If you are excited to start in e-commerce and believe it has a great future, you are right, as it has huge opportunities for long-term global growth. If you want to learn more about this industry, we have prepared in this article a comprehensive guide to all the answers you are looking for ..

Salla, the future of e-commerce, an easy platform to start your business

 Retail has witnessed a stunning transformation with the rise of digital transformation, as over the past few years it has become an essential part of retail worldwide, and economists reported that global e-commerce sales reached 3.914 trillion dollars during 2020, with the unprecedented shift toward digital shopping.

According to e-commerce statistics in Saudi Arabia, sales are expected to reach 9 billion dollars by 2025, and according to the ystat report, the Kingdom of Saudi Arabia is expected to outperform its peers in the Gulf Cooperation Council countries as the largest online retail market.

We at Salla have served more than 10 thousand stores. If you want to achieve your goals, we offer you a fully ready-made way to Create an online store so you can start working immediately.

What is e-commerce e-commerce

On August 11, 1994, a man sold a Sting CD to his friend through his website NetMarket, an American retail platform. That transaction was the first historical sale made online, which can be considered the first nucleus of e-commerce.

The term e-commerce refers to the buying and selling of goods or services using the internet, and the transfer of money and data to carry out these transactions, where consumers and businesses buy or sell products and services online.

 This term is often used to refer to the sale of physical products, but it can also describe any activity or any type of commercial transaction facilitated online, such as auctions, banking, payment gateways, and ticket booking.

What are the types of e-commerce?

There are seven main types of e-commerce into which online commercial transactions can be classified:

1- Business to Consumer B2C

B2C e-commerce includes transactions (buying and selling goods) that take place between online stores and consumers. B2C is one of the most common sales models and one of the fastest-growing sectors of the economy. For example, Zappos is an American online retail store for shoes and clothing, which is a business-to-consumer trade.

2- Business to Business B2B

Unlike B2C, B2B e-commerce includes sales that take place between businesses, such as a manufacturer and a wholesaler or a B2B retailer. No transactions occur with consumers; it happens only between businesses.

The difference between sales management and marketing in 3 steps

 Business-to-business sales often focus on raw materials or products that are repackaged before being sold to customers, and transactions can take the form of services used by the company. For example, a company sells software as a service for use in other companies.

3- Consumer to Business C2B

C2B reverses the traditional e-commerce model, when consumers make their products or services available to business buyers. For example, photographers sell their photos (iStockPhoto) for use in business from e-commerce websites or blogs... and others.

4- Consumer to Consumer B2B

C2C is one of the oldest forms of e-commerce, when a consumer sells products or services to another consumer, meaning that online commercial transactions take place between individuals. For example, a person sells their products on Amazon to another person.

5- Business to Administrations B2A  

This type of e-commerce includes all transactions between businesses and public administrations or government agencies online. For example, a company may provide governments with cloud-based platforms for communication, reporting, and budgeting.

6- Business to Governments G2B

This involves the government supplying companies with goods and services; government procurement, data centers, and e-learning are all examples of G2B.

7- Consumer to Administration C2A

This model is similar to B2A, but it involves individuals selling products or services to a public administration. C2A may include consulting for education and other transactions.

The importance and benefits of e-commerce

It is expected that by 2040, 95% of all purchases will be made online, which indicates the major importance of e-commerce in future commercial transactions. These are some of the most important advantages it offers to businesses and buyers alike:

• Transportation costs

Merchants can launch online stores with lower operating costs. When there is no need for a physical storefront or many employees, as your online store expands in the market, you will be able to scale operations easily without any need for huge real-estate investments or hiring a large workforce, which means higher profit margins overall.

The effects of lower operating costs for an online store are positively reflected in product pricing, and this is considered one of the biggest advantages of e-commerce. Prices online are usually lower than prices in traditional stores.

• Access to consumer data

Online store owners can access a mine of big data about customers, their interests, preferences, shopping behavior, and personal contact information, which can help online store owners improve the consumer journey and market more effectively and accurately. For example, a store owner can send an email to potential customers who abandoned their carts, motivate them, and remind them to review their purchases, or send new product offers to existing customers, along with discounts and periodic sales.

Why do potential customers abandon your cart? Find out 12 reasons for that

• Personalizing experiences

Customers tend to buy more from stores that personalize sales offers, and now it is possible to provide highly customized experiences according to customer preferences, with the help of automation and customer profiles, based on their database.

Displaying related products based on previous buying behavior, for example, can increase the average order value (AOV) and make the shopper feel as though you truly understand them as an individual.

• Global customer base

Thanks to e-commerce, your products can reach unlimited audiences across the country, or even around the world with fewer restrictions, because you will no longer be confined to your geographic area, and you will be able to reach new audiences that cannot be reached through traditional commerce.

• Always available

Your store will always be available 24 hours a day, 7 days a week. You will not have to close at 11 p.m. to go home, and customers will be able to access your products at any time of day, month, or year, and from anywhere, which means sales activity in your store will not stop مهما it is outside.

On the other hand, online commerce also provides unique advantages for consumers, including:

• It has allowed customers to buy what they want quickly from anywhere and at any time, faster without being tied to traditional store hours.

• It saves consumers time and effort. It is no longer necessary to go out and waste time moving from one store to another to buy goods, as e-commerce has allowed customers to access a larger number of products at a lower price and from home.

•  It allows consumers to make mostly correct decisions, as they have all the information related to the product and reviews and opinions from customers who tried it, and they can easily compare products and brands.

• It provides a variety of global products online; consumers can buy electronics from China, books from Britain, perfumes from Paris, and clothes from Rome... etc.

• Online shopping is safe and convenient for consumers of all segments, without having to wait in long lines or in harsh weather conditions.

Some disadvantages of e-commerce

• Poor cybersecurity

E-commerce sites, like other websites, are exposed to the risks of hacking and digital attacks, and this may happen due to negligence in securing the site. Therefore, it is necessary to consider taking important steps to secure the store from any data breaches.

• Site downtime

E-commerce depends entirely on an internet connection. One of the main drawbacks is the stoppage of operations due to site downtime. This can also happen if you do not have a good bandwidth connection, as you will face serious problems while loading pages and placing orders, which will push customers to leave the site immediately.

• Limited interaction with customers

E-commerce does not provide the opportunity for the owner of the online store to interact with the customer face to face to understand their needs and preferences and meet them. The lack of daily personal communication with the customer is one of the most important negatives (merchants use data collection, surveys, and other alternatives instead).

• Product testing issue

One of the main disadvantages of payment gateways in e-commerce is that the customer is unable to try and test the product before buying it. Often, the customer feels dissatisfied because they received a product that does not match what they saw in the pictures, which makes many consumers hesitant about buying online.

• Shipping delays

Shipping is an integral part of e-commerce, and if store owners do not have suitable infrastructure, this may cause serious problems and become a drawback in your online project.

Late delivery annoys online store customers and affects the relationship between the customer and the store. The customer feels angry if the order does not arrive on time, so it is necessary for store owners to make sure they find effective solutions to this problem before they lose their customers one after another.

• Not everything is sold online

Unfortunately, there are many products that cannot be sold online, such as ice cream at the very least, and some expensive luxury accessories such as gold and diamonds, as customers find it difficult to trust purchasing such products online.

Here are some examples of e-commerce

 Commerce takes several forms, all of which have different characteristics in transactions between online stores and consumers. These include:

• Retail

In this model, products are sold directly from the company to the consumer for personal use without the involvement of any third party.

• Wholesale

Instead of selling them individually, companies in this model sell their products wholesale to other companies in large quantities and at a discount within the supply chain, with the latter mostly selling them to individual consumers.

• Dropshipping Dropshipping

It is a model that carries out retail, where the store does not keep the products it sells in stock. Instead, when the store sells a product using the Dropshipping model, it buys the item from a third party and ships it directly to the customer.

• Crowdfunding

This model allows potential stores to present product and service ideas to an online community that may be interested in investing in them. Funds are collected from consumers in advance before the product becomes available in order to raise the capital needed to launch it in the market.

• Subscription

It is the automatic recurring purchase of a product or service on a regular basis, and the subscriber can choose to cancel the subscription. Digital newspapers and magazines such as "Harvard Business Review" use this e-commerce model.

• Physical products

This model offers only tangible products that are actually used in real life, and it requires stock replenishment and orders to ship them physically to customers when sales are made.

• Digital products

The digital goods model includes services that can be used or benefited from online, such as website templates, courses, and downloadable media that must be purchased for consumption or licensed for use.

• Services

This model allows the sale of a range of skills offered for certain fees. A service provider can be purchased for a fee, for example a news provider (journalism), or an entertainment provider (music, movies)... etc.

Latest e-commerce trends

E-commerce is constantly changing because of rapid technological development, changing consumer behavior, and merchants' desire to improve the user experience. Below we discover the latest online sales trends in 2023, according to experts:

• Augmented reality

In 2019, Gartner predicted that 100 million consumers would shop using augmented reality by 2020, so it will be interesting to see what the expectations are for the coming years.

The use of augmented reality allows products to be previewed in their own environment, at a time that suits them, before purchasing. Augmented reality can help customers make a buying decision and increase the likelihood of choosing the right product.

For example, furniture giant IKEA launched the IKEA Place augmented reality app to allow furniture shoppers to view furniture, as the app scans the space to get its dimensions and then shows how the furniture will fit with up to 98% accuracy.

• The voice search revolution

It is a technology that allows users to search the internet through their digital devices. This feature is gaining huge popularity. According to Think with Google, 72% of people who own voice-activated speakers say these devices are used as part of their daily routine.

The rise in voice search can change the rules of marketing in e-commerce. More consumers will use voice search in e-commerce to shop online, and the growth of voice search will create an opportunity for businesses to focus on keywords and content, with the most well-known brands taking the lead.

This will change the dimensions of customer relationship management and help marketers and store owners target customers based on impulse and susceptibility.

• Growth of smartphone shopping

In January 2021, there were 5.22 billion unique mobile users in the world, according to the latest data from GSMA Intelligence, and the total number of unique mobile users around the world grew by 93 million during the past twelve months. Unique mobile users are currently expected to grow at a rate of 1.8% annually.

In Saudi Arabia, the number of mobile internet users is expected to reach 36.17 million users in 2025.

The widespread use of mobile phones has affected e-commerce, as customers use their phones to search for products, and by the end of 2021, 73% of sales will take place on mobile devices.

• The boom in the big data market

According to the IDC report, the digital data world is estimated to grow by 61% to reach 175 zettabytes by 2025.

Online stores use many technologies to harvest and benefit from the big data available online, as more executives agree that big data holds the key to the amazing future of the e-commerce industry.

Big data helps improve user understanding by analyzing customer behavior, improving decision-making, gaining a competitive advantage, improving performance, products, and operational processes, building customized experiences, as well as predicting modern trends and forecasting demand.

• Influencers

Influencer marketing is expected to grow to 13.8 billion US dollars in 2021, as companies seek to build relationships with influencers.

Many brands face a content problem, as they are unable to create enough content at scale to support their marketing efforts. Therefore, they tend to leverage the influence of influencers to boost their marketing efforts, which are often effective. According to a Nielsen survey, 92% of consumers worldwide trust word of mouth and recommendations over other types of advertising.

What is the difference between e-commerce and traditional commerce?

Both online commerce and traditional commerce provide the service of selling goods and services to consumers, but each differs from the other in characteristics and advantages, and each model has its pros and cons. Below we summarize the most important differences between e-commerce and traditional commerce:

How to learn the basics of e-commerce

Entrepreneurs are strongly moving toward investing in the advantages of e-commerce, but they need to learn more about this industry before diving into investment. Below are the most important sources for learning: 

• Specialized e-commerce courses

The internet provides a huge wealth of paid and free training courses offered by specialists and global universities, where one can learn the basics of e-commerce, visual marketing, and business administration.

• Specialized blogs and books

The internet is full of a huge number of articles about online commerce and how you can start and learn this field from A to Z. Of course, merchants in the Arab world complain about the lack of Arabic content in this field, but many specialists are working to provide the necessary educational materials. Salla's blog offers dozens of rich articles to learn more about the topic.

• Discussions and webinars

Many experts host webinars to help beginner merchants enter this world, and you can also participate in expert discussions in this field through e-commerce applications and discussion management such as Clubhouse, to get expert advice about the industry and learn how to use e-commerce platforms better.

And now, how do you start an e-commerce business in 2023?

Entering the e-commerce business requires market knowledge and a strong business plan, careful research into products and business models, and monitoring competitors. To help newcomers in this space, we present the most important steps that will help you get started in this field (to learn more, read: Your online store from idea to your first 100$):

• Preparing a business plan: The most important step in any business at all is preparation and planning. The steps of preparing a business plan require focusing on a specific set of goals, including: what product you will sell, who your target audience is, what resources are needed for operation, and when you will start... and others.

   Evaluating what competitors do: To know where your website stands, it is necessary to analyze what your competitors are doing, what they sell, how they interact with their customers, what their strengths and weaknesses are, and how you can learn from their mistakes... etc.

•  Creating an online store: After setting the business plan and reviewing what competitors do, you can start building a platform, whether independent or by using specialized commerce platforms such as Salla platform, with less effort, money, and time.

• Search engine optimization: Digital merchants compete to rank at the top of search engines in order to get more customers brought in by those engines. You can optimize product pages as well as your store blog pages.

• Marketing and then marketing: Marketing ideas to increase sales in e-commerce are dynamic, and as the industry evolves and audiences change, it is necessary to adjust your marketing strategy, the budget allocated to this plan, and how to reach customers and promote your products.

• Evaluation and development: Knowing what your efforts achieve is essential. With every step in your plan, it is necessary to evaluate your performance, improve your strategies, and modify what needs to be modified.

We hope this article has helped you understand the importance of e-commerce in 2023. With advances in technologies, e-commerce will continue to grow and expand. If you want to join this trend to turn your goal into profits, we at Salla are happy to save you the trouble of building an online store from scratch.