E-business vs. Ecommerce: Key Differences and Similarities

Every ecommerce business leverages an online business model, but not every company that conducts aspects of its business online is an ecommerce company. For example, consider a doctor’s office that allows its patients to schedule in-person appointments via its booking website. Having an online portal for appointments doesn’t make the office an ecommerce store. 

While the term “ecommerce” wouldn’t apply to that pediatrician’s office, the term “e-business” would. That’s because the office uses an online service to manage customer relationships. In today’s increasingly digital economy, many organizations have e-business operations, even if they aren’t selling goods and services online. 

Here’s more about the difference between ecommerce and ebusiness operations.

What is an e-business?

An e-business, or electronic business, is one that conducts at least some of its processes over the internet. This includes, but is not limited to, business activities like buying, selling, marketing, assisting customers, managing internal operations, and generally providing services online.

Lots of organizations qualify as e-businesses. There are the obvious categories like online retailers, online service providers, digital marketplaces, and subscription-based platforms. But even traditional companies that have digitized parts of their operations (e.g., online payment processing, online customer support, and supply chain management powered by online technologies) may qualify as e-businesses. For example, auto body shops, pet grooming services, nail salons, and law firms can have e-business aspects. 

What is ecommerce?

The term ecommerce, which is short for electronic commerce, refers to the buying and selling of goods or services online through websites, mobile apps, or online marketplaces. An ecommerce business model focuses specifically on commercial transactions conducted over the internet, whether they are business to business (B2B), business to consumer (B2C), or consumer to consumer (C2C) (e.g., Craigslist or Facebook Marketplace). 

Ecommerce companies include online retail stores, dropshipping businesses, subscription box services, and digital product sellers such as software or course providers. They also include auction sites like eBay, which combine elements of B2C and C2C business transactions.

Compared to brick-and-mortar stores, ecommerce companies enjoy several key advantages. Having an online store enables 24/7 accessibility, lower operating costs, global reach, and personalized shopping experiences by way of digital marketing techniques. Plus, ecommerce stores have the ability to analyze customer data to optimize sales and marketing strategies. This is why so many retailers—even those that continue to operate physical stores—have migrated some or all of their operations to ecommerce platforms.

E-business vs. ecommerce: key differences

• Scope and focus
• Core business activities
• Use of digital tools
• Market perspective

While people sometimes use the terms interchangeably, ecommerce and e-business refer to different scopes of online business activity. Essentially, all ecommerce businesses are e-businesses, but not all e-businesses conduct ecommerce transactions. Here are the key differences to note when comparing the terms ecommerce versus e-business:

Scope and focus

Both e-businesses and ecommerce businesses handle many of their operations using digital tools and digital platforms. However, ecommerce specifically refers to online sales—the buying and selling of goods and services online. As such, ecommerce companies are primarily concerned with retail operations.

By contrast, e-business encompasses all aspects of running a business online, including operations like customer relationship management (CRM), supply chain efficiency, and online accounting software. It does not specifically connote online sales.

Core business activities

Ecommerce companies focus on online transactions. This represents a wide range of activities, from selling products online and conducting B2C retail sales to facilitating C2C exchanges through digital platforms like Facebook Marketplace, OfferUp, and others.

On the other hand, e-business refers to the use of digital tools to power broader business functions that support a company as a whole. Companies can use these tools for streamlining internal operations, managing business partners, and analyzing customer behavior across multiple websites. Of course, ecommerce companies routinely engage in these kinds of operations; what distinguishes them is their specific focus on selling merchandise or services via the internet.

Use of digital tools

E-businesses use digital tools like inventory management software, accounting software, customer education portals, CRM software, and social media sites. They use these tools to improve performance, build awareness, and promote customer engagement. 

Ecommerce sites often also use these tools, but they go further by also leveraging online platforms that facilitate shopping online, payment processing, and the delivery of goods and services.

Market perspective

The global ecommerce market focuses on commerce and trade, helping businesses sell to consumers or other businesses through an online platform. Meanwhile, the ebusiness concept is all about using technology to enhance productivity, reach, and integration across all company functions—not only those related to selling online. An e-business can have multiple points of focus, while ecommerce always centers around online sales.