EC (electronic commerce, 電子商取引) is trading in which goods or services are bought and sold, ordered, and paid for over a network such as the internet.
Category
Seller / provider
Buyer / user
Example
BtoB
Business
Business
Online ordering between a wholesaler and retail shops
BtoC
Business
General consumers
Online grocery stores, video streaming services
CtoC
Consumer
Consumer
Person-to-person sales on a flea-market app
BtoE
Business
The company's own employees
A booking site for employee-only resort facilities
The category name comes from the pair of parties involved: a deal between companies is BtoB, and one from a company to ordinary consumers is BtoC. Trading can happen at any time and from anywhere, but because the parties never meet, the moment a contract is formed and the safe exchange of payment and goods become issues.
AnalogyThe buying and selling once done at a shopfront on a shopping street, replaced by on-screen orders and home delivery.
How to rememberE stands for Electronic and C for Commerce. In names like BtoC, B is Business and C is Consumer, written in the order "provider to receiver."
Exam points
ExamE-commerce (電子商取引) categories are named by the role of the provider and of the receiver (business, consumer, and so on), not by the kind of goods traded. A purchase one individual makes from another is CtoC even when a company runs the marketplace.
ExamThe E in BtoE stands for Employee: a company provides services and the like to its own staff over a network.
ExamUnless otherwise agreed, an online shopping contract is formed when the seller's notice of acceptance reaches the person who placed the order.
No-store retailing (無店舗販売) is an umbrella term for selling methods that get goods to customers without using a store sales floor; online shopping for consumers is one of them.
No-store retailing
Mail order
Online shopping for consumers
Catalog sales
TV shopping
Door-to-door sales
Vending machines
Mail order, door-to-door sales, and vending machines all belong to this group, and mail-order customers can order from a catalog, by phone, or online. With no sales floor to run, the costs of opening and maintaining a shop are easier to keep down.
AnalogyInstead of waiting for customers to come to the shop, the goods go out to the customers.
How to remember"No-store" means there is no sales floor for customers to walk into; the business may still have a warehouse or an office.
Exam points
ExamAn online shop that sells goods to ordinary consumers is a form of no-store retailing (無店舗販売), and among e-commerce (電子商取引) categories it falls under BtoC.
Mix-upNo-store retailing is defined by whether there is a sales floor, so it includes non-electronic selling. EC is defined by the means of trading, so it includes deals between companies.
The long tail (ロングテール) is the idea that niche products, each selling only a few units, can add up to a large share of total sales when a seller stocks a huge range of them and keeps selling.
Rank products by units sold
The few best sellers at the top = head
The many items that each sell a little = tail
The tail adds up to a large share
Because the tail holds so many items, together they make up a large share of total sales.
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The name comes from a chart of products ranked by sales, where a long line of low-selling items stretches out like a tail behind a few best sellers (the head). Physical stores have limited shelf space and tend to favor best sellers, but EC keeps storage and display costs low, so it can carry the items in the tail too.
AnalogyEach piggy bank holds only a little change, but line up hundreds of them and the total becomes a large sum.
How to rememberThe Pareto principle, where the top 20% of products bring in most of the sales, looks at the head; the long tail looks at the tail.
Exam points
ExamSelling based on the long tail (ロングテール) means adding even rarely sold products to the range, listing them on the web, and building up revenue from many small sales.
ExamOnline sellers spend little on storing and displaying stock, so they can secure a profit through the sheer number of items even when each one earns little.
Freemium (フリーミアム) is a business model that draws in users by offering the basic service free of charge and earns revenue by making advanced features or extra services paid.
Offer the basic features for free
Many users sign up
Some users move to a paid plan
Paid revenue runs the whole service
Revenue from paying users covers the running costs, including those of the free users.
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The name is a blend of Free and Premium (an upgraded version sold at a higher price). Revenue comes from users who pay for the extras, and with a large enough user base, even a small share of payers brings in enough to run the service.
Exam points
ExamUnder freemium (フリーミアム), a single service has a free basic part and a paid add-on part, and only users who need the extra features pay.
O2O (Online to Offline) is a tactic that uses online information and promotions, such as websites and smartphone apps, to lead consumers to buy at physical stores.
Get information or coupons via an app or the web
Visit the physical store
Buy in the store
The purchase takes place in the store.
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Examples include coupons handed out in an app and redeemed at the counter, or using location data to send details of a nearby store. The online side serves as the entry point that gives customers a reason to visit.
AnalogyA greeter who puts up a sign online, calls out to passers-by, and shows them into the shop.
How to rememberThe 2 in the middle sounds like "to" and stands in for the "to" in Online to Offline.
Exam points
Mix-upWith O2O, the purchase happens in an offline store. That sets it apart from EC, where the sale itself is completed online.
OMO (Online Merges with Offline) is an approach that stops treating online and offline separately and designs a single customer experience that merges the two.
For example, an app and the stores share membership data, purchase history, and inventory, so customers can carry on seamlessly whichever side they browse or buy on. The starting point is to center the whole experience as the customer sees it, rather than which channel made the sale.
AnalogyKnocking down the wall between the online shop and the physical store so people can move between them as in one big store.
How to remember"Merges" means to flow together. Once two rivers join, you can no longer tell which water came from which river.
Exam points
Mix-upO2O treats online and the store as separate places and sends customers from online to the store. OMO treats them as a single place and designs the customer experience as a whole.
O2O (Online to Offline) vs. OMO (Online Merges with Offline)
Aspect
O2O (Online to Offline)
OMO (Online Merges with Offline)
Key differenceHow online and stores relate
Separate places, with a bridge between them
One place, with no boundary
Customer movement
One way, from online to the store
Free movement back and forth
Main aim
More store visits and purchases
A seamless customer experience overall
Key points
EC categories are set by the combination of parties, such as business or consumer, not by the kind of goods traded.
In the long tail (ロングテール), the breadth of the product range matters more to total sales than how many units each item sells.
In freemium (フリーミアム), payments from a portion of the users attracted for free support the revenue of the whole service.