations to establish detailed procedures that ensure consistency in

employee performance and provide employees with the ample resources and support they need

to conduct their responsibilities in a remote work environment.

Components of a virtual organization

Each virtual organization is unique, although they often include many of the same components

for optimal operations, like a remote workforce and company-specific technology networks.

Other components of a virtual organization may include:

 A flat organization structure with less middle management

 Virtual teams

 Loose organizational structure

 Boundaries and expectations

 Power flexibility

 Informal communication

Benefits of a virtual organization

Here are some benefits of virtual organizations:

Lower overhead costs

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Virtual organizations often have lower overhead costs because they don't need to pay monthly

fees for renting office spaces. Companies also save money by not having to pay supplemental

fees involved with renting a space, like utilities and maintenance costs. Some organizations also

ask employees to use their own equipment, such as personal computers and web cameras,

reducing equipment costs.

Improved employee satisfaction

Many virtual organizations have higher levels of employee satisfaction, presumably from the

increased freedom employees have to work in their own space. Some employees feel less

stressed, and the flexibility of working remotely often reduces absences. This helps improve

overall company morale and can encourage individuals to present quality work on behalf of their

employer.

Improved efficiency

Virtual organizations don't have the same distractions as traditional office settings, such as the

urge to chat with people surrounding you. With fewer distractions, efficiency may improve,

resulting in higher levels of productivity and better-quality work. Employees can establish their

own work environment, allowing them to determine what helps them best achieve more work in

less time.

Larger hiring market

Virtual organizations can hire employees from anywhere in the world. This removes geographic

restrictions, expanding the talent pool for hiring and allowing companies to hire individuals with

varying backgrounds and perspectives. This allows organizations to find, recruit and hire the best

talent without physical locations getting in the way.

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Flexible hours

Virtual organizations often have flexible hours, with many employers allow employees to

determine their own schedules within certain parameters. For example, some companies

establish core hours, such as 10 a.m. to 2 p.m. within a specific time zone each day, and allow

employees to work whenever they want outside of those hours. This level of flexibility often

allows organizations to accommodate a variety of different employees and their lifestyles.

Improved employee retention

Many virtual organizations have happy employees. Satisfied employees are often more engaged

at work and less likely to leave the company. This is especially true if the organization also offers

excellent benefits and competitive salaries besides their virtual organization setup.

Access to new markets

Virtual organizations often have access to a wide range of markets. These organizations do not

have geographic restrictions, allowing them to work with customers who may have been

inaccessible. This is especially appealing for remote sales professionals who can access

consumer markets from all corners of the world without physical distance or travel costs getting

in the way.

Challenges of a virtual organization

Here are some challenges you may experience while working for a virtual organization, along

with tips for overcoming them:

Lack of camaraderie

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Virtual organizations may experience a lack of camaraderie among teams. Employees work

isolated from each other, and they rarely meet face-to-face. There are few opportunities for

casual conversations to help build relationships.

You can overcome this by bringing traditional office events and aspects into the virtual setting.

Consider hosting video chats for virtual happy hours or trivia contests.

Think about creating instant messaging channels related to specific hobbies, interests or

lifestyles, such as channels for parents or people who enjoy reading or playing video games.

These channels can help employees make personal connections with each other and increase

feelings of camaraderie.

Difficulty developing company culture

Virtual organizations may struggle to develop and implement a company culture. There may be a

lack of cohesiveness among the team, as flexible schedules can lead to employees feeling

disconnected from each other.

Consider establishing certain hours of the week employees need to work without eliminating

their freedom and flexibility. Schedule regular meetings to discuss the state of the company and

gather feedback from employees. Use technology to emphasize company culture, such as casual

instant messaging conversations, to encourage employees to get to know each other better.

Increased importance of communication

Working in a virtual organization enhances the importance of good communication. Employees

cannot share information in passing like they would in a normal office setting. It may be difficult

for employees to meet from varied schedules.

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It's important to set clear policies and use a variety of tools to ensure employees actively and

effectively communicate with each other. Develop a clear policy for sending and responding to

emails and how to record important client information. Consider scheduling daily or weekly

check-in calls. Use an instant messaging service, and set up individual channels or threads for

specific groups.

Potential compliance and security issues

Virtual organizations may present some compliance or security issues. These organizations

require employees to transport a lot of data across multiple networks, some of which may

involve connections that are not secure. While this may be a risk for an organization, this may be

a higher risk for companies dealing with sensitive information in industries like healthcare and

finance.

Consider hiring IT or data security professionals to advise you on setting up your virtual

organization. They can help you reduce the risk of security issues or compliance violations. They

may advise employees on best practices, install privacy software or set up secure and private

connections, such as virtual private networks (VPNs).

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40
 Security in E-Commerce

eCommerce security is the guideline that ensures safe transactions through the internet. It consists

of protocols that safeguard people who engage in online selling and buying goods and services.

You need to gain your customers’ trust by putting in place eCommerce security basics. Such basics

include:

 Privacy

 Integrity

 Authentication

 Non-repudiation

1. Privacy

Privacy includes preventing any activity that will lead to the sharing of customers’ data with

unauthorized third parties. Apart from the online seller that a customer has chosen, no one else

should access their personal information and account details.

A breach of confidentiality occurs when sellers let others have access to such information. An

online business should put in place at least a necessary minimum of anti-virus, firewall, encryption,

and other data protection. It will go a long way in protecting credit card and bank details of clients.

2. Integrity

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Integrity is another crucial concept of eCommerce Security. It means ensuring that any information

that customers have shared online remains unaltered. The principle states that the online business is

utilizing the customers’ information as given, without changing anything. Altering any part of the

data causes the buyer to lose confidence in the security and integrity of the online enterprise.

3. Authentication

The principle of authentication in eCommerce security requires that both the seller and the buyer

should be real. They should be who they say they are. The business should prove that it is real,

deals with genuine items or services, and delivers what it promises. The clients should also give

their proof of identity to make the seller feel secure about the online transactions. It is possible to

ensure authentication and identification. If you are unable to do so, hiring an expert will help a lot.

Among the standard solutions include client login information and credit card PINs.

4. Non-repudiation

Repudiation means denial. Therefore, non-repudiation is a legal principle that instructs players not

to deny their actions in a transaction. The business and the buyer should follow through on the

transaction part that they initiated. eCommerce can feel less safe since it occurs in cyberspace with

no live video. Non-repudiation gives eCommerce security another layer. It confirms that the

communication that occurred between the two players indeed reached the recipients. Therefore, a

party in that particular transaction cannot deny a signature, email, or purchase.

Why you can’t afford to overlook eCommerce security?

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While growth in eCommerce has improved online transactions, it has attracted the attention of the

bad players in equal measures. eCommerce cybercrime reports reveal that the industry is among

the most vulnerable ones when it comes to cybercrimes.

The eCommerce world experiences about 32.4% of all attacks. 50% of small eCommerce store

owners are lamenting that the attacks are becoming severe. Furthermore, the reports show that 29%

of traffic accessing a website consists of malicious requests.

Such attacks have contributed to significant losses in financials, market shares, and reputation.

Almost 60% of small eCommerce stores that experience cybercrimes don’t survive more than six

months.

Therefore, it is very crucial to put in place water-tight security measures and hire a robust team. It

will ensure you run your business without worrying about closing down due to cybercriminals.

Common Ecommerce Security Issues

1. Lack of trust in the privacy and eCommerce security

Businesses that run eCommerce operations experience several security risks, such as:

 Counterfeit sites– hackers can easily create fake versions of legitimate websites without

incurring any costs. Therefore, the affected company may suffer severe damage to its

reputations and valuations.

 Malicious alterations to websites– some fraudsters change the content of a website. Their

goal is usually to either divert traffic to a competing website or destroy the affected

company’s reputation.

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  Theft of clients’ data– The eCommerce industry is full of cases where criminals have

stolen the information about inventory data, personal information of customers, such as

addresses and credit card details.

 Damages to networks of computers– attackers may damage a company’s online store

using worm or viruses attacks.

 Denial of service– some hackers prevent legit users from using the online store, causing a

reduction in its functioning.

 Fraudulent access to sensitive data– attackers can get intellectual property and steal,

destroy, or change it to suit their malicious goals.

2. Malware, viruses, and online frauds

these issues cause losses in finances, market shares, and reputations. Additionally, the clients may

open criminal charges against the company. Hackers can use worms, viruses, Trojan horses, and

other malicious programs to infect computers and computers in many different ways. Worms and

viruses invade the systems, multiply, and spread. Some hackers may hide Trojan horses in fake

software, and start infections once the users download the software. These fraudulent programs

may:

 hijack the systems of computers

 erase all data

 block data access

 forward malicious links to clients and other computers in the network.

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3. Uncertainty and complexity in online transactions

Online buyers face uncertainty and complexity during critical transaction activities. Such activities

include payment, dispute resolution, and delivery. During those points, they are likely to fall into

the hands of fraudsters.

Businesses have improved their transparency levels, such as clearly stating the point of contact

when a problem occurs. However, such measures often fail to disclose fully the collection and

usage of personal data.

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