What do you know about the word e-commerce? You’ve heard of it, you might even consider using it for your business. But you’re not sure how it really works and how e-commerce can help your business.
We’ll attempt to answer your questions today by first looking at what is e-commerce, what is e-marketplace, like Amazon or Lazada and the advantages e-commerce can provide. Lastly, we’ll help you decide if e-commerce is for you with a brief checklist!
What is e-Commerce, actually?
Commerce refers to the activity of buying and selling or the exchanging of goods and services. e-Commerce means ‘Electronic Commerce’, which refers to the same thing, only it happens on the internet. E-commerce businesses are those where you can do transactions online, particularly make payments.
You can quickly tell if a business is an e-commerce, if their website has an ‘Add to Cart’ button, meaning it has a payment gateway. Other elements of e-commerce could also be social media pages and a customer relationship management system (CRM).
Let’s first look at the difference between e-commerce and a traditional business:
Joe sells computer parts and fixes computers from his brick-and-mortar store. He advertises his business through flyers and word-of-mouth. ❌ Not e-commerce
Mr. Leong’s family business has a corporate website. They mostly rely on existing clients for revenue and have not thought of expanding their clientele through digital channels. ❌ Not e-commerce
Ifzan’s bakery has its own website where customers can order customised cakes, make payment and have it delivered to them. ✅ E-commerce (website e-commerce)
Freelancer Ronnie relies on his Instagram business page to advertise his photography business. ✅ E-commerce (social media e-commerce)
As what Ifzan and Ronnie had shown, there could be more than one type of e-commerce. But they both use the internet to market and sell their goods and services, whereas Joe and Mr. Leong do not.
Ifzan’s e-commerce website is the best example of what we usually mean when we talk about e-commerce. Her website allows customers to complete the whole shopping process in one integrated website - from browsing, ordering, paying, to setting delivery options. This is the ideal solution that every business should consider.
What is e-Marketplace?
By now, everyone knows about Shopee, Lazada, Presto Mall, Tmall and so many more e-marketplaces. What is the difference between them and an e-commerce website?
First thing you’ll notice is that e-marketplaces sell things under their website platform. Think of them like a night market or farmer’s market, where vendors sell their things in small stalls that require little capital to set up. They pay a fee to the organiser and the organiser is responsible for marketing and promotions.
In the digital space, e-marketplaces work in almost the same way. Amazon or Lazada invites merchants to sell their stuff on their platform at a fee or commission. They’ll be the ones doing all the marketing campaigns and maintaining the website.
But the downside of e-marketplace is that there are things like price markups and autonomy that put merchants at a slight disadvantage. Marketplaces are nonetheless still a great place to test the market for emerging online businesses and are still a very powerful distribution channel for even the biggest brands like Samsung and Panasonic.
Here are more ways how e-commerce helps your business:
Since there are different levels and types of e-commerce depending on the complexity of your business, you have a lot of options to decide where to start. Do you want to start with a business page on social media? Do you want to start from an e-marketplace, or is your business ready to have a whole e-commerce website under your own brand?
E-commerce allows businesses to market and sell at their own pace and budget. But ultimately, we want to strive for the highest level of e-commerce, which is your own website.
2. Online Brand Awareness
A lot of customers are shopping online, and brands have been vying for attention on every platform they can get their hands into. E-commerce gives your business the chance to be seen by your target customers at a bigger rate due to the connectivity of modern consumers.
3. Wider Customer Reach
It goes without saying that e-commerce allows SMEs to reach a wider range of customers, even as far as international markets and get the opportunity to export. It’s now very common for local businesses to ship to ASEAN and beyond, wherever their customers are. With an e-commerce website, anyone in the world can discover your name!
4. Better Customer Relationship Management
Businesses with an e-commerce website have the advantage to track, store and nurture customers and build meaningful relationships with them. With CRM plug-ins, it’s easier to understand customers’ needs and better address them.
How to know if your business needs e-Commerce to grow
- Do you struggle to find new customers?
- Do you want to expand your business operations?
- Do customers ask how to find you online or if you have social media?
- Do you struggle to meet customers’ demands and changes in the new norm?
If the answers to these questions are yes for more than once, then e-commerce might be something you should think about. E-commerce can do wonders for a business no matter its size and industry. Download our free e-book to get insights on the many e-commerce options in Malaysia and find us when you’re ready to launch your business to new heights!