eCommerce is the buying and selling of goods and services through the internet. Every business that deals with online buying and selling are engaging in eCommerce.
The full meaning of eCommerce is Electronics commerce. Anything that has to do with online transactions will be regarded as eCommerce.
eCommerce business started as far back as 1994 when a man bought a band sting from his friend’s website and paid through his MasterCard. This single transaction was an eye opener to the world that the internet can be used for online eCommerce transactions.
Since 1994 till now, a lot of online retailers, and large and small businesses have all benefited from the eCommerce model of online transactions which gives them the opportunity to sell their goods and services and take advantage of many opportunities that are not available in the offline transaction.
$5.5 trillion is the projected global retail eCommerce sales from 2020 – 2025 which means that there is a lot of money to be made by e-commerce businesses.
One of the most essential e-commerce questions is which channels are mostly used to carry out online business.
Relevant eCommerce statistics for 2022
If you have an interest in starting an eCommerce business, it’s really important you stay familiar and up to date with the latest eCommerce statistics because the best way you can understand and know better is through the facts and data.
eCommerce statistics for 2020 prove that its growth all over the globe is stable and massive, and there is also a prediction by experts that retail eCommerce sales will be up to $6 trillion in 2025.
- By the year 2040 90% of all purchases will be done via the internet.
- China is the fastest growing e-commerce market with an estimated market value of more than $650 billion in 2018
- The country with the highest e-commerce penetration rate is the United State of America with over 80% of all internet users making a minimum of two purchases.
- One of the reason e-commerce is growing fast is because it allows internet users to shop online whenever they want to 24/7.
- 50% of e-commerce website traffic comes from Google search engine (organic). That is the work of SEO. Learn more about how you can grow your e-commerce business with SEO.
- Slow–loading e-commerce websites have a bounce rate (abandonment) of 75%.
The B2c sector is popular in the eCommerce business but it is not the only sector that is thriving. B2B sector is also improving on its sales and can possibly outgrow the B2C sector in terms of profit in years to come.
List of important statistics you need to know:
- 40% of online product searches are paid for within 5 days.
- 60% of online product buyers conduct their purchases through their smartphones.
- Free shipping options attract more buyers to an e-commerce store.
- 95% of online shoppers say that the visual appearance of an e-commerce store plays an important role when making their buying decisions.
- It is estimated that 95% of online shoppers will not make a purchase from an e-commerce store that doesn’t have good return policies.
- Among all the products purchased via social media platforms, 90% of them come from Facebook.
- 14% of all retail sales across the world are accounted for by e-retail sales, and these figures are expected to keep growing to 25% by 2023.
- By the end of the year 2021, mobile e-commerce retail sales will reach $3.5 trillion.
- According to research, 70% of online shoppers prefer to pay with their credit card as opposed to cash.
- Online e-commerce stores with a strong and active social media presence have 45% more sales.
- Generation X has a 40% population among the online shoppers, followed by baby boomers, that take up 35% of the online shoppers and millennials take up 30% of online shoppers.
- 60% of all online shoppers take the stand that online reviews have a huge impact when making their buying decisions.
This is a clear sign that e-commerce is here to stay. But how do you get started? To get started with an eCommerce business you need to be familiar with its basics as I have written.
Types of eCommerce Business
The more an eCommerce business evolves, so does the way it is being conducted. Below are the types of eCommerce businesses.
1. Business to Consumer (B2C):
B2C is the most popular among all the types of e-commerce businesses. It is the selling of products directly to the customers, B2C sells goods and services to customers for personal use. E.g Amazon, eBay, Aliexpress e.t.c
2. Business to Business (B2B):
Unlike a B2C business, B2B is a commercial transaction between two businesses. Businesses producing products that other businesses need to survive are a typical example of B2B. It is a business model that mostly involves the use of products like raw materials. An example of a B2B eCommerce website is Grainger. Grainger is a leading provider of industrial supplies.
3. Consumer to Business (C2B):
These are business transactions between individuals and companies. In this business model, it is an individual that will create value for businesses, unlike business to consumers (B2C) where it is the companies that create value.
In this model an individual sells its service to businesses to help them make more profits.
Fiverr, Freelancer, and Upwork are all freelance platforms that connect individuals and businesses. This is an example of an eCommerce business model that brings two parties together to engage in consumer-to-business (C2B) transactions.
4. Business to Government (B2G):
It is the business transaction between companies/businesses and the government at the federal, state, and local levels. An example of this is a firearm manufacturing firm that sells weapons to the government.
5. Government to Business (G2B):
It is a business relationship between the public administration of a government and a company/business. It usually covers the electronic exchange of information between the government and a business.
6. Consumer to Consumer (C2C):
It is a business model that allows online customers to trade with each other. The C2C business model helps sellers and buyers locate each other to conclude a transaction but the lack of a C2C business is the lack of payment guarantee and the lack of quality control.
7. Consumer to Government (C2G):
As a consumer when you pay your household bills e.g health insurance, electronic bills, taxes, water bill or you request any information about the public sector, it means you are engaging in C2G business model.
I have given you a well-detailed explanation of the types of e-commerce. Most of the time when e-commerce is involved people majorly talk about the B2C and the B2B model.
eCommerce Business Examples
Every business model and individual can benefit from the ability to make use of the internet and sell their goods and services or offer skills and consultations.
Here are some examples of types of e-commerce:
- Retail: It is the direct transaction of products between a business and a consumer without the use of an intermediary.
- Dropshipping: It involves the sale of products through the use of a third-party website.
- Digital products: It involves the purchase of digital assets, software, or cloud-based products. These products take a large percentage of e-commerce transactions. Digital products can also be items like templates (website templates), digital courses, e-books, or anything media that must be purchased for use.
- Wholesale: These are Products sold in bulk to the retailers. Wholesalers buy products from the distributors and sell to the Retailers; Retailers buy products from the wholesalers who then sell the products to consumers.
- Services: Services are skills that an individual offers and are paid for online. E.g Influencer Marketing, copy-writing, content creation e.t.c.
- Subscription: Subscription model is the recurring monthly fees of products or services. 70% of Software businesses are in the subscription form.
Benefits of eCommerce Business
Unquestionably online e-commerce business offers numerous benefits. Let’s take a look at some of the biggest ones.
Convenience is the number benefit of e-commerce business, it makes product purchases easier, and faster and it saves a lot of time as it allows you to conveniently advertise your goods and services 24/7 to multiple online shoppers at the same time.
2. Lower Cost
Having an online eCommerce store eradicates the need to have a physical store for your products. Having an automated online e-commerce store will also require fewer staff as opposed to having a physical store.
3. Lower Marketing Budget
A big advertisement budget is not necessarily needed when you have an online store because online marketing is much more cost-effective and measurable than the traditional marketing method. For example using Google Adwords, Social Media Marketing, Email Marketing, and SEO is much cheaper than doing offline marketing. Lower cost of advertisement translates to lower product prices for the customers and more sales to the business.
Making use of the multiple online advertisement channels will let you meet your potential customers where they already are
4. Always Open
Having an online business means your business is open to the wider world 24/7 all year round. There are many automation software that will take good care of your store sales process even while you are sleeping, this makes it easier for customers to buy products from your store any day and at anytime
5. Scaling up Your Store is Easy
Unlike growing a physical store that requires more floor space and a lot of other resources, it is very simple to grow an online e-commerce store. All you will ever need are a few digital tweaks, cloud storage space, and more inventories. With your online store, you have to position yourself within the reach of a global marketplace, this eliminates the creation of a new store in another location when expanding.
6. Access to Customer Data:
With an online store, you will gain access to a goldmine of customer data that is not accessible through a physical store. Online customers will gladly provide their name, email address, and phone number when registering on your site, or when they want to make a purchase.
Your online store will also give you access to a wealth of consumer behavior and demographic data, available through your store analytics dashboard. The information you gathered through your online store will help you market more effectively to your customers.
7. Presence of Huge Customer Base:
With an online store, you have no geographical boundaries; you will sell your products to online shoppers across the world. With an online store, your shoppers are not limited to those in your state or country.
With your online presence the internet has opened your store to different parts of the world you haven’t visited and countries you don’t have a physical store
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