What’s the Difference Between Ecommerce and Ebusiness?

Understanding key terminology is crucial to navigating the online business world. The various digital business models require different approaches, resources, and structures. Among the most commonly discussed online business models are e-commerce and e-business.

Today, we will delve into the difference between ecommerce and ebusiness and the nuances and features that make them ideal for certain types of online businesses.

A brief overview of ecommerce and ebusiness

While the two terms are often used interchangeably, they both encapsulate different facets of online business.

Ebusiness is a general term for any business, primarily or entirely operated over the Internet. On the other hand, e-commerce is a subset of e-business that mainly deals with selling and buying products online.

Let’s dive into the key similarities and differences between the two.

What is e-commerce?

E-commerce is a subset of e-business. It refers to the buying and selling of goods and services via online channels. Most often, this includes the entire sales process – from presenting the products on a website and advertising them to securing monetary transactions and providing a delivery.

It’s a business model that has gained significant popularity in recent years, especially with the rise of intuitive platforms and streamlined processes. The reason is that they allow any entrepreneur to build and run an online store with minimum effort.

Examples of ecommerce platforms in Nigeria

E-commerce is one of the emerging modes of business in Nigeria. In fact, In 2020, the number of online buyers in Nigeria was about 76.7 million, which is nearly 46% of the entire population.

Some of the most prominent players in the country are Jumia, PayPorte, Konga, and Slot, among others.

Types of ecommerce models (B2B, B2C, C2C)

There are different categories of e-commerce depending on the target audience of the business, as well as the type of transaction that occurs:

• Business to Consumer (B2C) is the most common type of ecommerce as it generates the most online transactions. As the name suggests, B2C e-commerce covers transactions between business entities and individual clients, for example, retail stores such as Jumia.
  
  
• Business to Business (B2B) e-commerce organizations focus on providing products and services to other businesses. This may be in physical forms, such as wholesaling, but B2B businesses are primarily associated with software and services – like marketing tools, digital infrastructure, etc.
  
  
• Consumer to Consumer (C2C) is usually a business model that deals with creating digital platforms that allow consumers to complete all types of commercial transactions with other consumers. Examples of C2C platforms are OLX, eBay, Craigslist, Amazon Marketplace, and Etsy.
  
  

Advantages of ecommerce for businesses

The use of the Internet has granted many commercial businesses the ability to overcome geographical limitations and grow exponentially.

The online presence of a store also makes the buying experience much more convenient, essentially increasing the chances of a client purchasing your products or services.

Additionally, some stores may decide to run all their business activities online. This type of fully digital e-commerce reduces the costs of staffing and rent, making operations through the web much more affordable.

Challenges of ecommerce

The benefits of a fully online business do come with some challenges and potential downsides.

Primarily, the ease of access comes with a lot of competition. Most industries are populated with businesses selling the same types of goods and services. This either leads to heavy undercutting of prices at worst and the need for innovative marketing and product design at best.

The digital control of warehousing and supply chains can also be challenging. More often than not, e-commerce businesses will be working with third-party suppliers, so the timely delivery of physical packages may not always be consistent and in your control.

Finally, since this type of business requires Internet servers, hosting, and domains, your store’s security and customers’ information are exposed to malicious actions like hacking.

What is e-business?

The term e-business encompasses a broader set of activities. E-business refers to any and all business operations that run primarily or entirely online, including e-commerce stores, service-based companies, and others.

E-business employees communicate and collaborate online, share digital tools, and cater to clients without needing a physical establishment.

Examples of ebusiness models

Any type of online platform, such as NEXT BASKET or even a travel agency, is an example of e-business. Other platforms that allow users to interact with each other are also considered e-businesses (Facebook, eBay, etc.)

An e-business can be the company behind any software like, for example, accounting software, banking, or security.

Game development companies, content creation organizations, community-based platforms, and marketplaces are all examples of what an e-business can be.

Types of ebusiness models (B2B, B2C, C2C)

E-business and e-commerce are similar in that they are split into multiple sub-categories depending on the nature of business transactions. But most importantly, it’s the business integration of relevant technology and their target audience.

Below are some of the e-business models:

• Business to Consumer (B2C). This type of e-business is centered around the relationship and transaction between the company and individual customers through online channels. The end goal is the conversion of the consumer. Examples of B2C e-businesses are subscription-based media outlets like streaming services or games, retail e-commerce, and software like phone apps.
  
  
• Business to Business (B2B) models focus on business interactions. B2B businesses usually offer software or services that help automate or optimize specific processes within a company’s workflow. Hiring an SEO marketing agency is known as a B2B solution. Buying products in bulk in order to resell them at a retail price is also one.
  
  
• Consumer to Consumer (C2C) platforms are built to foster interaction, trading, and/or community between users, usually in exchange for a profit through ad revenue or commission. C2C platforms include community-based ones like Discord or Telegram, as well as peer-to-peer sharing ones like Airbnb, Couchsurfing, and even Uber.

Advantages of e-business models for businesses in Nigeria

At the end of the day, is e-business a good fit for the Nigerian markets?

Normally, starting a business in Nigeria can be tricky – Nigerian banks give out loans with an average interest rate of 25%, making raising capital a challenge.

Traditional businesses have reached a flatline, while e-business, on the other hand, is thriving in Nigeria. Among the advantages of “biz” are the lower startup costs, lower staff requirements, geographic freedom, and profit potential.

As e-business grows, physical stores and businesses are starting to either partially integrate e-business principles and processes or even fully transition into a completely digital entity.

Furthermore, digital infrastructures allow tracking of all the business activities an organization usually runs, offering insight into analytics and performance reports in a significantly more automated and inexpensive format.

In short, depending on the industry, e-businesses have a much higher scaling and saving potential compared to their traditional brick-and-mortar counterpart.

The challenges of e-businesses

While local businesses might thrive and sustain success due to a fit within the particular area’s needs, e-businesses tend to face heavy competition.

Dealing with competition means bringing a competitive edge to your market – be it an intricate marketing campaign, unparalleled product and service quality, or dynamic upkeep with evolving technologies. These steps are all healthy for the business in the long run but might require significant technical expertise and high upfront investment.

Another aspect of ebusiness is its complex nature that calls for a wide array of talent. There are many sides to a digital business – branding, marketing, supply, accounting, customer service, and web design – just to name a few. An online business is multifaceted, so in most cases, you’ll need to rely on other professionals to help.

Key Differences between Ecommerce and Ebusiness

Below, we will summarize the main differences between e-commerce and e-business.

Business model differences

The central distinction between e-commerce and e-business lies in their scope. E-commerce deals specifically with buying and selling online, while e-business covers a broader spectrum of digital operations beyond transactions only.

Instead, e-business involves digitizing a company’s processes through integrations like remote work systems, communication, and supply chain management. E-businesses leverage digital tools in order to optimize their business.

Scope of activities

E-commerce activities mainly surround product distribution – showcasing, marketing, and providing a secure payment system for clients to purchase them through.

On the other hand, e-business focuses on a broader scope of activities. It’s about building up a complex organization with many roles that operate in relative autonomy through communication systems, digital integrations, and knowledge bases.

Integration with traditional business models

Naturally, e-commerce businesses are e-businesses and may be treated as such in order to scale and optimize their online presence.

Many physical stores, for example, continue to operate after establishing a digital presence. This approach is especially efficient and profitable as the business usually maintains a single warehouse while covering conversion “holes” due to a lack of convenience.

Other traditional businesses, like agencies, stand to gain a lot from integrating e-business strategies and infrastructure into their existing business, thus streamlining many of their processes, improving communication, and saving significant resources.

Focus on online vs. offline activities

E-commerce stores that exclusively operate online tend to primarily deal with online processes like maintaining a strong online presence and laying out a customer journey that’s online all the way through.

E-businesses, however, have both online and offline sides to them. Remember – e-business is an umbrella term, and it encompasses the operations of an entire business. This includes online activities, such as using digital tools to optimize processes, and offline activities, like using ERP systems to optimize inventory management.

Different goals and objectives

As e-business and e-commerce differ in their scope, their purposes are different.

E-commerce only refers to the digital space in which a commercial business operates. Its only goal is to lead a customer to a successful sale.

E-business strategies aim to improve collaboration, operational efficiency, and relevant digitalization.

Which model is better suited to different types of businesses

Your choice of a business model highly depends on your organization’s objectives. If you want to build a commercial business to sell products and services or extend your existing store’s impact into the digital world, creating an e-commerce store would be the correct decision. But if you’re looking to digitalize your existing business or build one primarily relying on digital mechanisms, you’ll likely find a solution in e-business.