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B2C eCommerce Strategy and Market Structure: The Survey Based Approach

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  • Stefan W. Schmitz
  • Paul Peter Sint

Abstract

This paper follows two objectives: (i) It demonstrates the merits of the survey based approach to B2C eCommerce characteristics and company strategy, and (ii) it presents empirical evidence of the crucial importance of size and marketing investment in B2C eCommerce markets. It presents econometric estimates of the effects of company characteristics and company strategies on the performance of Viennese B2C eCommerce companies in 2001. We provide econometric analysis of three dependent variables in turn: (i) number of B2C eCommerce customers in 2000, (ii) number of B2C eCommerce employees in January 2001 and (iii) revenue growth rate in 2001. The models do explain the data quite well: Size as well as endogenous sunk costs emerge as the main success factors. Furthermore, the results of nonparametric tests are presented. They mostly confirm the econometric evidence. We also show that the quantitative results are consistent with the qualitative results of the surveys. Finally, we argue that the survey based approach to B2C eCommerce is a method that provides reliable and consistent data, and that it complements the approach based on prices and consumer behavior commonly applied.

Suggested Citation

  • Stefan W. Schmitz & Paul Peter Sint, 2003. "B2C eCommerce Strategy and Market Structure: The Survey Based Approach," Discussion Papers of DIW Berlin 323, DIW Berlin, German Institute for Economic Research.
    • Handle: RePEc:diw:diwwpp:dp323
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    References listed on IDEAS

    as
    1. Baylis, Kathy & Perloff, Jeffrey M., 2001. "Price Dispersion on the Internet: Good Firms and Bad Firms," Institute for Research on Labor and Employment, Working Paper Series qt2t0770rn, Institute of Industrial Relations, UC Berkeley.
    2. Yannis Bakos, 2001. "The Emerging Landscape for Retail E-Commerce," Journal of Economic Perspectives, American Economic Association, vol. 15(1), pages 69-80, Winter.
    3. Severin Borenstein & Garth Saloner, 2001. "Economics and Electronic Commerce," Journal of Economic Perspectives, American Economic Association, vol. 15(1), pages 3-12, Winter.
    4. Baylis, Kathy & Perloff, Jeffrey M., 2001. "Price Dispersion on the Internet: Good Firms and Bad Firms," Department of Agricultural & Resource Economics, UC Berkeley, Working Paper Series qt2t0770rn, Department of Agricultural & Resource Economics, UC Berkeley.
    5. Kathy Baylis & Jeffrey Perloff, 2002. "Price Dispersion on the Internet: Good Firms and Bad Firms," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 21(3), pages 305-324, November.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    B2C eCommerce; empirical evidence; success factors; endogenous sunk costs;
    All these keywords.

    JEL classification:

    • L10 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - General
    • L25 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Performance
    • L81 - Industrial Organization - - Industry Studies: Services - - - Retail and Wholesale Trade; e-Commerce
    • L86 - Industrial Organization - - Industry Studies: Services - - - Information and Internet Services; Computer Software

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