What are different ecommerce platforms
What is e-commerce? All you need to know
E-commerce (also often referred to as online trading or electronic trading) has been around since 1994, when Phil Brandenberger bought the first product online - “Ten Summoner's Tales” from Sting. Let's jump into the current year 2020, when it is estimated that over 15 percent of sales will take place online. Over 25 percent of the world's population will buy products online this year!
These statistics show that in less than 20 years, e-commerce has become a stable part of daily life for people around the world. In this article, we're going to dig deeper into what ecommerce actually is. We'll look at the history of e-commerce and some key statistics. In addition, we will look at the development, platforms and business models to show what impact the model has had on the world so far.
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Ecommerce Definition: What is Ecommerce
What does e-commerce actually mean? E-commerce, also known as electronic commerce or online trading, is a business model in which transactions take place over the Internet. Stores that sell their products online are ecommerce stores or companies.
For example, Amazon is one of the most popular online shopping platforms in the e-commerce industry.
History of e-commerce
The basis for e-commerce was created in 1979 by Michael Aldrich. He connected his television to a computer using his phone line. While this was of course different from e-commerce as we know it today, his approach sparked the idea of shopping without visiting a local store. Back then, most people didn't own computers. Bill Gates and Steve Jobs made computers popular and accessible to the general public. Gates even said at the time that his goal was to put a computer on every desk and in every household. Without computers, e-commerce would be remarkably different.
In 1994 Jeff Bezos founded Amazon as an online shop that sold over a million different books when it launched. After all, Amazon was to become the most popular online shop for consumers to buy products of all kinds.
In the mid-1990s and early 2000s, computers were already in the majority of households, paving the way for the growth of e-commerce. In the early to mid-1990s, businesses accepted checks because there was no online payment gateway to transfer funds from customers to businesses. When PayPal was founded in December 1998, it made the shopping experience easier for customers by accepting credit cards with ease.
With the addition of Shopify, WordPress, and similar platforms in the 2000s, companies were able to build their ecommerce businesses with little to no development skills. This lowered the market entry barrier. Now anyone with an Internet-connected computer and a little capital could easily set up an e-commerce store.
By 2008, online sales represented 3.4 percent of all sales, which is evidence of the industry's growth. In 2014 there were an estimated 12-24 million online stores worldwide.
In this day and age, the knowledge gap between beginners and advanced e-commerce professionals is closing very quickly. Thanks to the growing number of blogs and online resources, industry-specific tips, tricks and strategies are available at the push of a button. Now anyone can set up an ecommerce website overnight and get solid results in less than six months.
- It is estimated that there will be 2.05 billion digital shoppers worldwide by 2020.
- It is estimated that global e-commerce sales will reach $ 4.135 trillion by 2020, making e-commerce a growing and profitable industry.
- The USA is expecting 224 million online buyers by 2019, which makes the USA a very attractive market for entrepreneurs in the e-commerce segment.
- In the USA, around 167 million people are said to have made at least one purchase on their mobile device in 2020. As a result, shop owners need to ensure that their websites and ads are optimized for the smartphone in order to effectively reach their target audiences. According to Business Insider, men (22 percent) are also more likely than women (18 percent) to buy a product using a mobile device.
- Women shop online more often than men. For every $ 10 spent online, women spend $ 6 while men spend $ 4.
- Millennials ages 18-34 tend to spend around $ 2,000 online each year, making them the most popular generation to shop online.
Common types of ecommerce business models
There are many different types of ecommerce, depending on the business model you choose. The nice thing about ecommerce is that there are more options to choose from. In contrast, the business models in traditional retail were far more restrictive. There are four well-known business models, and there are also other niche models. These well-known types of e-commerce are:
- B2B: One speaks of a B2B (Business to Business) model when a company sells to other companies. Alibaba is an example of a B2B business as its suppliers sell to other companies. Prices at Alibaba are extremely low as these are wholesale prices. This enables other companies to make a profit on their products.
- B2C: The B2C model (Business to Consumer) includes companies that sell to end consumers. If you decide to open your very own online store, you will likely sell to end customers rather than companies. Amazon, Walmart, and Apple are examples of B2C businesses.
- C2C: A C2C (Consumer to Consumer) model is used when consumers sell to other consumers. Examples of a C2C business model are eBay, Craigslist, Facebook groups, and Kijiji. Many of the sellers on these websites are not businesses but average consumers selling products, whether used or new.
- C2B: The C2B (Consumer to Business) model occurs when a consumer sells their own products or services to a company or organization. This could be a photographer selling their photography to a company.
What is an ecommerce website?
An ecommerce website is any website that sells a good or service. This type of website can adhere to any of the ecommerce business models mentioned above. Below we outline the common types of ecommerce websites to show just how diverse ecommerce can be.
Common types of ecommerce websites
- Ecommerce websites with physical goods:
In-store retailers can bring their business to the Internet with an online shop in order to reach a larger audience. This option is ideal for retailers who want to increase their sales but don't want to open additional locations.
- Ecommerce websites for services:
Freelancing and online-only services have become a huge trend lately. In these models, websites act as a link between a freelancer and their potential clients.
- Ecommerce websites for digital products:
Companies that sell digital products such as software or video games do not need physical stores as the customer just needs to download the product. This type of e-commerce is thriving as exclusive distribution over the Internet lowers costs and makes it easier to make a profit.
- Ecommerce websites as a dropshipping model:
Somewhat different to shops with physical products, dropshipping is the sale of goods via an online shop, although no own inventory is kept. Instead, dropshippers find a supplier through whom they can sell goods. When orders come in, they pass them on to the supplier, who then packs and sends them. You can find more information about dropshipping in our detailed article “What is dropshipping? The easiest way to start an online business ”.
What is an e-commerce platform?
An e-commerce platform is a software solution that companies and entrepreneurs can use to set up online shops. In these online stores, companies can sell products or services to people around the world and use delivery services to get their products to customers. Examples of ecommerce platforms are Shopify, BigCommerce, and Magento.
Shopify was founded in 2004 by Tobias Lütke, Daniel Weinand and Scott Lake. In 2016, 377,500 retailers were already using the Shopify platform. Together they generated $ 15.4 billion in gross sales. The platform allows shop owners to install apps, including the popular Oberlo dropshipping app or the Hurrify Countdown Timer. Shopify's platform is considered to be the best ecommerce platform right now with a 10/10 rating.
The most popular ecommerce websites
Amazon: Amazon, founded by Jeff Bezos, is currently the 12th most popular website in the world and 3rd in the United States, according to Alexa.
Taobao:Taobao was founded by Jack Ma. The platform is in 8th place worldwide. In China, it is in 3rd place.
Tmall:Tmall was also founded by Jack Ma. In the global ranking, the website ranks 3rd and 1st in China.
AliExpress:AliExpress was also founded by Jack Ma. The site currently ranks 40th worldwide and 38th in the United States, according to Alexa.
eBay: eBay was founded by Pierre Omidyar. The e-commerce website ranks 39th worldwide on Alexa and 10th in the US.
Flipkart: Flipkart was founded by Binny Bansal and Sachin Bansal. Alexa ranks the site 81st worldwide and 6th in India.
What makes an e-commerce shop successful?
Running an e-commerce business is not easy. Just having a shop and a few products to sell doesn't mean people will come in droves and rip your products out of your hands. However, there are some tried and tested strategies you can use to ensure your business is a success.
- Focus on the user: With e-commerce, you can sell anything to anyone. However, you have to be clear about the best way to build trust with your visitors so that they will ultimately buy from you. Choose the right website theme, develop the right branding and tonality for your texts, and focus on just one or two target groups.
- Testing with friends: Bring your friends in as test subjects and let them go through the purchase steps to make sure everything goes perfectly. Finally, you want to avoid the checkout process taking too long and people leaving before they have placed an order.
- Optimization for mobile: Make sure users can shop conveniently on their mobile devices. The importance of mobile is increasing in all industries. So, following this trend is of the utmost importance to the success of your ecommerce business.
- SEO and PPC advertising: SEO (search engine optimization) and PPC advertising (pay-per-click) generate traffic for your shop. Staying inactive here will hold back your success. If you are on a budget, you can find a good consultant or agency and then watch how easy it is to generate revenue even with a small budget.
- Research and Development: Never be satisfied with what you do. Research new products and ways to sell them. That doesn't mean that you have to replenish your shop with new products every month. But try with innovative ways to generate attention and expand your shop.
What is Ecommerce Marketing?
Ecommerce marketing is a process that helps increase sales for online stores. Most of the time, strategies and platforms are used, most of which are online. This can include campaigns for more brand awareness, display advertising, discount codes, etc. Most of these tactics come from traditional marketing strategies but are used online.
The beauty of marketing for ecommerce is that you can learn almost anything online through webinars, blogs, and e-books. That means there is an opportunity for everyone to become successful through this type of marketing, regardless of budget.
For example, the ad segment now includes search engines like Google and Bing. Google Ads and social media marketing are significant factors in almost any marketing campaign. In addition, e-mails and newsletters have replaced traditional flyers and brochures. Other ecommerce marketing examples include affiliate marketing, video marketing, and influencer marketing.
The future of e-commerce
The e-commerce industry will continue to grow. In the US, brick-and-mortar retailers generate $ 3.9 trillion in sales, while e-commerce generates $ 294 billion, according to N Channel. In the future, e-commerce will continue to compete with traditional retailers for additional market shares, as has already been observed in recent years. This is good news for those looking to open an online store as sales will only keep increasing. However, competition in this area will also increase.
E-commerce is likely to evolve over the years, offering buyers a more virtual or augmented reality. Shops will eventually contain functions that customers can use to try on clothes “virtually”. This ensures that the clothes really fit the customer, while allowing them to get an idea of what the selected item would look like before purchasing. Buyers will likely also be able to "try out" make-up through the camera on their laptop or cell phone.
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