Concept of e-business
E-business (electronic business) means doing business activities using computer networks and the internet. It includes buying, selling, making goods, managing money, hiring people and working with suppliers.
E-commerce is narrower: only the buying and selling part done online, along with online payment. So every e-commerce activity is e-business, but not every e-business activity is e-commerce.
Scope of e-business
1. B2B (business to business)
Firms deal with each other online: ordering raw material, tracking stock, paying suppliers, linking with dealers. Parts can arrive "just in time", so less stock is kept.
2. B2C (business to customer)
A company sells to final customers through a website or app. It also uses the net for advertising, taking orders, payment, feedback and after-sales service.
3. C2C (customer to customer)
Customers sell to other customers on a website, such as used books, furniture or vehicles. The website only connects them.
4. Intra-B (within the business)
Departments and staff inside one firm are linked on a network. Sales, production, accounts and HR share the same data. Staff can work from home and meet online.
Benefits of e-business
- Easy to start: little money and no big shop are needed.
- Low cost: savings on rent, staff, paper and advertising.
- Speed: orders, payments and messages move in seconds.
- Open 24 × 7: customers can buy at any time.
- Global reach: a small seller can reach buyers across the world.
- Paperless: records are kept digitally and are easy to search.
- Supports government goals such as digital payments and transparency.
Limitations
Less personal touch; customers cannot touch or try the goods; order and delivery may not match in time; people need internet skills; risks of fraud, hacking and loss of privacy.
E-business vs traditional business
| Basis | Traditional business | E-business |
|---|---|---|
| Starting | Difficult, needs a shop, licences, stock | Easy, can start from a website |
| Investment | High | Low |
| Location | Near markets or raw material | Anywhere |
| Operating cost | High (rent, staff) | Low |
| Contact with buyers | Through middlemen, face to face | Direct, online |
| Business hours | Fixed hours | 24 × 7 |
| Reach | Local | Global |
| Personal touch | High | Low |
| Speed of transactions | Slow | Fast |
Key formulas and definitions
- E-business = all business activities done through networks and the internet.
- E-commerce = online buying and selling (a part of e-business).
- B2B: business ↔ business.
- B2C: business ↔ customer.
- C2C: customer ↔ customer.
- Intra-B: inside one business.
Worked examples
1. A bakery orders 200 kg of flour every week from a flour mill's online portal. Which scope of e-business is this?
B2B, because both the bakery and the mill are businesses.
2. Priya sells her old school books to a junior on a resale website. Which scope?
C2C: one customer sells to another; the website only connects them.
3. A clothing brand's app lets you order, pay and return a shirt. Which scope?
B2C: a business sells directly to the final customer.
4. A shop pays ₹30,000 a month rent and ₹20,000 for two salesmen. An online store for the same goods costs ₹12,000 a month. How much is saved a year?
Traditional cost = ₹50,000 a month. Saving = 50,000 − 12,000 = ₹38,000 a month = ₹4,56,000 a year.
5. In a company, the sales team books an order and the factory starts making it at once because both use the same software. Which scope?
Intra-B (within the business).
Common mistakes
- Using e-business and e-commerce as the same thing. E-commerce is only the buying-selling part of e-business.
- Thinking C2C means a company selling to a customer. C2C is customer to customer.
- Believing e-business has no drawbacks. It lacks personal touch and has fraud and privacy risks.
- Forgetting intra-B. Links inside a firm are also part of e-business.