Ecommerce or electronic commerce are basically the transactions conducted through the internet. Every time individuals/companies buy or sell products and services online they engage in ecommerce. The term ecommerce also incorporates activities like online auctions, internet banking, payment gateways, online ticketing and more.
How ecommerce came to be?
The first ecommerce transaction was made in 1994 by a guy named Phil Brandenberger when he used his Mastercard to buy Sting’s Ten Summoners’ Tales via the internet for $12.48. This particular transaction enlightened the world that the “internet is open” for ecommerce transactions. For the first time encryption technology was used to commence an online purchase.
As a matter of fact, ecommerce has grown manifolds ever since. The rise of ecommerce giants like Amazon and Alibaba in the mid 90s changed the face of the retail industry. They largely capitalized on the global internet penetration and digitalization that resulted in the decline in sales for many businesses.
The growth of ecommerce has also resulted in the migration of the retail workforce. The U.S Bureau of Labour Statistics has stated that from 1997 to 2016, employment in the ecommerce sector almost increased by a whopping 80% and predicted that the number of ecommerce jobs will keep on increasing and reach around 450,000 in the US by 2026. Hence, it’s evident that the highly competitive ecommerce sector will keep on transforming the retail industry and influence customers’ behaviour. However, starting an ebusiness nowadays seems like a great idea for various savvy entrepreneurs. Now let us find out more about the ecommerce industry — how it came about, what types of merchants exist, and what platforms allow online selling for different countries. We will also shed light on some ecommerce success stories and loopholes to give you an idea of what it takes to succeed in this ecommerce industry.
So, if you wish to begin an ecommerce website or you’re already running an online store and just want to dive into ecommerce industry, you’ll find lots of nuggets in this blog.
The Significant Ecommerce Statistics for 2020
If you are willing to do online business, it’s vital to be aware of the trending ecommerce statistics. Also, experts predict that retail ecommerce sales will reach $4.13 trillion in 2020.
- 95% of all purchases will be by ecommerce by 2045.
- The world’s fastest-growing ecommerce market is China with an estimated revenue of $672 billion in 2017.
- The US has the highest ecommerce penetration rates, with 80% of all internet users making at least one purchase.
- The top reason why people do online shopping is that they can buy anything, 24/7.
- 43% of ecommerce traffic comes from Google search (organic).
- Slow-loading websites see an abandonment of 75%.
- 35% of Google product searches are converted into purchases in 5 days.
- 51% of digital buyers shop via their smartphones.
- Buyers are likely to spend more if they are provided with free shipping.
- 93% of online buyers think that the visual appearance of an online store plays a vital role in their purchasing decisions.
- 80% of online buyers don’t buy from ecommerce sites that have complex return policies.
- 85% of all products purchased through social media platforms come from Facebook.
- Mobile ecommerce retail sales will reach $3.5 trillion by 2021.
- 42% of online shoppers prefer to pay with a credit card in 2021.
- Online stores with an active presence on social media platforms have 32% more sales.
- 55% of all online buyers have an impact on their buying decisions due to reviews.
Types of Ecommerce Businesses
There are various ways to classify ecommerce websites. These can be categorized according to the products or services that they sell, the parties that they transact with, or even the platforms on which they operate.
Classifying ecommerce businesses according to what they sell
Let’s start with the products and services sold online. Here’s a list of ecommerce merchants according to what they sell.
1. Physical Goods Seller:
These are typical online retailers having clothing, furniture, tools, accessories, and other physical goods. Potential customers can buy through online stores by visiting the stores’ websites, adding items in their shopping cart, and making a purchase.
Once the buyer makes a purchase, the store delivers the products at the doorstep while there are some online stores where buyers make an online purchase but go to the store themselves to pick up the products. Some of its examples are Warby Parker, Bonobos, Zappos, etc.
2. Service-based e-tailers
As a matter of fact, services can also be purchased online. Everytime you hire consultants, educators & freelancers via online platforms, you’re dealing with service-based e-tailers. The service buying process depends on the merchant. Some allow you to buy their services directly from their website like Fiverr.com, a freelance marketplace. People who want to buy services from Fiverr must place an order on the website before the seller delivers their services.
While some service providers ask you to get in touch with them to determine your needs. Like Blue Fountain Media creates digital strategies for large clients, asks clients to fill in an online form first where they should describe their business needs.
3. Digital products
Ecommerce on the Basis Of Parties Involved
1. Business to consumer (B2C)
In B2C ecommerce model refers to a transaction between businesses and individuals. B2C ecommerce is the most common among physical and online retailers. Some of its examples are Nike, Macy’s, IKEA, and Netflix.
2. Business to business (B2B)
As the name suggests, B2B ecommerce model refers to a transaction between two businesses. Here, one business offers the other with different products and/or services.
3. Consumer to business (C2B)
The C2B business model refers to a transaction in which individuals create value for businesses. Consumers offer companies with products or services, co-operate on projects and help businesses grow their profits.
Like Freelancer, a platform which connects remote workers and companies.
4. Consumer to consumer (C2C)
5. Government to business (G2B)
The G2B ecommerce models occur when the government provides companies with goods and services. Government procurement, data centres, and e-learning are all examples of G2B ecommerce.
6. Business to government (B2G)
The B2G model refers to companies and businesses that provide goods and services for the government. For example, OpenGov is a company that offers governments cloud-based platforms for communication, reporting, and budgeting.
7. Consumer to government (C2G)
Every time consumers pay taxes, health insurance, electronic bills, or request information concerning the public sector, they’re engaging in C2G.
What are the best ecommerce platforms?
Retailers can build online stores where they display their products or services or both. Having an online storefront is one of the best straightforward ways to run an ecommerce business. There are a number of ecommerce solutions and choosing the right fit for your business depends on your budget, preferences, and requirements. Below we’ve listed the best ecommerce solutions currently on the market.
- Shopify powers over 2,921,565 websites around the globe.
- Shopify has 21% of the ecommerce market share.
Shopify allows users to build effective online stores and scale their business. Having a user-friendly and tons of templates, this platform offers 100+ payment gateways, flexible shipping rates, automatic taxes, etc. Shopify enables social media integrations, is packed with built-in SEO features.
Best for: Small businesses looking for an all-in-one ecommerce solution.
- Magento has powered over 772,000 websites around the world till date.
- There are over 5,900 extensions that integrate with Magento.
Magento is a very flexible ecommerce solution used by medium sized businesses. It has robust features which allow retailers to personalize all aspects of their online store like custom templates, extensions and modules.
Best for: Brands looking for a highly customizable ecommerce solution.
- As of 2020, the platform has 150,000 active users.
- Salesforce was awarded multiple times with prestigious recognitions like the GSMA Glomo Award – Best Mobile App for Business, the 2017 DMN Awards, and the AOTMP Mobility Awards, & more.
One of Salesforce’s strengths is that it’s built with omnichannel retailers in mind with features that allow merchants to easily sell across physical and digital storefronts.
Best for: Large businesses that need a fully-fledged and scalable CRM software.
- Most companies that use Oracle Commerce are in the retail, computer software, and information technology niche.
- Oracle Commerce holds 0.36% of the ecommerce market share.
Oracle Commerce is a powerful ecommerce solution for both B2B and B2C retailers. It is packed with versatile features that enable you to sell complex merchandise.
Best for: Growing businesses looking for a flexible and scalable ecommerce platform.
- WooCommerce powers over 3,876,748 live websites.
- CodeCanyon sells over 1,773 plugins designed to integrate with WooCommerce.
WooCommerce is one of the biggest open-source ecommerce platforms. Designed to integrate with WordPress, WooCommerce has a number of templates that can help you build a unique online store. You’ll get all vital features including unlimited products, unrestricted customization, order management, and free shipping.
Best for: Small businesses that have a website powered by WordPress.
- BigCommerce powers over 150,000 websites around the world.
- Pandora, a popular jewellery retailer, is built with BigCommerce.
BigCommerce is a popular ecommerce solution that provides online retailers with a robust online store builder for creating a fully functional online store and selling numous products. One thing that is unique about it is that it has features like shipping, reporting, and product and order management.
Best for: Growing businesses that want to leverage on multi-channel selling.
- The total amount of purchases made through stores built with Volusion reached 13.8 million in 2018.
- There are over 11,000 websites powered by Volusion in 2020.
Volusion allows merchants to create online stores, showcase their merchandise, and take payments all on one platform. Volusion comes with standard features like a site builder, shopping cart software, marketing tools, etc.Best for: Small businesses in need of easy-to-use ecommerce platform.
_____________________________________________________________________ Compiled By: Aarshi Sharma