What is E-Business? Definition, Features, History, Models, and Importance

What is E-Business (Electronic Business)?

E-business (electronic business) refers to the carrying out business activities online with the help of basic tools internet, intranet, and extranet. E-business also called online business which includes activities such as buying, selling, business deals, procurements, monetary transactions over the internet, customer relationship management, collaboration with suppliers, and other stakeholders.

In simple words, electronic business means the transactions of business activities that take place online with the help of the internet. It is the modern way of doing business, handling customers, fulfilling their expectations, and uplifting companies’ profits.

Electronic business has changed the way the traditional businesses used to be where physical presence is vital for buyers’ and sellers’ interactions and for the delivery of goods and services. But, in e-business physical presence is not required. Buying and selling, order processing, and buyers and sellers interactions are done electronically using telecommunication networks.

An E-business system uses a number of information technology-based business practices to enhance the relationship between business and customers. It includes changes in marketing communication, distribution systems, and business models.

What is E-Commerce (Electronic Commerce)?

The terms e-commerce and e-business are often used interchangeably but they differ. E-commerce means buying and selling goods and services online with the help of the internet and making monetary transactions at the same time. E-commerce remains at this.

But, e-business goes beyond just buying and selling over the internet and making payments as mentioned above it also includes managing customers, CRM, ERP, managing production control, processing payments, e-recruiting, e-collaboration, and many more.

In fact, electronic commerce is the part of the electronic business – it can be best convinced as electronic commerce is the subset of electronic business whereas e-business is the superset of e-commerce.

Important definitions of electronic business:

  • Philip Kotler – Electronic business is the general term for buying and selling process that is supported by electronic means.
  • International Fiscal Association – E-business means commercial transactions in which an order is placed electronically and goods and services are delivered in tangible or electronic form.
  • European Union Website – E-business is a general concept covering any form of business transactions or information exchange that is made by using information and communication technology.

Key points to remember about e-business:

  • Electronic business is the conducting of business on the Internet, not only buying and selling but also servicing customers and collaborating with business.
  • The processes and tools that allow an organization to use Internet-based technologies and infrastructure, both internally and externally, to conduct day-to-day business process operations.
  • Stands for electronic business and refers to any kind of sales, services, purchasing, or commerce on the Internet.
  • A new-tech jargon word is used more for marketing than for technical description. Most commonly it broadly refers to conducting business over the internet (email and web) by communicating and perhaps transacting (buying and selling) with customers, suppliers, and business partners.

Characteristics of E-Business?

Thanks to the electronic business we do not have to go to visit shops and stores physically. The buying and selling, payments, delivering process, contracting, dealing, etc. are possible without a physical presence.

Some of the salient features/characteristics of the electronic business are mentioned below:

24×7 Service

It is electronic business/commerce that helped to achieve to give 24×7 service availability. It has automated the way business enterprises give services to customers. As such customers can use services at any time from anywhere.

Non-Cash Payments

In traditional commerce, the transactions – buying and selling of products were done in cash – in fact, this was the only way to do it. But today to do such transactions there is no need of carrying cash electronic business has enabled the use of credit cards, debit cards, smart cards, electronic fund transfers via the bank’s website, and other modes of electronic payment.

Improved Advertising/Marketing

E-commerce makes advertising and marketing activities of enterprises global reach. Better marketing management of goods and services is achieved. Online businesses can provide value to their clients and appeal to their requirements through individualized online experiences by using written articles, and visual, and video content.

Improved Sales

Using e-commerce, orders for the products can be generated anytime, anywhere without any human intervention. It gives a big boost to existing sales volumes.


E-commerce provides various ways to provide pre-sales and post-sales assistance to provide better services to customers. After buying or before buying customers can easily interact with the vendors about the products they want to buy or have bought from companies’ websites.

Inventory Management

E-commerce automates inventory management. Reports get generated instantly when required. Product inventory management becomes very efficient and easy to maintain.

Communication Improvement

E-commerce provides ways for faster, more efficient, and reliable communication with customers and partners. Since physical presence is not required as in traditional commerce customers and other stakeholders are welcome to make contact with the enterprise, and vendors from anywhere.

History of eBusiness/eCommerce

The development of eCommerce took place in 1969 when the first eCommerce company CompuServe was established. A brief development period can be presented below:

Since the Covid-19 pandemic has arrived, the trend of e-business/eCommerce growing tremendously.

Models of E-Business

The e-business or e-commerce model, like any business model, entails how an enterprise functions, how it provides a product or services, how it generates revenue, and how it will create and adapt to new markets and technologies.

The main models/types of e-business are mentioned below:

Business-to-Business (B2B)

The B2B business model involves a website selling its items to an intermediary buyer, who then sells the product to the ultimate client. A wholesaler, for example, makes an order on a company’s website and, after receiving the shipment, sells the finished product to the ultimate client who visits one of the company’s retail locations.

Business-to-Consumer (B2C)

A website that follows the B2C business model sells its items to customers directly. Customers can look at the products that are shown on the website. The customer can select a product and place an order for it. The website will then send an email message to the business organization, which will then ship the merchandise to the customer.

Consumer-to-Consumer (C2C)

By putting their information on a website that follows the C2C business model, consumers can sell their assets such as residential property, vehicles, motorcycles, and so on, or rent a room. The consumer may or may not be charged for the website’s services. By viewing the post/advertisement on the internet, another consumer may decide to purchase the initial customer’s offering.

Consumer-to-Business (C2B)

In this e-commerce concept, a customer visits a website that lists numerous business groups that provide a specific service. The customer enters an estimate of how much he or she wants to pay for a specific service.

For example, websites can be used to compare interest rates on personal loans and auto loans offered by multiple institutions. A company contacts a customer and offers its services after meeting the customer’s needs within the budget constraints.

Business-to-Government (B2G)

The B2G model is a subset of the B2B model. Governments utilize such websites to trade and exchange information with a variety of corporate entities. These websites have been approved by the government and provide a means for businesses to submit government application forms.

Government-to-Business (G2B)

Governments use G2B model websites to approach business organizations. Such websites support auctions, tenders, and application submission functionalities.

Government-to-Citizen (G2C)

Governments use G2C model websites to approach citizens in general. Such websites support auctions of vehicles, machinery, or any other material. Such website also provides services like registration for birth, marriage, or death certificates. The main objective of G2C websites is to reduce the average time for fulfilling citizens’ requests for various government services.

Advantages of E-Business

The advantages/importance of e-business/commerce can be better studied by categorizing into customers, organizations, and society.

Advantages to Organization:

  • E-commerce helps organizations to expand their market to national and international markets with minimum capital investment.
  • E-commerce helps organizations to reduce the cost to create processes, distribute, retrieve and manage paper-based information by digitizing the information.
  • E-commerce improves the brand image of the company.
  • E-commerce helps organizations to provide better customer services.
  • E-commerce helps to simplify the business processes and makes them faster and more efficient.
  • E-commerce reduces the paperwork.
  • E-commerce increases the productivity of organizations.

Advantages of Customers:

  • It provides 24×7 support.
  • The E-commerce application provides users with more options and quicker delivery of products.
  • The E-commerce application provides users with more options to compare and select the cheaper and better options.
  • A customer can put review comments about a product and can see what others are buying, or see the review comments of other customers before making a final purchase.
  • E-commerce provides options for virtual auctions.
  • It provides readily available information. A customer can see the relevant detailed information within seconds, rather than waiting for days or weeks.
  • E-Commerce increases the competition among organizations and as a result, organizations provide substantial discounts to customers.

Advantages to Society:

  • Customers need not travel to shop for a product, thus less traffic on the road and low air pollution.
  • E-commerce helps in reducing the cost of products, so less affluent people can also afford the products.
  • E-commerce has enabled rural areas to access services and products, which are otherwise not available to them.
  • E-commerce helps the government to deliver public services such as healthcare, education, and social services at a reduced cost and in an improved manner.

Applications of E-Business

Electronic business applications are enhancing the way companies perform over the internet. The major e-business applications are:

  • Online Marketing and Purchasing – Data of customers are collected consisting of needs, wants, tastes, preferences, etc., and marketing campaigns are applied that best-fit customers’ actual needs hence customers get a sweetened purchase experience.
  • Finance – Banks and financial institutions are using e-commerce to a great extent to provide their financial services as such customers can easily check balances and account activities.
  • Online Booking – Booking hotels, air tickets, film tickets, etc. are common nowadays’s been possible by an internet booking engine.
  • Online Publishing – Electronic publishing includes the digital publication of e-books, digital magazines, and the development of digital libraries and catalogs.
  • Auctions – Customer-to-Customer E-commerce is the direct selling of goods and services among customers. It also includes electronic auctions that involve bidding.

E-Business Vs. E-Commerce

In the actual field of online business – e-business and e-commerce are used interchangeably.

  • E-commerce is buying and selling products online but e-business is more than that.
  • E-commerce is a subset and an essential part of e-business.
  • E-commerce is limited to monetary transactions but e-commerce includes monetary transactions and allied activities.
  • To communicate with their online customers from all over the world, E-Commerce needs the internet. To connect with the parties, E-Business can use the internet, intranet, and extranet.


E-business hence is the process of conducting business activities over the internet. The development of electronic business has made online shopping possible and enhanced the company’s performance. And, the trend of e-business/eCommerce is tremendous that has never been seen before and further Covid-19 has boosted its growth.

Leave a Comment