E-Commerce & E-Business: What Are The Key Differences?

Saturday, January 1st, 2022

e-business

The internet has made our lives simpler, now all you need to have to do anything is have an internet connection and a device and you are set. You can do everything sitting right on your sofa without leaving the comfort of your home. However, this has also brought in some confusion as well specially in the terminology definitions of doing business online. People use both e-commerce and e-business interchangeably as they both involve business being conducted online.

As you can guess, the “e” in both the terms means electronic. Despite the common perception, these two are separate things with certain common characteristics.

What is E-Business? E-business is a broader and complex term encompassing all processes of business being conducted using the internet. It can also be defined as any business that is done with the help of the internet. Any of the business processes like inventory management, human resources etc. can be run online by the e-business.

E-business can be used for any type of business since it encompasses all the business cycle process from planning to marketing stage. With the help of technology and software’s, e-business can reduce the overhead expenses of a business.

What is E-Commerce? The narrower subset of e-business, e-commerce refers to any transaction on the internet where rights of ownership are transferred. Alternatively, in simpler terms, the process of buying, selling, ordering and paying for goods and services online.  Use of internet in a transaction involving money is e-commerce.

It can be online banking, online shopping or even ordering of cinema tickets online.

What Are The Main Differences Between The Two:

  • E-commerce is narrower in the scope and is a subset of e-business.
  • E-commerce is one of the components of e-business, but not the only one.
  • E-commerce is the process of buying and selling of goods/ideas etc., on the internet meaning it involves transfer of money. Whereas, e-business is not limited to money transactions only as all processes like supply management and marketing are a part.
  • Just a website is enough for e-commerce, whereas, e-business uses CRM and ERP for running the business.
  • E-commerce is more tilted towards B2C transactions, while B2B transactions are mainly the focal point of e-business.
  • Other than internet, which is the only requirement of e-commerce, an e-business also uses intranet and extranet.

Some Examples of E-Business:

In case the differences are still not clear, let us look into some examples of e-business to give you a better idea.

  • Online Retailer: Yes, an online retailer is an e-commerce business but it is also an e-business.
  • Digital Marketing: It can include email marketing since you are using internet to send the emails. On the other hand, it can also refer to a brick and motor store having a Facebook page to engage with the customers.
  • An induction program on a website for employees that includes all the presentations and tests, thus fully automating the onboarding process.

To sum it up, e-commerce is one of the parts of e-business covering only the commercial transactions whereas E-business can be any business process that is done with the help of the internet.

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Disclaimer: This information is intended for informational purposes. Some information may not be accurate or current and are of the author's opinion (not 10KHits). It's not meant as financial, investment advice, a recommendation regarding a course of action or legal advice.


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