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E-commerce: Meaning, Advantages and Disadvantages

E-commerce: Meaning, Advantages and Disadvantages

E-Commerce Meaning 

Electronic commerce or e-commerce is the process by which business houses and consumers purchase and sell goods and services via an electronic medium. It emerged in the 90s decade and the usage of it has increased at a rapid pace. Many of the corporate organizations have websites of their own. Now a days, not only e-commerce companies, but also other organizations are having their online presence. Amazon, Ebay, Flipkart, etc are some of the corporate houses which are carrying on their e-commerce business in India. E-commerce business is of three types. Business to Consumer (B to C) is the most popular type in which a business concern sells to the consumers products and services directly over the internet. In Business to Business (B to B), the companies sell their products to other companies via internet. The last but not the least is the Consumer to Business (C to B). It involves selling of goods and services by the consumers to the business houses.

E-commerce: Meaning, Advantages and Disadvantages

E-commerce: Meaning, Advantages and Disadvantages


The benefits of e-commerce are listed as follows:-

1. Cost Effective: The entire transactions are electronic. So, purchases of goods for consumers are cheaper than purchasing them by physically visiting the stores.

2. Higher Margin: E-commerce enables in reducing cost of purchases for the customers. Therefore, volumes of sales increase which eventually results in higher amount of profit margin.

3. Quick Comparison: E-Commerce helps a prospective customer comparing prices of goods manufactured by numerous business houses in no time. It aids in smart shopping.

4. Economy Benefit: It helps the E-commerce entities to operate in cost effective manner. Investment on stores, machineries, etc. are not required. The business concern only needs an user friendly website and qualitative customer service.

5. Easy to find reviews: The e-commerce companies also provide reviews of the customers on the various products and services hosted on their websites. For a potential customer, these reviews will make him/her well informed about the product and it will help/him her to make choice of purchase.


E-commerce suffers from a few drawbacks as well. Let us have a look at the limitations of the same.

1. Security: They mechanism of making the payment by the customers may not be safe. Customers also need to have confidence and trust on the genuine E-commerce entities.

2. Scalability of System: People are becoming tech savvy. A company definitely needs a very well developed website to support numbers of customers at a time. If your web destination is not well enough, you better forget it.

3. Integrity on Data and System: Customers require secured access all the time. Apart from that, data protection is also important. If the transaction cannot meet such requirement then e-commerce is not an alternative to choose.

4. Focus on products: People who like to buy products by physically seeing them will not be that interested in buying them from an E-commerce business concern.

5. Delay in receiving goods: It takes a few days on a general basis to for an order to reach the customer’s place. Although, the companies promise quick deliveries but the customers need to be mentally prepared for the delays.

Conclusion on Pros and Cons Of Ecommerce 

E-commerce is the need of the hour in the business world. In India, several business houses are resorting to e-commerce to expand their business and retain their existing customers. As India is heading towards cashless economy, the need of e-commerce is going to increase at a rapid pace in the next few years.

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About the author

Rajarshi Bose

I am scorpion by birth, very passionate about art, quite humorous by nature, accounting & finance student, financial trader by hobby and last but not the least, lover of sports.