In this paper, we study how provision of product information and/or market information affects buyers' and sellers' behavior and the resultant sales in an online marketplace. We first identify the ...Pareto‐dominant equilibrium for the sellers' pricing decisions. Then, we study the impact of market parameters on the sales of the platform in equilibrium, under various information structures. We find that the platform's sales increase with the size of potential buyers but change nonmonotonically with the size of potential sellers. Next, we analytically characterize the platform's optimal information strategy as a function of the underlying market parameters. We find that while it is always optimal for the platform to reveal some information, it should be strategic about which information to reveal when faced with different supply and demand conditions. In particular, in a seller's market (high ratio of potential buyers to sellers), the platform should provide both product and market information to the sellers and buyers. However, in a buyer's market (low ratio of potential buyers to sellers), it is optimal for the platform to only provide the market information—providing both the product and market information would backfire on the platform by jeopardizing its sales.
PurposeRecent decade has witnessed exponential growth in e-commerce segment, leading to emergence of various online selling platforms catering to diverse product requirements of customers. Such a ...development has provided impetus to both existing businesses and newly established ventures to make available their offerings through online selling platforms with a view to improve the reach of their products. This study is an attempt to identify the experience of registered vendors with the online marketplaces. It aims to develop and validate a scale to measure vendor's experience with e-commerce platforms.Design/methodology/approachAs a part of the scale development process, relevant literature sources were scanned to spot the precise knowledge gap and to put in place a sound theoretical background for the study. Thereafter, a scientific approach was adopted for scale creation. First, the scale items were identified through interviews of vendors registered with major online selling platforms and other academic experts pertaining to the marketing domain. Subsequently, major dimensions of seller experience were identified through exploratory factor analysis (EFA) applied on data collected from active vendors by the means of a structured survey instrument. The final data set was subjected to confirmatory factor analysis (CFA) in a bid to validate the scale.FindingsThe study’s outcomes reveal that seller experience in an online marketplace can be best captured by a multidimensional scale characterized by six major dimensions. These are “Registration,”; “Product Listing”; “Pricing Autonomy”; “Ease of Pick-up and Delivery”; “Credit of Receivables” and “Vendor Assistance.” A proper emphasis to continually improve upon these dimensions by the e-commerce platforms is expected to enhance the utility and overall experience of vendors from such platforms. Existence of a mutually beneficial relationship between vendors and online marketplaces will help marketplaces to mitigate concerns like nonfulfillment of orders and dispatch of substandard products.Originality/valueSustainable long-term relations between vendors and online marketplaces hold the key for such marketplaces to render error-free and delightful service on each individual order received. Seller experience of registering and operating on such e-marketplaces inspite of playing a defining role in vendor–marketplace relations has received scant attention of researchers, both in academia and industry till date. The present research is a seminal attempt to address this gap in marketing literature and offer additional know-how.
With the development of online retailing, traditional online platforms have begun to offer a novel online marketplace format that brings many advantages but also gives rise to problems such as ...operational risks and changes in channel power. This paper studies whether the e-tailer and manufacturer can reach a consensus on introducing the marketplace channel and obtains the following insights. First, the manufacturer always prefers to introduce the online marketplace in the model where she acts as the leader. The e-tailer has the same preference for the online marketplace when he moves later or simultaneously with the manufacturer. Second, as the participants become more risk-averse, the manufacturer and e-tailer would be less willing to introduce the online marketplace, and it would be more difficult to realize the equilibrium strategy under all power structure models. Third, by combining the cross-effect of the attitude towards risks and the power structure, we find that when the participants prefer risks and the e-tailer has strong channel power, it would be much easier for the two parties to reach a consensus about introducing the online marketplace.
This paper explores how the traditional incumbents coped with the rapid transition provoked by disruptive innovation in the South Korean retail industry. More specifically, the study concentrates on ...the challenges incumbents faced and their step-by-step attempts to deal with disruption. Shinsegae affiliates and SSG.COM were chosen as the target companies for our descriptive study. Shinsegae is one of the top three retail conglomerates in South Korea, owning various subsidiary brands. SSG.COM is also one of its subsidiaries, first established as the online distribution channel for Shinsegae affiliates. However, its role has later become expanded and critical, turning into an online marketplace aimed at overcoming disruption in the retail industry. By reviewing SSG.COM’s dynamic responses to disruptive innovation, we found that what makes its incumbents vulnerable to sudden disruption lies in their static business model. Furthermore, the platform economy allowed offline retailers to be easily disrupted by the key characteristic of platform business—the “network effect”. To counteract online market domination, this study implies that SSG.COM should innovate its business model to integrate its online and offline ecosystems successfully.
To date, the number of e-commerce applications in Indonesia keeps increasing. However, the adoption rate amongst Small and Medium Enterprises (SMEs) is still around 13%. Thus, the research aims to ...analyze the factors that affect small and medium enterprises’ resistance to adopting online marketplaces in Indonesia by applying the technological-organizationalenvironmental framework, the diffusion of innovations theory, and the innovation resistance model. The respondents are 356 owners of SMEs in Indonesia who have sold their products online through social media or marketplace. The research applies a quantitative approach using an online questionnaire and interview. Then, the covariance-based structural equation modeling method is applied to analyze the data. In addition, the research interviews five SME representatives to gain further understanding and information for the rejected hypothesis. The results show that perceived complexity, owners’ self-efficacy, and enabling conditions are proven to affect perceived behavioral control. Perceived complexity is also shown to affect perceived risk. On the other hand, government support does not affect perceived behavioral control. It is also found that perceived risk and behavioral control affect resistance to adopting online marketplaces. The findings provide recommendations to overcome this situation, such as the simplification of online marketplace features for sellers and improvements in the digital literacy of the owners of SMEs.
Abstract
We study an e‐commerce marketplace consisting of a third‐party seller, a dominant platform, and a competing platform. The seller pays referral fees to sell on the platforms. The dominant ...platform has a larger consumer base and offers an exclusive program. We formulate a game theoretic model to study strategic responses for all parties involved. The research questions are:
How would the seller optimally choose between the two selling options: “go exclusive” with the dominant platform or “go wide” with both the dominant and the competing platforms? How would the dominant platform optimally adjust the referral fee in the exclusive program? How would the competing platform optimally discount the referral fee to compete with the dominant platform?
We find that it is optimal for the seller to sell exclusively on the dominant platform if the referral fee adjustment in the exclusive program is lower than a threshold value. For the dominant platform, we identify the optimal value of the referral fee adjustment so that the seller can be enticed to choose the selling strategy that benefits the dominant platform as well. For the competing platform, we prove that there exists an optimal value of the referral fee discount. We also identify the market conditions that it is optimal for the competing platform to discount the referral fee or to set the referral fee the same as the dominant platform. We contribute to the e‐commerce literature by studying exclusive selling and platform competition while incorporating base demand asymmetry and referral fee asymmetry.
Official online stores and online marketplaces present distinct challenges and opportunities for retail brands, impacting their control over the customer experience, pricing, and brand presentation. ...Understanding consumer intentions in online channel selection is crucial, especially given the rise of online shopping and the impact of the COVID-19 pandemic on consumer behavior. This study explores the factors influencing channel selection intention within official online stores and online marketplaces, focusing on customers who have purchased Apple electronics. A quantitative questionnaire facilitated data collection, resulting in responses from 490 individuals and 606 samples. Those who shopped through both channels were requested to complete the questionnaire twice. The respondents were divided into two groups based on their purchasing experience, and structural equation modeling was employed for hypothesis testing. In official online stores, cross-channel searching negatively impacts channel selection intention, whereas brand loyalty and channel pricing advantage have positive effects. In contrast, no significant relationships between these variables were observed in online marketplaces. Channel satisfaction was found to positively influence channel selection intention across official online stores and online marketplaces, while perceived risk demonstrated a negative impact. Based on these findings, several recommendations are proposed to aid in developing effective sales channel strategies.
Online marketplace business competition is getting tougher, so customer loyalty is becoming an increasingly important factor for companies. Shopee is one of the increasingly popular online ...marketplace business in Indonesia. Customer loyalty can be rised through increasing the number of transactions and visits on the Shopee website. E-servicescapes are all elements that companies use to deliver digital services to consumers. The elements of e-servicescapes include aesthetic appeals, layout and functionality, and financial security. The level of customer satisfaction and perceived value of e-servicescapes can increase customer loyalty which have an impact for increasing the number of visits to Shopee's website. The purpose of this study is to determine the e-servicescape elements that most influence the satisfaction and perceived value of Shopee website users. This study used a quantitative approach with primary data derived from Shopee website users. An important contribution of this research is the guideline to improve the quality of e-servicescapes, so that the company is able to get a higher level of customer loyalty. The results of this study indicate that e-service-scapes affect the perceived value and customer satisfaction that can encourage the formation of their loyalty. Other findings show that Shopee has financial security as the best e-servicescape aspect. However, Shopee still needs improvements in the aspects of layout and functionality, because these aspects get the lowest ratings from Shopee website users.
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