What is E-commerce?
Electronic commerce or e-commerce is an online platform used to buy or sell products. The two most popular e-commerce platforms are Amazon and Flipkart. With growing technologies and increased usage of mobile and internet, the e-commerce market is expected to grow exponentially.
Flipkart and Amazon share most of the e-commerce sector where Flipkart dominates the Indian online market with a 32% share. In 2018, Walmart bought 77% of Flipkart’s share in $16 billion to get the hold of the Indian e-commerce market which is expected to cross $600 billion by 2026. Amazon also plans to invest whopping 1$ billion per year in the Indian market share of Amazon.
In this article, we will explore the significance of e-commerce in the current economy and dig deeper into the meaning of this new business spreading across the world rapidly. We will also see some of the important components of e-commerce. Hence, let’s begin.
Components of e-commerce
E-Commerce businesses depend upon several different components such as Logistics, Marketplace, Sellers, Transaction partners, and Operations, in order to function successfully. Let’s learn more about these components in order to understand e-commerce businesses properly.
Marketplace in e-commerce is a virtual Store, which is used to display items to be sold online. At a marketplace, all exchanges take place. Sellers sell their products and customers shop online at this interface. The marketplace has a different interface for different e-commerce platforms.
At this place, all the items are arranged in a way so that a buyer gets a full list of items arranged at a single place. The most popular marketplaces are Amazon, Walmart (Flipkart), and eBay, for B2C and Alibaba Marketplace, IndiaMART Marketplace, and Thomas Net for B2B business, etc.
Logistics ensures the transportation of goods and services from sellers to customers. Every successful e-commerce platform has an independent logistic unit. Logistics work in the area of supply chain management of e-commerce business.
Amazon and Flipkart also have their own logistic partner. Ekart works for Flipkart and Amazon has its own delivery department, and anyone can join it by providing trained drivers and appropriate vehicles to work as a third party delivery services for Amazon.
Sellers are those people who sell their items online at the Marketplace. Anyone can become a seller with genuine product appropriate documents. Sellers can sell their products on their own or they can take help from third parties as well.
Flipkart and Amazon both provide third party selling options. Both parties provide warehouse facilities for the sellers. Third-party sellers help the sellers to sell their products successively on the Marketplace. Sellers are equally important as the customers in an e-commerce business.
Online transactions are done with the help of different transaction partners of e-commerce firms. To make online payments easier, transaction partners provide payment gateway to the customers. This makes it easier for customers to make an online payment.
Flipkart owned Phonepe solves this issue of online payments and transactions are done at the customer’s end. Amazon has Amazon pay for the same purpose. Amazon has launched Amazon credit card in partnership with ICICI Bank. With the help of transaction partners, e-commerce businesses are making payments easier for the customers, hence they become more trustworthy towards their customers.
Operations and support
To run a business successfully, there is a need for an operations team. Every successful e-commerce business has a strong technical background and a successful operational unit working behind to run the business properly. Ecommerce giants like Walmart and Amazon have a very successful and dedicated team behind their operations.
After-sales support and seller support are very important in running an e-commerce business. Amazon and Flipkart have a very hardworking and dedicated team behind the support for sellers and customers. Support teams help the sellers’ queries and also provide seller assistance in doing their business. They also solve queries from the customers’ end; this increases the reliability of customers on their products
World’s E-Commerce leaders
Amazon and Flipkart are the two biggest E-Commerce giants in the world. These two businesses occupy the maximum percentage of the online Global Business. This increased their rivalry with each other, which becomes a blessing in disguise for all the customers, as they get different benefits like discounts and postpaid facilities due to the competition. Let’s know more about commerce leaders.
Amazon was incorporated by Jeff Bezos in July 1994 in Washington, The USA. The basic idea was to sell books on the online platform. When Amazon was in its primitive stage, the internet was not that much into effect as it is now, but things started to change afterward. In 2002, Amazon came up with Amazon Web Services, which helped in the successful development of the data-centric business of Amazon.
Amazon started to sell electronic items and merchandise. Apparels are one of the largest selling sections of the Amazon. With the estimated worth of $1trillion, Amazon tops the list of successful online businesses. Jeff Bezos is the world’s richest person with a net worth $24 billion, in 2020.
Flipkart was founded by Binny Bansal and Sachin Bansal in 2007. The idea was the same as Amazon, that bookselling was the first intention of the startup. Through the journey of successful e-Commerce platform Flipkart has seen many ups and downs. Walmart acquired Flipkart in 2018 for 16 billion dollars. After the acquisition, Flipkart has seen significant growth in online business.
Flipkart is considered to be India’s most successful e-commerce platform. With 70% market share Flipkart tops the choices of sellers and buyers in India. Flipkart is set to become the next big thing in e-commerce business. After the acquisition by Walmart, Flipkart has seen significant growth in sales
Benefits of using e-commerce
The digitalization of businesses has made it essential for the Retail Industry to come online. Electronic Commerce or e-commerce is a great example of an online retail business. One can sell or buy a wide variety of products using an online platform. Let’s see the benefits of using e-commerce.
Global exposure to the sellers
Sellers can now reach their customers sitting at other corners of the globe with the help of an e-Commerce platform. With an increase in internet usage across the world, potential buyers are easy to be found in different parts of the world. This has increased online business in the e-Commerce sector with significant growth.
Ease of doing business
Sellers find it easy to sell anything online with the help of the seller support team provided by E-Commerce giants in the race. E-commerce business has come up with thousands of job Creations and added multi-billion value to the world economy.
Bring business on e-commerce has turned out to be a profitable nice for individual or third-party sellers. While doing business online, parties are able to save other resources like office space, retail space, manpower, etc. Ecommerce platforms provide assistance to the sellers so that they can make most of the e-commerce business.
Due to its user-friendly nature, e-commerce services are recommended by most of their customers. Today, every third person has a mobile phone with an internet connection on it. Using an E-Commerce mobile platform, customers can get their ordered products delivered to their doorsteps.
Ecommerce is the future
Talk about the successful delivery of orders through a drone, or introduction to artificial intelligence in the operations of Marketplace and Logistics, e-commerce has taken a small step into the future. That day is not so far when people will be able to get their every essential, delivered at their doorsteps. It won’t be wrong to say that e-commerce is the future of the Retail Industry.
So these were the benefits of using e-commerce in your day to day life and e-commerce has successfully put their first step into the future.
E-commerce in India
India has a huge offline retail market which is expected to grow by $1 trillion in 2025. Before the acquisition of Flipkart, Walmart saw great potential in the Indian retail market. Amazon is also not that far behind in making Investments into the e-commerce-sector of India. India’s 98% of the retail market is offline and more than 50% of the population has internet access in India.
Indian B2B online business is also at a good pace. IndiaMART and Trade India are the two most successful B2B platforms in India. Foreign government policies, like 100% direct foreign investment have strengthened the B2B business sector in India. Whether it’s B2B or B2C, India has seen a huge growth in demand, and the future also seems to be secured in the online business.
So, e-commerce is the future of the retail industry in India and all over the world. Ecommerce is growing rapidly with an increase in internet users. Different components of the e-commerce sector work together in order to run the business successfully. We also saw the different benefits of using an e-commerce platform from the seller’s perspective as well as the customer’s perspective. Hence we can say, the e-commerce business is growing in India and across the world.