trends in e-commerce with a focus on small & medium enterprises

7/29/2019 Trends in E-Commerce With a Focus on Small & Medium Enterprises.

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Trends in E-Commerce

with a focus on

small & medium enterprises.

Sandeep Krishnamurthy, Ph.D.Associate Professor of E-Commerce & Marketing

University of Washingtonhttp://faculty.washington.edu/sandeep

[email protected]

APEC OVOP Training Workshop on E-CommerceTaipei, Taiwan

August 2007
http://faculty.washington.edu/sandeepmailto:[email protected]:[email protected]://faculty.washington.edu/sandeep


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E-Commerce

Leveraging theInternet and WorldWide Web to

generate revenue.


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Big Picture

MarketIntermediaries

Supply of Information Demand for Information


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E-Commerce Business Model

Online firms make money in these ways-

Commerce

Digital products (e.g. software, music)

Non-digital products (e.g. book, clothing)

Advertising

Banner, text ads, rich media

Fees Affiliate fees/commission


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Trend # 1- E-commerce is

Doing Well.

Business-to-Consumer electronic

commerce is growing.

But, the growth rate has gone down.

There is considerable potential for growth.

Key players have shifted from a retailerbusiness model to a platform model.


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US E-Commerce Trend(Source: Forrester Research)

$76

$114

$141

$176

$220

24%25% 25%

51%48%

$0

$50

$100

$150

$200

$250

2002 2003 2004 2005 2006

US$B

0%

10%

20%

30%

40%

50%

60%

% YOY

growth


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Amazon + eBay, Revenue Trend(in thousands, USD)

-

1,000,000

2,000,000

3,000,000

4,000,000

5,000,000

6,000,000

q1 q2 q3 q4 q1 q2 q3 q4 q1 q2 q3 q4 q1 q2 q3 q4 q1 q2 q3 q4 q1 q2

2002 2003 2004 2005 2006 2007

AmazoneBay

TOTAL


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Amazon + eBay, Indexed(2002 q1 indexed as 100)

0.000

100.000

200.000

300.000

400.000

500.000

600.000

q1 q2 q3 q4 q1 q2 q3 q4 q1 q2 q3 q4 q1 q2 q3 q4 q1 q2 q3 q4 q1 q2

2002 2003 2004 2005 2006 2007


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Trend # 2- The Web

is now Worldwide

After all these years, the World Wide Web

is living up to its name.

The World Wide Web is now a dynamicglobal communication platform.

New patterns of trading.

Buyers/Sellers from around the world.

New patterns of communication.


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Global Picture


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Amazon.coms International SalesAs a Percent of Total Sales

0.00%

10.00%

20.00%

30.00%

40.00%

50.00%

60.00%

q1

q2

q4

q3

q2

q1

q4

q3

q2

q1

q4

q3

q2

q1

q4

q3

q2

q1

q4

q3

q2

q1

200720062005200420032002

Media

Electronics+general

TOTAL


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eBays International SalesAs a Percent of Total Sales

0.00%

10.00%

20.00%

30.00%

40.00%

50.00%

60.00%

q1 q2 q3 q4 q1 q2 q3 q4 q1 q2 q3 q4 q1 q2

2004 2005 2006 2007


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Baidu.com vs. Google.com

Baidu.com, Google.com


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Trend # 3- Advertising is growing

faster than commerce.

Online advertising is replacing commerce

as the killer business model.

As content grows, advertising grows.

Search dominating online advertising with40% of revenue.


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Online advertising growth trend(source: iab.net, figures in millions)

-

1,000

2,000

3,000

4,000

5,000

6,000

q1

q2

q3

q4

q1

q2

q3

q4

q1

q2

q3

q4

q1

q2

q3

q4

q1

q2

q3

q4

q1

q2

q3

q4

q1

q2

q3

q4

q1

q2

q3

q4

q1

q2

q3

q4

q1

q2

q3

q4

q1

1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007


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(Google+Yahoo) vs. (Amazon+eBay)

-

1,000,000

2,000,000

3,000,000

4,000,000

5,000,000

6,000,000

q1q4q3q2

20072006

Google+Yahoo

Amazon+eBay

All figures in thousands.


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Advertising vs. Commerce

Commerce is a seasonal business. Tends to peak in Q4 of each year due to

holiday shopping.

Advertising is not seasonal.

Advertising requires low infrastructure.

Advertising is a low risk option for a publisher. Commerce still requires non-trivialinfrastructure.


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Trend # 4- User-generated Content

Top blog on the Internet (Xu Jinglei)


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User-generated contentpopular everywhere.


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Wikipedia, Blogger,Youtube

Wikipedia.org, Blogger.com, Youtube.com, Amazon.com


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Youtube vs. Amazon

(reach)

Youtube.com, Amazon.com


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Youtube vs. Amazon

(page views)

Youtube.com, Amazon.com


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Youtube vs. eBay

(reach)

Youtube.com, eBay.com


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Youtube vs. eBay

(page views)

Youtube.com, eBay.com


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Trend # 5- Emergence of Global

Sourcing Platforms.

Global Sourcing Platforms help small and

medium enterprises find buyers for theirproducts.

Two prime examples

Alibaba.com

Globalsources.com


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How can a Small and Medium EnterpriseBenefit From E-Commerce?

Commerce Selling direct (risky)

Selling through a platform (preferred)

Amazon.com, eBay.com, Yahoo.com Alibaba.com, Globalsources.com

Advertising Googles AdSense, Yahoo, MSN/Live.com

Affiliate Amazon.coms Affiliate Program


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Sandeep Krishnamurthy

University of Washington

[email protected]

http://faculty.washington.edu/sandeep
mailto:[email protected]://faculty.washington.edu/sandeephttp://faculty.washington.edu/sandeepmailto:[email protected]

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