What is B2C e-commerce?

Business-to-consumer (B2C) e-commerce or commerce between companies and consumers, includes customers gathering information, information goods (or goods of electronic material or digitized content, such as software, or e-books); or purchasing physical goods (i.e. tangibles such as books or consumer products) and, for information goods, getting products over an electronic network.

It is the second major and the initial form of e-commerce. Its origins can be traced to online retailing (or e-tailing). Thus, the more familiar B2C business models are the online retailing companies such as Drugstore.com, Amazon.com, Beyond.com, Noble and Barnes and Toysrus. Other B2C examples relating information goods are E-Trade and Travelocity.

The more familiar applications of this type of e-commerce are in the areas of purchasing information and products, and personal finance management, which pertains to the administration of personal investments and finances with the make use of online banking equipments (e.g., Quicken).

E-Marketer estimates that worldwide B2C e-commerce revenues will rise from US$59.7 billion in 2000 to US$428.1 billion by 2004. Online retailing transactions make up a most important share of this market. E-Marketer also estimates that in the Asia-Pacific area, B2C revenues, while registering a modest figure compared to B2B, nonetheless went up to $8.2 billion by the end of 2001, with that figure doubling at the end of 2002-at total worldwide B2C sales below 10%.

B2C e-commerce reduces transactions costs (particularly search costs) by increasing consumer access to information and allowing consumers to locate the most competitive price for a service or product. B2C e-commerce also reduces market entry barriers since the cost of maintaining and putting up a Web site is greatly cheaper than installing a "brick-and- mortar" structure for a firm. In the case of information goods, B2C e-commerce is even smarter because it saves firms from factoring in the additional cost of a physical distribution network. Moreover for countries with a robust and growing Internet population, delivering information goods becomes increasingly feasible.