What is the Difference Between ECommerce and EBusiness? An Explanation

by OverHeadWatch Team | Jan 19, 2018 | Blog | 0 comments

Some people use these two terms, ecommerce and ebusiness, interchangeably. Indeed, they are both referring to business processes that are conducted electronically. However, there are a couple of things that differ between the two, and if you want to use them correctly, you should keep reading. Today we are going to find out what is the difference between ecommerce and ebusiness and offer some explanations on this topic.

What Is Ecommerce?

Ecommerce is the term used for any transaction that is made over a computer-mediated network. Moreover, it needs to involve the transfer of ownership or rights with the purpose of using goods or services. The transactions don’t necessarily need to include a price. Moreover, this also refers to sales and items such as free downloads. The network through which you can do e-commerce can be anything from internet, intranet, extranet or WWW (world wide web) to email or fax.

Types of Ecommerce

One of the common classification reasons for the ecommerce is the nature of the transactions or the relationships that are in place among the participants. Here you have a brief list of the types of ecommerce:

B2B (Business-to-business) – the largest form of e-commerce, where business focus on selling to other businesses.
B2C (Business-to-customer) – the earliest form of ecommerce, it refers to retail sales that take place between businesses and individual customers.
C2C (Consumer-to-consumer) – consumers sell products, as well as personal services, to each other through an online market maker (e.g.: eBay, Craigslist).
B2G (Business-to-government) – a growing segment of e-commerce, it refers to the transactions with the government (filing taxes, business registrations, licensing procedures, etc.).
C2B (Consumer-to-business) – takes place between private individuals who sell products on the Internet and organizations or individuals who bid on the products or services for sale.
M-Commerce (Mobile commerce) – purchasing goods and services with the help of wireless technology, through cell phones and handheld devices.
P2P (Peer-to-peer) – Internet users share files and computer resources directly without going through a central web server.

What Is EBusiness?

This is a concept that is broader than e-commerce. It refers to e-commerce businesses that rely on transactions, as well as those who run in a traditional manner but also cater to online activities. Such an e-business can run part of the internal processes it has online, such as HR, inventory management, finance, risk management, etc. If a business wants to become an e-business, it needs to start selling products online and handle some or all the company activities or extra sales online.

E-Business Types and Strategy

According to the Ohio State University, e-business would work for any type of business, since it refers to the entire business cycle, starting from production, distribution, procurement, sales, fulfillment, payment to restocking and marketing. When it comes to strategy, things can get a little complicated, since this relies on 4 planning directions:

Vertically – website front/back-end systems;
Laterally – customers, business partners, suppliers;
Horizontally – e-commerce and customer relationships, resource planning and supply-chain management;
Downward – integrate new technologies, business processes.

What Is the Difference between Ecommerce and EBusiness?

Now that we have a better understanding of each of the two terms, it’s time to find out what is the difference between ecommerce and ebusiness. We will have a quick rundown of the most important aspects of them, and then see the main difference(s) between the two concepts.

Technology

One of the major similarities between ecommerce and ebusiness is the fact that they both rely on the Internet to achieve their goals. The business owners set up both systems through their desktop or mobile devices, and use basic notions of security and data management (legacy systems, system management, servers, etc.).

Internal Management

Ecommerce is mostly concerned with the outside functions, as well as the appearance of the business. Meanwhile, the ebusiness looks after the inner processes of the organization itself. It is used to apply online solutions to HR, payroll, internal data management, as well as other systems that are not visible to the customer.

Appearance

When it comes to appearance, ecommerce cares more about this than the ebusiness. Ecommerce is mainly concerned with transactions, whether with customers or online suppliers/distributors. You can tell a lot about a company from their ebusiness applications, for example the values they promote for marketing their business. As such, in ecommerce you will see more often a concern for user interface and advertising, as opposed to the ebusiness.

Business Models

Usually, ecommerce requires a new or an extra business model to conduct online sales and services. The new model relies on different system managements, security, methods of advertising, marketing. Moreover, it includes the costs incurred by the online website. Meanwhile, ebusiness (though it can also use the ecommerce strategies), has the tendency to affect the already-established business model more. As such, it basically reinvents the older processes, instead of coming up with new ones.

The Main Difference

So what is the difference between ecommerce and ebusiness? Perhaps the most important one is the fact that ecommerce is a subset of ebusiness. Moreover, it’s concerned with the transactions done online, while ebusiness focuses on the business processes. You can also say that ecommerce relies on buying and selling. Meanwhile ebusiness also concentrates on the exchange of information related to buying and selling.

With ecommerce, you only need to use a website. However, with ebusiness a business owner also needs to use CRMs and ERPs that connect the various processes in a company. Once again, ecommerce covers the outward facing processes, while the ebusiness is concerned with the internal ones. Another thing you should know is the fact that ecommerce is a narrower concept, while ebusiness is a broader one.

Check out this clip explaining the difference in detail:

https://youtube.com/watch?v=KFLl_WO_4IY%3Ffeature%3Doembed

Conclusion

Though many people mistake ecommerce for ebusiness and viceversa, there are some significant differences between them. If before reading this article you didn’t know what is the difference between ecommerce and ebusiness, now you know. One of them, ecommerce, is narrower and it is a subset of ebusiness, for example. There are also other differences to which you should pay attention if you don’t want to get the terms confused.