In recent years, the number of companies and marketers using the Internet environment to develop their businesses and services has been increasing, and Internet business is being used in a variety of situations.
“Electronic Commerce” is a typical business service that utilizes the Internet environment. Electronic Commerce, also abbreviated as ”
EC
“, has become a familiar part of our daily lives. If you are a user who uses the Internet environment on a daily basis, you have probably heard the phrase “EC” at least once.
Nowadays, “EC” has become an indispensable part of Internet business, and it plays a very important role for Internet users and companies and marketers who use the Internet environment to develop their businesses and services. .
Among these, online shopping is a business that attracts a large number of market users. Online shopping is indispensable when talking about EC. The number of users of online shopping is also on the rise, and it is attracting more and more attention every year because it is a contactless and easy way to shop and use services. This is why Electronic Commerce continues to grow and evolve.
In this article, we will discuss what is “Electronic Commerce (EC)”? Starting from the basics, we will introduce services in the evolving EC market.
What is EC?
With the improvement of the Internet environment and the increasing demand for smartphones and tablets, there are more opportunities to interact with Internet business. Meanwhile, a phrase called “EC” has started to be thrown around a lot.
To begin with, “EC” is an abbreviation for Electronic Commerce, which means “electronic commerce” in Japanese. Electronic commerce refers to all transactions using internet lines, mainly the buying and selling of businesses and services, as well as contracts for such items. There is also a term called “E-commerce,” which is used in many markets. However, EC refers to electronic commerce in general, and “E-commerce” is a term used to describe online shopping itself. Let’s keep it separate.
The existence of e-commerce in our daily lives probably has the greatest demand for online shopping. By using online shopping, you can easily and stress-free purchase your favorite products and services regardless of time or place. Furthermore, as we experience a global pandemic, online shopping, a contactless service, continues to attract increasing attention, and the number of users is rapidly increasing. For this reason, the use of online shopping has become commonplace, and because of its various conveniences, it has become popular and captivated by many Internet users.
Type of EC
In fact, EC can be broadly classified into three types. From here, we will introduce the types of EC.
BtoB (Business to Business)
It mainly refers to commercial transactions conducted between companies.
A business model in which companies provide services and products to other companies.
BtoC (Business to Consumer)
It primarily represents transactions between businesses and consumers.
A business model in which various products and services provided by businesses are sold to consumers.
CtoC (Consumer to Consumer)
It mainly refers to commercial transactions conducted between consumers.
C2C is driving demand for transactions with the emergence of applications that make transactions between consumers easier and more convenient. (Auction, flea market, Mercari, etc.)
What is an EC site?
An EC site refers to a website that provides online shopping services, which is the “e-commerce” explained above. To explain briefly, an EC site is a sales site that uses the Internet environment to sell services and products provided by companies and marketers. Additionally, EC sites can be classified into two types: “mall type” and “site type”.
mall type
“Mall type” refers to a type of store where companies and marketers open stores offering products and services within platforms such as Yahoo! Shopping, Amazon, and Rakuten Market. Since various systems are already in place on each platform, there is no need to build a site or prepare a payment system from scratch, making it possible to arrange products and services relatively easily.
site type
The “site type” is a type that requires companies and marketers to build their own e-commerce sites. There are also patterns of building a site from scratch and patterns of building a site using a site building tool. Compared to the mall type, the site type allows you more flexibility in your business and has various advantages because you build the site yourself. However, keep in mind that you will need specialized knowledge and skills to create the site yourself.
Advantages of using e-commerce
With the development of the Internet environment and the expansion of online shopping users, developing businesses and services that utilize e-commerce will play an important role.
From here, we will introduce the benefits of using e-commerce.
There are no restrictions on where you can sell your products or services.
If you provide your products and services only through physical stores, unless you have an attractive brand, service, or product that attracts customers, it will be difficult to attract customers to your physical stores, and you will have a hard time attracting customers. Additionally, the process for a customer to actually visit a physical store requires a number of actions, such as “making a plan, preparing to go out, walking, driving, and taking a train,” making the process extremely difficult. will be higher. Especially when the weather is bad.
By utilizing e-commerce from this perspective, as long as the internet environment is in place, it is possible to deliver services and products to customers using online shopping, regardless of location, weather, etc. It becomes.
You can do business without worrying about time
Operating a physical store involves business hours, known as opening and closing times. During business hours, products and services can be sold, and companies and marketers can actually establish points of contact with customers. However, if it is outside business hours, sales activities cannot be carried out and there are no points of contact with customers.
By using e-commerce, you can sell products and services 24 hours a day, without being limited by time. This is highly efficient for companies and marketers, and greatly increases the possibility of securing sales.
Abundant data that can be collected
Utilizing e-commerce also has the advantage of being able to collect more customer information than physical stores. At physical stores, there are opportunities to have conversations with customers who visit the store, but most of the conversations are focused on selling services and products. Therefore, it is difficult to obtain customer data such as the customer’s age, place of residence, and points of contact with the company from the conversation.
On the other hand, by utilizing e-commerce, you can appropriately collect a variety of detailed data about your customers, and use the collected data for your own marketing activities. In addition, using data analysis tools provided by Google, you can understand user behavior paths in e-commerce and analyze collected data, so you can promote sales in e-commerce, secure sales, and develop new measures. You will be able to effectively demonstrate your abilities in various aspects of marketing, such as planning.
Services for the evolving EC market
From here, we will introduce services that are gaining attention in the e-commerce market, which is evolving day by day.
Meta (formerly Facebook)
Meta has changed its name from Facebook and is currently attracting attention. It has been announced that the company will continue to focus on the metaverse industry as a pioneer in services and businesses that primarily utilize three-dimensional virtual space. In November 2020, we announced the acquisition of e-commerce company Kustomer. Kustomer provides a CRM platform and actually holds customer data collected through e-commerce, so it is said that Meta may use that customer data for web advertising.
Instagram is also a popular service developed by Meta. Thanks to various updates in recent years, shopping functionality is now available within the app. By utilizing this feature, it is possible to move users directly from the product image to the product purchase page. Meta’s full-scale entry into e-commerce is expected to lead to further evolution of such groundbreaking tools. Items that can be used by
avatars
in the Metaverse may be sold to consumers through Instagram’s shopping feature.
Shopify
Shopify is a global company founded in Canada in 2004. It is a platform that supports the construction of e-commerce sites, and is now indispensable to the growing demand in the e-commerce market. In recent years, the number of Shopify users has expanded rapidly, and Shopify has grown into a platform that has gained a lot of support from many users.
The background to this is that, in line with market trends, companies and marketers that operate e-commerce businesses in large shopping malls are reconsidering the importance and utility of their own e-commerce sites, and are changing their mindset toward operating their own e-commerce sites. What happened has a big impact.
In addition, it provides value in a variety of ways, including low operating costs, a wide variety of applications that can be linked, high scalability for businesses and services, and the ability to easily update and build sites. Masu.
D2C business model
In recent years, due to the increasing demand in the e-commerce market, a business model called D2C has been attracting attention. D2C is an abbreviation for “Direct to Consumer” and means that “manufacturers of goods and services transact directly with consumers.”
D2C is characterized by the fact that the company is in charge of all processes until the product or service reaches the consumer, and sales are performed without going through retailers or sales agents. This makes it possible to significantly reduce commissions and distribution costs. In addition, you can choose various sales methods and marketing measures relatively freely, and you can expand your business by utilizing sales methods that suit your company. This increases the possibility of improving profit margins and leads to more efficient business development.
summary
In this article, we will discuss what is “Electronic Commerce (EC)”? Starting from the basics, we have introduced services in the evolving e-commerce market. In recent years, the scale of the e-commerce market has continued to expand, and many companies and marketers are increasingly using e-commerce.
In addition, due to the effects of the global pandemic, companies and marketers have once again understood the importance of e-commerce business, and the movement to make the most of e-commerce to supplement sales outside of brick-and-mortar stores will continue to accelerate. Probably. With this article, we hope you will deepen your understanding of the basics of e-commerce and make use of it in your future marketing activities.