IT 204: E-Commerce
By the end of this chapter, you will be able to:
Business-to-Consumer (B2C) e-commerce refers to online transactions between businesses and individual consumers. It's the digital version of traditional retail shopping.
Click True or False for each statement.
B2C e-commerce typically involves high volume, low value individual transactions.
B2C means a business sells primarily to other businesses, not individual end-consumers.
User Experience (UX) and convenience are key focuses in B2C e-commerce design.
B2C marketing must be intensive and broad since it targets a large general audience.
We will explore the definition, revenue model, and examples for each.
Definition: Online retail stores that sell physical goods directly to consumers via the internet.
Click each card to reveal how each E-tailer type works.
Click to reveal
Sells exclusively online — no physical storefront.
Revenue: Markup on products sold.
Nepal: Daraz | Global: Amazon
Click to reveal
Physical store + online presence — omnichannel strategy.
Revenue: Sales via both channels.
Nepal: Bhatbhateni, Big Mart
Click to reveal
Manufacturer sells directly to consumers, cutting out intermediaries.
Revenue: Full retail margin (no middleman).
Global: Dell, Apple
0 / 3 revealed
A hypothetical UK retailer owns a kettle and sells it online.
E-tailer: earns product sales revenue.
An independent merchant lists a kettle on the same website.
Market creator: facilitates the sale and earns a fee.
A customer orders online and collects the retailer's kettle in its shop.
Bricks-and-clicks: online and physical channels work together.
Ask who owns the goods, who sets the offer and what the platform earns. Classify the activity, not just the logo.
Creates online environments for people with similar interests to connect and share.
Revenue: Ads, premium memberships, transaction fees.
Nepal Example: Hamrobazar, Facebook Groups
Distributes digital content like news, music, and videos online.
Revenue: Subscriptions, ads, pay-per-view.
Nepal Example: Onlinekhabar, Kantipur Online
A hypothetical Brazilian audio-learning service starts a month with 1,000 subscribers. During the month, 50 leave and 80 join. Each subscriber pays R$20 per month.
Find end-of-month subscribers, starting-cohort churn and next month's monthly revenue if that ending base all pays.
Illustrative figures. Acquisition matters, but retaining paying customers is part of the model.
A "gateway" to the web, offering a broad array of services like search, news, and email.
Revenue: Primarily advertising and referral fees.
Nepal Example: Google, Hamro Patro (acts as a portal)
Processes online transactions for consumers and earns a fee for each one.
Revenue: Transaction fees or commissions.
Nepal Example: eSewa, Khalti, Merojob
Note: Tootle is discontinued — use Pathao as the live Nepal ride/delivery example.
Builds a digital environment where buyers and sellers can meet and transact (peer-to-peer).
Revenue: Transaction/listing fees, promoted listings.
Nepal Example: Facebook Marketplace, Hamrobazar
Offers services online, from digital tools to arranging offline services.
Revenue: Service fees, commissions, subscriptions.
Nepal Example: Foodmandu, Pathao
A hypothetical used-bicycle marketplace in Amsterdam has many sellers but few buyers. Sellers stop responding because listings rarely lead to a sale.
Pairs: should the startup recruit more sellers, recruit buyers, or narrow its focus? Propose one action and one success measure.
Possible action: focus on one district and one bicycle category; attract local buyers and help sellers make accurate listings.
Measure: share of listings receiving a genuine enquiry within a week. Sign-ups alone do not prove the market works.
Click a model name (left), then click its revenue source (right) to match them.
B2C Models
Revenue Sources
| Model | Primary Revenue | Inventory? | Customer Interaction | Example (Nepal) |
|---|---|---|---|---|
| E-tailer | Product sales | Yes (Physical) | Transactional | Daraz |
| Content Provider | Subscription/Ads | Yes (Digital) | Consumption | Onlinekhabar |
| Transaction Broker | Transaction fees | No | Facilitation | eSewa |
| Market Creator | Listing/Transaction fees | No | Peer-to-peer | Hamrobazar |
| Service Provider | Service fees/Commission | No | Service arrangement | Foodmandu |
Read each scenario and select the correct B2C model.
Scenario 1: eSewa lets you pay your electricity bill online and charges a small fee for each successful payment.
Scenario 2: Onlinekhabar.com publishes daily news and earns revenue from banner advertisements on its webpage.
Scenario 3: Daraz stocks phones and clothing in its warehouse and ships them directly to customers.
Scenario 4: Hamrobazar.com lets any person post a listing to sell a used motorbike and charges for promoted placements.
Each clue describes a B2C success factor. Click the correct factor name.
Clue 1: Shoppers abandon their cart when the site loads slowly or is hard to navigate on a phone.
Clue 2: A consumer will not enter their credit card number if they fear their data could be stolen.
Clue 3: Customers leave negative reviews when orders arrive late, get lost, or cannot be tracked.
Clue 4: Buyers return to brands that quickly solve their complaints via chat, email, or phone.
Clue 5: Most new customers discover Daraz through Google searches, Facebook ads, and influencer posts.
Hypothetical Kenyan online shop; illustrative KSh figures, no tax or fixed costs included.
| Given | Compute |
|---|---|
| Campaign KSh10,000; 50 first-time buyers | Acquisition cost = KSh200 per buyer |
| First-order sales KSh1,000; product cost KSh650 | Gross profit = KSh350 |
| Delivery/payment/support KSh150 per order | Contribution before acquisition = KSh200 |
| Deduct acquisition cost | First-order contribution after ads = KSh0 |
Not yet profitable: fixed costs remain. Repeat orders may help, but only if customers actually return and order costs stay controlled.
A mobile checkout requires account creation, reveals delivery charges at the final step and pre-selects a paid add-on.
Choose two changes. Explain the customer benefit and one measure to watch.
Offer guest checkout; show total costs earlier; require explicit add-on consent.
Watch completed purchases, complaints and refunds, not only clicks.
A short-term conversion increase is not worth misleading customers. Trust and usable design reinforce each other.
A customer receives the wrong jacket and posts a negative review. The retailer blames the courier; the courier says the seller packed it.
In pairs: propose the next customer-facing action, one internal investigation and one prevention metric.
Short answer
Long answer
Revise the answers in the full note.
Any questions?
Next Up: Unit 2.3 - B2B E-commerce Models