Electronic commerce facts for kids

Electronic commerce, or e-commerce, is when people buy and sell products or services using the internet or other electronic tools. This way of trading has grown super fast because more and more people are using the internet.

E-commerce started because banks and businesses wanted to use computers better. They also needed to keep customers happy and share information quickly. One of the first big steps was when banks started using electronic funds transfer (EFT). Over time, this led to things like debit cards, credit cards, and direct deposits, which we use all the time now.

Types of E-commerce

There are several main types of e-commerce:

• Business to Consumer (B2C): This is when a business sells directly to you, the customer. Think about buying clothes or games from an online store.
• Business to Business (B2B): This is when one business sells products or services to another business. For example, a company that makes car parts selling them to a car factory.
• Consumer to Consumer (C2C): This is when individuals sell things to other individuals. Online auction sites or marketplaces where people sell used items are good examples.
• Business to Administration (B2A): This involves businesses selling to government agencies. This could be for things like getting licenses or public services.
• Intra-organizational E-commerce: This is about how a company uses electronic tools internally to manage its own operations.

Advantages of E-commerce

E-commerce offers many benefits for both businesses and customers:

• More Sales and Lower Costs: Businesses can make more money and spend less on things like rent for a physical store.
• Always Open: Online stores are open 24 hours a day, 7 days a week. You can shop anytime you want!
• Global Reach: Businesses can sell to customers all over the world, not just in their local area.
• Better Advertising: Companies can get more out of their ads if they manage them well online.
• New Connections: It helps businesses find new suppliers, partners, and customers easily.
• Easy Shopping: It's super flexible and easy for customers to shop from home.
• More Choices: Shoppers can find a much wider range of products online than in a local store.
• Personalized Shopping: You can often find products that are customized just for you.

Disadvantages of E-commerce

Even with all the good things, e-commerce has some downsides:

• Can't Touch or Feel: You can't physically touch or try on a product before you buy it online.
• Waiting for Delivery: You have to wait for your product to be shipped to you.
• Damaged Goods: Things that spoil easily, like fresh food, might get ruined during delivery.
• Safety Concerns: It can be hard to know if an online website is safe and trustworthy.
• Extra Taxes: If you buy something from another country, you might have to pay taxes when it arrives at customs.
• Fake Reviews: Sometimes, reviews can be made up to trick customers into buying a product.

How E-commerce Works

E-commerce uses many different technologies. Some important ones include:

• Electronic Data Interchange (EDI): This is a standard way for businesses to exchange important information, like orders or invoices, electronically.
• Electronic Mail (e-mail): Even simple emails and faxes can be part of e-commerce.
• Electronic Funds Transfer (EFT): This is how money moves electronically between bank accounts.

Today, M-Commerce (Mobile Commerce) means shopping on your phone or tablet. F-Commerce (Facebook Commerce) means selling and buying through social media platforms like Facebook. The number of online transactions has been growing a lot.

E-commerce Growth and Challenges

In many countries, like Bangladesh, the e-commerce industry has been growing steadily. More people getting internet access has helped this growth. For example, in Bangladesh, the number of internet users grew from 66.6 million in 2016 to over 96 million by 2019. This growth has led to many new online stores and businesses.

However, there are still challenges for e-commerce:

• Internet Access: Not everyone has fast, reliable internet, especially in rural areas.
• Delivery Problems: Getting products delivered to all parts of a country can be hard due to poor roads or transportation.
• Trust and Payment: Many people still prefer to pay with cash when their product arrives (cash-on-delivery). This is often because they don't fully trust online payment systems or don't have credit/debit cards.
• Quality Control: Sometimes, customers worry about getting low-quality or expired products. There needs to be better protection for shoppers.
• Competition: Local online businesses face competition from bigger international companies.

Despite these challenges, e-commerce has a lot of potential. Governments are often trying to support this sector as part of their plans to make their countries more digital. Making online payments safer and ensuring good customer service are key steps for the future of e-commerce.

Images for kids

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  Store closing flags outside a Toys R Us in Deptford, New Jersey. Even with investments, the chain struggled to compete with online shopping.

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  An example of an older type of automated online assistant on a shopping website.

See also

In Spanish: Comercio electrónico para niños