E-commerce or electronic commerce, is conducting business communications and transactions via computers and over networks. It is the buying and selling of goods and services through digital communication, E-commerce also includes transactions on the World Wide Web (WWW) and Internet, and modes such as electronic funds transfer, smart - Cards, and digital cash.

E-business, or electronic business, derived from 'e-commerce', It is conducting business on the Internet, but not just buying and selling but also servicing customers and collaborating with business partners, The term conveys that the business conducts its business entirely online.


Before running an online business one has to find out what drives the consumer to actually place orders via the Internet. Providing that the barriers in terms of payment are solved, there are still some fundamentals which need to be looked into before assuming that the customers will favor the web before the physical shop around the corner.

The drawbacks on the web are obvious:

  • The customer does not get lute physical contact with the product, The feeling of physical contact is hard to replace, The customer cannot fulfill his need of the product instantly, In turn, the web has some equally obvious positives.
  • It provides a variety of goods, which is not limited to local accessibility Prices are expected to be lower than those found in the physical shop. It can be more convenient than buying in the physical shop

Having those fundamentals in mind what development could be expected in B2C e-commerce? To come to an answer one has to draw the line between shopping and buying.

Shopping is for many people something done for pure pleasure, that’s when you wander around the malls and end up buying something you did not know you needed. On the contrary buying is something completely different, For simplicity, let us define buying, as purchasing something you knew you needed when you started searching Then we have a customer that knows what he wants and is ready to search for it, Either on the web or in the store. What drives the buying customer to the web? There are various reasons which all can be traced back to the fundamentals listed above.

The different reasons create different business opportunities; let's have a look at them.


The first fundamental is uniqueness, Retailers with limited geographic coverage can utilize the web to expand their marketplace and this also opens opportunities for specialized web shops that would have a too small customer base to exist if they were physical shops, Examples are special interest shops, hobbies, poetry books, etc, The web provides the tool for people to make a living out of what previous have been niches too small to be commercial, To successfully make business out of the first fundamental requires providing goods that the customer won't find elsewhere.

Price Level

The second fundamental is the price level on the web, which the customers expect to be significantly lower than in the physical stores. Sites going for these customers must provide well-known merchandise at very good prices, These goods can also be bought at the local mall, so the balance between price and barrier must be attractive, If delivery times are long but the goods can be bought locally, then it must really be a bargain online.


The third fundamental is convenience, Delivery must be fast, and flexible delivery is essential, where the customer can select a delivery address as well as delivery time. For businesses targeting the third fundamental, the customer satisfaction in terms of delivery is the essential. Those are goods that the customer really need; one missed delivery could be fatal. The conclusion of looking at the B2C e-business from the view of the fundamental drivers is that each site that wants to be successful must know which fundamentals they are targeting and then deliver the positives linked' to those fundamentals accordingly. Businesses that don't deliver on one or more of the three fundamentals are not in a good position to make money. This is common sense, but looking at some of the sites on the web today, does it appear to be that common?