What is eCommerce and its models
E-commerce plays an important role in our life. Any type of business that involves the transfer across the internet is called E-commerce, as known as electronic commerce. The range of the E-commerce covers different types of business areas, from consumer-based retail websites to auction or application sites that provides goods and services.
Type of E-commerce Models
In general, the markets have for major types of ecommerce models that can identify nearly every transaction that happened among businesses and consumers.
Business to Business (B2B)
When a business offers services or goods to another business. For instance, a business sign-up or subscribe software-as-a-service from another business for their daily business operation usage.
Business to Consumer (B2C)
This is most common scenario in many sites where a merchant is selling products or goods to an individual, for example, you may purchase a set of TV console from a home appliances online shop.
Consumer to Business (C2B)
C2B is when consumer offer their own services or products back to a business or organisation. For example, a photographer licenses their photo through a platform for a business to use to sell to others, or an influence offers their exposure to their followers from a business.
Consumer to Consumer (C2C)
This model happened when consumer sells a good or service to another consumer in sites like Facebook Marketplace, Mudah.my, Carousell, they are selling second-hand or used items, such as books, old furniture, etc.
Why E-Commerce?
Nowadays, most of the people owns a smartphone with data roaming. Almost everyone is connected to the internet in anytime and anywhere. E-commerce provides lots of convenient, the consumers can shop wherever they want in anytime, and even use the function in the website to search the desire product and services, or to make comparison to find out the best price.
In Malaysia, there are 15.3 million online shoppers (50% of the population) and 62% of mobile users used their devices to shop online in 2018. (Source: https://www.export.gov/article?id=Malaysia-E-Commerce) According to the survey done by Malaysian Communications and Multimedia Commission (MCMC), it shows that there are 87.2% of respondents conducted research on the products before they proceed for online purchasing. Of this, about 70.5% respondents used search engines to find product information, while 64.2% of respondents browsed retailers’ website to seek for product details and reviews as well as 44.1% of respondents are searching product information on social media. (Source: https://www.mcmc.gov.my/skmmgovmy/media/General/pdf/ECS2018.pdf)
*Percentage of e-commerce consumers on product research and platform used
E-Commerce business has contributed RM 85.8 billion to the gross domestic product (GDP) of Malaysia in year 2017. Source: (https://dosm.gov.my/v1/index.php?r=column/cthemeByCat&cat=319&bul_id=RDdRV3ZkeE81MjIvQjNnbit3VDZLUT09&menu_id=TE5CRUZCblh4ZTZMODZIbmk2aWRRQT09)
*Value added and contribution of e-commerce to GDP
On average, an individual in Malaysia spent around RM 470 per transaction in the last 12 months. Clothing and accessories were the most popular product categories purchased by online shoppers in Malaysia.
(Source: https://www.mcmc.gov.my/skmmgovmy/media/General/pdf/ECS2018.pdf)
*products categories purchased by online shoppers in Malaysia
Malaysian has relatively high awareness on e-Commerce where 75.8% of respondents claimed they have knowledge on e-Commerce while 65.7% of respondents reported to visit any e-Commerce platform i.e. websites, mobile apps, etc. in the last 12 months. (Source: https://www.mcmc.gov.my/skmmgovmy/media/General/pdf/ECS2018.pdf)
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