Trends in E-Commerce with a focus on small & medium enterprises.

APEC OVOP Training Workshop on E-Commerce Taipei, Taiwan August 2007

Sandeep Krishnamurthy, Ph.D. Associate Professor of E-Commerce & Marketing University of Washington http://faculty.washington.edu/sandeep sandeep@u.washington.edu

1

E-Commerce
• Leveraging the Internet and World Wide Web to generate revenue.

2

Big Picture

Supply of Information

Market Intermediaries

Demand for Information

3

g.E-Commerce Business Model • Online firms make money in these ways– Commerce • Digital products (e. music) • Non-digital products (e. rich media – Fees • Affiliate fees/commission 4 . book. clothing) – Advertising • Banner. text ads. software.g.

– But.E-commerce is Doing Well. the growth rate has gone down. • Key players have shifted from a retailer business model to a platform model. • There is considerable potential for growth. 5 .Trend # 1. • Business-to-Consumer electronic commerce is growing.

US E-Commerce Trend (Source: Forrester Research) $250 51% 48% $200 $176 40% $150 US$B $100 $76 $50 $114 24% $141 25% 25% 30% % YOY growth $220 50% 60% 20% 10% $0 2002 2003 2004 2005 2006 0% 6 .

000.000.000.000 2.000 Amazon 3.000.000 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 7 .000 5.000 4. USD) 6.000 eBay TOTAL 1. Revenue Trend (in thousands.Amazon + eBay.000.000.

000 200.000 100. Indexed (2002 q1 indexed as 100) 600.000 0.000 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 8 .000 500.000 300.000 400.Amazon + eBay.

• Buyers/Sellers from around the world. 9 . – New patterns of trading.The Web is now Worldwide • After all these years. – New patterns of communication. the World Wide Web is living up to its name. • The World Wide Web is now a dynamic global communication platform.Trend # 2.

Global Picture 10 .

11 .

12 .

00% 10.com’s International Sales As a Percent of Total Sales 60.00% Electronics+general TOTAL 20.00% q1 q2 q3 q4 q1 q2 q3 q4 q1 q2 q3 q4 q1 q2 q3 q4 q1 q2 q3 q4 q2 q1 2002 2003 2004 2005 2006 2007 13 .00% Media 30.00% 50.Amazon.00% 40.00% 0.

14 .

00% q1 q2 q3 q4 q1 q2 q3 q4 q1 q2 q3 q4 q1 q2 2004 2005 2006 2007 15 .00% 30.00% 20.00% 50.00% 40.00% 10.00% 0.eBay’s International Sales As a Percent of Total Sales 60.

Google. Google.com 16 .com vs.Baidu.com Baidu.com.

Advertising is growing faster than commerce. • Search dominating online advertising with 40% of revenue.Trend # 3. 17 . • Online advertising is replacing commerce as the killer business model. • As content grows. advertising grows.

000 4.000 1.000 5.Online advertising growth trend (source: iab.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 18 . figures in millions) 6.000 3.net.000 2.

000.000 5.000 1.(Google+Yahoo) vs. (Amazon+eBay) 6. 19 .000.000 4.000.000.000 q2 q3 2006 q4 q1 2007 All figures in thousands.000.000 2.000.000 Google+Yahoo Amazon+eBay 3.

– Advertising is a low risk option for a publisher. – Tends to peak in Q4 of each year due to holiday shopping. Commerce • Commerce is a seasonal business.Advertising vs. – Commerce still requires non-trivial infrastructure. • Advertising requires low infrastructure. – Advertising is not seasonal. 20 .

Trend # 4.User-generated Content Top blog on the Internet (Xu Jinglei) 21 .

User-generated content popular everywhere. 22 .

com 23 . Blogger.Youtube Wikipedia. Blogger.com.com.Wikipedia. Youtube.org. Amazon.

com 24 . Amazon.Youtube vs. Amazon (reach) Youtube.com.

Youtube vs.com. Amazon.com 25 . Amazon (page views) Youtube.

com 26 . eBay (reach) Youtube. eBay.com.Youtube vs.

eBay (page views) Youtube. eBay.com.Youtube vs.com 27 .

• Two prime examples – Alibaba.com – Globalsources. • Global Sourcing Platforms help small and medium enterprises find buyers for their products.Trend # 5.com 28 .Emergence of Global Sourcing Platforms.

29 .

30 .

31 .

32 .

Globalsources. MSN/Live. eBay.com • Alibaba.com.com.com • Advertising – Google’s AdSense. Yahoo.com. Yahoo.com’s Affiliate Program 33 .com • Affiliate – Amazon.How can a Small and Medium Enterprise Benefit From E-Commerce? • Commerce – Selling direct (risky) – Selling through a platform (preferred) • Amazon.

washington.edu http://faculty.washington.Sandeep Krishnamurthy University of Washington sandeep@u.edu/sandeep 34 .

Sign up to vote on this title
UsefulNot useful