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E-commerce promises: Structural change and efficiency

“An agent is at hand to bring everything into harmonious cooperation, triumphing over space and time, to subdue prejudice and unite every part of our land in rapid and friendly communication… and that great motive agent is steam.” [Charles Fraser, 1880].

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E-commerce promises: Structural change and efficiency

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  1. “An agent is at hand to bring everything into harmonious cooperation, triumphing over space and time, to subdue prejudice and unite every part of our land in rapid and friendly communication… and that great motive agent is steam.”[Charles Fraser, 1880]

  2. E-commerce promises: Structural change and efficiency • Entry barriers shattered • Small is powerful • Disintermediation • Frictionless economy

  3. The story so far... • Entering is easy, staying is difficult • Large players dominate, consolidation • New intermediaries emerge, old intermediaries adapt • Stickiness gives traction, friction-free is slippery

  4. Making sense of the transformation • The many faces of E-commerce • What is really new? • What are the implications?

  5. Mapping E-commerce deliverable transaction& payment marketplace infrastructure

  6. Mapping E-commerce conventional ConventionalCommerce deliverable C-good transaction& payment Conventional marketplace marketplace infrastructure

  7. Mapping E-commerce conventional electronic ConventionalCommerce Net-aidedCommerce deliverable C-good C-good transaction& payment Conventional marketplace marketplace infrastructure Electronic infrastructure

  8. Mapping E-commerce conventional electronic IndirectE-commerce ConventionalCommerce Net-aidedCommerce deliverable C-good C-good C-good transaction& payment E-payment Conventional marketplace Electronic marketplace marketplace infrastructure Electronic infrastructure

  9. Mapping E-commerce conventional electronic DirectE-Commerce IndirectE-commerce ConventionalCommerce Net-aidedCommerce deliverable C-good C-good C-good E-good E-delivery transaction& payment E-payment Conventional marketplace Electronic marketplace marketplace infrastructure Electronic infrastructure

  10. Mapping E-commerce Creating new Marketplaces conventional electronic C-good C-good C-good E-good E-delivery E-payment Conventional marketplace Electronic marketplace marketplace Electronic infrastructure

  11. Not so new: Network-aided commerce • Enhance the flow of market-related information • Inform price changes and relay them ("more dynamic pricing") • Fast, cost-effective demand and supply matching • Speed up transactions • Reach new customers • Lower sales and marketing costs • Lower procurement costs

  12. Really new:The network is the marketplace The network has become the place where fundamental market processes take place: • discovery • matching • negotiation • transaction • (sometimes) delivery

  13. Network configuration determines Marketplace architecture • Who can play? • Buyers, sellers, third parties • Equal or differential access • By what rules? • Exchange (bid/ask), auctions, catalog, brokerage,... • level or biased • network control yields market control

  14. Multiple marketplaces • Consolidate existing market relationships and market power (e.g. auto, Dell) • New trading and distribution spaces (e.g. Napster, content syndication) • Aggregate buyer power (e.g. procurement) • Walled gardens (e.g. AOL-TW, broadband cable, I-mode, WAP)

  15. E-marketplace Neutral exchanges Buyers’ agents Existingchannels automation Sellers’ agents - execution / fulfillment + Content & Communityportals - Discovery +

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