E-business, or electronic business, refers to conducting business activities using electronic technology. This includes various online transactions such as buying and selling products and services over the internet. With the rapid growth of technology and the internet, e-business has become an essential part of modern-day commerce. In this article, we will provide a comprehensive guide on what e-business is and how it works.
What is e-business?
E-business, short for electronic business, encompasses all commercial activities conducted through computer-mediated networks. This includes online sales, customer support, marketing campaigns, and supply chain management, among others. It enables organisations, regardless of size or type (for-profit, governmental, nonprofit), to streamline operations and reach global markets efficiently. With the widespread adoption of internet technologies, e-business has become integral to modern commerce, offering accessibility and cost-effectiveness to businesses worldwide.
Examples of e-business
Here are some examples of e-business organisations:
- Online retailers: Businesses that sell goods and services exclusively through websites and digital platforms, reaching global markets without physical storefronts.
- Ride-hailing services: Platforms that connect drivers and passengers through mobile apps, disrupting traditional taxi and livery services with digital convenience.
- Travel platforms: Websites and apps that enable users to plan and book trips, offering personalised options such as accommodation, transportation, and activities.
- Legacy companies with digital transformation: Traditional businesses integrating e-business strategies like IoT and digital technologies to enhance products or services and streamline operations.
These examples highlight the diverse applications of e-business across industries, leveraging digital technologies to innovate and improve efficiency.
Features of e-business
Some features of online business are:
- Easy to set up
- No geographical limits
- Cheaper than traditional businesses
- Flexible working hours
- Lower marketing costs
- Often receive government subsidies
- Few security and integrity problems
- No personal interaction
- Buyer and seller do not meet in person
- Product delivery can take time
- There is transaction risk
- People can buy anything from anywhere at any time
- Transaction risk is higher compared to traditional businesses
Components of e-business
E-business comprises several key components:
- E-commerce platforms: Websites or apps where goods and services are traded.
- Customer Relationship Management (CRM): Systems that help manage a company’s interactions with current and potential customers.
- Enterprise Resource Planning (ERP): Integrated software used to manage day-to-day business activities such as accounting, procurement, project management, and manufacturing.
- Supply Chain Management (SCM): The oversight of materials, information, and finances as they move from supplier to manufacturer to wholesaler to retailer to consumer.
Benefits of e-business
There are several benefits to conducting business activities through e-business, such as:
- Global reach: E-business allows businesses to reach a global audience regardless of location. This can lead to increased sales and market share.
- Cost-effective: E-business can be more cost-effective compared to traditional brick-and-mortar businesses. This is because e-businesses require less overhead, such as rent and utilities.
- Increased efficiency: E-business allows businesses to automate various business processes, leading to increased efficiency and productivity. This may include inventory management, order processing, and customer service.
How does e-business work?
E-business entails several steps and components. Here are the key components of e-business:
- Website: A website is the core component of an e-business. It serves as the virtual storefront and provides the platform for all online transactions.
- Electronic payment system: An electronic payment system allows businesses to accept payments online. This can include credit card payments, bank transfers, or digital wallets.
- Secure server: A secure server ensures that all online transactions are secure and safe.
- Customer support system: A customer support system allows businesses to provide support to customers through various channels such as email, chat, and phone.
- Marketing strategies: E-business requires effective online marketing strategies to reach and engage customers. This may include social media marketing, email marketing, and search engine optimisation (SEO).
Types of e-businesses
E-business can be categorised into several types:
- B2C (Business-to-Consumer): Direct sales between a business and the end-user consumer.
- B2B (Business-to-Business): Transactions between businesses, such as between a manufacturer and a wholesaler, or between a wholesaler and a retailer.
- C2C (Consumer-to-Consumer): Where consumers sell directly to other consumers, typically through online platforms.
- B2G (Business-to-Government): Companies provide products or services to government agencies.
- C2B (Consumer-to-Business): Consumers offer products or services to businesses.
- Mobile Commerce: Buying and selling goods through mobile devices.
- Social Commerce: E-commerce conducted via social media platforms.
- Marketplace: A platform that facilitates transactions between multiple buyers and sellers.
Challenges of e-business
The challenges of running an online business differ from one company to another, depending on several factors such as whether the company started online, if online services are crucial to its main offerings, if only some parts of the company use online services, and if the company uses old technology. Despite these differences, common challenges in e-business include:
- Protecting online services from advanced cyber threats
- Quickly scaling services to meet demand without losing performance
- Updating technologies to keep up with market changes
- Finding and training skilled workers to handle advanced technologies
- Keeping up with the constant demands of online services
Many companies also find it hard to integrate their separate data and functions so that they work well together.
Electronic business vs. electronic commerce
Electronic business (e-business) encompasses the broader scope of using digital technologies to conduct various business processes, including marketing, sales, customer service, and collaboration. Electronic commerce (e-commerce), on the other hand, specifically focuses on the online buying and selling of goods and services. While e-commerce is a subset of e-business, e-business extends beyond transactions to encompass all aspects of running a business online. E-business includes functions like online communication, supply chain management, and digital collaboration tools, making it a more comprehensive approach to leveraging technology for business operations in the digital age.
How to start an e-business in 7 steps?
Starting an e-business involves careful planning and execution. Here are seven essential steps to guide you through the process:
- Market research: Identify your target audience, assess market demand, and analyse competitors to understand market trends and opportunities.
- Business plan: Develop a comprehensive business plan outlining your e-business model, products or services, pricing strategy, marketing approach, and financial projections.
- Legal considerations: Register your business, obtain necessary permits and licenses, and ensure compliance with relevant laws and regulations, including data protection and online sales regulations.
- Choose a platform: Select an e-commerce platform or build a custom website that suits your business needs and budget, considering factors like design, functionality, scalability, and payment options.
- Product sourcing: Source or develop high-quality products or services to offer to your target market, ensuring competitive pricing and reliable supply chains.
- Marketing and promotion: Implement a comprehensive marketing strategy to attract customers, including search engine optimisation (SEO), social media marketing, content marketing, and email campaigns.
- Launch and iterate: Launch your e-business, gather feedback from customers, analyse performance metrics, and continuously iterate and improve your offerings and marketing efforts to optimise success.
By following these steps, you can lay a solid foundation for launching and growing a successful e-business.
Limitations of e-business
The limitations of e-business are as follows:
1. Low personal touch:
E-business lacks personal interaction, which is important for some types of businesses like clothing and toiletries. Even though it is advanced, it does not provide the personal touch that some customers prefer.
2. Delay between ordering and receiving products:
While placing an order online is instant, the physical delivery of products can take time. Technical issues like slow websites or server problems can also frustrate users, creating a mismatch between ordering and receiving products quickly.
3. Need for technology skills:
To engage in e-business, both businesses and customers need to be comfortable with technology and computers. This can create a digital divide, as those who are not tech-savvy may miss out on the benefits of e-business.
4. Higher risk due to anonymity:
It is hard to verify the identities of the parties involved in online transactions. This anonymity increases the risk of fraud and security issues like impersonation and information leakage. There are also risks from viruses and hacking.
5. People resistance:
Many people resist e-business due to the need to adapt to new technologies and methods, which can cause stress and insecurity. This resistance can hinder an organisation's move to e-business.
6. Ethical issues:
E-business can raise ethical concerns. For example, companies might monitor employees' computer files and emails, which can be considered unethical if used against them.
Why you need a business loan for e-business?
Starting an e-business requires a significant amount of investment, and securing a business loan can provide you with the necessary funds to grow your business. Here are some common reasons to apply for a business loan for your e-business:
- Create or improve a website: Your website is the face of your e-business, and creating or improving a website can require significant investment.
- Marketing: Marketing is an essential aspect of any business, and e-businesses require effective online marketing strategies to reach more customers.
- Inventory: Purchasing inventory can be a significant investment, especially for an e-business, where inventory must be stored and shipped.
- Technology: E-businesses require the latest technology to compete in the online marketplace, and securing a loan can help finance these investments.
Bajaj Finserv business loans are designed to help businesses meet their funding requirements. These loans cater to businesses of different sizes, offering a range of loan amounts and repayment schedules. Here are some benefits of opting for our business loan:
- High loan amount: Our business loans offer a high loan amount of up to
Rs. 80 lakh. - Flexible repayment options: We provide flexible repayment options ranging from 12 months to 96 months.
- No collateral: Business loans from Bajaj Finance do not require any collateral or guarantors, making it accessible to businesses of all sizes.
- Online application: Businesses can apply for a loan online, making the application process quick and convenient.
- Fast disbursal: Our business loans offer fast disbursal of funds, providing quick access to funding.
- Attractive interest rates: We offer competitive interest rates, making them an attractive option for businesses.
E-business has become an essential part of modern-day commerce, leading to increased efficiency, cost-effectiveness, and global reach. If you need funding to start an e-business, consider Bajaj Finserv Business Loan. With fast approval times and a simple application process, we make securing funding for your business easy and hassle-free.
