Author ： Feng Zhu and Qi-Hong Liu

Professor ： Soe-Tsyr (Daphne) Yuan

Presenter ： Po-Wei Chiang

CompetitionWhen PlatformsAttack

Platform business model

Platforms attack

Contradiction & Impact

Strike back

Discussion

Outline

Platform business model

a) acquiring a critical mass of customers in each group

b) matching them throughc) connecting them so that they can

exchange d) enabling a transaction so that purchase

can be made

Platform business model

Reference： http://www.launchworksventures.com/2014/04/21/what-is-a-platform-business/

What does the platform of Amazon look like?

Product suppliers

Third-party sellers

Amazon Customers

Platforms attack

What happens if the platform decides to offer competing products itself?

Would the platform owners essentially run the platform as a lab, and then cherry-pick the best products for themselves?

Hypothetical question of platforms attack

Walmart – Great value

7-11 – Seven select

Twitter – Periscope

Apple – Flashlight apps

Are there any cases happened before?

At Feb 2014, Amazon starts to sell a total of 5,000 products they didn’t sell ten months ago.

Amazon was more likely to offer products directly because…a) strong demand relative to other items in the same category

b) there were numerous third-party sellers

c) shipping costs were low

d) prices were relatively high.

Attacks from Amazon

Attacks from Amazon(cont’d)

The Battle for Visibility

The products directly sold by Amazon often became the default option.

Contradiction & Impact

In theory…Company move into a product’s space might provide better customer service than third-party seller.

Contradiction

After analyzing…Most customers seemed happy with the products they had bought prior to Amazon’s entry.

The sellers’ willingness to introduce innovative products on the platform might be eroded.

The platform effect of Amazon will be weaken, if they discourage too many small sellers.

Impacts

Strike back

Sign exclusive deals with suppliers

Manufacture some products yourself

Focus on a large selection of niche products

What can third-party seller do?

What more can third-party seller do?

How to decide the balance between private and third-party products?

Discussion