In this day and age, every small thing has gone digital. The world of digitization seems to have swallowed even the minute aspects of our lives, thus providing us with various benefits, the most important of which is perhaps convenience. Since everything has gone online, it can be difficult to distinguish the types of transactions taking place online.
E-business vs. E-commerce: What’s The Difference?
Almost all economic activity has been shifted to the online world, but there still exists a clear demarcation between them. E-business and E-commerce are two such concepts, which although different in their functionality, are used interchangeably among people.
This, however, is not right, since there is a clear distinction between the two, and here is a look at why.
E-business:
The thing about E-business is that it is much wider in scope when compared to e-commerce. It entails a large list of activities that take place over the internet, primarily, the auxiliary transactions which are undertaken in the running of a business. This means that any activity which involves things other than a mere buying and selling of goods can be considered an e-business when it happens digitally. So, if you engage in the purchase of raw materials, develop websites that are sold online, or are even a part of the supply chain that forms the framework for e-commerce, then they fall into the category of e-business. Engaging in e-business requires not only a website but also ERP, CRM, intranet, extranet, and the internet, among others.
E-commerce:
E-commerce forms a part of a subset, which is derived from e-business. When compared to its counterpart, the scope of e-commerce is fairly limited, since it stays confined to the buying and selling of goods or services that take place online or even the digital transactions that take place through an online medium. If you look at it from a business owner’s point of view, then the part when there takes place an exchange of goods in the direction of the target market, which is followed by a subsequent monetary exchange in return for it, can be considered as e-commerce. Any part that comes before it, such as the purchasing of a website, procuring raw materials, et cetera, will be a part of e-business. So, if you buy any goods online, in any form, then it will be considered as e-commerce. Engaging in this type of digital economic activity requires you to have a website, along with proper access to the internet.
Relation between the two
The basic relation that can be drawn between the two is that one is the subset of the other. E-business entails all the business activities which are conducted online, whereas e-commerce consists of just the part which involves an exchange of goods and money, online. E-business requires all the facilities that E-commerce does, but with the addition of a few more. E-business is usually apt for a business-to-business model since its functionality works in tandem with that type of economic activity. E-commerce, on the other hand, can be seemingly limited to the business-to-consumer mode of conducting transactions. While this does not mean that they cannot be used for other purposes, they are still typically associated with the two.
Conclusion
There is a clear, discernible line that separates the two concepts of e-business and e-commerce. They differ in terms of scope, functionality, requirements, et cetera. However, e-commerce is fairly restricted when compared to the two, and forms a small part of e-business. The binding factor for both of them is the fact that they are only conducted through an online medium. Both e-business and e-commerce are crucial to promoting economic activity, and in their respective fields, are extremely impertinent to maintain a natural order of things in the digital world.
