What is eCommerce?
In the digital age, the concept of a shopping mall has expanded beyond physical spaces to encompass online platforms where goods and services are bought and sold. These online marketplaces, commonly referred to as eCommerce websites, have become synonymous with modern shopping malls.
eCommerce, or electronic commerce, goes beyond the traditional idea of shopping malls. It includes various online activities such as real-time booking, secure transactions, wholesale supply, and auctions. Essentially, any website that enables users to browse and purchase products or services falls under the umbrella of eCommerce.
eCommerce has redefined the way we shop, transforming the traditional shopping mall into a virtual space accessible to anyone with an internet connection.
eCommerce Market History
The history of the eCommerce market began in the United States in 1979. It started with users connecting their TVs to phone lines to order specific products, although at that time, it was not possible to complete payments. However, the market value of the possibility to order products without visiting a store was unimaginable before, leading to numerous companies diving into the eCommerce market.
One of the first pioneers was the giant pizza chain Pizza Hut in the United States. They introduced PizzaNet, allowing customers to order pizza online and developed their own eCommerce system. Amazon, which still dominates the global eCommerce market, also started its business by launching an online book-selling website during this period.
Various products and services from different companies emerged, leading to a significant expansion of the eCommerce market. Around the same time, in Korea, companies like Interpark, Lotte Internet Department Store, and Auction began their services, pioneering the domestic eCommerce market in earnest.
eCommerce Market Share
The size of the global eCommerce market was measured at $6 trillion as of 2023. This represents a very high proportion, approaching 20% of the international retail trade and distribution market, indicating that eCommerce is widely recognized as a very familiar transaction format for customers. This recognition is set to continue growing and blossom into a $8.1 trillion industry by 2026.
Back to more present times, in 2023, Amazon accounted for 37.8% of eCommerce sales, followed by Walmart, Apple, eBay, and Target. In the United States, 16.4% of retail transactions were thought to have taken place online, while 79% of shoppers claim to shop online at least once a month. And these transactions are not solely domestic. 57% of online shoppers report shopping internationally.
eCommerce Store Types
There are a total of four types of eCommerce stores. They are categorized into four types based on various conditions such as target customers, entry difficulty, types of products, and store owners. The four types of eCommerce stores are proprietary stores, open markets, comprehensive malls, and specialized malls. Now let’s take a closer look at each of these four types of online eCommerce stores.
If you are considering selling products through an online eCommerce store, it is important to understand the characteristics of each store type and choose the one where your products are likely to sell well. With a well-planned strategy, you can potentially earn higher profits than even well-known offline stores. However, if you do not properly consider the type of eCommerce store and simply enter without careful consideration, there is a high likelihood that you may not generate any profit at all.
eCommerce Store Type 1: Self-Owned Stores
Self-owned stores, as the name suggests, are online stores operated directly by the company itself. Since these stores are owned and managed by corporations or businesses, they offer a high level of autonomy in operations. Sellers can upload desired products and start selling at any time, and they have the flexibility to change web design, including UI/UX, whenever necessary.
Both marketing and promotion planning and execution are handled directly by the company operating the self-owned store. Therefore, if the performance is poor, the company bears direct losses. Thus, operating a self-owned store requires not only website design and maintenance but also specialized personnel for product marketing and data analysis. With a successful operational strategy, companies can secure loyal customers and ensure stable profits. This is referred to as Direct-to-Consumer (D2C) distribution.
Representative types of self-owned stores include:
eCommerce Store Type 2: Open Markets
As the name suggests, open markets are highly open forms of online stores. Anyone who wants to sell products can join, and buyers can find products they want regardless of category. The role of open markets is to mediate between buyers and sellers, and they charge commission fees for sales.
There are advantages to starting sales without difficult procedures, and if you join a well-established open market, your products can be exposed to many customers. However, sellers need to continuously pay a portion of the sales amount as commission fees, and if they do not participate in promotions conducted by open markets, they may face competition in terms of similar products and prices.
Representative types of open markets include:
eCommerce Store Type 3: Multi-brand Stores
Multi-brand stores are eCommerce platforms similar to open markets. However, they differ significantly from open markets in one key aspect. Multi-brand stores are created by businesses that are already actively engaged in selling a variety of products and services, akin to department stores or home shopping channels, seeking to expand into eCommerce.
Managed by corporations, multi-brand stores have a high entry barrier. Moreover, the fees incurred during sales are also relatively high. The strategy involves meticulous product selection, aiming to offer items that cater to the primary customers of department stores and malls, particularly high-spending VIP customers. The success of multi-brand stores lies in providing online products of equivalent quality to those offered by department stores and home shopping channels.
Representative types of multi-brand stores include:
eCommerce Store Type 4: Specialty Stores
Specialty stores are eCommerce platforms that, as the name suggests, specialize in curated selections. These platforms focus exclusively on selling specific category products and services, which has led to the formation of a very loyal customer base. In addition to items available from third-party sellers, specialty stores often offer products directly produced and sold by the platform itself.
Due to their focus on specific categories of products and services, customers find it easier to trust their purchasing decisions. Furthermore, the mere act of accessing a specialty store often implies an intention to purchase within that specific category, making it advantageous for sellers to utilize specialty stores if their products and services fall within the predefined categories.
Representative types of specialty stores include:
How to Create an eCommerce Store
The process of creating an eCommerce store is the most sought-after information and often the most challenging step for many sellers venturing into operating their own online stores. This is because creating an eCommerce store itself involves web development and design skills. Nevertheless, many sellers undertake the challenge of creating their own stores because of the advantages of owning a self-operated store, such as not having to pay sales commissions and enjoying the freedom of operation.
When sellers no longer wish to lose commissions to sales channels, when they do not want to incur losses by participating in discount campaigns merely for platform growth, and when they want to analyze customer data more thoroughly to facilitate business growth, they opt to create their own eCommerce stores. The process of creating an eCommerce store typically follows the four steps outlined below:
eCommerce Production Process
- Building Domain and Hosting Server
This involves the purchase of servers and domains to establish the infrastructure of the shopping mall. - eCommerce Site Design
During this phase, the layout of the eCommerce site, including the design of site components, is developed. - Development of eCommerce Systems and Features
Development of systems and features necessary for eCommerce operation takes place in this stage. - Final Testing and Launch
After thorough testing to confirm the proper functioning of all completed eCommerce features, the official launch takes place.
Web design and web development expertise is essential. Additionally, various types of personnel, such as customer service and operations management, are needed even after eCommerce site production. Initial investment costs are high, and it takes a considerable amount of time to build the eCommerce website to a level where it can be effectively promoted to customers. If you lack the manpower to undertake production yourself, outsourcing to web development agencies specializing in website production, including eCommerce, is a viable option.
Zeta Production is a premium website production company that provides eCommerce production services, including web design and website server construction. With in-house web business experts providing web planning, partnering with Zeta Production enables quick and efficient production of your own eCommerce website.
WordPress eCommerce
WordPress eCommerce refers to building an eCommerce store using WordPress, which has been increasingly recognized as the most outstanding CMS in recent years.
Functionalities can be easily found and utilized within WordPress, much like downloading apps from an app store, and depending on the plugins and themes added, any form of eCommerce store can be built and expanded. The popularity of WordPress is also attributed to its high degree of freedom and continuous updates that provide customer-friendly features.
WordPress eCommerce Pros and Cons
Advantages of WordPress eCommerce
- Superiority in Google environment optimization
- High scalability through plugins and themes
- Ability to apply responsive web design
Disadvantages of WordPress eCommerce
- Barriers to entry
- Can slow your site down if you use too many plugins
- Requires specialized customization to add more functionality
Consider using WordPress when creating an eCommerce store, taking into account the various features and pros and cons explained so far. If it’s challenging to do it yourself, consider using the WordPress eCommerce production service provided by Zeta Production. We will create a WordPress eCommerce store that best fits your customer’s needs through trendy WordPress expertise and the know-how to achieve high exposure on Google.
Conclusion
The eCommerce store is the most crucial element of online business. Apply the features, types, creation methods, and WordPress-related information learned together directly to your work to promote the growth of your web business.
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FAQs
What is an eCommerce store?
An eCommerce store refers to a website where services or products are bought and sold online. The importance of eCommerce is increasing daily as it efficiently generates higher profits than offline stores. With customers increasingly accepting online purchases as part of their daily routine, it is predicted that more eCommerce stores will emerge.
What are the features of eCommerce stores?
The main feature of eCommerce stores is the ability to conduct transactions online. This is the primary feature that has elevated the market position of eCommerce stores to its current level. Additionally, this feature has facilitated easy connectivity between buyers and sellers online, leading to a wide variety of products and services available for sale.
How much does it cost to create an eCommerce store?
The cost of creating an eCommerce store varies depending on various factors such as the products to be sold, store design, and required functionalities. Pricing for eCommerce store creation at Zeta Production starts at $30,000. Corporate clients discuss the store creation cost before proceeding with the work. There are additional pricing options for WordPress eCommerce development, specifically.
What are the advantages of WordPress eCommerce stores?
The advantage of WordPress eCommerce stores is their scalability. Users can freely utilize plugins and themes to create the desired type of store. While there may be some learning curve to proficiently handle WordPress itself, it is considered an excellent platform for quickly implementing trendy technologies, including responsive web design.
