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M-commerce and E-commerce

M-commerce and E-commerce

Information and communication technology (ICT) is the computing and communications system that a business uses to exchange information with its stakeholders. ICT is developing rapidly, and with this development, businesses are changing how they work. ICT has impacted various sectors and industries, including collecting, storing, and analyzing information; digital communication; and m-commerce and e-commerce. Read along if you are curious about the differences between m-commerce and e-commerce.

E-Commerce Definition

Before diving deep into the details of e-commerce and m-commerce, let's consider the term 'commerce.' Cambridge dictionary defines commerce as:

The activities involved in buying and selling things.1

Once we know that commerce includes all the activities needed for trade, we can guess what e-commerce is. What do you think are the most critical factors in commerce? You are correct if you think of a buyer, a seller, and a product of interest. E-commerce works the same as traditional commerce, just electronically.

Electronic commerce, or e-commerce, is the act of buying and selling goods electronically using the Internet.

It is hard to find a single person who does not know what Amazon does. E-commerce may be a company selling its products via a website or different vendors selling various products on an e-commerce platform. Some businesses, like Spareroom, Shein, Zalando, etc., run entirely on the Internet without any physical locations. Companies that stayed away from e-commerce are now either regretting it or running hard to catch up.

Some platforms are trying to get small businesses on board to join the e-commerce revolution and compete with their giant counterparts. Platforms like Uber Eats and Deliveroo are trying to get local restaurants and grocery stores onto food ordering apps. E-commerce is joining more countries than ever and is a fundamental part of globalization.

A person sitting in their living room can start an e-commerce website that will serve customers worldwide. See the friends working on their website in Figure 1 below.

So what exactly do you need to start an e-commerce business? Just a laptop with working Internet.

M-commerce and E-commerce 2 people sitting at a coffee shop talking and laughing StudySmarterFig. 1 - Two men planning to strat their e-commerce store

M-Commerce Definition

M-commerce is a sub-part of e-commerce.

M-commerce, or mobile commerce, is the buying and selling of goods using mobile, handheld devices such as smartphones or tablets.

M-commerce can take place via a dedicated app that customers may download on their mobile phones or by simply accessing the mobile version of the website. The Amazon shopping app and the Google Play store are examples of m-commerce apps.

Difference between E-Commerce and M-Commerce

Even though m-commerce is a part of e-commerce, there are some differences. M-commerce is a newer technology than e-commerce and comes with improvements implemented over time. Here are a few:

  1. Portability: Generally, e-commerce activities are done via desktops or laptops. These devices are not highly portable compared to m-commerce devices such as mobiles and tablets.

  2. Location tracking: Location tracking and providing localized offers can become tedious when using e-commerce, whereas location tracking is easy with mobile phones, as they have built-in GPS.

  3. Push notifications: The technology is mainly associated with mobile devices and can make m-commerce a better and more secure option than e-commerce.

  4. Security: Mobile devices are used in e-commerce for 2-factor authentication. M-commerce has the advantage of additional protection via biometrics like fingerprint and face recognition.

  5. Ease of use: Mobile apps are optimized for the best user experience. It takes fewer taps and less navigation compared to e-commerce websites.

Advantages and Disadvantages of E-Commerce and M-Commerce

E-commerce is equally important to customers as it is for businesses. The advantages and disadvantages of e-commerce are also present in m-commerce. As more and more companies are going online, one may find high competition in every market. Is it worth it for businesses to go online? Or will it create a burden businesses won't be able to handle?

M-Commerce and E-Commerce: Advantages

  1. Cost reduction: Businesses do not have to put up any money to rent a fancy shop on a busy high street. Entirely online-operating businesses save extra costs such as energy bills and operating costs.

  2. New markets: e-commerce help businesses tap into the global market. Goods nowadays are delivered across the globe. It also helps companies launch new products with minimum investment.

  3. Business expansion: Businesses that have established physical locations can expand their business online. This expansion might become a source of an extra revenue stream.

  4. No working hours restriction: Customers can check products and place an order 24/7. An e-commerce website provides a personalized shopping experience to customers around the clock.

  5. Easy to track KPIs: E-commerce websites can track many key performance indicators (KPIs) that are difficult to uncover otherwise. Websites can check which items are in demand, what time people love to shop, how much money they are willing to pay, and what customers dislike. Providing good customer support online becomes more straightforward as more data becomes available.

Key performance indicators (KPIs) are a set of quantifiable measures used to gauge a company's success. Examples of KPIs are sales conversion rates, average time spent on a website, most frequently bought products, etc. KPIs are measurable, and they reflect performance.

M-Commerce and E-Commerce: Disadvantages

  1. Website and mobile app building: Businesses have to invest in building professional websites that are secure and provide a good user experience. Both websites and mobile apps are necessary for m-commerce. To tap into more customers, the app must be available on leading app stores like the Google Play Store for Android or the App Store for Apple users.

  2. Platform management: Just building apps and websites will not help. Businesses must have trained service staff to deal with potential issues and developers to manage the website.

  3. Complicated supply chain: Going global also means businesses have to sort out their supply chains and delivery around the globe. Businesses must be able to accommodate the scale of orders that may come with launching an e-commerce store.

  4. Security: It falls on the business to provide a secure purchasing experience for customers. Companies must extend security measures to financial transactions as well as personal data.

E-Commerce and M-Commerce Example

Depending on how businesses operate their customer base, e-commerce businesses can be divided into three major types (see Figure 2 below).

  1. Business-to-business (B2B): Businesses selling their goods or services to other businesses are called B2B firms. B2B businesses might include professional service providers, wholesalers, etc. For example, imagine an auto garage ordering spare parts in bulk from the website of a car parts dealer. Another example of this would be Amazon. Amazon does not charge buyers, but they charge sellers to open their stores on the platform. From this point of view, Amazon is a B2B company.

  2. Business-to-consumer (B2C): Online shopping websites of fashion brands such as Zara, H&M, and Superdry, or grocery giants like Tesco and Morrisons, are examples of B2C e-commerce. Some companies, like Shein, do not have physical stores and run entirely online. Businesses reach out directly to end customers via these websites or apps.

  3. Customer-to-customer (C2C): eBay provides a platform to users to sell their goods. All the transactions take place securely on the platform.

Some companies base their business models on other types of e-commerce, such as consumer-to-business and business-to-government.

To learn more about the different types of businesses, check out our explanation of Business Markets and B2B Marketing.

Before you head off, let's take a look at an example of e-commerce through the company Amazon.

Amazon is one of the largest e-commerce retailers in the world. An interesting thing about Amazon is that it engages in both B2C and B2C markets. You might already be familiar with Amazon's B2C marketplace, where customers can purchase various products, including household goods, clothing, gardening supplies, and even groceries (through Amazon Fresh). Amazon also runs its Prime subscription service through which members can receive the items they ordered with same-day and next-day delivery.

On the other hand, businesses can also use Amazon's e-commerce retail platform. Using Amazon's B2B site, business sellers can reach thousands, if not millions, of business customers.2 The only difference here is that instead of an individual purchasing one or two items, it's an entire business purchasing (usually) in large quantities. Businesses can purchase a number of different products, like office supplies, furniture, technology, etc., in bulk.

M-commerce and E-commerce Amazon packages for e-commerce StudySmarterFig. 3 - Amazon is one of the biggest examples of e-commerce

E-commerce and M-commerce are now inseparable parts of online businesses. In the coming years, e-commerce will be everywhere. Remember, Tesla cars can now order new tires on their own. But businesses should be cautious while trying to capture new markets via e-commerce, as e-commerce can open new markets and create new risks.

M-commerce and E-commerce - Key takeaways

  • Electronic commerce (e-commerce) is the act of buying and selling things electronically using the Internet.
  • M-commerce is a subpart of e-commerce.
  • M-commerce is the buying and selling of goods using mobile, handheld devices such as smartphones or tablets.
  • M-commerce has advantages such as portability, location tracking, push notification technology, biometric support, extensive security, and ease of use over e-commerce.
  • E-commerce provides various advantages to businesses, such as cost reduction, the ability to enter new markets, 24/7 availability, and ease of KPI tracking.
  • Some disadvantages of e-commerce include businesses having to invest in developing websites and mobile apps, extending their supply chain, and providing enhanced security to customers online.
  • B2B, B2C, and C2C are the main types of e-commerce businesses.

References

  1. Cambridge Dictionary. Meaning of Commerce in English. https://dictionary.cambridge.org/dictionary/english/commerce
  2. Amazon. Amazon Business. 2022. https://sell.amazon.co.uk/programmes/amazon-business

Frequently Asked Questions about M-commerce and E-commerce

Electronic commerce or e-commerce is the act of buying and selling goods electronically using the Internet. M-commerce is a sub-part of e-commerce. M-commerce is the buying and selling of goods using mobile, handheld devices such as smartphones or tablets.

Yes, m-commerce is a sub-part of e-commerce.

For businesses, the issues with e-commerce and m-commerce include having to invest in building a professional and user-friendly website, platform management, a complicated supply chain, and potential data security issues.

Mobile commerce can be divided into three types: business-to-business (B2B), business-to-consumer (B2C), and customer-to-customer (C2C).

Some examples of e-commerce are fashion retailers like ASOS or Zalando, food delivery platforms like Uber Eats or Deliveroo, and large B2C and B2B retailers like Amazon.  

Final M-commerce and E-commerce Quiz

Question

What is e-commerce?

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Answer

Electronic commerce is the act of buying and selling things electronically using the internet.

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Question

What is m-commerce?

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Answer

M-commerce is buying and selling of goods using mobile, handheld devices such as smartphones or tablets. 

Show question

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Are m-commerce and e-commerce the same?

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Answer

M-commerce is a subcategory of e-commerce. E-commerce via mobile devices is m-commerce.

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What are the advantages of m-commerce over e-commerce?

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Answer

Portability, location tracking, push notifications, and security 

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Which of the following is a disadvantage of e-commerce for a customer?

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Waiting for product to be delivered

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Mention 2 advantages of e-commerce for businesses

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Any two from cost reduction, exploring a new market, no work hour restrictions, and ease of KPI tracking.

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Mention 2 disadvantages of e-commerce business.

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Any two from high initial cost for website and app development, complicated supply chains, and security.

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Mention two major types of e-commerce business.

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Answer

Any two from B2B, B2C, or C2C.

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What is a B2B e-commerce business?

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B2B means business to business. If a wholesaler is selling goods online purchased in a large quantity by a retailer, then it is a B2B e-commerce operation.

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What is B2C?

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B2C is Business to Customer. A shopper purchasing a pair of jeans from the Zara website is an example of a B2C operation.

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What is C2C?

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C2C is customer to customer. A person buying a used sofa from eBay is a customer-to-customer e-commerce operation.

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Identify B2B transactions from the following examples.

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A person paying monthly fees to sell his products on the Amazon platform

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Which of the following is not an example of an e-commerce transaction?

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Browsing Zara clothes online and purchasing in store

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What is the future of e-commerce?

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E-commerce is predicted to grow in the coming years and physical stores will hardly exist.

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Which of the following is an example of an m-commerce transaction?

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Answer

Ordering food via the uber eats app

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Question

___ is the act of buying and selling goods electronically using the Internet.

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Answer

Electronic commerce or e-commerce 

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___ is the buying and selling of goods using mobile, handheld devices such as smartphones or tablets.


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Answer

M-commerce, or mobile commerce 

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It is impossible to run a business without a physical location.

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False

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The Amazon shopping app and the Google Play store are examples of ___ apps.


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Answer

m-commerce 

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M-commerce can take place via a dedicated '___’ that customers may download on their mobile phones or by simply accessing the mobile version of the website. 


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Answer

app 

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___ is the increase in price over time.

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Answer

Inflation 

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___ are a set of quantifiable measures used to gauge a company's success.


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Key performance indicators (KPIs)  

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It is easier to provide good customer support online.

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True

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KPIs are not measurable.

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False

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Businesses which sell their goods or services to other businesses only are called...


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Answer

business-to-business (B2B).

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Businesses that reach directly to end customers via websites or apps are called...


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Answer

business-to-customer (B2C).

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eBay is an example of...

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customer-to-customer (C2C).

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 E-commerce websites can track key performance indicators (KPIs).


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True

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More competition infers competing prices, which in turn assures ___ price inflation. 


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lower 

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E-commerce and m-commerce are terms that can be used interchangeably.

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False

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