Platform-based online services, competitive actions, and e-marketplace seller performance

Abstract

Platform-based services are online services provided by e-marketplace operators to online sellers for them to compete and enhance performance. This paper aims at examining two important questions in the context of e-marketplace: (1) what kind of platform-based services can be used by online retail sellers as competitive moves? and (2) to what extent does the usage of these platform-based services impact online seller's performance? Drawing on competitive dynamics theory, we argue that sellers that undertake a larger number of, more complex and heterogeneous platform-based services achieve better performance in e-marketplace. Using data of 1046 sellers, who open online retail stores and sell cosmetics on Taobao, a Chinese e-marketplace, we found that while undertaking more complex platform-based services is important by itself, it is more important to be strategic by undertaking a large number of platform-based services and these services had better be different from its competitors and the industry. Implications for practice and research and suggestions for future research on improving sellers' competitiveness are discussed. This research was supported in part by a grant from the Research Grants Council of the Hong Kong Special Administrative Region, China (No. CityU 141809).