Unit 2.1

Unit 2: E-commerce Business Models

IT 204: E-Commerce

Chapter Objectives

By the end of this session, you will be able to:

✅ Identify and describe the 8 key elements of a business model.
✅ Identify and describe the major B2C business models.
✅ Identify and describe the major B2B business models.
✅ Understand how these models are applied by e-commerce businesses in Nepal.

What is a Business Model?

Definition: A set of planned activities designed to result in a profit in a marketplace.

Think of it as the story of how your business works and makes money.

A successful model answers the fundamental questions of who your customer is, what you offer, and how you do it profitably.

The 8 Key Elements of a Business Model 📊

1. Value Proposition

Why should the customer buy from you?

2. Revenue Model

How will you earn money? (Sales, ads, subscription)

3. Market Opportunity

Who are you selling to and how big is the market?

4. Competitive Environment

Who are your rivals?

The 8 Key Elements (Continued) 📊

5. Competitive Advantage ⚡

What makes you better? (Superior product, lower price)

6. Market Strategy

How will you attract customers?

7. Organizational Development

How is your company structured for success?

8. Management Team

Who is leading the charge?

Major B2C Business Models 🛒

Models where businesses sell directly to individual customers.

E-tailer

Online retail stores.

Ex: Amazon, Daraz

Content Provider

Distributes digital content.

Ex: Netflix, Onlinekhabar

Market Creator

Builds a digital marketplace.

Ex: eBay, Hamrobazar

More B2C Business Models 🛒

Community Provider

Connects people with similar interests.
Ex: Facebook

Portal

Web search + integrated services.
Ex: Google, Yahoo

Transaction Broker

Processes online transactions for consumers.
Ex: Expedia

Service Provider

Provides online-to-offline services.
Ex: Foodmandu, Pathao

🔍 B2C in Practice: Foodmandu

Discussion Question

What is the business model of Foodmandu? Which category does it fall into, and what are its key elements?

Category: B2C Service Provider
Value Proposition: Convenient food delivery from a wide variety of local restaurants.
Revenue Model: Transaction fees (commission from restaurants) and delivery fees from customers.

Shifting Gears: B2B Business Models 🏭

Models focused on businesses selling products or services to other businesses.

Key Difference: B2B often involves larger transaction volumes, longer sales cycles, and a focus on building long-term relationships.

Major B2B Business Models

E-distributor

Supplies products and services directly to other businesses (e.g., office supplies).

Ex: Grainger

Exchange

A digital marketplace where many suppliers meet a smaller number of large commercial buyers.

E-procurement

Creates and sells access to digital markets, connecting businesses.

Nepal Ex: Aayo (connects manufacturers to retailers)

Industry Consortium

Industry-owned vertical markets that serve the specific needs of that industry.

E-commerce in Nepal: B2C vs. B2B 🇳🇵

B2C Landscape

Highly visible and mature.

E-tailers: Daraz, Sastodeal
Market Creators: Hamrobazar
Service Providers: Foodmandu, Pathao, Tootle

B2B Landscape

Developing but growing rapidly.

Focus on digitizing traditional supply chains.
E-procurement Example: Aayo
Huge opportunity for growth in this sector.

🎯 Chapter Summary & Key Takeaways

A business model is a blueprint for profitability, built on 8 key elements from value proposition to management team.
Major B2C models (E-tailer, Service Provider) are highly visible in Nepal with players like Daraz and Pathao.
Major B2B models (E-distributor, E-procurement) focus on streamlining business supply chains, with platforms like Aayo emerging locally.
Understanding these models is crucial for identifying market opportunities and building a competitive advantage.

Thank You

Any Questions?

Next Topic: Unit 2.2 - E-commerce Revenue Models in Depth

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