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what is eCommerce

What is eCommerce?

What is eCommerce? eCommerce Guide South Africa

For now, eCommerce is a daily part of our lives and definitely a major role player in our future. The Covid-19 pandemic, has left many countries adopting lockdowns to restrict movement but increasing eCommerce related sales in South Africa. We order clothes, food, and electronics online, we use debit/credit cards every day, pay via your mobile phone while using public transport. So, eCommerce is fully integrated into our lives and it’s so hard to imagine our life without it.

TABLE OF CONTENTS

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What is eCommerce?

eCommerce, also known as electronic commerce or internet commerce, this basically refers to buying and selling of goods or services via internet, and the transfer of money and data to execute these transactions. There’s no real agreement on how to write the word but at 19 Digital we prefer to use “eCommerce”. You could also see the following variations being used throughout the web:

  • eCommerce
  • ecommerce
  • e-Commerce
  • E-commerce

Now let’s look into a bit of history quickly…

History of eCommerce

Did you know? eCommerce made its first appearance roughly 50 years ago – with the creation of the EFT (Electronic Funds Transfer). This is on a very basic level but the first step opened up the entire world of eCommerce as we know it today.

Take a brief look into this eCommerce timeline:

eCommerce Timeline:

1966: Electronic funds transfer or EFT was created.

1972: The first online transaction was made in 1972 when students from Stanford Artificial Intelligence Laboratory and MIT were selling online cannabis via ARPANET (the Advanced Research Projects Agency Network).

1979: Michael Aldrich invented electronic shopping.

1990: The first web browser WorldWideWeb appeared. Everyone with the access to internet could shop online.

1995: Amazon and eBay launched. The new era of marketplaces started.

1996: Internet banking in South Africa started, first to launch was ABSA.

1998: Google as well as PayPal, an online payment system, launched.

1999: Alibaba launched.

2000: Google launched Adwords, Walmart launched its eCommerce website.

2002: Google Shopping (formerly Google Product Search) was launched.

2009: Bitcoin launched.

2011: Google Wallet launched.

2014: Apple Pay and Jet.com launched.

2017: South Africa hits +-R10 billion in internet retail sales

2018: Instagram shoppable posts and stories appeared.

2019: 19 Digital launched

2020: Facebook launches its Shops feature.

Different Types Of eCommerce Businesses

Let’s take a look at the products and services typically sold online. Below is a list of eCommerce merchants according to what they sell.

1. Physical Goods eCommerce Stores

These are considered your typical online retailers. Clothing, jewellery, tools, and accessories are all examples of physical goods. Shoppers can buy physical goods through online stores by visiting the stores’ websites, adding items in their shopping cart, and making a purchase. Once the shopper has made a purchase, the store delivers the item(s) right at their doorstep or the customer can choose to collect the item(s).

tanya wheeler + co online store

Examples of physical goods eCommerce stores include Mantality, an online shopping retailer for men, Tanya Wheeler + Co online jewellery store, and handmade shoe retailer Matsidiso.

2. Service Based eCommerce

Aside from products, services can also be purchased online daily. Every time you hire educators, freelancers, and consultants through online platforms, you’re doing business with service-based eCommerce providers. 

19 Digital Service based eCommerce provider

The buying process for services depends on the service provider. Some may allow you to purchase their services straightaway from their website or platform. 

Some service providers, on the other hand, require you to get in touch with them first (i.e. book a consultation, request a quote) to determine your needs. For example, 19 Digital, a website design and digital marketing agency in South Africa, that creates digital strategies for small to medium businesses in South Africa, asks clients to contact them by filling in an online form first where they should describe their business needs and requirements.

3. Digital Products eCommerce

The term digital products refers to all items that are in a digital format including ebooks, online courses, software, graphics, and virtual goods. eCommerce transactions are conducted via the internet which is why, in the eCommerce realm, products are usually referred as “e-goods”.

19 Digital WEBSITE BUILDER South Africa

Examples of retailers that sell digital products are Coursera (a platform for online learning), Audiobooks (a website where you can buy audio books) and 19 Digital Builder (a platform where you can build your own website with a drop and drag website builder).

Classifying eCommerce Business

Let’s take a quick look at some of the parties engaging in the transactions, is also considered a way in which eCommerce sites can be classified. These typically include:

1. Consumer To Business (C2B)

The Consumer to business model represents a transaction in which individuals create value for businesses, unlike the traditional business-to-consumer model where companies are the ones that deliver value. Consumers provide companies with products and/or services, co-operate on projects, and ultimately help businesses increase their profits.

Itorho, a freelance platform that connects remote workers and companies, is an example of a company that brings two parties to engage in C2B transactions. Another company which offers a platform for freelancers is ICanLikeTo.

2. Consumer To Consumer (C2C)

Consumer to consumer eCommerce happens when the two parties involved are consumers that trade with one another. Gumtree is an examples of online marketplaces where individuals buy and sell products to each other.

3. Business To Consumer (B2C)

As the name suggests, the Business to Consumer eCommerce model represents a transaction between businesses and individuals. B2C ecommerce is the most common business model among both physical and online retailers.

Takealot, and Netflix are all examples of companies that engage in B2C ecommerce.

Takealot.com

4. Business To Business (B2B)

In the Business to Business eCommerce model, both parties involved are businesses. In this type of a transaction, one business provides the other with products and/or services.

Slack, a platform for communication between remote businesses, and Wave, a free cloud-based accounting software for businesses, are examples of B2B companies.

5. Consumer To Government (C2G)

Every time consumers pay taxes, traffic fines, health insurance, electronic bills, or request information concerning the public sector, they’re engaging in Consumer to Government.

Make note that we’ve included all these sections to give you a general idea of eCommerce classification, although models like G2C or C2G are part of ecommerce only in its loosest definition. Most of the time, when we’re talking about eCommerce, we’re talking about the B2C or the B2B model.

6. Government To Business (G2B)

The Government to Business eCommerce models happen when the government provides companies with goods and services. Government procurement, data centres, and e-learning are all examples of G2B ecommerce. The Department of Trade, Industry and Competition is an example of Goverment to Business.

7. Business To Government (B2G)

The B2G model refers to companies and businesses that provide goods and services for the government. For example, GPW is a company that offers governments all its printing services etc.

Recommended eCommerce Platforms

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Here are some WooCommerce facts:

  • WooCommerce powers over 3,876,748 live websites.
  • WooCommerce has 26% eCommerce market share
  • There are 1500+ plugins designed to integrate with WooCommerce.

WooCommerce is one of the biggest open-source ecommerce platforms. Specifically designed to integrate with WordPress, WooCommerce has plenty of templates that can help you build a unique online store. You’ll get all essential features including unlimited products, unrestricted customization, order management, and free shipping.

Best for: Small businesses that have a website powered by WordPress.

Here are some 19 Digital Builder facts:

  • 19 Digital Builder offers an all-in-one eCommerce solution 
  • Build Sales Funnels & Bump-up offers with ease!

A newbie on the market but packed with power, a future popular choice for entrepreneurs and small to medium businesses in South Africa. 19 Digital Builder allows clients to build effective online stores and scale their business. Created with a user-friendly and intuitive interface, as well as tons of templates, this platform offers flexible shipping rates, automatic taxes, and over 20 payment gateways including PayFast (South Africa’s number 1 online payment gateway). 19 Digital Builder enables sales funnels, easy pop-ups, and packed with built-in SEO features, and is fully hosted with SSL.

Best for: Small businesses looking for an all-in-one eCommerce solution.

Other platforms to consider: Shopify, Magento as well as BigCommerce.

Is Social Media eCommerce A Thing?

Retailers use these social media platforms to showcase their products by using visuals, like photos and videos, and appealing social media copy to attract customers and reach a wider audience. The most popular social media platforms such as Facebook, Instagram, and Twitter, aren’t usually used by sellers as an alternative to online stores. Consumers that come across an item they like on social media platforms are then directed to the retailer’s online store so they can make a purchase.

Is social media eCommerce a thing? Social media platforms are taking things further by enabling clients to sell products directly from their social media accounts. For example, retailers that showcase their products on Instagram can use Instagram’s checkout option. This feature enables customers to purchase the items they like without having to leave Instagram. Since September 2018, companies can also use Instagram Shoppable Stories, a feature which allows businesses to add product stickers on a story. Customers that come across a product they like can just click on a sticker which will redirect them to the product page that features further details about the product.

Facebook is currently in 2020, experimenting with a “Shop” feature, this feature will allows users to buy and sell their products directly on Facebook. It is being testing with a few select businesses who have been approached by Facebook and may be launched in the near future to the general public. Questions relating to Facebook’s policies, content censoring and blocking of profiles as well as security, relating to profile hacks etc are a big area of concern BUT Facebook do have a large online presence and this could be a big game changer in the eCommerce world and the future of eCommerce. 

In Conclusion: Take Action

Now that you know what eCommerce is, the different types of eCommerce, and some key platforms. What’s next?

Answer: take action.

If you’re just starting out and need help picking a platform, read the section on eCommerce platforms. No matter where you are in your eCommerce journey we hope this post has helped you venture into this space a little more confidently. If the above was not enough, consider reading a few of our other posts:

If you need additional advice or want to start a new project, we’re here to help. Whether you need advice concerning search engine optimization, product promotion, eCommerce website, or branding, our team at 19 Digital will be happy to help your eCommerce business grow and prosper.

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