E-commerce, also known as electronic commerce or internet commerce, started on August 11, 1994, when a man sold a CD by the band Sting to his friend through an American retail platform i.e. NetMarket website. The Internet was already revolutionizing eCommerce and it was estimated to grow by billions. However, the pandemic has led to a rapid increase in this growth rate. During the pandemic, the unprecedented demands of online shopping and active users have taken the e-Commerce world by storm.
- Types of eCommerce Models
- The rise in online sales
- Rise in entrepreneurship
- Role of social media
There are four main types of eCommerce models explaining every online transaction taking place.
- Business to Consumer (B2C):
When a business sells its goods or services to online buyers (for example, shopping done with online retailers.)
- Business to Business (B2B):
When a business sells its items to other businesses. For instance, selling software to other companies.
- Consumer to Consumer (C2C):
When a consumer ( can be an entrepreneur) sells a good or service to another consumer (e.g. Your friend is selling old electronics through OLXto another consumer).
- Consumer to Business (C2B):
When consumer sells their products or services to a business or organization (e.g. Photographer licensing his photos to businesses).
During the pandemic, there was a recorded 30 percent increase in sales over 2020. This hype in online sales driven by the unusual consumer demand has evolved eCommerce to a larger extent. Lockdown extended from weeks to months, leading to more active internet users, making online shopping and selling trendy and a necessity. Moreover, the freestyle credit account system, taking over the traditional role of credit card, also made online shopping easier and more possible for all – thereby, increasing the online purchasing trends in recent times.
The rise in online shopping trends brought with it a rise in the scope of entrepreneurship. Ecommerce niches that used to have low traction, now attract more clients. People with lots of spare time in the lockdown spent their time building innovative ideas to revolutionize the business trends. Moreover, the internet-based application system and client-friendly approach of getting a personal loan attracted young entrepreneurs, enabling them to open their businesses on easier terms. The new market for hand sanitizers and their large advertisement on the subject of maintaining human health is the latest example of new business trends.
The business pages on Facebook and sponsored ads on Instagram are also playing a substantial role in the world of e-commerce. These social media platforms are not only easy to use but are accessible for all. According to research, almost 76% of Instagram users made an impulse buy on social media mostly because of its ease of purchase. Moreover, the continuously updating social media platforms have made the in-app purchase possible. The recent trends of hand-made garments and organic product business on these platforms explain the vital role of e-commerce. Branding, by involving celebrities to recommend the product to their followers, who have become more active during the pandemic, is another innovation in marketing. Moreover, Youtubers reviewing products and advertising them in their videos is another way of attracting the target audience, while enhancing the role of social media marketing in e-commerce.
The expanded scope of e-commerce, presenting a variety of niches, also signifies high competition in the field – thereby, calling for quality marketing and advertising content, which in turn brings in more investments. Digital marketing techniques like search engine optimization (SEO) or social media marketing (SMM) are used to make backlinks and direct more buyers directly towards the product’s website. Large retailers who didn’t pay attention to this either faced huge losses or went through a tough time. Therefore, more e-commerce scope brought with its competition and more innovation in the marketing world.
As soon as outdoor shopping stopped due to lockdown a threshold increase in eCommerce was seen. According to the statistics of the Salesforce Global Shopping Index, between 2019 to 2020 there was a 16 percent growth in digital traffic for retailers. Moreover, the growth in average spend per visit was also seen to increase by four percent.
Portable internet devices had already increased online shopping trends but in 2020, as the internet users started spending more time online, mobile e-commerce also jumped by 25 percent. In the United States, this mobile lead eCommerce growth chart showed an increase of 28 percent.
Analyzing the goods that drive most digital traffic it was found that the percentage spike in home goods sales was the highest i.e. 51 percent. Moreover, the growth of games and toys increased by 31 and 34 percent respectively. Additionally, the phenomenal growth of 20 percent was seen in personal care products and food.
Indeed, while COVID-19 had devastating effects on the economy, it has also introduced new ways of earning. It has revolutionized the world of eCommerce, allowing more people to invest and start their home-based businesses. Therefore, one can say that as 2021 advances, the role of eCommerce becomes increasingly influential, bringing with it new trends and cultures.