Categories of Electronic Commerce

Some people find it useful to categorize electronic commerce by the types of entities participating
in the transactions or business processes. The five general electronic commerce
categories are business-to-consumer, business-to-business, business processes,
consumer-to-consumer, and business-to-government. The three categories that are most
commonly used are:
● Consumer shopping on the Web, often called business-to-consumer (or B2C)
● Transactions conducted between businesses on the Web, often called
business-to-business (or B2B)
● Transactions and business processes in which companies, governments, and
other organizations use Internet technologies to support selling and purchasing
activities
To understand these categories better, consider a company that manufactures stereo
speakers. The company might sell its finished product to consumers on the Web, which
would be B2C electronic commerce. It might also purchase the materials it uses to make
the speakers from other companies on the Web, which would be B2B electronic commerce.
Businesses often have entire departments devoted to negotiating purchase transactions
with their suppliers. These departments are usually named supply management or
procurement. Thus, B2B electronic commerce is sometimes called e-procurement.
In addition to buying materials and selling speakers, the company must also undertake
many other activities to convert the purchased materials into speakers. These activities
might include hiring and managing the people who make the speakers, renting or
buying the facilities in which the speakers are made and stored, shipping the speakers,
maintaining accounting records, purchasing insurance, developing advertising campaigns,
and designing new versions of the speakers. An increasing number of these transactions
and business processes can be done on theWeb. Manufacturing processes (such as
the fabrication of the speakers) can be controlled using Internet technologies within the
business. All of these communication, control, and transaction-related activities have
become an important part of electronic commerce. Some people include these activities in
the B2B category; others refer to them as underlying or supporting business processes.