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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
APEC OVOP Training Workshop on E-CommerceTaipei, Taiwan
August 2007
http://faculty.washington.edu/sandeepmailto:[email protected]:[email protected]://faculty.washington.edu/sandeep7/29/2019 Trends in E-Commerce With a Focus on Small & Medium Enterprises.
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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
http://faculty.washington.edu/sandeep
mailto:[email protected]://faculty.washington.edu/sandeephttp://faculty.washington.edu/sandeepmailto:[email protected]