What is E-commerce?

What is E-commerce?

E-commerce (electronic commerce) refers to the system of buying and selling goods/services or commercial transactions through electronic networks or internet platforms. Examples include online retail websites like Amazon and eBay, or Shopee, Lazada, and TikTok Shop, which are popular in Thailand.

Currently, the E-commerce market is growing by 25%, with Shopee (Thailand) Co., Ltd. reporting a net profit of 2,400 million baht, a 147% increase from the previous year. This demonstrates that E-commerce transactions are one of the most powerful marketing tools today(Static in Thailand).

6 Types of E-commerce

In general, e-commerce or commercial transactions can be divided into 6 types based on the characteristics of business partners, namely: 1. Business-to-Business (B2B) 2. Business-to-Consumer (B2C) 3. Direct-to-Consumer (D2C) 4. Consumer-to-Consumer (C2C) 5. Consumer-to-Business (C2B) 6. Consumer-to-Government (C2G)

1. B2B (Business-to-Business) e-commerce refers to the electronic exchange of goods, services, or information between businesses rather than between businesses and consumers. Examples include websites that allow shops or businesses to search for products, services, or information, and support online transactions through electronic procurement systems, such as wholesale product websites from China.
2. B2C (Business-to-Consumer) e-commerce occurs when businesses sell products, services, or any information to consumers. Generally, there are intermediaries or brokers who manage shipping, transportation, and customer service (CRM). This is gaining popularity in Thailand as retailers bringing products to sell online is a novel concept. Currently, there are many online stores and department stores on the internet selling all types of consumer goods. In Thailand, Shopee dominates most of the B2C market.
3. D2C (Direct-to-Consumer) may be unfamiliar to many, but it’s when businesses that produce goods and services sell directly to consumers online without intermediaries or distributors involved. This differs from B2C e-commerce. For example, Tops supermarket sells and delivers products without relying on brokers or agents in their operations.
4. C2C (Consumer-to-Consumer) is a type of e-commerce where consumers exchange goods, services, and information with each other online. Generally, these commercial transactions are conducted through a third party which is merely a website interface or application (not an intermediary or distributor) open to the public, such as second-hand goods websites, freelance job boards, or Facebook Marketplace.
5. C2B (Consumer-to-Business) is another interesting type of e-commerce where consumers offer their products and services online for companies to bid on and purchase. Examples include online legal contract drafting systems, website selling platforms, software selling websites for shops, and photo marketplaces like Shutterstock. This is the opposite of traditional B2C e-commerce.
6. C2G (Consumer-to-Government) refers to commercial transactions conducted online between consumers and government agencies or state organizations. Although governments don’t typically buy goods or services from individuals, people often use e-commerce methods for various conveniences, such as paying social security fees, filing taxes, buying online lottery tickets from the government lottery office, and conducting financial transactions with the public sector.

How E-commerce Works

E-commerce is driven by the internet network through users’ personal electronic devices. When a purchase order is placed, the customer’s browser communicates with the server hosting the E-commerce website.

The order information is sent to a central computer called the order manager, which then communicates with inventory databases, payment processing applications, and shipping departments.

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แพลตฟอร์มที่ใช้โฮสต์ธุรกรรมเชิงพาณิชย์(อีคอมเมิร์ซ)ยอดนิยม เช่น Woocomerce และซอฟต์แวร์บริการ(SaaS) จะช่วยให้ลูกค้าเข้าถึงโครงสร้างพื้นฐานของร้านค้าปลีกออนไลน์ และเครื่องมือโอเพ่นซอร์สที่บริษัทต่างๆ ใช้จัดการโดยนักพัฒนาภายในองค์กรต่อไป

Advantages of E-commerce

Open 24 hours: Because online stores are always open, your customers can shop whenever they want, unlike traditional stores that have fixed opening and closing times.

Accessible anytime: Online shopping must be fast. E-commerce web pages load quickly, and it usually takes only a few clicks to make a purchase, saving you time compared to queuing for service at offline stores.

Wide variety of products: Online stores have many products because there are no space or warehouse limitations like traditional stores. Therefore, you certainly have more opportunities to close sales.

Easy product search: In e-commerce systems, your customers can easily find what they want using categories or search bars on the website, unlike in regular stores where you might have to walk around to find what you need to present to customers every day.

Accessible from anywhere: E-commerce websites are not limited by location. People can buy from anywhere in the world as long as that area has internet connectivity.

Reduced costs: Online e-commerce businesses save money by not having physical stores, which may mean offering promotions and being able to lower set prices to attract customers.

Easier marketing planning: E-commerce websites remember what customers have viewed and bought before. The online store system can therefore recommend products that your customers might like, making shopping more personalized and ultimately creating opportunities to close sales on multiple items simultaneously.

Disadvantages of E-commerce

Less customer intimacy: Sometimes providing help and answering questions online can be more difficult compared to when customers are choosing products in a physical store, as admin chat responses on e-commerce systems require human interaction and are only done during specific times.

Unable to touch or see products: Customers cannot touch or see the actual products before buying online, which may lead to disappointment if the product doesn’t meet the buyer’s expectations.

Shipping time: Unlike buying in a physical store where you receive the product immediately upon payment, online purchases always require waiting for delivery from shipping companies.

Potential for fraud: There’s a risk of fraud or personal data breaches when customers buy products online, as hackers can create fake websites or steal credit card information, which may put your personal information at risk. Therefore, emphasizing Cyber Security is something e-commerce should strictly prioritize.

E-commerce Growth in Thailand

The growth of E-commerce in Thailand has a bright future due to the increasing online population and greater use of technology in daily life. This is a good opportunity for businesses looking to expand their market through online E-commerce channels.

KKP Research by Kiatnakin Phatra Financial Group estimates that the E-commerce market in Thailand will expand by an average of 20% per year over the next 5 years, increasing from 300 billion baht to 750 billion baht in 2025, or 16% of the total retail market. Read more…

The growth of e-commerce in Thailand is influenced by several factors, including creating convenience for consumers in buying and selling goods and services, developing stable technological foundations and infrastructure, such as high-speed networks and more efficient delivery systems.

Moreover, in Thailand, there is also promotion and support for E-commerce businesses from both government and private organizations, such as providing various benefits and organizing promotions to encourage online shopping. This may help create incentives for entrepreneurs interested in entering the E-commerce market in Thailand.

How to Start Your Own E-commerce Business

Step 1: Find what you want to sell

First, look at the different types of e-commerce models to decide what kind of business you want, from the 6 main types: B2B, B2C, D2C, C2C, C2B, or C2G. Then search for products or services you want to sell that align with the chosen e-commerce model type.

Step 2: Create a business plan

Write goals and plans for your commercial business. This helps you organize and is useful in attracting investors to your business. Funding will make it easier for you to create an E-commerce business.

Step 3: Choose a name and create a brand

Choose an eye-catching name that relates to what you’re selling. Check that the web domain and social media for the E-commerce platform are available. Make sure the name and brand content reflect marketing goals with diverse cultures if you plan to use the E-commerce platform for global sales.

Step 4: Register your business

Make your business official by registering for electronic commerce with the Department of Business Development to ensure your E-commerce store is certified under Thai law and increase credibility for your customers.

Step 5: Create your online store

It’s time to create an E-commerce website where people can buy your products. You’ll need a domain name and a systematic e-commerce platform like Shopify, WooCommerce, or Magento. Each platform has different advantages and disadvantages, so choose a platform that suits your needs and software understanding.

Step 6: Prepare your products

If you produce your own goods, we recommend producing enough to start selling. Decide how much inventory you want by considering your production capacity and marketing plans. Or if you want to do B2C e-commerce, you should seek business partners or manufacturers to supply products to you with clear and fair product delivery agreements for sale.

Step 7: Launch and market your business

Congratulations, you’ve now entered the world of E-commerce. So the next step is to focus on increasing brand reputation and visibility. Track your sales and try various online marketing strategies (Digital Marketing) to stimulate and attract customers to your E-commerce platform brand. Always adjust your approach as your business grows, or contact us for free marketing consultation. We’re happy to help!