An argument ensued between some of my colleagues during a meeting on if eCommerce is really an industry or just a subset of a set. Well, it is in the light of this that I strongly perceive it is essential to throw more light on this on where eCommerce stands and what it represents in Nigerian economy if we can actually refer to it as an industry or a just a market and business type. Before we delve into that we might need to clearly define some terms then we can evaluate and see if eCommerce is an industry or not. People often use both industry and sector interchangeably to describe eCommerce, but we really need to understand what is the appropriate term to use.
According to business dictionary an Industry is described as “The manufacturing or technically productive enterprises in a particular field, country, region, or economy viewed collectively, or one of these individually. A single industry is often named after its principal product; for example, the auto industry, manufacturing industry.
For statistical purposes, industries are categorized generally according to a uniform classification code such as Standard Industrial Classification (SIC). On the other hand, any general business activity or commercial enterprise that can be isolated from others, such as the tourist industry or the entertainment industry”. I hope this is clear?
Let’s take a look at what sector mean, according to Investopedia. “A sector is an area of the economy in which businesses share the same or a related product or service”.
Economies consist of four sectors.
The primary sector involves the extraction and harvesting of natural products from the earth (e.g., agriculture, mining, and forestry).
The secondary sector consists of processing, manufacturing and construction.
The tertiary sector provides services, such as retail sales, entertainment, and financial services.
The quaternary sector is made up of intellectual pursuits, like education.
With this elucidation on what industry and sector entail, we can now have an overview of what eCommerce is all about to determine which category it falls.
E-commerce literally implies electronic commerce which is the trading of products and services using internet enabled devices such as computers, tablets, mobile phones and games. E-commerce is also referred to as buying and selling of goods and services, booking of air tickets or the transmitting of funds or data, over an electronic network, primarily the Internet. These business transactions occur either business-to-business, business-to-consumer, consumer-to-consumer or consumer-to-business.
From the definitions of specific terms above we can logically derive our deductions but before we jump into conclusion we need to understand that e-commerce is a form of business and it involves using the internet, whether products or services it means you are selling something online, we can categorically state that e-commerce is a niche in the business world. There are different things you can sell and buy online, eCommerce is able to accommodate different business industry, ranging from retail to auto, transport and much more. Cheki, for instance, sells car online – the auto industry, Konga – retail industry – Wakanow – transport & tourism industry, Jovago – tourism & hospitality.
Since eCommerce for some industry is another means of achieving the business goal would you rather categorize it as an industry or just call it a market or a form of business? It would even be wrong to refer to eCommerce as a sector because that is even broader than industry. However with the rate of technology growth and development eCommerce is coming to a point where it would be classified as an industry.
What is your opinion on this? Feel free to comment.