| E-commerce |
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| Digital content |
| Retail goods and services |
| Online shopping |
| Mobile commerce |
| Customer service |
| E-procurement |
| Purchase-to-pay |
| Super-apps |
The term mobile commerce was originally coined in 1997 by Kevin Duffey at the launch of the Global Mobile Commerce Forum, to mean "the delivery of electronic commerce capabilities directly into the consumer's hand, anywhere, via wireless technology."[1] Many choose to think of Mobile Commerce as meaning "a retail outlet in your customer's pocket."
Mobile commerce is worth US$800 billion, with Asia representing almost half of the market.
The Global Mobile Commerce Forum, which came to include over 100 organisations, had its fully minuted launch in London on 10 November 1997. Kevin Duffey was elected as the Executive Chairman at the first meeting in November 1997. The meeting was opened by Dr Mike Short, former chairman of the GSM Association, with the very first forecasts for mobile commerce from Kevin Duffey (Group Telecoms Director of Logica) and Tom Alexander (later CEO of Virgin Mobile and then of Orange). Over 100 companies joined the Forum within a year, many forming mobile commerce teams of their own, e.g. MasterCard and Motorola. Of these one hundred companies, the first two were Logica and Cellnet (which later became O2). Member organisations such as Nokia, Apple, Alcatel, and Vodafone began a series of trials and collaborations.
Mobile commerce services were first delivered in 1997, when the first two mobile-phone-enabled Coca-Cola vending machines were installed in the Helsinki area in Finland. The machines accepted payment via SMS text messages. This work evolved into several new mobile applications such as the first mobile phone-based banking service launched in 1997 by Merita Bank of Finland, also using SMS. Finnair mobile check-in was also a major milestone, first introduced in 2001.
The m-Commerce(tm) server developed in late 1997 by Kevin Duffey and Andrew Tobin at Logica won the 1998 Financial Times award for "most innovative mobile product," in a solution implemented with De La Rue, Motorola and Logica.[2] The Financial Times commended the solution for "turning mobile commerce into a reality."[citation needed] The trademark for m-Commerce was filed on 7 April 2008.[3]
In 1998, the first sales of digital content as downloads to mobile phones were made possible when the first commercial downloadable ringtones were launched in Finland by Radiolinja (now part of Elisa Oyj).
Two major national commercial platforms for mobile commerce were launched in 1999: Smart Money in the Philippines, and NTT DoCoMo's i-Mode Internet service in Japan. i-Mode offered a revenue-sharing plan where NTT DoCoMo kept 9 per cent of the fee users paid for content, and returned 91 percent to the content owner.
Mobile-commerce-related services spread rapidly in early 2000. Norway launched mobile parking payments. Austria offered train ticketing via mobile devices. Japan offered mobile purchases of airline tickets.
In April 2002, building on the work of the Global Mobile Commerce Forum (GMCF), the European Telecommunications Standards Institute (ETSI) appointed Joachim Hoffmann of Motorola to develop official standards for mobile commerce.[4] In appointing Mr Hoffman, ETSI quoted industry analysts as predicting "that m-commerce is poised for such an exponential growth over the next few years that could reach US$200 billion by 2004".[5]
As of 2008, UCL Computer Science and Peter J. Bentley demonstrated the potential for medical applications on mobile devices.[6]
PDAs and cellular phones have become so popular that many businesses[specify] are beginning to use mobile commerce as a more efficient way to communicate with their customers.
In order to exploit the potential mobile commerce market, mobile phone manufacturers such as Nokia, Ericsson, Motorola, and Qualcomm are working with carriers such as AT&T Wireless and Sprint to develop WAP-enabled smartphones. Smartphones offer fax, e-mail, and phone capabilities.
"Profitability for device vendors and carriers hinges on high-end mobile devices and the accompanying killer applications," said Burchett.[who?] Perennial early adopters, such as the youth market, which are the least price sensitive, as well as more open to premium mobile content and applications, must also be a key target for device vendors.
Since the launch of the iPhone in 2007, mobile commerce has moved away from SMS systems and into actual applications. SMS has significant security vulnerabilities and congestion problems, even though it is widely available and accessible. In addition, improvements in the capabilities of modern mobile devices make it prudent to place more of the resource burden on the mobile device.
Unlike online banking using bank websites, mobile banking allows a smaller number of operations based on short messages or applications installed on mobile devices. At present, it is estimated that by 2022, the number of customers adopting mobile banking will increase to 2 billion, and banks are investing more and more in improving mobile applications to improve security and customer satisfaction.[7]
More recently, brick and mortar business owners, and big-box retailers in particular, have made an effort to take advantage of mobile commerce by utilizing a number of mobile capabilities such as location-based services, barcode scanning, and push notifications to improve the customer experience of shopping in physical stores. By creating what is referred to as a 'bricks & clicks' environment, physical retailers can allow customers to access the common benefits of shopping online (such as product reviews, information, and coupons) while still shopping in the physical store. This is seen as a bridge between the gap created by e-commerce and in-store shopping, and is being utilized by physical retailers as a way to compete with the lower prices typically seen through online retailers. By mid summer 2013, "omnichannel" retailers (those with significant e-commerce and in-store sales) were seeing between 25% and 30% of traffic to their online properties originating from mobile devices. Some other pure play/online-only retail sites (especially those in the travel category) as well as flash sales sites and deal sites were seeing between 40% and 50% of traffic (and sometimes significantly more) originate from mobile devices.
The Google Wallet Mobile App[8] launched in September 2011 and the m-Commerce joint venture formed in June 2011 between Vodafone, O2, Orange and T-Mobile are recent developments of note.[9] Reflecting the importance of m-Commerce, in April 2012 the Competition Commissioner of the European Commission ordered an in-depth investigation of the m-Commerce joint venture between Vodafone, O2, Orange and T-Mobile.[10] A recent survey states that 2012, 41% of smartphone customers have purchased retail products with their mobile devices.[11]
Consumer-to-business (C2B) e-commerce is when a consumer makes their services or products available for companies to purchase.[2] The competitive edge of the C2B e-commerce model is in its pricing for goods and services. This approach includes reverse auctions, in which customers name the price for a product or service they wish to buy. Another form of C2B occurs when a consumer provides a business with a fee-based opportunity to market the business's products on the consumer's blog.[9]
For instance, food companies may ask food bloggers to include a new product in a recipe and review it for readers of their blogs. YouTube reviews may be incentivized by free products or direct payment. This could also include paid advertisement space on the consumer website. Google Adwords/Adsense has enabled this kind of relationship by simplifying the process in which bloggers can be paid for ads. Services such as Amazon Affiliates allow website owners to earn money by linking to a product for sale on Amazon. Examples of C2B include: a graphic designer customizing a company logo, or a photographer taking photos for an e-commerce website.[2]
The C2B model has flourished in the internet age because of ready access to consumers who are "plugged in" to brands. Where the business relationship was once strictly one-directional, with companies pushing services and goods to consumers, the new bi-directional network has allowed consumers to become their own businesses. Reductions in the cost of technologies such as video cameras, high-quality printers, and Web development services give consumers access to tools for promotion and communication that were once limited to large companies. As a result, both consumers and businesses can benefit from the C2B model.[9]
The disadvantages of C2B transactions are that one must be well-versed in web design to create such a website and the amount of money earned is far less than what could be earned by selling the mortgage directly to the consumer instead.[10] The advantages of C2B can be expressed through an example: The C2B website thefreemortgagecalculator.com offers a LendingTree advertisement at the top of the page. The advantage of this website is that the owner does not have to sell mortgages, meet with customers, or pay for everyday business operation expenses in order to make money. If the LendingTree advertisement is used by a visitor, the website owner gets paid a commission from LendingTree for the lead.[10]
Consumer-to-consumer (C2C), or customer-to-customer, represents a market environment where one customer purchases goods from another customer using a third-party business or platform to facilitate the transaction.
In this case, the third-party platform typically earns their money by charging transaction or listing fees.[11][3] These businesses benefit from self-propelled growth by motivated buyers and sellers, but face a key challenge in quality control and technology maintenance.[3] Another customers' benefit is the competition for products. Customers may often find items that are difficult to locate elsewhere. Also, margins can be higher than traditional pricing methods for sellers as there are minimal costs due to the absence of retailers or wholesalers.[11]
Opening a C2C site takes careful planning.[5] Examples of C2C include Craigslist and eBay, who pioneered this model in the early days of the internet.[3] Generally, transactions in this model occur via online platforms (such as PayPal), but often are conducted using social-media networks (e.g., Facebook marketplace) and websites (Craigslist).[2]
The advantages of C2C include:[citation needed]
The disadvantages of C2C include:[citation needed]
Business-to-administration (B2A), also known as business-to-government (B2G), refers to all transactions between companies and public administrations or government agencies. Government agencies use central websites to trade and exchange information with various business organizations.[1] This is an area that involves many services, particularly in areas such as social security, employment, and legal documents.[2]
Businesses that are accustomed to interacting with other businesses or directly with consumers often encounter unexpected hurdles when working with government agencies. Layers of regulation can harm the overall efficiency of the contracting process, and thus, governments tend to take more time than private companies to approve and begin work on a given project.[12]
While businesses may find that government contracts involve additional paperwork, time, and vetting, there are advantages to providing goods and services to the public sector. Government contracts are often large and more stable than analogous private-sector work. A company with a history of successful government contracting usually finds it easier to get the next contract.[12] One example of a B2A model is Accela, a software company that provides government software solutions and public access to government services for permitting, planning, licensing, public health, and so on.[1]
Consumer-to-administration (C2A) e-commerce encompasses all electronic transactions between individuals and public administration. The C2A e-commerce model helps the consumer post their queries and request information regarding the public sector directly from their local governments/authorities. It provides an easy way to establish communication between the consumers and the government.[1]
Examples of C2A include taxes (filing tax returns), health (scheduling an appointment using an online service), and paying tuition for higher education.[2]
There are many types of e-commerce models', based on market segmentation, that can be used to conducted business online. The 6 types of business models that can be used in e-commerce include:[1] Business-to-Consumer (B2C), Consumer-to-Business (C2B), Business-to-Business (B2B), Consumer-to-Consumer (C2C), Business-to-Administration (B2A), and Consumer-to-Administration
B2B e-commerce refers to the sale of goods or services between businesses via an online sales portal.[2] While sometimes the buyer is the end user, often the buyer resells to the consumer.[3] This type of e-commerce typically applies to the relationship between producers and wholesalers; it may additionally remain applied to the relationship between the producers or the wholesalers and the retailers themselves.[2] However, the same relationship can also occur between service providers and business organizations.[4] B2B typically requires more venture capital and a longer sales cycle, but results in higher order value and more recurring purchases.[3][5]
As newer generations become decision makers in business, B2B ecommerce will become more important. In 2015, Google found that close to half of B2B buyers were millennials—nearly double the amount reported in 2012.[3]
Examples of this model are ExxonMobil Corporation, the Chevron Corporation, Boeing, and Archer-Daniels-Midland. These businesses have custom, enterprise ecommerce platforms that work directly with other businesses in a closed environment.[5]
The advantages of B2B e-commerce include:[6]
The disadvantages of B2B e-commerce include:[6]
Business-to-consumer (B2C), or direct-to-consumer, is the most common e-commerce model. It deals in electronic business relationships between businesses—both producers and service providers—with end consumers. Many people like this method of e-commerce as it allows them to shop around for the best prices, read customer reviews, and often find different products that they would not otherwise be exposed to in the physical retail world. This e-commerce category also enables businesses to develop a more personalized relationship with their customers.[2]
Anything one buys online as a consumer is done as part of a B2C transaction. The decision-making process for a B2C purchase is much shorter than a business-to-business (B2B) purchase, especially for items that have a lower value, thus having a shorter sales cycle. B2C businesses therefore typically spend less marketing dollars to make a sale but also have a lower average order value and less recurring orders than their B2B counterparts. B2C innovators have leveraged technology like mobile apps, native advertising and re-marketing to market directly to their customers and make their lives easier in the process.[3]
Examples of B2C businesses are everywhere: exclusively-online retailers include Newegg, Overstock.com, Wish, and ModCloth. Major B2C-model brick-and-mortar businesses include Staples, WalMart, Target, REI, and Gap.[5]
The advantages of B2C e-commerce include:[8]
The disadvantages of B2C e-commerce include:[8]
B2B e-commerce, short for business-to-business electronic commerce, is the sale of goods or services between businesses via an online sales portal. In general, it is used to improve the efficiency and effectiveness of a company's sales efforts. Instead of receiving orders using human assets (sales reps) manually – by telephone or e-mail – orders are received digitally, reducing overhead costs.[1]
B2B and B2C e-commerce may look the same, but they are quite different. Business buyers and retail consumers have different purchasing needs.[2] The differences can be:
Supply chains are more important to B2B transactions. Manufacturing companies obtain components or raw materials from other companies and then sell to a wholesaler, distributor, or retail customer. For example, an automobile manufacturer makes several B2B transactions such as buying tires, glass for windscreens, and rubber hoses for its vehicles. The final transaction, a finished vehicle sold to the consumer, is a single B2C transaction.[3] Wholesalers and distributors still have a supply chain, but their chain consists of finished products.
Generally, B2B and B2C web stores both have search, navigation, detailed product information and personal account history pages. However, in some ways, B2B greatly differs from B2C. Most B2B businesses have complex ordering processes, large collections of attributes and elaborate back-end systems. Moreover, in a B2B scenario, buying is part of the customers' jobs. He needs to make sure he buys all the necessary products or components for keeping his company up and running. Thirdly, since organizations can be very large, they need a lot of products or components to keep their business going. Therefore, B2B buyers often place large orders. B2B purchases are also characterized by recurring orders instead of single purchases. Because of that, companies make deals based on their monthly or even yearly demand. They closely collaborate, and each B2B customer can have its specific prices for certain products. Lastly, multiple people are involved in B2B purchases. For instance, a company can have multiple buyers or buying centres. They are responsible for finding the right products and making the right deal with resellers. Because multiple people are involved in a single deal, B2B is more fact-based instead of based on emotions. It's not about the nicest packaging, but the best deal for the company. In general, the ratio is leading.
The characteristics mentioned above can be summarized as follows:
| B2C | B2B |
|---|---|
| Single buyer | Multiple Decision Makers |
| Fixed consumer prices | Customer specific prices |
| Direct payments | Payment on credit sales |
| Stocks (for a.s.a.p shipments) | Smart shipments (i.e. truckloads) |
| Low frequency purchases | Reoccurring purchases |
| Single visits | Long-lasting relationship between customer and manufacturer |
| Buying because you like it | Buying as part of the job |
| Consumer | Buyers as part of an organization with a relationship defined by a contract, terms and conditions |
B2B transactions can be processed online in various ways, of which Electronic Data Interchange (EDI) and B2B e-commerce is most often used. Although EDI and B2B e-commerce both have their own, distinctive features, they are frequently confused.[4]
EDI is the electronic transfer of purchasing information between the buyer and seller. EDI transmits the information from the buyer's purchase order to the seller's sales or customer service department for conversion to a sales order. EDI is well suited for placing large, recurring orders to supply raw materials to manufacturers.[5] For instance, following the example above, an automobile manufacturer regularly needs to order a specific brand and size of tires for a certain car model. When manufacturing a certain number of that type of car, the buyers can use EDI to place an order for the number of tires needed. So, the seller need not worry about providing product information – like a description, images or pricing –for reordering purposes.[6]
Although, like EDI, sales orders are processed online, with B2B e-commerce it is possible for customers to order occasionally and in irregular order quantities. Also, B2B e-commerce enables the display of many different types of detailed figures and images. It is possible to exhibit a full range of products or parts. Therefore, a web store provides the opportunity to cross- and upsell.[5]
The B2B e-commerce market is growing rapidly. In 2014, 63% of industrial supplies buyers made their purchases online. The US market was projected to grow from $780 billion in 2015 to $1.1 trillion by 2020, [7] but recent data suggests that it is even larger. In 2022, just over 10% of B2B product sales, totaling $1.676 trillion, were made through e-commerce websites. This growth trend is expected to continue strongly until at least t 2026.[8] The European Union Enterprise policy aims to "enhance trust and confidence" in B2B electronic markets.[9]
In the US, B2B e-commerce is expected to reach $1.8 trillion by 2023.[10] This growth is being driven by a number of factors, including the increasing adoption of cloud computing, the growth of mobile commerce, and the rising demand for end-to-end supply chain solutions.
The phrase mobile commerce was originally coined in 1997 by Kevin Duffey at the launch of the Global Mobile Commerce Forum, to mean "the delivery of electronic commerce capabilities directly into the consumer's hand, anywhere, via wireless technology."[11] Mobile e-commerce for B2B is becoming increasingly popular.[citation needed] B2B has features different from mobile e-commerce for B2C.[citation needed] Whereas B2C is mostly classic catalogue browsing, mobile e-commerce for B2B requires specific features, which include:[citation needed]
The "electronic components district" of Guangzhou, where numerous shops sell electronic components to other companies that would use them to manufacture consumer goods Business-to-business (B2B or, in some countries, BtoB) is a situation where one business makes a commercial transaction with another. This typically occurs when:
Business-to-Business companies represent a significant part of the United States economy. This is especially true in firms of 500 employees and above, of which there were 19,464 in 2015,[1] where it is estimated that as many as 72% are businesses that primarily serve other businesses.[2] One possible argument of economics to explain the levels of Business-to-Business activity is that it allows for business segmentation.[3]
B2B is often contrasted with business-to-consumer (B2C) trade.
B2B involves specific challenges at different stages. At their formation, organizations should be careful to rely on an appropriate combination of contractual and relational mechanisms.[4] Specific combinations of contracts and relational norms may influence the nature and dynamics of the negotiations between firms.[citation needed]
Vertical B2B is generally oriented to manufacturing or business. It can be divided into two directions: upstream and downstream. Producers or commercial retailers can have a supply relationship with upstream suppliers, including manufacturers, and form a sales relationship.[5] As an example, Dell works with upstream suppliers of integrated circuit microchips and computer printed circuit boards (PCBs).
A vertical B2B website can be similar to the enterprise's online store.[5] Through the website, the company can promote its products vigorously, more efficiently and more comprehensively which enriches transactions as they help their customers understand their products well. Or, the website can be created for business, where the seller advertises their products to promote and expand transactions.
Horizontal B2B is the transaction pattern for the intermediate trading market. It concentrates similar transactions of various industries into one place, as it provides a trading opportunity for the purchaser and supplier, typically involving companies that do not own the products and do not sell the products. It is merely a platform to bring sellers and purchasers together online.[6] The better platforms help buyers easily find information about the sellers and the relevant information about the products via the website.
A 2022 Amazon report highlighted a "rapid transformation of B2B e-procurement in recent years", with 91% of the B2B buyers surveyed in their study stating that they preferred online purchasing.[7]
 | This section includes a list of general references, but it lacks sufficient corresponding inline citations. (March 2016) |
In B2B commerce, it is often the case that the parties to the relationship have comparable negotiating power, and even when they do not, each party typically involves professional staff and legal counsel in the negotiation of terms, whereas B2C is shaped to a far greater degree by economic implications of information asymmetry. However, within a B2B context, large companies may have many commercial, resource and information advantages over smaller businesses. The United Kingdom government, for example, created the post of Small Business Commissioner under the Enterprise Act 2016 to "enable small businesses to resolve disputes" and "consider complaints by small business suppliers about payment issues with larger businesses that they supply."[8]
The principal difference between B2B and B2C is that the first one refers to commerce transaction between manufacturer and retailer, and the second one it is the retailer supplying goods to the consumer.[9] In B2B there are business people on both sides, whereas in B2C there is normally one business person and one consumer. In the first case, the decision is pursued by need (because the other business needs it), and in the second case, they are expectations rather than needs. B2B has many sellers and different stores, whereas B2C, is usually just one supplier. B2B concentrates on raw data for another company, but B2C focuses on producing something for consumers. A B2B transaction entails direct-sourcing contract management, which involves negotiating terms that establish prices and various other factors such as volume-based pricing, carrier and logistics preferences, etc. B2C transaction is clearer, it has spot sourcing contract management that offers a flat retail rate for each item sold. Time is also different as B2B has a slower process than B2C which is concluded in shorter periods (that could be minutes or days).
Business-to-business generally requires an upfront investment whereas business-to-customers do not need a business to spend money on infrastructure. The last difference mentioned here is that in B2B, lagging behind in the digital transformation, have to deal with back-office connectivity and invoicing a number of different partners and suppliers, while B2C results in more seamless transactions as options, such as cyber-cash, allows the business to accept a wider variety of payment options. B2B typically only allows payment via credit card or invoice, making the purchasing process longer and more expensive than with B2C. B2B, as there are normally bigger amounts involved over longer periods of time, usually have higher costs than B2C, which consists of quick, daily transactions. Businesses typically want to buy on net terms, meaning that B2B merchants have to wait weeks, if not months to get paid for their goods or services. As a result, smaller businesses with less capital often struggle to stay afloat. In B2B, brand reputations greatly depend on the personal relationship between businesses. On the other hand, in B2C, the business's reputation is often fueled by publicity through the media.
In many cases, the overall volume of B2B (business-to-business) transactions is much higher than the volume of B2C transactions.[10][11][12] The primary reason for this is that in a typical supply chain there will be many B2B transactions involving subcomponents or raw materials, and only one B2C transaction, specifically the sale of the finished product to the end customer. For example, an automobile manufacturer makes several B2B transactions such as buying tires, glass for windows, and rubber hoses for its vehicles. The final transaction, a finished vehicle sold to the consumer, is a single (B2C) transaction.
B2B2C means "business-to-business-to-consumer". According to the TechTarget website, the purpose of the terminology is to "extend the business-to-business model to include e-commerce for consumers". B2B2C aims to "create a mutually beneficial relationship between suppliers of goods and services and online retailers".[13] According to Lomate and Ramachandran, it enables manufacturers (the first "B" in B2B2C) to connect with, understand and serve their end customers ("C") without undermining their sales and distribution networks, including online sellers (the second "B") or excluding them from continuing customer engagement.[14]
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