Understanding Business to Consumer (B2C) Business model

Business-to-consumer refers to the sale of goods or services to individuals. Business-to-consumer enterprises, often known as B2C firms, use the Internet to connect, interact, and transact business with consumers. B2C comprises online banking, travel services, online auctions, and health and real estate websites, among other things.

The B2C model does not require a business to sell directly to the customer and can involve wholesalers, retailers, or third-party online sellers to convey goods from the business to the customers.

What Is Business-to-Consumer (B2C)?

Business-to-consumer (B2C) refers to the process of selling products and services directly to customers who are the end-users of the company's products or services. The majority of businesses that sell directly to customers are referred to as B2C businesses.  

Business to Consumer

B2C is one of the most common and well-known sales models. B2C used to refer to shopping in malls, eating out at restaurants, watching pay-per-view movies, and watching infomercials. The emergence of the internet, on the other hand, spawned a whole new B2C business channel in the shape of e-commerce, or the sale of products and services via the internet.

Despite the fact that many B2C firms were wiped out by the ensuing dot-com crash as investor interest in the industry waned and venture capital financing dried up, B2C giants such as Amazon and Priceline survived the shakeout and have emerged victorious.

What Difference Between B2C Enterprises And Internet Sellers ?

Previously, many enterprises offered their products to retailers with physical stores. Retailers profited from the markup they added to the manufacturer's pricing. That changed though when the Internet arrived. New enterprises formed with the promise of selling directly to the consumer, skipping the store and decreasing prices. Businesses tried to maintain an online presence during the dot-com crash in the 1990s. Many stores were forced to close their doors and go out of business as a result of the crisis.

Decades after the dot-com invention, B2C businesses with a digital platform dominate conventional brick-and-mortar competitors. Survivors of the early dot-com boom include Amazon, Priceline, and eBay. They've built on their early successes to become industry giants.

Five Types of Digital B2C Business Models

Most companies use one of five types of online B2C business strategies to reach out to their customers.

Direct Sellers

This is the most typical way for customers to purchase items from internet merchants. Producers, small enterprises, and even online versions of department stores that offer items from various manufacturers are examples of these.

Online Intermediaries

These are mediators or go-betweens who do not own items or services but connect buyers and sellers. Expedia, Trivago, and Etsy are examples of this type of website.

Advertising-based B2C

Free information is used in this strategy to attract visitors to a website. These visitors are then exposed to digital or online advertisements. Advertising, which offers products and services, is sold using large numbers of online visitors.

One good example is media sites such as the Huffington Post, a high-traffic site that combines advertising with its own content.

Community-based

Marketers and advertisers may push their products directly to customers through sites like Meta (previously Facebook), which create online communities based on similar interests. Ads are often targeted depending on demographics and geographic location of viewers on websites.

Fee-based

Netflix and other direct-to-consumer sites demand a subscription to view their content. The site may also provide certain content for free, but only to a limited audience while charging for the majority of it. The New York Times and other major newspapers frequently operate on a fee-based B2C basis.

B2C Enterprises and Mobile

B2C enterprises are still eyeing a rising market: mobile shopping, decades after the e-commerce revolution. B2C enterprises have changed their focus to mobile customers and profited on this popular technology, with smartphone applications and traffic expanding year over year.

B2C enterprises rushed to build mobile applications in the early 2010s, much as they had done with websites decades before. In a nutshell, a B2C model's success hinges on the ability to adapt to changing customer demands, views, trends, and wishes.

Advantages Of A Business To Consumer Business Model

Advantages of the B2C commercial model has a variety of hidden benefits, such as:

  • Borderless. The target audiences of larger-scale B2C firms are usually quite large. As a result, ads and marketing initiatives on the internet and social media can reach millions of prospective clients.
  • Low cost. Operation cost for E-commerce B2C models are low because it rarely using physical infrastructure and rental shop.
  • User personalization. B2C enterprises models may design their advertising strategy to a specific demographic group and the demands of individual customers.
  • Direct User Experience. In the B2C model, good customer relationships may be established between users and merchants. Users' experiences are completely within the control of both online and offline businesses. This control can lead to greater customer service, cross-selling, and client loyalty.
  • Customer data. Customer data, such as sales conversion statistics, email addresses for marketing automation, analytics, customer behaviour actions,  home address, and psychographics, may help a company's marketing strategy and give valuable insights into its customers.                  

Business- to-Consumer (B2C) vs. Business-to-Business (B2B)

B2B and B2C are two business marketing models in which sales are the end-result, however the two business models are not the same. B2B stands for business to business, and as the name implies, it is a type of commercial transaction in which two business houses buy and sell items, such as one entity supplying material to another for production, or another firm offering services to another.

Business to Consumer (B2C) is another paradigm in which a company sells its products and services to final consumer. B2C companies are companies whose products and services are consumed directly by the end consumer.

Here are a few of the differences between Business to Consumer (B2C) and Business to Business (B2B).

Business to Consumer (B2C)Business to Business (B2B)
Offer goods or services directly to individual consumersOffer goods or services to other companies
Focus is on the personal productFocus on the relationship with the commercial entities
The purchasing and selling process is instant.The purchasing and selling process takes a long time.
The amount of items sold in B2B is small.The amount of items sold in B2B is large.
Brand value is built on the advertisement and promotionBrand value is built on the foundation of corporate entities' personal relationships and trust.

Business-to-Consumer Companies in Malaysia

For moving towards a digital economy country, Malaysia has developed cross-border logistics infrastructure (the Digital Free Trade Zone) to improve its ability to fulfil orders across ASEAN. The government's actions have accelerated the transition of many traditional enterprises to a digital platform. Below are the most well-known Business to Consumer (B2C) companies in Malaysia.

Hermo

Hermo.my is a pioneer in Malaysian beauty and cosmetics online retail. Hermo.my, a Malaysian firm based in Johor Bahru, has been allowing companies to sell directly through their marketplace since 2012. Hermo.my offers well-known beauty and skincare brand products such as Olay, Cetaphil, Biore and etc. with a big promotional prices to its website visitors.

Website: hermo.my

Go Shop

Go Shop provides a multichannel retail experience to its clients, allowing them to shop from the comfort of their own homes via an internet platform and a 24-hour television channel. Electrical and technological gadgets, home and kitchen supplies, fitness, beauty, and fashion accessories are all available at Go Shop.

Website: goshop.com.my

PrestoMall Malaysia

PestroMall is an online department store that also serves as a platform for retailers to sell their items online. It is one of Lazada's two primary competitors. PestroMall, formerly known as 11street Malaysia, was founded in 2014 as a joint venture between Celcom Axiata, a Malaysian mobile telecommunications company, and SK Planet, the owner of the original 11street website from South Korea. Presto will also serve as a platform for merchants, company owners, and sellers to communicate with customers and establish a brand presence. Users may expect cashbacks with their purchases, as they do with many other all-in-one platforms.

Website: prestomall.com

Zalora Malaysia

Zalora, the largest and fastest-growing e-commerce site dealing in fashion in Southeast Asia, is leading the pack of followers. Zalora was launched in 2012 by Rocket Internet to offer fashion companies to sell their products to the site's users. It is operating in Singapore, Indonesia, Malaysia, and Brunei, as well as the Philippines, Thailand, Vietnam, Hong Kong, and Taiwan.

Website: zalora.com.my

 Lazada Malaysia

Lazada is an online department store and B2C marketplace allowing retailers to sell their items to consumers in Southeast Asia. Lazada presents its operation in Malaysia, Indonesia, the Philippines, Singapore, Thailand, and Vietnam. Alibaba is the biggest shareholder of Lazada, it bought a majority share in Lazada and its Southeast Asian operations in 2016.

Website: Lazada.my

Shopee Malaysia

Shopee is a leading digital market platform in Southeast Asia, with locations in Malaysia, Singapore, Philippines, Thailand, Indonesia, Vietnam, and Taiwan. Shopee is a primarily digital trade platform that offers a variety of products to website users. Shopee launched as a Consumer to Consumer (C2C) marketplace but has since turned to a Consumer to Consumer (C2C) and Business to Consumer (B2C) hybrid model for enhancing its user experience.

Website: Shopee.my

RunningMan Food Delivery

RunningMan Delivery is an online food delivery platform established in 2015. RunningMan provides and assigns the delicious and most recommended meals for clients, with cuisines ranging from Malay, Chinese, Indian, Japanese, Western, and Korean cuisines from popular restaurants. Currently, their services are mainly focused on the Kuala Lumpur area, and they do not have a minimum order requirement. On-demand delivery of food, groceries, cooking gas, and pet supplies are available. RunningMan food delivery is funded by the NEXEA Venture Capital & Angel Investors in its early stages.

Website: runningman.my

Foodpanda

Foodpanda is Malaysia's leading food order and delivery platform. Foodpanda is using the Business to Consumer business model for connecting people with the best restaurants in their neighbourhood, including in Kuala Lumpur, Petaling Jaya, Melaka, Ipoh, and many other Malaysian cities.

Website: foodpanda.my

Conclusion

In conclusion, the Business to Consumer (B2C) model emphasizes the brands marketing to large audiences. Advertisements and promotional campaigns such as videos and big discount prices are always used in B2C businesses since they can raise brand awareness and reach target audiences.

On the contrary, B2B businesses pay attention to establishing long term relationships with specific clients. B2B companies frequently use main media such as TV, newspaper and official social media pages to promote their business information.

Furthermore, B2C marketing focuses on targeting users and specific demographics. For B2C businesses, particularly e-commerce vendors, cross-selling and upselling can be a substantial source of revenue.

References

Business to Consumer Companies

Business to Consumer (B2C)

Types of Business to Consumer

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Written by Benson Ong

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