E-Commerce Models: Types and How They Work
Published on October 28, 2025
• 8 min read
India’s e-commerce ecosystem is experiencing unprecedented growth, driven by the adoption of UPI, integration with ONDC, the availability of affordable smartphones, and increased rural internet penetration.
E-commerce models define how value is created, how transactions flow, and which strategies are most effective in achieving this goal. The impact of e-commerce on business models is evident in the rise of D2C brands, the growing popularity of aggregator apps, and even in government-driven digital transactions.
However, regardless of the path a business chooses, whether it’s an inventory-based e-commerce model or a value chain model, fulfillment and logistics are crucial for success.
In this blog, we’ll break down five types of e-commerce models, explain how they work, highlight market trends, and share e-commerce models with examples to help you choose the right strategy for your business.
Business-to-Consumer (B2C) Model
In the Business-to-Consumer (B2C) model, businesses sell products or services directly to consumers, bypassing intermediaries such as wholesalers. For example, a clothing brand selling directly to customers online follows this model. Flipkart, Nykaa, and BigBasket are leading B2C players in India.
The aggregator model in e-commerce, specifically in the B2C model, involves a platform partnering with multiple service providers or sellers, standardizing their offerings under its brand, and directly connecting them with consumers. Examples include Uber, Zomato, and Swiggy, among others.
How It Works
- A consumer identifies a need, explores available options, and completes the purchase.
- In e-commerce models, this process moves online.
- Consumers browse a website or app, pay digitally or via COD, and receive doorstep delivery.
Market Size & Trends
The global B2C e-commerce market was valued at USD 5.47 trillion in 2023 and is projected to reach USD 17.77 trillion by 2030, growing at a CAGR of 19.1% (2024–2030).
Future Outlook
B2C will continue to evolve through social commerce, D2C brands, and quick commerce (Q-commerce). With consumers demanding faster delivery, hyperlocal fulfillment, and advanced logistics, this e-commerce model will be at the core of the industry.
Business-to-Business (B2B) Model
The B2B e-commerce model involves businesses selling products or services to other businesses, rather than directly to individual consumers. Examples include SaaS providers offering productivity tools to enterprises or wholesalers supplying retailers. Some examples are: IndiaMART, Udaan, and JioMart.
How It Works
- In this B2B model in e-commerce, a company employee or department purchases on behalf of the organization.
- The buying process is longer and more complex compared to B2C
- Involves stages such as awareness, evaluation, engagement, and negotiation before a purchase.
- Contracts, bulk orders, and custom pricing often define these transactions.
Market Size & Trends
The global business-to-business e-commerce market was valued at USD 18,665.95 billion in 2023 and is expected to reach USD 57,578.97 billion by 2030, at a CAGR of 18.2% (2024–2030).
Future Outlook
The B2B e-commerce model is expected to continue growing with the digitization of supply chains, the adoption of AI-driven procurement, and the implementation of seamless payment solutions. Platforms offering bulk B2B fulfillment, such as WareIQ, and those with transparent pricing will dominate the next phase.
Consumer-to-Consumer (C2C) Model
The Consumer-to-Consumer (C2C) model is one of the earliest e-commerce business models, where individual consumers sell goods or services directly to other consumers. In the C2C model, a third-party platform facilitates the exchange of goods and services. Examples include OLX and Meesho.
How It Works
A consumer lists a product or service on a C2C platform. Other consumers browse these listings, contact the seller, and complete the transaction through the platform’s payment gateway. The platform earns revenue by charging listing fees, commissions, or transaction charges.
Market Size & Trends
The global consumer-to-consumer e-commerce market was valued at USD 1,789.58 billion in 2023 and is projected to reach USD 7.91 trillion by 2030, at a CAGR of 24.3% (2024–2030).
Future Outlook
C2C platforms will continue to expand further with the rise of social commerce and recommerce trends. As sustainability gains importance, second-hand and thrift platforms are expected to reshape e-commerce models in India.
Consumer-to-Government (C2G) Model
The Consumer-to-Government (C2G) model enables digital transactions between individual citizens and government agencies. Citizens act as customers, while the government provides services online. Examples: Income tax and GST payments, Passport Seva applications, driving license renewals, and property tax payments.
How It Works
A citizen accesses a government portal or mobile app, selects the service, fills in the required details, and completes a secure payment via credit/debit card, UPI, or digital wallet. The government processes the transaction and issues a digital confirmation or receipt.
Future Outlook
C2G adoption will expand as digital governance strengthens, offering more services online with seamless payment and verification options, simplifying citizen-government interactions.
Business-to-Government (B2G) Model
The Business-to-Government (B2G) model refers to transactions in which businesses provide goods or services to local, state, or federal government agencies. Office supply firms, IT service providers such as TCS and Wipro, and specialized equipment manufacturers are collaborating with public sector agencies.
How It Works
Government agencies usually release tenders or requests for proposals (RFPs). Businesses that meet the eligibility criteria participate in the bidding process by submitting proposals and pricing information. The government then reviews submissions and awards contracts to the most suitable vendor.
Market Size & Trends
The Indian government is increasingly digitizing procurement through platforms like the Government e-Marketplace (GeM), where over 60,000 buyers and 5 million sellers are already registered. This has accelerated the adoption of the B2G e-commerce model across various industries, including IT, infrastructure, and defense.
Future Outlook
With initiatives like Digital India and GeM, B2G e-commerce is expected to continue expanding, offering greater transparency, faster procurement, and more opportunities for SMEs to engage with the government.
Comparison Table of All Models
| Model | Definition | How It Works | Examples | Future Outlook |
| B2C | Businesses sell directly to consumers. | The consumer browses, pays, and receives doorstep delivery. | Flipkart, Nykaa, BigBasket, Swiggy | Growth via D2C, social commerce, and quick commerce. |
| B2B | Businesses sell to other businesses. | Bulk orders, contracts, and longer buying cycles. | IndiaMART, Udaan, JioMart | Digitized supply chains, AI-driven procurement. |
| C2C | Consumers sell to other consumers. | The seller lists, the buyer pays via the platform, and the platform charges fees. | OLX | Rise of recommerce and thrift-driven platforms. |
| C2G | Citizens transact with the government online. | Pay taxes, bills, fines, or apply for services digitally. | Income Tax Portal, GST, Passport Seva | More services to move online under Digital India. |
| B2G | Businesses provide goods/services to the government. | The government issues tenders, businesses bid, and contracts are awarded. | TCS, Wipro, GeM sellers | Expansion via GeM and SME participation. |
Which Model is Best for You and how WareIQ can Help
The right e-commerce model depends on your business goals, target customers, and industry.
- If you’re building a D2C brand, a B2C model with quick, reliable deliveries works best.
- For wholesalers and distributors, the B2B model enables bulk orders and long-term partnerships.
- Sellers of pre-owned or thrift products benefit from the C2C model, while digital-first startups can explore B2B2C or aggregator models.
- Businesses and citizens interacting with the government leverage B2G and C2G models.
WareIQ, a Y-Combinator-backed full-stack e-commerce platform, enables brands to scale across D2C, marketplaces, quick commerce, and B2B (general & modern trade) with ease.
What WareIQ Offers:
- Pan-India Fulfillment Network: Seller Flex & FAssured compliant warehouses in 12+ cities, delivering to 27,000+ pin codes.
- Multi-Channel Fulfillment Platform: Plug-and-play integrations with leading marketplaces (Amazon, Flipkart, Myntra, Nykaa), D2C platforms (Shopify, Magento, WooCommerce), WMS, and ERPs.
- Smart B2B Fulfillment: From inventory transfers to picking, packing, and last-mile shipping with real-time tracking.
- Analytics & Visibility: Centralized dashboard to monitor operational performance and optimize costs.
By combining a tech-first SaaS platform with an extensive logistics network, WareIQ has become the preferred fulfillment partner for over 400 leading Indian e-commerce brands.
FAQs
Can a business operate under more than one e-commerce model at the same time?
Yes. Many brands use hybrid strategies. For example, a D2C brand (B2C) that also supplies to retailers (B2B) or sells through marketplaces (B2B2C).
What role does logistics play across different e-commerce models?
Logistics is critical in every model. In B2C and quick commerce, speed of delivery is the most important factor. In B2B, bulk shipping and warehouse efficiency are crucial for success. In C2C, platforms need reliable courier integrations.
How do payment systems differ across e-commerce models?
B2C and C2C focus on instant digital payments or COD, while B2B often uses credit terms, bulk invoicing, or recurring billing. Government-related models (C2G/B2G) rely on secure gateways, UPI, and compliance-based payment processes.
Which e-commerce model is most suitable for startups in India?
For most startups, B2C or D2C is the best entry point due to lower barriers, direct customer relationships, and scalability via marketplaces. Over time, startups may expand into B2B or B2B2C once their brand and supply chains mature.
What are the common e-commerce revenue models?
Common revenue models include commission-based (e.g., Flipkart, Meesho), subscription-based (e.g., Amazon Prime), freemium (e.g., SaaS tools), advertising-based (e.g., OLX, marketplaces), and inventory-based (e.g., brands selling directly).
