4.7.1

E-Commerce

Test yourself on E-Commerce

After reading these notes, test your knowledge with free interactive questions on Seneca — used by over 10 million students.

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

Business Organisation & Environment

1.1

Introduction to Business Management

1.1.1Why Businesses Exist & Sectors
1.2

Types of Organisation

1.2.1Sole Traders1.2.2Limited Liability1.2.3Non-Profit1.2.4Franchising1.2.5End of Topic Test - Franchising
1.3

Organisational Objectives

1.3.1External Environments1.3.2Business Mission & Corporate Objective1.3.3Mission, Corporate Objectives & Strategy1.3.4SWOT Analysis1.3.5End of Topic Test - SWOT Analysis
1.4

Stakeholders

1.4.1Stakeholders
1.5

External Environment

1.5.1Social & Technological Environment1.5.2Lifestyle & Technological Environment1.5.3Corporate Social Responsibility1.5.4Economic Environment1.5.5Political & Legal Change
1.6

Growth & Evolution

1.6.1Growth & Retrenchment1.6.2Challenges of Growth1.6.3Growth Models1.6.4End of Topic Test - Diseconomies of Scale1.6.5Internationalisation1.6.6Sourcing Resources & Entering Markets1.6.7End of Topic Test - Internationalisation1.6.8Managing Internationalisation1.6.9Impact of Internationalisation
1.7

HL Only: Organisational Planning Tools

1.7.1Organisational Planning Tools
2

Human Resource Management

2.1

Functions & Evolution of Human Resource Management

2.1.1Setting Human Resource Objectives2.1.2Human Resource Management2.1.3Labour Turnover & Retention2.1.4Labour Productivity
2.2

Organisational Structure

2.2.1Organisational Structures
2.3

Leadership & Management

2.3.1Managers2.3.2Management Theories2.3.3End of Topic Test - Management
2.4

Motivation

2.4.1Motivating & Engaging Employees2.4.2Taylor's Theory2.4.3Maslow's Theory2.4.4Herzberg's Theory2.4.5Different Incentives2.4.6Evaluating Incentives
2.5

Organisational (Corporate) Culture

2.5.1Managing Organisational Culture2.5.2Organisational Structures
2.6

HL Only: Industrial/Employee Relations

2.6.1Improving Employer-Employee Relations2.6.2Case Study - The Winter of Discontent
3

Finance & Accounts

3.1

Sources of Finance

3.1.1Internal Sources of Finance3.1.2External Sources of Finance3.1.3Factors for Financing3.1.4End of Topic Test - Debt
3.2

Costs & Revenues

3.2.1Costs & Revenues
3.3

Break-Even Analysis

3.3.1Profit3.3.2Break-Even Analysis
3.4

Profitability & Liquidity Ratio Analysis

3.4.1Profitability Analysis
3.5

Cash Flow

3.5.1Cash Flow3.5.2Solutions to Cash Flow Problems3.5.3Improving Cash Flow & Profits
3.6

HL Only: Investment Appraisal

3.6.1Investment Appraisal
3.7

HL Only: Budgets

3.7.1Cash-Flow & Budgets
4

Marketing

4.1

The Role of Marketing

4.1.1Setting Marketing Objectives4.1.2Market Calculations
4.2

Marketing Planning

4.2.1Marketing Mix4.2.2Segmentation4.2.3Niche & Mass Markets
4.3

Market Research

4.3.1Market Research4.3.2Market Mapping4.3.3Methods of Market Research
4.4

The 4 Ps

4.4.1Product Decisions4.4.2Pricing Decisions & Price Skimming4.4.3Pricing Decisions & Price Penetration4.4.4End of Topic Test - Pricing & Competition4.4.5Promotional Decisions4.4.6Promotional Decisions 24.4.7Promotional Decisions 34.4.8Digital Marketing4.4.9Evaluating Digital Marketing4.4.10Case Study - The Marketing Mix & Promotion4.4.11Place & Distribution
4.5

HL Only: The Extended Marketing Mix

4.5.1The Extended Marketing Mix
4.6

HL Only: International Marketing

4.6.1International Marketing
4.7

E-Commerce

4.7.1E-Commerce
5

Operations Management

5.1

The Role of Operations Management

5.1.1Setting Operational Objectives
5.2

Production Methods

5.2.1Production Processes Overview5.2.2Production Processes5.2.3Production Efficiency5.2.4Technology & Production
5.3

HL Only: Lean Prodution & Quality Management

5.3.1Importance of Quality5.3.2Measuring & Identifying Quality5.3.3Total Quality Management5.3.4Evaluating Total Quality Management5.3.5Case Study - Toyota Production System
5.4

HL Only: Production Planning

5.4.1Capacity5.4.2Productivity & Efficiency5.4.3Technology & Efficiency5.4.4Improving the Supply Chain5.4.5Inventory5.4.6Outsourcing
5.5

HL Only: Research & Development

5.5.1Organisational Planning Tools

Practice questions on E-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
Answer all questions on E-Commerce

Unlock your full potential with Seneca Premium

  • Unlimited access to 10,000+ open-ended exam questions

  • Mini-mock exams based on your study history

  • Unlock 800+ premium courses & e-books

Get started with Seneca Premium

International Marketing

Setting Operational Objectives