2.2.16

E-commerce & M-commerce

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E-Commerce and M-Commerce

E-commerce and m-commerce are changing the way people shop and this is also changing how businesses distribute their products and services. They are prime examples of how technological advances can impact businesses.

E-commerce

E-commerce

  • E-commerce describes the purchases that take place electronically on the internet.
M-commerce

M-commerce

  • M-commerce is buying goods online using a mobile phone.

Benefits of E-Commerce and M-Commerce

There are many benefits of e-commerce and m-commerce:

Reach more customers

Reach more customers

  • Businesses can now easily sell their products to customers all over the world without setting up a physical store there.
    • A business’ products can reach international markets without setting up stores or overseas subsidiaries.
    • Small businesses in particular rarely have the finance (money) needed to set up shops internationally. Before e-commerce, expanding was harder for small businesses.
Cheaper to set up a business

Cheaper to set up a business

  • It is cheaper to set up a business that uses e-commerce.
  • Firms don’t have to invest lots of money in opening stores and hiring people to work in store.
    • Amazon was started by Jeff Bezos. He initially sold books from his garage and the only investment that he had to make was in a website and some books, rather than leasing (renting) a store. Amazon is now worth over $700bn.
Sell direct to consumer (B2C)

Sell direct to consumer (B2C)

  • Because businesses are selling directly to the consumer, no middle men take a cut, and so the business can offer a lower price to the customer.
  • The business has lower average costs and usually lower prices.
  • This should help a business to remain competitive.

Drawbacks of E-Commerce and M-Commerce

There are also drawbacks of e-commerce and m-commerce for businesses:

Increased competition

Increased competition

  • Because e-commerce allows business to easily reach wider markets, UK businesses face more competition. Foreign businesses can compete in the UK more easily.
    • For example, AussieBum sells men’s underwear and sportswear directly to customers in the UK from its production plant in Sydney, Australia. Prices are cheaper for UK customers than buying from approved retailers like House of Fraser and this allows AussieBum to compete against brands like Ted Baker in the UK.
  • Increased competition can have a negative effect on profits.
Investment needed

Investment needed

  • Firms must invest in specialists who can build websites.
  • Large businesses who sell a large volume of products may have to invest in warehouses and fulfilment centres.
Selling online can create problems

Selling online can create problems

  • Some goods are hard to judge from a computer or mobile phone. Consumers may want to see a product in person before buying it.
    • For example, people may want to sit on a sofa or mattress before buying it. However, companies like Casper are now successfully selling mattresses online. They offer a money back guarantee if people do not like their mattresses.
Jump to other topics
1

Investigating Small Business

1.1

Enterprise & Entrepreneurship

1.1.1The Dynamic Nature of Businesses1.1.2Risk & Reward1.1.3The Role of Business Enterprise1.1.4The Role of Business Enterprise 21.1.5The Role of the Entrepreneur1.1.6End of Topic Test - Dynamic Nature of Business1.1.7Grade 9 - Dynamic Nature of Business
1.2

Spotting a Business Opportunity

1.2.1Customer Needs1.2.2Market Research1.2.3Market Segmentation1.2.4The Competitive Environment1.2.5Primary & Secondary Market Research1.2.6End of Topic Test - Business Opportunities1.2.7Application Questions - Business Opportunities1.2.8Exam-Style Questions - Market Segmentation1.2.9Diagnostic Misconceptions - Competition
1.3

Putting a Business Idea into Practice

1.3.1Business Aims1.3.2Business Objectives1.3.3Business Revenues & Costs1.3.4Costs - Calculations1.3.5Revenue - Calculations1.3.6Business Profits & Break-Even Analysis1.3.7Profits & Losses - Calculations1.3.8Interest - Calculations1.3.9Cash & Cash Flow1.3.10Cash & Cash Flow 21.3.11Cash Flow - Calculations1.3.12Sources of Business Finance1.3.13End of Topic Test - Business in Practice1.3.14Grade 9 - Business in Practice1.3.15Exam-Style Questions - Business in Practice1.3.16Diagnostic Misconceptions - Profit1.3.17Diagnostic Misconceptions - Company vs Business1.3.18Diagnostic Misconceptions - Economies of Scale1.3.19Diagnostic Misconceptions - Cash Flow1.3.20Diagnostic Misconceptions - Break-even1.3.21Diagnostic Misconceptions - Fixed Costs
1.4

Making the Business Effective

1.4.1The Options for Start-Up & Small Businesses1.4.2Limited Liability1.4.3Franchising & Not-For-Profits1.4.4Business Location1.4.5The Marketing Mix1.4.6Business Plans1.4.7End of Topic Test - Effective Business1.4.8Application Questions - Effective Business1.4.9Exam-Style Questions - Business Plans
1.5

Business Stakeholders

1.5.1Business Stakeholders1.5.2Technology & Business1.5.3Legislation & Business1.5.4Legislation & Business 21.5.5The Economy & Business1.5.6External Influences1.5.7End of Topic Test - Business Stakeholders1.5.8Grade 9 - Business Stakeholders1.5.9Diagnostic Misconceptions - Recessions
2

Building a Business

2.1

Growing the Business

2.1.1Business Growth2.1.2Finance2.1.3Changes in Business Aims & Globalisation2.1.4Ethics & Business2.1.5The Environment & Business2.1.6End of Topic Test - Growing a Business2.1.7Application Questions - Growing a Business2.1.8Exam-Style Questions - Business Growth
2.2

Making Marketing Decisions

2.2.1Product2.2.2Product Life Cycle2.2.3Price2.2.4Pricing Methods2.2.5End of Topic Test - Product & Price2.2.6Grade 9 - Product & Price2.2.7Promotion & Advertising2.2.8PR & Sales Promotions2.2.9Sponsorship & Product Placement2.2.10Promotional Mix2.2.11End of Topic Test - Promotion2.2.12Application Questions - Promotion2.2.13Exam-Style Questions - Promotional Mix2.2.14Place & Wholesalers2.2.15Direct to Consumer2.2.16E-commerce & M-commerce2.2.17Diagnostic Misconceptions - Decreasing Price2.2.18Diagnostic Misconceptions - Advertise vs Promote2.2.19Diagnostic Misconceptions - Social Media
2.3

Making Operational Decisions

2.3.1Job Production2.3.2Batch & Flow Production2.3.3Working with Suppliers2.3.4Effective Supply Chains2.3.5Just In Time & Just In Case2.3.6Managing Quality2.3.7Total Quality Management2.3.8The Sales Process2.3.9End of Topic Test - Operational Decisions2.3.10Grade 9 - Operational Decisions2.3.11Exam-Style Questions - Managing Stock2.3.12Diagnostic Misconceptions - JIT vs JIC
2.4

Making Financial Decisions

2.4.1Gross Profit & Net Profit - Definitions2.4.2Gross Profit - Calculations2.4.3Net Profit - Calculations2.4.4Rate of Return2.4.5Rate of Return - Calculations2.4.6Research & Financial Data2.4.7Marketing Data2.4.8Percentage Change - Calculations
2.5

Making Human Resource Decisions

2.5.1Organisational Structures2.5.2Organisational Structures 22.5.3Recruitment2.5.4Effective Recruitment2.5.5Training a Workforce2.5.6Motivating a Workforce2.5.7End of Topic Tests - Human Resources2.5.8Application Questions - Human Resources2.5.9Exam-Style Questions - Human Resources2.5.10Diagnostic Misconceptions - Owners vs Shareholders2.5.11Diagnostic Misconceptions - Internal Recruitment2.5.12Diagnostic Misconceptions - Employee Motivation

Practice questions on E-commerce & M-commerce

Can you answer these? Test yourself with free interactive practice on Seneca — used by over 10 million students.

  1. 1
    What is E-commerce?Multiple choice
  2. 2
    Trainline sell train tickets via their mobile app and website. What type of commerce are they taking advantage of?Multiple choice
  3. 3
    Comparing e-commerce and m-commerce:True / false
  4. 4
    What are some benefits of e-commerce and m-commerce?Fill in the list
  5. 5
    Why do businesses using e-commerce and m-commerce usually have lower prices?Multiple choice
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Direct to Consumer

Diagnostic Misconceptions - Decreasing Price