Product variants are combinations of product options. Variants will vary from each other in one or more properties. If you sell perfume, you can for example distinguish the content and fragrance options.
When a blouse is offered in white and blue, in sizes S, M and L and in the materials linen and cotton, there are 2 x 3 x 2 = 12 product variants for this blouse. The advantage of this is that the blouse is not in your storefront 12 times, but only once. The retailer can choose exactly which combination he or she wants to purchase by using the dropdown on the productpage. Read here how to create product variants in your back office.