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9 minutes read

What Is the Difference Between eCommerce and eBusiness?

By Alvaro Insignares
By Alvaro Insignares
9 minutes read

The difference between eCommerce and eBusiness is essential to understand if you want to be up to date with the current global business trends. 

It is not a secret that businesses are experiencing a digital transformation, which is quickly changing the global business landscape. This has impacted the physical-versus-Internet balance of commercial monetary transactions and the rise of omnichannel strategies. Although not everyone might agree on how this process has been accelerated throughout the pandemic, we can indeed say that the Internet seems to have finally caught up with all types of companies, not just the big ones, and across all industries. 

To explain this shift towards online business and omnichannel strategies and why it matters, we will focus on the difference between eCommerce and eBusiness, analyze their business models, and think about eCommerce properly. 

The Importance of Online Business

Business transactions are part of how human societies work. So it was just a matter of time for companies, small and large, to migrate almost entirely to the Internet. But however powerful this transformation has been, it has not meant the complete disappearance of the physical aspects of different business processes.

This digital shift in business activities has meant several benefits like increased productivity, cost reduction, and greater efficiency, simplifying routine tasks like inventory management, transaction process, coordination between business processes, etc. Although there is still a long way to go, eCommerce is here to stay. 

A crucial technological element that has allowed this transformation to occur is electronic data interchange, also known as EDI. Thanks to the possibility of exchanging business information through digital channels, companies have been able to migrate their business activities to digital environments. This has meant a significant shift in mentality and how things are done. In particular, it has revolutionized traditional models of business.

Business Model

The idea of a business model is not new. However, it was introduced to an entire generation during the past decade thanks to the book Business Model Generation. As a result, a simple yet complete business model framework was introduced: the Business Model CANVAS

With this tool, existing companies and entrepreneurs alike could think of their business activities in a new and integrative way that made it easy to understand a considerable amount of information. Moreover, it allowed a systemic perspective of business, looking at it as an integral concept, all thanks to the power of digital tools. 

The business model approach has changed many rules of the game. In particular, it has given all sorts of companies the conceptual tools to think big, improve their enterprise resource planning, increase their revenue, and establish unique relationships with their customers.  

What Is the Difference Between a Business Model and an eBusiness Model?

No business can avoid the power of the Internet and the use of EDI tools in one way or another. The resulting shift in business has been a move from a traditional business model, that is, in the physical world, to one where the Internet cannot be overlooked. A conventional business model refers to one where digital tools are not at the center of how business is done. In contrast, an eBusiness model refers to a company that uses digital tools as a fundamental part of its process. 

As the Internet engulfs every aspect of our lives, terms like eTail have become popular; this is the selling of retail products and services over the Internet. Other ones like eCommerce and eBusiness are more popular. These two terms are often used interchangeably as if they were the same. However, in practical terms, they are two different concepts, and understanding the difference between them can be beneficial to how you run your company. 

The Difference Between eCommerce and eBusiness

The difference between eCommerce and eBusiness is one of scope. eCommerce is how digital or online commerce is done, in contrast to how traditional brick and mortar commerce is done. This includes activities like eTail, electronic monetary transactions, online supply chains, mCommerce, digital marketing, and data analytics.

In contrast, eBusiness is the more inclusive digital version of business activities. This sounds pretty general because eBusiness is a vast concept. It includes things as diverse as eCommerce and Digital Therapeutics: two business models that belong to the Retail and MedTech industries but are digital. 

In short, eCommerce refers to online transactions, while eBusiness refers to all sorts of online businesses. eCommerce is included within the scope of eBusiness.

Just as eTail belongs to the broader eCommerce category, so does eCommerce with eBusiness. So, one could say that the difference between eBusiness and eCommerce is that the latter is a specific set of the former. This has important implications, such as eCommerce can be considered similar to retail, whereas eBusiness can include other models like those of the FinTech and MedTech industries. However, no matter the industry, there seems to be a way to think of eBusiness models that can also apply to eCommerce.

The Four Main Types of eBusiness Models

There are four main types of business models:

  • Business to Business (B2B)
  • Business to Consumer (B2C)
  • Consumer to Consumer (C2C)
  • Consumer to Business (C2B)

These models, or ways to segment your channels, can be referred to as different types of both eBusiness and eCommerce models.

Understanding the differences between each of the four models is vital for any company. By having clear differentiated channels, your company can build different ways to reach customers, helping it become better positioned to outpace competitors and expand its growth rate and bottom line. 

If you run a business, what you do and how you do it certainly differs from what a consumer does to close a transaction with another consumer. Things like communication and sales channels, how you produce revenue, and who your target audience is might be completely different. 

Business to Business B2B

In this first type of business model, a commercial transaction occurs between a business and another business; hence it is known as B2B. Because fewer monetary transactions might occur here than at the consumer level, the products and services offered tend to be more expensive and produce higher profit margins. However, consider that high volumes are handled in some cases as the supply chain model is Business to Business (B2B).

Business to Consumer B2C

B2C is probably the most common business model, and the one most people think of when they think about how a business operates. This model refers to the business transactions of products and services between regular companies and customers. Thanks to eCommerce and an improved customer experience through retail apps, this segment has seen a significant increase in online transactions.

Consumer to Consumer C2C

Thanks to the Internet’s possibilities, consumers can quickly sell their products and services to other consumers through C2C channels. As a result, solutions like marketplaces have become popular within this segment, as they help to match customers who want to sell something with those who want to buy it. 

Consumer to Business C2B

The idea of C2B, a consumer selling his products or services, sounds strange but is possible. This is thanks to the power of the Internet together with some powerful eCommerce tools. Thanks to digital transformation processes, an individual can sell products and services efficiently and securely to businesses all over the world. 

Models for eCommerce

Digital tools have had a considerable impact on eBusiness models. This has also been the case for eCommerce. For any eCommerce company with a robust online presence or wishing to have one, it is essential to consider the following aspects and how they relate to each eBusiness model.  

Online Shopping

The idea of shopping online sounds simple. You go to a website, select what you want, pay, and wait for it to be delivered. However, most companies lack this basic understanding of how their eCommerce systems should work. 

Most companies still think that eCommerce is just electronic commerce and not something new. However, to deliver your customers a seamless online shopping experience, it is necessary to use the right tools and adapt your processes to a new way of thinking about your business. Shopify Plus is a great way to do so. 

Customer Relationship Management

What the Internet has drastically changed for businesses is how they relate to customers. It is now possible to keep track of a great deal of information that can be used to create a better User Experience (UX). In addition, companies can target specific products to consumers based on their preferences, letting them know when an offer will take place, and much more. 

Products and Services

In the past, we saw how few specific products and services were sold by the numbers. Another critical aspect that eBusiness has changed is the possibility that many more products are sold, even if in low numbers in individual terms. An item unlikely to be found due to its low volume of sales can now be easily found thanks to online retail tools. This phenomenon is referred to as the long tail

To take advantage of this possibility, it is necessary to have the right tools. Therefore, a retail app becomes very important for companies that want to benefit from the long tail and similar market phenomenon. The best way to start doing so is through a retail MVP

eBusiness and eCommerce Retail Apps

Whether your company is in eBusiness or eCommerce, digital tools and having an online presence are important factors. No matter what model your company uses, it is important to have the right processes and tools. 

Digital transformation is a challenge many companies face. To guarantee a successful business transition, the best thing to do is to work with a qualified technology partner that can help you make the right decisions. Failing to do so may result in costly mistakes for your company and a terrible experience for your customers. 

At Koombea, we’ve been helping businesses build world-class retail apps since 2007. As a retail app development company, we know the importance of merging technology with how your business operates. 

Contact us and schedule a free consultation with one of our retail experts for more information on the difference between eCommerce and eBusiness and how we might help you build a retail app

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