examples of ecommerce, e.g. mobile phone/internet banking, online shopping, online ticketing

3.3.5 E‑commerce

Learning objective

Identify and give examples of the main types of e‑commerce (e.g., mobile‑phone/internet banking, online shopping, online ticketing) and evaluate the opportunities and threats it creates for businesses and consumers.

What is e‑commerce?

Electronic commerce (e‑commerce) is the buying and selling of goods, services, or the transmission of funds or data, over an electronic network – principally the Internet.

Key types of e‑commerce (with concrete examples)

• Business‑to‑Consumer (B2C) – a retailer’s website selling clothing to individual shoppers (e.g., ASOS, Amazon).
• Business‑to‑Business (B2B) – a wholesaler’s online portal where a bakery orders flour from a supplier.
• Consumer‑to‑Consumer (C2C) – a user listing a second‑hand smartphone on eBay or Depop.
• Mobile commerce (M‑commerce) – banking apps, mobile‑only shopping apps, QR‑code ticket purchases.

Examples of e‑commerce activities

1. Mobile phone / Internet banking

   Customers use banking apps or web portals to check balances, transfer money, pay bills and apply for loans without visiting a branch.

2. Online shopping

   Retailers sell products through websites or apps – clothing, electronics, groceries, digital downloads, etc.

3. Online ticketing

   Customers purchase tickets for travel, concerts, movies or sporting events via websites or mobile apps and receive e‑tickets instantly.

Comparison of e‑commerce examples

Opportunities for businesses and consumers

• 24 h sales – businesses can make sales round the clock.
• Access to global markets – small firms can reach customers abroad.
• Lower overheads – reduced need for physical premises and staff.
• Data‑driven marketing – online analytics help tailor offers.
• Convenient for consumers – shop anytime, anywhere, with instant confirmation.
• Speed of transaction – immediate payment and order processing.

Threats for businesses and consumers

• Cyber‑security risks – fraud, data breaches and the cost of protecting information.
• Intense online competition – price wars and the need for constant innovation.
• Reliance on technology – system failures or slow internet can halt sales.
• Logistics & returns – handling delivery delays, damaged goods and costly returns.
• Regulatory compliance – consumer‑rights, data‑protection (GDPR) and taxation rules.
• Limited sensory experience – customers cannot touch or try products before purchase.

Evaluation prompts (AO4)

When answering exam questions, consider questions such as:

• To what extent does the benefit of 24‑hour sales outweigh the risk of cyber‑crime for a small retailer?
• How far can global market access compensate for the higher competition faced on international platforms?
• Is the reduction in overheads more significant than the potential cost of logistics and returns?

Pros‑cons table (pairing each opportunity with its related threat)

Legal / regulatory issues

• Data protection – UK GDPR requires firms to obtain explicit consent before storing personal data and to provide a clear privacy notice.
• Consumer‑rights legislation – the Consumer Rights Act 2015 gives online shoppers a 14‑day right to cancel most purchases and a right to a refund for faulty goods.
• Electronic payment regulations – PSD2 (Payment Services Directive) mandates strong customer authentication for online transactions.

Online promotion tools (Internet & social media)

• Search Engine Optimisation (SEO) – improves website visibility on Google.
• Pay‑per‑click advertising (Google Ads, Bing Ads) – drives targeted traffic.
• Social‑media marketing – Facebook, Instagram, TikTok, X ads and organic posts.
• Influencer partnerships – influencers showcase products to their followers.
• Email newsletters & marketing automation – personalised offers and cart‑abandonment reminders.
• Affiliate programmes – third‑party websites earn commission for referring sales.

Example: A fashion retailer launches a flash sale on Instagram Stories, uses a swipe‑up link to its e‑commerce site, and follows up with an email reminder to users who added items to their cart but did not purchase.

E‑commerce and the marketing mix (4 Ps)

The exam frequently asks candidates to evaluate how e‑commerce changes each element of the 4‑P framework. The table below shows typical impacts and an illustrative example.

Advantages of e‑commerce (summary)

• Convenient for customers – shop anytime, anywhere.
• Lower operating costs for businesses – reduced need for physical premises.
• Wider market reach – ability to sell internationally.
• Speed of transaction – immediate payment and confirmation.
• Access to data – analytics help improve products and marketing.

Disadvantages of e‑commerce (summary)

• Security concerns – risk of fraud and data breaches.
• Dependence on technology – system failures can halt sales.
• Limited sensory experience – customers cannot touch or try products before purchase.
• Delivery issues – delays or damage during shipping.
• Higher competition – price pressure from many online rivals.

Quick revision questions

1. Give two examples of mobile commerce (M‑commerce).
2. What are three benefits of online ticketing for customers?
3. Explain one disadvantage of online shopping for businesses.
4. List two online promotion tools and describe how they help a business reach new customers.
5. Briefly describe how e‑commerce can affect each element of the marketing mix (4 Ps).
6. Using the pros‑cons table, discuss whether the opportunity of “global market access” outweighs its associated threat.