M-commerce and E-commerce

Information and communication technology (ICT) is the computing and communications system that a business uses to exchange information with its stakeholders. ICT is developing rapidly, and with this development, businesses are changing how they work. ICT has impacted various sectors and industries, including collecting, storing, and analyzing information; digital communication; and m-commerce and e-commerce. Read along if you are curious about the differences between m-commerce and e-commerce.

E-Commerce Definition

Before diving deep into the details of e-commerce and m-commerce, let's consider the term 'commerce.' Cambridge dictionary defines commerce as:

Once we know that commerce includes all the activities needed for trade, we can guess what e-commerce is. What do you think are the most critical factors in commerce? You are correct if you think of a buyer, a seller, and a product of interest. E-commerce works the same as traditional commerce, just electronically.

It is hard to find a single person who does not know what Amazon does. E-commerce may be a company selling its products via a website or different vendors selling various products on an e-commerce platform. Some businesses, like Spareroom, Shein, Zalando, etc., run entirely on the Internet without any physical locations. Companies that stayed away from e-commerce are now either regretting it or running hard to catch up.

Some platforms are trying to get small businesses on board to join the e-commerce revolution and compete with their giant counterparts. Platforms like Uber Eats and Deliveroo are trying to get local restaurants and grocery stores onto food ordering apps. E-commerce is joining more countries than ever and is a fundamental part of globalization.

A person sitting in their living room can start an e-commerce website that will serve customers worldwide. See the friends working on their website in Figure 1 below.

So what exactly do you need to start an e-commerce business? Just a laptop with working Internet.

Fig. 1 - Two men planning to strat their e-commerce store

M-Commerce Definition

M-commerce is a sub-part of e-commerce.

M-commerce can take place via a dedicated app that customers may download on their mobile phones or by simply accessing the mobile version of the website. The Amazon shopping app and the Google Play store are examples of m-commerce apps.

Difference between E-Commerce and M-Commerce

Even though m-commerce is a part of e-commerce, there are some differences. M-commerce is a newer technology than e-commerce and comes with improvements implemented over time. Here are a few:

E-commerce is equally important to customers as it is for businesses. The advantages and disadvantages of e-commerce are also present in m-commerce. As more and more companies are going online, one may find high competition in every market. Is it worth it for businesses to go online? Or will it create a burden businesses won't be able to handle?

M-Commerce and E-Commerce: Advantages

1. Cost reduction: Businesses do not have to put up any money to rent a fancy shop on a busy high street. Entirely online-operating businesses save extra costs such as energy bills and operating costs.

2. New markets: e-commerce help businesses tap into the global market. Goods nowadays are delivered across the globe. It also helps companies launch new products with minimum investment.

3. Business expansion: Businesses that have established physical locations can expand their business online. This expansion might become a source of an extra revenue stream.

4. No working hours restriction: Customers can check products and place an order 24/7. An e-commerce website provides a personalized shopping experience to customers around the clock.

5. Easy to track KPIs: E-commerce websites can track many key performance indicators (KPIs) that are difficult to uncover otherwise. Websites can check which items are in demand, what time people love to shop, how much money they are willing to pay, and what customers dislike. Providing good customer support online becomes more straightforward as more data becomes available.

M-Commerce and E-Commerce: Disadvantages

1. Website and mobile app building: Businesses have to invest in building professional websites that are secure and provide a good user experience. Both websites and mobile apps are necessary for m-commerce. To tap into more customers, the app must be available on leading app stores like the Google Play Store for Android or the App Store for Apple users.

2. Platform management: Just building apps and websites will not help. Businesses must have trained service staff to deal with potential issues and developers to manage the website.

3. Complicated supply chain: Going global also means businesses have to sort out their supply chains and delivery around the globe. Businesses must be able to accommodate the scale of orders that may come with launching an e-commerce store.

4. Security: It falls on the business to provide a secure purchasing experience for customers. Companies must extend security measures to financial transactions as well as personal data.

E-Commerce and M-Commerce Example

Depending on how businesses operate their customer base, e-commerce businesses can be divided into three major types (see Figure 2 below).

1. Business-to-business (B2B): Businesses selling their goods or services to other businesses are called B2B firms. B2B businesses might include professional service providers, wholesalers, etc. For example, imagine an auto garage ordering spare parts in bulk from the website of a car parts dealer. Another example of this would be Amazon. Amazon does not charge buyers, but they charge sellers to open their stores on the platform. From this point of view, Amazon is a B2B company.

2. Business-to-consumer (B2C): Online shopping websites of fashion brands such as Zara, H&M, and Superdry, or grocery giants like Tesco and Morrisons, are examples of B2C e-commerce. Some companies, like Shein, do not have physical stores and run entirely online. Businesses reach out directly to end customers via these websites or apps.

3. Customer-to-customer (C2C): eBay provides a platform to users to sell their goods. All the transactions take place securely on the platform.

Some companies base their business models on other types of e-commerce, such as consumer-to-business and business-to-government.

Before you head off, let's take a look at an example of e-commerce through the company Amazon.

E-commerce and M-commerce are now inseparable parts of online businesses. In the coming years, e-commerce will be everywhere. Remember, Tesla cars can now order new tires on their own. But businesses should be cautious while trying to capture new markets via e-commerce, as e-commerce can open new markets and create new risks.