E-Business Models
1. E-Commerce vs E-Business
- E-commerce — buying and selling of goods/services and funds transfer over electronic networks (primarily the Internet). Narrow, transaction-focused.
- E-business — the whole electronic envelope of doing business: e-commerce plus e-procurement, supply-chain management, ERP, CRM, HR, intra-firm collaboration, knowledge management.
2. The Major B2x Models
| Model | Parties | Example | Typical revenue |
|---|---|---|---|
| B2B — Business to Business | firm ↔ firm; the largest volume (supply chains, procurement portals) | Alibaba.com, IndiaMART, supplier EDI | subscriptions, transaction fees |
| B2C — Business to Consumer | retailer ↔ end customer | Amazon, Flipkart, Netflix | retail margin, subscription |
| C2C — Consumer to Consumer | consumer ↔ consumer via a platform | OLX, eBay, Airbnb (hosts) | listing/commission fees |
| C2B — Consumer to Business | individual supplies to business | freelance portals (Upwork), stock photos | payout to contributor |
| B2G — Business to Government | firm ↔ government (e-procurement, tenders) | GeM (India) | contract sales |
| P2P | peer-to-peer sharing | BitTorrent, UPI-style payment apps | fee/ads |
3. Revenue Models (how e-tailers earn)
- Sales — direct sale of goods (retail margin).
- Subscription — access fee (Netflix, Office 365, OTT/news).
- Transaction fee / commission — cut of each deal (brokerages, marketplaces, ticketing).
- Advertising — paid display/sponsored listings (Google, Facebook).
- Affiliate marketing — referral commission.
- Freemium — free base service, paid premium tier.
- Data/licensing — selling aggregated data, white-label platform.
4. Market Structure: Pure vs Partial vs Brick-and-Click
| Type | Meaning | Example |
|---|---|---|
| Pure play (virtual) | exists only online | Netflix, Zerodha |
| Bricks-and-clicks (click-and-mortar) | physical stores + web channel | Reliance Retail/JioMart, Target |
| Aggregator/marketplace | platform hosting many sellers | Amazon marketplace, Uber |
5. Framework — Eight Components of E-Commerce (Laudon & Traver)
- Business — vision, value proposition, revenue model
- Technology — platforms, protocols, mobile
- Organisations — structure, culture, partners
- Society — users, governments, regulation
- People
- Process
- Marketing & advertising
- Policy — privacy, taxation, IP
Value proposition levers: lower search & transaction costs, wider selection, price transparency, personalisation, 24×7 availability, global reach.
6. Classic Strategy Case Studies (case-study material)
- Amazon — long-tail selection, aggressive logistics build-out, AWS as a by-product of internal infrastructure.
- eBay — pure C2C auction → reputation system solved trust without brick-and-mortar.
- Alibaba — B2B platform first, then B2C (Tmall) and payments (Alipay) — platform network effects.
- Dell — direct-to-customer build-to-order model, disintermediating resellers.
- Netflix — subscription streaming; disintermediated video rental.
Disintermediation — removing middle layers (manufacturer sells direct);
Re-intermediation — new digital intermediaries appear (comparison sites, aggregators).
7. Business Enablers and Constraints
Enablers: Internet penetration, mobile & UPI payments, logistics networks, cloud hosting, digital advertising.
Constraints: trust & security perception, digital divide, logistics for returns, tax/regulatory issues (GST, data protection laws), fraud.
8. Exam Points
- Explain the various e-business/e-commerce models (B2B, B2C, C2C, C2B, B2G) with examples — 10 marks (very frequent).
- Differentiate e-commerce and e-business — 5 marks.
- Explain revenue models of e-commerce firms — 5-7 marks.
- Short note on disintermediation and re-intermediation — 3-5 marks.
- Discuss any two e-commerce case studies (Amazon/eBay) — 7 marks.