GCSEBusinessAQARevision NotesMarketingThe Elements of the Marketing MixPlace: E-Commerce & M-Commerce

Place: E-Commerce & M-Commerce (AQA GCSE Business): Revision Note

Exam code: 8132

Lisa Eades

Written by: Lisa Eades

Reviewed by: Steve Vorster

Updated on

E-commerce

  • E-commerce is the trade of goods and services over the internet

    • Businesses can trade through their own websites

    • Alternatively, platforms such as Amazon, Ebay and Etsy offer the chance for small businesses to sell their products online

  • The rise of e-commerce means customers increasingly pay online using credit/debit cards 

    • Consequently, contactless payment systems (such as Apple Pay and Paypal) are growing in popularity

  • E-commerce can make life more convenient for customers and is a source of competitive advantage

    • It also provides the potential for small businesses to reach large audiences

  • However, setting up an e-store can be costly and some consumers may be concerned about security risks of purchasing online

Evaluation of e-tailing for businesses and consumers

 

Advantages

Disadvantages

Businesses

  • Websites offer a direct and cheap promotional method 

  • Businesses can easily make online purchases of supplies and materials from other businesses

  • An easy-to-use and well-thought-out website can encourage customers to buy more

    • E.g. Automation suggests complimentary products often purchased at the same time

  • Dynamic pricing techniques can easily be implemented so profit can be maximised during periods of high demand

  • Competition comes from many businesses around the world, allowing customers to easily switch brands

  • Large warehouses and efficient stock control systems are needed to fulfil online orders 

  • E-commerce is not suitable for businesses selling personal services such as beauty services or home improvements

  • The lack of face-to-face contact with consumers means businesses miss out on instant and useful market research feedback

Consumers

  • Competition drives prices down and allows customers to easily 'shop around' and compare prices

  • Electronic payment using credit and debit cards is relatively easy

    • E.g. Using 'one-click' platforms such as Apple Pay 

  • E-commerce is convenient as it allows customers to shop from anywhere in the world 

    • E.g. when travelling, 24 hours, on many different devices

  • Customers can buy from worldwide retailers so have increased choice

    • E.g. Chinese e-commerce businesses Shein and Temu are increasingly popular in the UK

  • Poor connections or technical difficulties can sometimes deter or stop customers from using the website to make purchases

  • Customers in low-income countries may not be able to access the products due to poor infrastructure, limiting potential market size

  • Many consumers are concerned about identity theft or fraudulent use of credit cards if they buy goods online

  • Products cannot be handled or tried out before purchase, which means customers frequently return them because they are unsuitable

M-commerce

  • M-commerce refers to transactions conducted on a mobile phone

  • Most businesses have developed optimised applications that allow customers to browse and purchase their products on mobile phones

    • E.g. Next's mobile app is a simplified version of its popular website that allows customers with an account to view products, check availability, place and check the progress of orders

  • Text messaging and instant messaging, often via the app itself, can be used to communicate special offers, links to websites and product surveys to customers

    • E.g. Logistics company Evri sends customers text messages containing delivery updates and links to review recent delivery experiences

Examiner Tips and Tricks

A common misconception is that setting up online selling operations involves a business selling via its own website.

Small businesses - and even many larger firms - do not have to go to the expense of setting up and operating their own e-commerce or m-commerce platforms. They can sell products via third party sites such as Etsy or Amazon, allowing them to access large markets.

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    Author
    Reviewer
    Lisa Eades

    Author: Lisa Eades

    Expertise: Business Content Creator

    Lisa has taught A Level, GCSE, BTEC and IBDP Business for over 20 years and is a senior Examiner for Edexcel. Lisa has been a successful Head of Department in Kent and has offered private Business tuition to students across the UK. Lisa loves to create imaginative and accessible resources which engage learners and build their passion for the subject.

    Steve Vorster

    Reviewer: Steve Vorster

    Expertise: Economics & Business Subject Lead

    Steve has taught A Level, GCSE, IGCSE Business and Economics - as well as IBDP Economics and Business Management. He is an IBDP Examiner and IGCSE textbook author. His students regularly achieve 90-100% in their final exams. Steve has been the Assistant Head of Sixth Form for a school in Devon, and Head of Economics at the world's largest International school in Singapore. He loves to create resources which speed up student learning and are easily accessible by all.