Understanding E-business

Return to chapter video

Click on the links below to learn more


What is E-business?

E-business (or electronic business) is the term used to describe using the internet to operate your business. E-business represents only a fraction of worldwide business, but is one of the fastest growing sectors and provides entrepreneurs with excellent opportunities to enter the market.

In a historical sense, the internet is a relatively new way in which to do business, with the growth of e-business taking off in the 1990's. The internet provides consumers with an increasing amount of ways to interact with businesses and has made buying and selling more competitive worldwide. The rate of globalisation has been significantly impacted by the internet, making it easier for people and organisations separated by distance to communicate and interact with each other.

E-business can be as simple as using the internet to send emails between staff or communicate with suppliers. A business can be considered an e-business even if it doesn't buy and sell products over the internet, as the term refers to business activities that are What is E-business? assisted by the internet. For example, a successful shop front business may decide to create a website to promote their business but not actually sell products directly through the internet. Almost all businesses are now an e-business to at least some extent, however, many have taken a step further and are involved with e-commerce.

E-commerce specifically refers to ordering, buying, selling and paying for products and services using the internet. E-commerce is a subset of e-business and can make up the entirety of the business or be used alongside existing, traditional business models. E-commerce uses the internet to market, sell and conduct transactions with customers without face to face contact between the buyer and seller. Many e-businesses now conduct all of their operations online and have no physical store that customers are able to visit.

As the internet continues to grow in popularity, technology improves and access becomes more widely available, more and more entrepreneurs are expected to capitalise on the potential of using the internet to operate their business.