What Is eBusiness?

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.


About the Author

Denise Dayton, M.S., M.Ed. is a freelance writer specializing in careers, education and technology. In addition to writing for corporate clients, she has published articles in Library Journal and The Searcher.