Technology continues to drive explosive growth in the world of e-business. Projections estimate that there will be $4.8 trillion in online retail sales worldwide in 2021, creating opportunities for jobs and innovations in every aspect of e-business.
TL;DR (Too Long; Didn't Read)
E-business, or ebusiness, is shorthand for electronic business. It is a broad term that refers to the use of digital information and communication technologies to support business processes and optimize their functioning.
E-Business vs. E-Commerce
The terms e-business and e-commerce are often used interchangeably, but they're not the same. E-commerce is a part of e-business. E-commerce refers to commercial transactions using the internet. When you buy or sell something online, you're engaged in e-commerce.
E-business, on the other hand, refers to a number of business processes that support the buying and selling of goods and services online. E-business includes functions such as supply chain management, customer relations and financial management. Without e-business functions behind the scenes, e-commerce businesses couldn't operate.
Who's Engaged in E-Commerce?
E-commerce is a way of doing business that is growing rapidly. E-commerce sales are predicted to top $27 trillion in 2020 for the retail sector alone. Wholesale and business-to-business (B2B) sales will add significantly to that figure.
E-commerce businesses encompass a range of products and services, including:
- Physical goods: Customers browse online as they would in a retail store. They add items to a virtual shopping cart and complete the transaction with a credit or debit card or a digital wallet (or e-wallet) such as Apple Pay or Google Pay. Items are shipped to customers. Some retailers give customers the option of in-store pickup so they can get their items more quickly.
- Services: Consultants, educators, web designers and writers are among those who sell their services online. Customers contact online service businesses through the business website or through a platform such as Fiverr.com, which connects freelancers and those who need services to find each other.
- Digital products: Digital products are downloadable items such as software, graphics, e-books and online courses. Sellers of digital products market through their own websites or a platform such as Patreon for creative content such as songs or graphics or Udemy for online learning.
Developing the E-Business Model
Not surprisingly, computer giant IBM was one of the first companies to use the term e-business. It's a common business model in today's world, but in 1997, IBM spent approximately $500 million to market and advertise what was then a new way of business. The global business community had to be convinced that e-business was the future and that the internet was not a fad.
Transforming for the Digital Age
Established businesses such as L.L. Bean, The New York Times, Fidelity, Walmart and Disney Parks successfully transitioned to the digital age by embracing e-business strategies and tools. In contrast, retailers such as Radio Shack and Toys R Us filed for Chapter 11 bankruptcy because leadership didn't keep up with tech trends.
New Businesses Emerge
E-business has spawned a number of new industries as technology creates new possibilities. Uber and Grubhub are two examples of enterprises that could be created because e-business tools are available to support them. The internet facilitates communications between customers and service providers and manages payments.
Amazon: The World's Most Successful E-Business
Amazon engages in e-commerce by retailing an incredible range of products, from physical goods such as hardware and camping supplies to digital products such as music and e-books.
Amazon is an e-business because it facilitates transactions by third-party sellers, including management of subscription services and collecting monies through Amazon Pay. Amazon offers digital data storage and management through its cloud computing services. The company uses e-business tools in the operation and management of the brands it has acquired, including names such as Zappos, Whole Foods, Twitch, Audible, PillPack and Kiva Systems.