Commerce as a whole is an essential pillar of any nation and the world in general. What it means in simple terms is that it is the exchange of goods, services, products, etc on a large scale between businesses or nations and so on. This system of goods exchange has been around essentially from the birth of civilization, the early form of the barter system was reported in the Harappan civilizations and similar time periods.
Now after million years of evolution the simple barter system has evolved as well, we have the foreign exchange committees, stock markets, cryptocurrency, and so on. All these elements play a pivotal role in both traditional commerce and e-commerce.
Traditional Commerce vs E-commerce
The main difference between traditional commerce and e-commerce is that the former refers to the exchange or rather a commercial transaction of goods, data, and other services which are done mostly in person or a face to face dealing. The latter one is done entirely with the help of the internet, that is the same transaction of goods, etc is done via the internet.
Comparison Table Between Traditional and E-commerce
| Parameters of comparison | Traditional Commerce | E-commerce |
| Process of transaction | A Direct transaction is done between the buyer and the seller. | An indirect transaction between the buyer and the seller. |
| Accessibility | Only when the business is open, thus it is accessible only at certain times of the day. | The websites are up and running all around the clock, 24*7. |
| Maintenace | The seller needs to maintain a warehouse and also display goods and products they offer to attract customers. | Mostly they need to physically maintain a warehouse, the website once created is up and running without much fuss or attention. |
| Inspection | The goods can be physically examined for example while buying shoes, clothes, etc, the customer can get a perfect size. | Such facilities are not easily available. |
| Scope of business | Restricted to a certain geographical location. | Worldwide transactions can be done. |
| Business relation | Liner | End-to-end. |
What is Traditional Commerce?
As defined before, traditional commerce refers to the practice of selling items or services which is done in person and face to face dealings. This system has been around since the very dawn of civilization, the earliest form of traditional commerce was the barter system where people used to exchange goods as there was no currency like money, etc. This has then evolved and now we see shops, shopping malls, and so on where people sell goods to interested buyers.
These businesses are constricted to a general area geographically and they do not have a worldwide audience. The major advantage of traditional commerce is that the person can get to see the quality, fit, ingenuity, or whatever the case may be of the product or service they are purchasing. The buyer also feels a sense of brotherhood as they can directly support their local business and help the community grow. Though they are not accessible 24*7, there are traditional businesses in remote parts of the world where there is poor or no internet.
Also, there is no headache of getting scammed or anything as there are no hackers or fake sellers on this model. These business models are based on the supply side and linear model where they take in components create products and sell it to the user.
What is E-commerce?
E-commerce or electronic commerce is the new age commerce where the buyer and the seller need not interact on a physical or face to face basis but contact over the internet to buy and sell products respectively. It was in the year 1991 when the internet was opened up to commercial businesses and e-commerce has only bloomed since then. Today it is accessible and availed by most of the urban population in the developing countries and all of the developed country population.
There are 3 major business models in e-commerce which are B-2-B transaction that is business-to-business, B-2-C, Business-to-consumer, and Consumer to consumer or consumer to business. There is also the business to the administrator model where a business sells any item or service to public administration or government bodies and also vice versa, where the administrator sells to the business.
The e-commerce site has really boosted up even those who were not so sure to buy materials via the internet are turning to it. The advantages of this are high too, from the 24 hours availability, the ease of access given one has working internet, the worldwide delivery and beggar scope of business these help the buyer and the seller.
There is also a lower cost to maintain the business as the seller only needs to maintain the warehouse physically and the storefront is done by programs and AIs. However, there are some disadvantages of this which include theft or scams and even getting fake or damaged goods as the buyer cannot physically examine the good. The buyer needs to wait a few days before getting the item and returns can be a hassle too.
Main Differences Between Traditional Commerce and E-commerce
- Traditional commerce means the commercial transaction of material goods or services on a large scale without the use of any internet. E-commerce, on the other hand, is done via the internet for the transaction of goods, etc.
- The business relation in traditional commerce is linear while in e-commerce it is end-to-end.
- The scope of business is restricted to a certain geographical area in traditional commerce while in the case of e-commerce it can be done worldwide.
- The delivery of products is mostly instant in the case of traditional commerce while in the case of e-commerce it takes time to deliver products.
- In traditional commerce, the seller needs to maintain both the warehouse and the storefront so as to attract customer, while in the case of e-commerce they mostly need to maintain the warehouse and the website once is up, is generally easy to maintain given they have the technical knowledge.
- Traditional commerce is mostly focused on the supply side while
e-commerce is based on the demand side.
Conclusion
These are the major differences between e-commerce and traditional commerce, and what is important to remember is that there is no one without the other. So as to say, there is a need for both and one cannot be a substitute for another, and even if they are it might be costly or not sustainable in the long term for the environment either.
Reference:
- https://core.ac.uk/download/pdf/301356832.pdf
- https://www.indianjournals.com/ijor.aspx?target=ijor:ijemr&volume=8&issue=2&article=023