Ecommerce (Cambridge International IGCSE Business)
The nature of ecommerce
Spec point — examples of ecommerce, e.g. mobile phone/internet banking, online shopping, online ticketing
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E-commerce is the trade of goods and services over the internet
- The rise of e-commerce means customers increasingly pay online using payment systems such as Apple Pay and PayPal
Examples of ecommerce
Online banking, shopping and ticketing are examples of ecommerce
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Businesses can sell goods through their own websites or via selling platforms such as Amazon, Ebay and Etsy
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Financial institutions, such as banks, can provide their service via mobile apps
- Customers can manage their bank accounts, transfer money, manage lending and pay bills online
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E-ticketing facilities provide paper-free access to events and transport
Evaluation of ecommerce
Spec point — "advantages and disadvantages of ecommerce for businesses advantages and disadvantages of ecommerce for customers"
Evaluating the use of ecommerce
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E-commerce can make life more convenient for customers and is a source of competitive advantage for businesses
- It also provides the potential for small businesses to reach large audiences
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However, setting up an webstore or app can be costly
- Some consumers may also be concerned about security risks of purchasing online
Advantages and disadvantages of ecommerce for businesses and consumers
| Advantages | Disadvantages | |
|---|---|---|
| Businesses | - Websites provide a cheap and direct way to promote products - Businesses can easily order supplies and materials online - A clear and user-friendly website can increase customer purchases - For example, automation can suggest related items - Dynamic pricing allows higher profits during busy periods | - Businesses face global competition, making it easy for customers to switch brands - Large warehouses and efficient stock systems are needed to meet demand - E-commerce does not work well for personal services like beauty treatments or home repairs - The lack of face-to-face contact limits fast and useful customer feedback |
| Consumers | - Online competition helps lower prices and allows easy comparison - Paying by credit card or debit card is quick and simple - For example, services like Apple Pay allow one-click purchases - Shopping online is convenient from any place, at any time and on any device - Customers have a wider choice from global retailers such as Shein and Temu | - Poor internet or technical problems can stop customers from buying online - Customers in low-income areas may struggle to access products due to poor infrastructure - Many people worry about credit card fraud or identity theft - Products cannot be tested before buying, so returns are more common |
Exam Hint Avoid assuming ecommerce suits every business – in exams, stronger answers recognise its limits, such as products that customers prefer to see or try before buying
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