When I was in primary school, we had mental games that required us to spot the differences between two similar-looking items. For instance, we could search for differences between two elephant images that looked like each other’s copycat from afar. By looking at the two objects analytically and keenly, we would notice very subtle differences that the common eye could not pick on first sight.
The rise of the Internet revolution also presents us with the same challenge of differentiating between similar terms. For example, since companies started trading online, the terms e-commerce and business sound like synonyms. However, what is the difference between the two terms and activities? Unfortunately, many people use these terms interchangeably. Although they sound like synonyms, they are not the same thing—in practice. In the remaining sections of this post, I will show you the main differences between e-commerce and business. Therefore, I invite you to remain with me as I show you these differences.
Defining Business and Commerce
So, how does e-commerce differ from e-business? Before proceeding to the differences, I will define the two terms to enable you to understand how they differ.
E-commerce, a short form of the term electronic commerce, is the process of buying, selling, dealing, ordering, and paying for goods and services on the Internet. Here, customers can communicate with sellers without making personal contact with them. For instance, online banking and shopping are some of the forms of e-commerce activities we have. Moreover, e-commerce takes different forms. Below are some of the forms of e-commerce we have:
- B2B: This is where business takes place between businesses
- B2C: In this setting, commercial transactions happen between sellers and buyers. In this segment, security plays an important role. If we think about the security of e-commerce, SSL certificate is necessary and EV SSL certificate is an ideal choice for e-commerce security.
- C2C: Here, commerce takes place between customers
- C2B: It occurs when commercial transactions take place between a customer and a business
Ebusiness is the short form of electronic business. It is simply a business’ online presence. By definition, it is the process of using the internet to do business and exchange electronic data. However, it is not limited to the buying or selling of goods or services the way e-commerce is. Ebusiness includes other activities such as customer service, communication with workers, contact with suppliers and other business partners, and any other relevant activities necessary for a business’ online presence. Online business can take two main forms, which are:
- Pure-play: In this setting, a business does not have any physical presence such as premises
- Brick-and-click: In this arrangement, a business has physical and online existence
With the above understanding in mind, we can now proceed and examine the main differences between e-commerce and business.
The Type and Scope of Activities Involved
First, these two commercial realities differ in their type and scope of activity. E-commerce entails commercial transactions over the Net while business involves the conducting of business over the Internet.
Second, these two online realities differ in their business models. In e-commerce, you will need a new and additional model to govern online sales and services. Here, business owners require different methods of advertising and marketing for their services or products. Inversely, business affects existing business models by reinventing older processes completely.
In addition, e-commerce and business differ in their appearance before buyers. For example, e-commerce deals primarily with customers, online suppliers, and distributors. Inversely, business gives a perfect image of a company and promotes the values a firm uses to promote its businesses. Therefore, we can say that e-commerce is more concerned with the user interface and advertising than business.
Buying and Selling
Another major difference between e-business and e-commerce is how they approach buying and selling. With e-commerce, the primary focus is on mere selling and buying. On the other hand, business deals with more activities that precede and succeed the actual selling or buying of products and services. For instance, a business takes care of the exchange of information that directly relates to buying and selling.
The Scope of Online Platforms
The scope of online platforms is another main difference between electronic business and commerce. For example, e-commerce only needs a website to operate. Conversely, business entails and requires other tools such as the intranet, extranet, CRM, and ERPs to perform different business processes.
Internal vs. External Focuses
The two platforms also differ in the way they approach external and internal business activities. For instance, e-commerce focuses more on the external processes and activities that affect buyers and suppliers. Inversely, e-business focuses more on the internal processes that keep a business running. For example, it takes care of areas such as production, inventory management, product development, risk management, and finance. Moreover, it seeks to apply online solutions to processes such as payroll, human resources, internal data management, and other internal systems customers do not see even though they affect the entire business.
Lastly, the advantages these two realities enjoy also differentiate them. For example, e-commerce enjoys market-oriented advantages that allow businesses to access potential customers which they could not have accessed any other way. E-business, on the other hand, focuses on the efficiency of business processes. Its strategies incorporate and blend into the system slowly and they can be more costly. However, they increase overall business growth and profitability in the long-term.
Even though e-commerce and e-business have many similarities, they have many differences. Essentially, they are the same in the same way milk and yogurt are similar. However, the differences between them emerge in the way they operate. In short, e-commerce is the “face” of e-business that customers interact with. On the other hand, e-business is the foundation upon which e-commerce is built. In this post, I sought to show you these differences to help get a better understanding of how these two realities differ despite their many similarities. I hope you are now up to date with these differences and you will use them to interact with e-commerce and e-business better.