E-commerce [electronic commerce]

E-commerce (electronic commerce) is the activity of buying and selling goods and services, or the transmitting of funds or data, over an online network, primarily the internet. Contemporary electronic commerce can be classified into two categories.

The first category is business based on types of goods sold (involves everything from ordering “digital” content for immediate online consumption to ordering conventional goods and services to “meta” services to facilitate other types of electronic commerce). The second category is based on the nature of the participant.

Transactions regarding physical goods can take place electronically up to the moment of payment of the purchased goods, but in any case they involve the performance of traditional activities such as transport and delivery to the purchaser; in the case of digital goods (software, audio files, video files) the entire exchange process can take place exclusively by electronic means. Among the services that can be purchased electronically, the most common are those related to information and advertising, banking and financial services, booking of tickets for travel or shows.

The markets relating to e-commerce are generally classified into three categories which, in turn, may include specific subcategories: B2B (Business to Business, between companies); B2C (Business to Consumer, between companies and consumers); C2C (Consumer to Consumer, between consumers).

Subcategories of B2B can be considered the so-called Intra-Business commerce, which involves a company with branches distributed on the territory or a group of companies belonging to the same group; the B2G (Business to Government), in which the public administration acquires goods and services from the private sector; the G2B (Government to Business), in which private companies acquire services offered by the public administration.

The B2B constitutes the sector of e-commerce currently most developed (70-85% of the total value); it involves all productive activities, but it is more developed in the tertiary sector and, in particular, in the financial one. B2C markets have developed with regard to superior standardized goods (books, CDs, DVDs), but also for more traditional goods (consumer durables, such as cars) and digital goods (music and online software). C2C e-commerce is essentially about auction markets, where both sellers and buyers are individuals.

The proliferation of e-commerce can be an important factor in promoting the economic development of a country, increasing the efficiency and productivity of companies and providing benefits to consumers. For the enterprises, the affirmation and the increasing diffusion of the electronic transactions involve meaningful advantages: reductions of the transaction costs, an efficient and fast system of supplying that concurs to reduce the supplyes of semifinished and raw materials, acquisition rapid and to low cost of important information on the characteristics of the customers.

Finally, the e-commerce can favor an increase of the degree of competitiveness: also enterprises localized in distant areas can more easily compete with the local ones. For how much concerns the families, a developed system of e-commerce involves: a reduction of the transaction costs, a fast and little expensive acquisition of information that concurs better choices of purchase and the possibility to carry out a compravendita of goods and services with particular characteristics wished from the buyer.

The authorities of economic politics of many between the advanced countries are dedicating an increasing attention to the e-commerce and to the individualization of measures that can favor the development of it. E-commerce, however, also gives rise to new problems, of particular relevance are those of a fiscal nature: the concern is that the development of e-commerce may produce an erosion of the tax base, above all with regard to revenue from taxes applied at the time of the sale of a good or service (such as, for example, VAT).

Business applications

  • Business to Business (B2B)
  • Business to Consumer (B2C)
  • Business to Employee (B2E)
  • Business to Government (B2G), also called Business to Administration (B2A)
  • Business to Machines (B2M)
  • Business to Manager (B2M)
  • Consumer to Business (C2B)
  • Consumer to Consumer (С2C)
  • Citizen to Government (C2G), also called Consumer to Administration (C2A)
  • Government to Business (G2B)
  • Government to Citizen (G2C)
  • Government to Employees (G2E)
  • Government to Government (G2G)
  • Manager to Consumer (M2C)
  • Peer to Peer (P2P)

Leave a Comment