Home > Uncategorized > The 5 types of e-commerce businesses

The 5 types of e-commerce businesses

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So the other day I was thinking if it was possible to categorise the various types of e-commerce businesses that exist in the world. Why? Do you ask? Well just because I can. I think. Look forward to your feedback to ensure this is complete.

OFFLINE TO ONLINE: This is the most obvious type of business. You are selling stuff in the real world and you decide to do the same on-line. Walmart, Tesco, Marks & Spencers being the obvious one. These would usually be Retailers who are using the digital medium as an alternative, or option, to what they do in the real world. Doesn’t require much change to their business model, save the need to have strong inventory management and agile customer service. These are actually true for all e-commerce businesses but is specially important to these because it requires a change in mindset.

DISINTERMEDIATION: This is the evolution from the previous model. Here brands, companies decide they can deal with end customers directly and either save money for themselves or the end customers. Usually it is the former. Airlines were the first to do this. Other high value products can, and have opted to, do this. Many IT brands like Norton, Microsoft and IBM. Car Companies are also trying this model. The challenge here of course is the potential conflict with their off-line channels.

PEER TO PEER: In this model companies are connecting supply and demand between individuals/companies and others. Yes this is where I would place Uber, Air BnB, TaoBao, ebay. etc. I would probably also classify companies like Alibaba and facebook here. As also paytm. Companies here create the platform offering connectivity between two, or more, sides. They generate the traffic that buyers and sellers can exploit. The opportunity here is to identify that niche of demand that can be fulfilled on the supply side by tapping into individuals or companies that can fulfill them.

ORGANISING THE DISORGANISED: There are a large numbers of business categories that are in various states of disarray and we have recently seen businesses emerge that are making it easier to deal with this chaos. Brands like practo, housejoy, swiggy, 99acres come to mind immediately. Google’s stated mission was to organise the world’s information. With google maps they are organising the retail space to help customers find places to spend their money. Many a travel site I would put in this category as well because they too are organising bits of information like hikes, bike trails and the like for the benefit of end customers.

WEB RETAIL: This last category is, in many ways, the simplest because these players are doing on-line what they could do off-line but didn’t. Amazon, flipkart being the two obvious players.

In recent years we have seen the greatest growth in Peer to Peer and the Organizing business!

Any e-commerce company needs the following as enablers to their business.

  1. A strong ERP engine that connects inventory to billing in real time.
  2. Logistics and delivery to ensure that the product/service being sold is actually delivered to customer expectations.
  3. A customer service culture to quickly redress any potential issues coming up due to challenges in either of the above two.

 

I am really keen to know if this makes sense and if there are categories I have missed or maybe a different, yet simple, way to map the e-commerce world.

 

 

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