How does e-commerce differ from traditional retail?

E-commerce is fundamentally based on the buying and selling of goods and services over the internet. This model enables businesses to reach a broader audience beyond geographical constraints, unlike traditional retail, which typically depends on physical presence and location. The ability to operate online allows for greater flexibility, 24/7 availability for customers, and often a wider variety of products and services compared to what might be available in a traditional store.

The other options relate more to aspects not characteristic of e-commerce. For instance, physical store sales would primarily describe traditional retail rather than e-commerce. Operating solely offline contradicts the essence of e-commerce, which is by definition an internet-based activity. Additionally, the idea that e-commerce is limited to local markets fails to recognize that e-commerce businesses can operate on a global scale, providing access to markets and customers worldwide, expanding their business opportunities significantly. This highlights why the correct answer specifically identifies the online nature of e-commerce transactions.