E-channel competition is the competition that conventional channels encounter from electronic channels such as the Internet, which have grown significantly in importance within the past decade. E-channel competition threatens the existence of conventional channel intermediaries. This may lead to conflicts that hamper or stifle the development of electronic commerce. On the other hand, e-channel competition may uncover inefficiencies in channels. Synergies and complementarities between conventional and electronic channels also indicate that the two channel types are not pure substitutes. This paper argues that more research is necessary to understand the multifarious implications of e-channel competition. We present both empirical evidence and theoretical considerations to depict the necessity of incorporating e-channel competition in the formulation of business models for electronic commerce.