Types of E-commerce: How to Choose the Right Model for Your MSME?

The E-commerce world can feel like a confusing maze of terms, acronyms, and endless choices. 

But the truth is, there is a clear path for your MSME if you understand the different types of E-commerce.

This blog is your map. 

I’ll explain the different types of E-commerce business models, like B2C, direct-to-consumer (DTC), and b2b E-commerce, to help you choose the one that fits your business best.

With more customers from Tier-2 and Tier-3 cities shopping online than ever before, there is a huge opportunity waiting for local businesses, artisans, and manufacturers like you.

Let’s start with the basics…

What is E-commerce? 

E-commerce is simply the activity of buying and selling goods or services on the internet. 

Instead of serving only the people who walk into your physical store, types of E-commerce allow you to sell online without being limited by four walls.

Why the Right E-commerce Model Matters for Your Business?

Just “going online” is not a plan. 

The real results come when you choose the right way to sell. 

This is where understanding different business models in E-commerce becomes important. 

This choice decides who you sell to, how you earn money, and how you run your daily operations.

Here is what the right model can do for you –

• Bigger Reach – 

Sell products from a Tier-2 city to Mumbai or Dubai. Geography is no longer a limit.

• Lower Costs – 

Save on showroom rent and overheads to invest in product quality.

• Smarter Operations – 

Track dead stock instantly to stop money from getting stuck.

• Direct Connection – 

Talk directly to buyers to get feedback that helps you grow.

On paper, this looks simple. 

In real life, most founders get stuck here because they try to copy a competitor’s model instead of picking one of the E-commerce categories that fits their own strengths.

The Main Types of E-commerce Business Models

These “business models” are simply about who is selling and who is buying.

Let’s look at the types of E-commerce with examples to see where your MSME fits.

Selling Directly to Customers (B2C & D2C)

This is the most common and easiest-to-understand category. 

E-commerce is about selling products or services directly to individuals for personal use.

1. B2C (Business-to-Consumer) – 

Business-to-consumer E-commerce is the online version of your retail store. 

It is any business that sells straight to the end user. 

When you order a phone from Amazon or food from Zomato, you are part of a business-to-consumer E-commerce transaction.

• Example – 

An MSME designs kurtis and sells them on a marketplace like Myntra. 

You are the seller, and the customer is the wearer.

• Why does it work? 

Business-to-consumer E-commerce gives you access to the largest market of every online shopper. 

However, it comes with heavy competition, so you need good pricing and reviews.

Once you pick your model, speed matters, and scaling it requires a plan. A business coach can help you turn that initial traffic into consistent sales.

2. D2C (Direct-to-Consumer) –

Direct-to-consumer (DTC) is a stronger version of B2C. 

Here, the brand that makes the product sells it directly to the customer through its own website, removing middlemen like distributors or retailers.

• The Difference – 

If someone buys Forest Essentials oil from Nykaa, that is B2C. 

If they buy it from the Forest Essentials website, that is direct-to-consumer (DTC).

• Example – 

A Jaipur artisan making handcrafted leather shoes and selling only through their own Shopify store.

• Why does it work? 

You earn more profit by cutting out middlemen. 

You control your brand’s story and own the customer data.

Selling to Other Businesses (B2B & Intra-B)

This category shifts the focus from individual shoppers to other companies. 

Among the types of E-commerce, this one offers higher volume and longer relationships.

3. B2B (Business-to-Business) –

In b2b E-commerce, your customer is another company. 

These deals usually involve bulk quantities and recurring orders.

• Example – 

A manufacturer making eco-friendly packaging and selling it in bulk to online retailers via IndiaMart or Udaan.

• Why does it work? 

B2B E-commerce provides steady, predictable income. 

You don’t need flashy ads. You need trust and reliability.

4. Intra-B Commerce – 

Intra-b-commerce isn’t about selling. 

It is about internal efficiency. 

It refers to using digital tools within your business to run operations.

• Example – 

Using a cloud-based inventory system where your sales team in Delhi updates stock levels that the warehouse team in Pune can see instantly.

• Why does it work? 

Intra-b-commerce reduces mistakes and speeds up decision-making for growing teams.

Connecting People & Skills (C2C & C2B)

Sometimes, the business isn’t a “company” at all. 

These types of E-commerce rely on individuals.

5. C2C (Consumer-to-Consumer) – 

Consumer-to-consumer (C2C) platforms let individuals sell directly to each other. 

The platform (like OLX) doesn’t own the product. 

They just connect the parties.

• Example – 

Selling used furniture on OLX or Facebook Marketplace is a classic consumer-to-consumer (C2C) transaction.

• Why does it work? 

It is a zero-risk way to test a product idea. 

List a few items to see if people want them before building a website.

6. C2B (Consumer-to-Business) – 

In C2B E-commerce examples, individuals sell services or products to businesses. 

This is the gig economy.

• Example – 

A freelance graphic designer in Pune selling logo designs to a company in Bengaluru via Upwork.

• Why does it work? 

You can use C2B E-commerce examples to hire talent (like writers or accountants) without the cost of full-time employees.

Working with the Government (B2G, C2G & B2A)

This area covers digital interactions with the public sector. 

While less talked about, these are vital types of E-commerce business models for compliance and contracts.

7. B2G (Business-to-Government)

Business-to-government (B2G) involves businesses selling goods or services to government agencies.

• Example – 

An IT MSME winning a tender to manage a municipal website, or selling furniture to government schools via the GeM (Government e-Marketplace) portal.

• Why does it work? 

Business-to-government (B2G) contracts are large and secure, though the paperwork can be heavy.

8. C2G & B2A (Interacting with Administration)

These categories handle administrative transactions.

• C2G (Consumer-to-Government) – 

This involves citizens paying taxes or electricity bills online. 

It is sometimes referred to as C2A E-commerce (Consumer-to-Administration) when dealing with specific agencies.

• B2A (Business-to-Administration) – 

This is your company filing GST returns or applying for permits online. 

Business-to-administration (B2A) is essential for keeping your MSME compliant.

Which E-commerce Model is Best for Your MSME?

The right model matches what you sell and what you can manage. 

Ask yourself these three questions to find your fit among the E-commerce categories.

1. Who Are Your Customers? 

• Selling to individuals? 

If you sell clothes, food, or home decor for personal use, you belong in B2C or D2C.

• Selling to businesses? 

If you sell raw materials, office supplies, or machinery, you are looking at a b2b E-commerce model.

2. Are You a Maker or a Reseller?

• The Maker – 

If you create your own unique products, D2C is powerful. 

It lets you tell your story and charge a premium.

• The Reseller – 

If you buy products to sell for a margin, B2C Marketplaces (like Amazon) are better because they already have the customers you need.

3. What Are Your Resources? Be honest about your time and budget.

• Low Budget? 

Start with consumer-to-consumer (C2C) platforms like Facebook Marketplace or dropshipping.

• No Logistics Team? 

Use a B2C Marketplace that handles shipping (like Amazon FBA).

• Marketing Savvy? 

If you are good at social media and ads, build your own direct-to-consumer (DTC) website.

If you are struggling to answer these questions, you need clarity. One-on-one business coaching helps you define your target audience and strategy.

How To Choose Your E-commerce Website Type?

You’ve figured out your model (e.g. selling directly to customers). 

Now, where will you actually sell? 

You must select the right types of E-commerce websites or platforms to host your store.

Many business owners confuse the business models in E-commerce with the platform.

• Model – “I will sell shoes directly to women.” (Strategy)
• Platform – “I will use Shopify.” (Tool)

Here are your three main options for a digital storefront –

1. Marketplaces (Amazon, Flipkart, Myntra) 

Think of this like renting a shop in a busy mall.

• Pros – 

Instant access to millions of customers, they handle payments and often shipping.

• Cons – 

High competition, commission fees reduce margins, and you don’t own the customer data.

2. Your Own Website (Shopify, WooCommerce) 

This is like building your own exclusive showroom. 

It is one of the most flexible types of E-commerce websites.

• Pros – 

Full control over brand and design, you own the customer data (email/phone), and no commission fees.

• Cons – 

You must do all the marketing to get people to visit, and you handle shipping and returns.

3. Social Media Selling (Instagram, WhatsApp) 

Selling directly where your customers hang out.

• Pros – 

Great for visual products (fashion, jewellery), zero setup cost, and direct chat with buyers.

• Cons – 

Hard to manage inventory, and manual payment collection can be messy as you scale.

Conclusion

E-commerce offers the best opportunities for MSMEs to reach more customers, reduce costs, and compete on a bigger platform.

The key is aligning three things: your product, your ideal customer, and the right types of E-commerce. 

There is no single “best” path, only the one that fits your current reality.

Whether you choose types of E-commerce with examples like D2C for higher margins or b2b E-commerce for volume, the important thing is to start.

It costs nothing and gives you immediate feedback. Start small, understand the process, and then expand.

Ready to scale your business? Read our blogs on marketing for MSMEs.

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