What is E-commerce?

Ecommerce, also called electronic commerce or internet commerce indicates the acquiring and vending of items or facilities through the internet, and the transfer of money and details for successful transactions. Ecommerce is often used to indicate the vending of tangible products online, but it can also relate to any kind of commercial activity that is carried out through the internet.

How it works:

As the order is placed, the consumer web browser will communicate from side to side with the server that is hosting the online store website. Data related to the order will then be passed on to a central computer known as the order manager. Then will be forwarded to databases that manage inventory. A merchant computer that manages payment information, and a bank computer for verification before circling back to the order manager. This is to make sure that stock (store inventory) and customer funds are acceptable for the order to be processed. After the order is verified, the order manager will notify the store's web server (the server that is hosting the online store website), which will then display a message notifying the customer that their order has been successful. The order manager will then send Data related to the order to the warehouse, in order for the product or service to be successfully consigned to the consumer (customer). After all steps, the products will be shipped to a consumer (customer).

 

Types of e-commerce:

·         Retail: The sale of products directly to a buyer without a mediator.

·         Dropshipping: The sale of products that are produced and shipped to buyers via a third party.

·         Digital products: A digital product is any product you sell online that doesn't have a physical form. For example, some e-books are acquired in pdf format.

·         Wholesale: Products that are vended in large quantities. Wholesale products are often vended to a retailer, who then vends the products to the buyer.

·         Services: These are skills like coaching, writing, influencer marketing, etc., that are acquired and rewarded online.

Benefits of e-commerce:

Clearly, online commerce offers plenty of benefits:

·         Convenience: Online commerce makes acquiring easy, enhanced, allowing sales for 24/7, fast-track deliveries, and easy returns.

·         Personalization and customer experience: E-commerce merchandising can create rich user profiles that allow them to customize the products offered and make recommendations for other products that might be more pleasing.

·         Global marketplace: Customers from around the globe can easily shop at e-commerce sites

·         Minimized expenses:  Many vendors pay a big amount of money to maintain their shops (physically). This amount of money can be costs like r

·        Economical advertising and marketing: Vendors don’t have to pay a big amount of money for product advertisements. The world of e-commerce has various economical, quick ways to market online. Ecommerce merchandising is visual channels – and vendors can present their products. For example, Amazon vendors can use Advertising tools to add videos, good quality resolution images.

·        Product and price comparison: In e-commerce, vendors can compete for the products using tools or on their own. This gives them a good idea of the product choices available and the rates. Comparison is quicker online and covers many products. As all details are available on the shopping site so the process of comparison is enhanced. In a physical shop, vendors may not be able to get access to so many details –they only have a better understanding of their own inventory.

There is one more benefit for consumers too. When consumers see many products that are ready for acquiring, they feel more confident about which product they should spend their money on.

·        No, reach limitations: A vendor with a physical shop may be able to reach a certain number of consumers (buyers) who live nearby to the shop. But through e-commerce vendors can reach a good number of consumers because there is now no limit such as distance or city or country. Consumers from anywhere can acquire their desired product and the vendor will deliver it to the consumers’ homes. But there can be distance limitations but it also has a solution. Various e-commerce marketplaces have their own logistics and delivery system. 

      Future of e-commerce:

E-commerce is growing consistently in Pakistan. The industry in 2018 was approximated to be at Rs99.3 billion which was a good increase from 2017 when the figures were Rs51.8 billion (growth of 92 percent). Pakistan is one of the largest undiscovered markets of e-commerce in the world. However, e-commerce in Pakistan has not reached a level where digital payments or payment gateways (PayPal, etc) can be used and become the more preferred form of payment method of cash.