What is the difference between ecommerce and ebusiness?

The article provides the basic concepts of e-business and e-commerce …

Currently, the terms “ebusiness” and “ecommerce” are often mixed and used almost synonymously. But in fact, although they are close, they are still different concepts.

1. The concept of electronic business – Ebusiness. 

Electronic business is a form of doing business, in which a significant part of it is carried out using information technologies (local and global networks, specialized software, etc.).

E-business includes sales, marketing, financial analysis, payments, employee search, user support, support for partnerships, etc.

The internet-related parts of e-business include:

1. Business ON the Internet (internet service, hosting, content and service).
2. Business AROUND the Internet (supply of hardware, supply of software, web-design, programming and related services).
3. Business IN internate (online advertising, online shopping, online auctions, online settlements, online marketing, online commerce, newsletter, online media).

2. E-commerce as a sphere of the network economy

Initially, ecommerce (“e-Commerce”) was a form of sales organization. Without pretending to be independent, it only reproduced the methods of traditional commerce and transferring them to the Internet environment. As a result, e-commerce began to be seen as a sphere of the network (electronic, digital, web, etc.) economy.

The network economy is economic activities carried out using electronic networks (digital telecommunications). The networked economy is technologically an environment in which legal entities and individuals can contact each other about joint activities.

Currently, there are many definitions of the term “e-commerce”. The most general definition of “e-commerce” as an economic sector is as follows:

“E-commerce is an area of ​​the economy that includes all financial and commercial transactions carried out using computer networks, and the business processes associated with conducting such transactions.”

E-commerce provides the key functions of the networked economy to facilitate transactions using the power of the Internet. In general, these opportunities come down to transforming supply chains, informing customers, and organizing the acceptance of orders and payments.

E-commerce consists of six main elements that enable business transactions:

Electronic Data Interchange (EDI) is the exchange of information using digital means of communication with standardized business documents (orders and invoices) between buyers and sellers. Electronic data interchange is based on information formatting and transfer standards developed by the International Organization for Standardization (ISO).

Electronic Funds Transfer (EFS) is an electronic exchange or transfer of money from one account to another. In e-commerce, EFS is concerned with conducting electronic money transactions. The EFS mechanism involves the exchange of data between servers that process money transactions and related information.

An example of such data exchange is the SWIFT (Society for Worldwide Interbank Financial Telecommunications) system of international interbank settlements. In e-commerce, such systems are used to make not only interbank payments but also any other types of payments. Electronic capital flows are classified by the content of transactions (debit, credit), by their scope (for example, business transactions), or by types of operators (banks, providers). At the same time, “virtual organizations” (for example, services for exchanging virtual money) can act as transaction operators.

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Electronic commerce (e-trade) – carrying out trade operations and transactions on the Internet, through which the purchase (sale) of goods, as well as their payment, is made. E-commerce transactions include product selection, order confirmation, payment acceptance, and delivery assurance.

Typically, these functions are not provided directly by vendors, but by intermediary providers. Moreover, payment and delivery may not be related to the use of the Internet (for example, by mail or a transport company). Although the trend in the development of electronic sales indicates a gradual transition to using the capabilities of the Internet at all stages of the sales cycle.

Electronic money (e-cash) – monetary obligations of the issuer to the principal in electronic form. Electronic money is both a means of payment and an obligation of the issuer. Their advantage is the speed of cashless payments, and the disadvantage is the limited scope. Electronic money can be converted into ordinary money only within the framework of the relationship between its owner and the issuer.

The use of electronic money in payment systems implies the presence of electronic wallets, which are an online tranzaction service that stores the payment information of users. A type of electronic money is prepaid plastic cards, which have all the characteristics of plastic cards but do not imply the possibility of replenishment.

Electronic marketing (e-marketing) is a set of marketing activities related to market analysis and promotion of goods on the Internet. Typically associated with email marketing is the placement in the marketing information network (websites, blogs, advertisements, etc.), as well as the management of posted content (web design, web design, web programming, and web administration).

At the same time, if we consider email marketing as an activity related to the promotion of goods and services on the Internet, then here you can find all the elements of the traditional marketing mix. The focus of online commerce on interaction with an indefinite circle of consumers in an indefinite territory makes electronic marketing an indispensable tool for promoting goods on the Internet.

Electronic banking (e-banking) is a technology of remote banking services, in which access to the accounts and operations of the client is carried out via the Internet. In Russia, this technology is called “bank-client” and is widely used by most Russian banks.

Electronic banking includes money transfers, payment for goods and services, checking balances on bank accounts and plastic cards, etc. Many electronic banking systems and online exchanges operate on the basis of remote Internet service technologies. Among the technical standards for Internet banking are: Open Financial Exchange (OFX), Home banking Computer Interface (HBCI), and Bank Internet Payment System (BIPS).

So what is the difference between ecommerce and ebusiness?

Ebusiness is a generic term that includes all forms of use of digital information and communication technologies to support and improve the efficiency of business processes at all stages of the sale. On the other hand, Ecommerce refers to the trade of products and services, especially on the Internet, and therefore is a part of a larger Ebusiness.