When you think about shopping nowadays, it’s not just the mall or department stores that you’re imagining but most likely some online stores that you love to buy stuff from. According to Forbes, 16.4% of retail purchases in the country in 2023 are expected to be done online, with Amazon taking the highest market share. Other popular e-commerce sites include:

  • Etsy
  • Walmart
  • eBay
  • Target
  • AliExpress 

Just like traditional trade, e-commerce also involves the buying and selling of goods and services. The difference lies in where that exchange takes place. For e-commerce, trade happens online or digitally, and buyer and seller don’t have to meet face to face to complete the transaction. 

And, e-commerce is only expected to grow. From 20.8% of estimated global retail purchases in 2023, that figure is expected to increase to 24% in 2026. With trillions on the line, it’s important to understand how e-commerce impacts businesses, their customers, and society as a whole.

So if you want to compete in the online marketplace, make sure to do your research and hire a team of experts in everything from UX and security to payment processing who are ready to help you create a site that represents your brand, streamlines your customers’ experience, and enables you to convert potential buyers into lifelong customers.

Developing an e-commerce website is no easy feat. It requires a rigorous strategic planning process, content organization, and design mapping. Many moving parts must work together seamlessly for your site to function fully. Customers expect a site to be fast, easy to navigate, and efficient in processing payments.

Impacts of e-commerce in business

In the past, traditional brick-and-mortar stores were limited to customers who live in the cities or towns where they are located or those people living nearby. Today, businesses have the ability to tap into significantly more people than ever before thanks to e-commerce. They now have access to a global marketplace. E-commerce has broken any geographical barriers that prevented brick-and-mortar stores in the past from selling beyond their localities. E-commerce provides businesses with a borderless marketplace where they can tap into national and international markets. 

In addition, e-commerce has also given rise to new business models which take advantage of the marketing and selling on the internet. 

  • Direct-to-Consumer e-commerce

In the past manufacturers had to go through middlemen, such as a distributor or retailer, to be able to sell their products. E-commerce has allowed manufacturers to remove these middlemen and sell directly to their customers. As a result, the company reduces cost and makes more money.

  • Online intermediaries

While e-commerce has allowed businesses to sell directly to their customers, it hasn’t totally eliminated any middlemen. Online intermediaries have sprung up to provide both businesses and consumers a platform where they can buy and sell products and services. To join the platform, however, you have to agree to give the online intermediary a cut of each transaction. 

  • Advertising-based models

The internet has also given rise to websites that operate solely to provide information to people. The information is free, but these websites place advertisements throughout the site and earn money from them.

  • Community-based sites

These are social networks or other networking platforms that allow people with the same location, interests, goals, or demographics to congregate online. Popular examples include Facebook, LinkedIn, Twitter, Instagram, and Pinterest. Similar to the advertising-based model, community-based sites also earn through placing targeted ads throughout its site.

  • Fee-based or subscription models

Other businesses have also used e-commerce to sell subscriptions to their customers. Consumers can subscribe to read an online publication’s content, such as the case of The Wall Street Journal, The New York Times, and National Geographic. This content could also be songs, videos, or shows that streaming sites, such as Netflix, Spotify, and Apple Music, sell. Or, businesses could also sell software services such as what Microsoft, Salesforce, and Adobe are doing.

In addition, e-commerce has also created a new category of products that are now available for customers to purchase. These products include software, ebooks, and other virtual or electronic-format items that can be emailed or downloaded through the internet. 

Marketing these products and services have also been affected by e-commerce. Consumers are most likely to search Google for information about products and services, so marketing also needed to evolve to meet consumers where they are. Thus, many businesses today mostly rely on digital marketing over traditional marketing. 

Impacts of e-commerce on customers

E-commerce changed the way consumers shop. From walking into physical stores, buyers today are most like shopping online. And while brick-and-mortar stores have operating hours shoppers need to take note of, online shopping is available 24/7 so they can shop anytime. What’s more, when you shop online, you only need your phone or other mobile device to access shops. So, you can shop anywhere – mostly likely at home or somewhere comfortable.

Furthermore, shoppers are not limited to just a few choices in terms of products and shops. With e-commerce, they have a wide range of choices. You can take your pick from a multitude of products and shops located anywhere on Earth. 

And, it’s easier to compare prices with a simple search on Google, so you save a lot of time. Or, you can shop around by visiting the sites of different shops or an intermediary that aggregates many suppliers in one marketplace.

Because many online shops have removed the middleman or thanks to increased worldwide competition, you can most likely find a store that sells the product or service you want for a lower price. For instance, when you buy directly from the manufacturer. 

Once you’ve made your choice, paying for your purchase is also a breeze. Thanks to payment methods that don’t require you to get up from your couch or bed, you can just pay via your credit card, PayPal, or other digital wallet.

While you still might wait a few days for your order to arrive, some products you can buy online are delivered immediately. Such is the case of ebooks, music, or other digital downloads or virtual products. After paying, you can expect to receive what you bought instantaneously. 

Impacts of e-commerce on society

First of all, e-commerce connects people from all over the world and different walks of life. People from Asia can access information, products, and services from North America through the internet and vice versa. Even certain public services can be done online, such as online consultations. 

What are the impacts of e-commerce?

With the buying process all done online, consumers enjoy a more convenient, efficient, and versatile shopping experience. On the business side, by reaching customers outside their geographic borders, companies can reap higher profits and earnings. Competition from the global marketplace also fosters innovation. All of these lead to a boost in the global and local economies.