Research On E-commerce Platform Competition And Business Model Based On Time-Spatial Perspective

Rencently,E-commerce platform markets develop quickly. In 2015,China’s e-commerce platform trading volume exceeded 18 trillion, increasing by 35%, and online retailing trading volume reached 3.8 trillion, increasing by 37.2%.The B2C and C2C platforms have an important part of people’s daily life and the e-commerce industry becomes the key industry for demand and production. At the same time, fierce competition arouses among the e-commerce platforms and business model innovation emerges. However, China’s research on e-commerce platforms is not enough and the research tool is far from perfect.E-commerce is now changing people’s living way. people could be able to trade at any time and any place, the moving of the commodities are accomplished by logistics, the whole process is breaking the physical time-space constraints,consumers feel more about time and time value. Although many studies mentions this characteristic,these studies are not deep enough. In fact, these theories are based on the fact of being constrained physical time-spatial constraints, which could not explain the two-sided and the physical-time-space-breaked e-commerce platform. The two-side market theory focuses much on the credit card,computer system and less on e-commerce platform, especially fail to explain the time-spatial characteristic.Meanwhile,products of China’s e-commerce platform market are highly homogeneous which makes competition fierce. In order to compete for differentiation, JD focuses on the construction of logistics.Compare with Alibaba(Taobao&Tmall),JD compresses the time-distance of shopping online and improves consumption time value. Suning,DangDang,WoMai then focus on logistics improvements.Alibaba now pays more attention on integrating logistics resources to enhance time efficiency. Seldom studies research on platform differentiation competition and focus on product differentiation,few notice and study the differentiation competition basedon time.This paper pays attention on the time-spatial characteristic and considers it essence as the change of correspondence with physical time-space and economic time-space, which economic time-space breaks the physical time-space constrains and expands to a larger scale. This change expands the consumer time value and thus improve consumers’ utility. This paper puts forwards Time Value Spillover Effect(TVSE), which is a unique effect different from cross-externality and direct-externality of the traditional two-side markets. Different e-commerce platform produces different TVSE which causes the differentiation competition among platforms. Meanwhile, change of time-spatial correspondence also causes the business model innovation of e-commerce platform and the difference of TVSE makes this innovation different. This paper’s main results are:(1)Under Internet environment, economic time-space breaks the physical time-space constrains and expands to a larger scale. In infinite economic space, transaction time and place could not be identical. From the perspective of time, consumers could make use of pieces of time on transaction which means the necessary consumption time is compressed. This compressed time could be rearranged to do things for higher utility which actually means the value-added by consumption through e-commerce platform and indirectly improve consumers’ utility. From the perspective of space, economic time-space expands the coordination space among the people,logistic and capital. The change of correspondence with physical time-space and economic time-space is the main reason of the appearance of e-commerce platform.(2)TVSE means the improvement of consumers’ time will make sellers and the platform better off. This notion is proposed by research on consumer behavior with time constrains and the impact of consumption time value under time heterogeneous, which is the innovation of this paper.TVSE brings about externality:The improvement of consumption time value enhances both the consumers’ and sellers’ demand for platform,thus increases trading volume and scale of the platform. However,when surpassing critical time, consumption time value will reduce,which in result producing negative externality.TVSE works together with cross-externality and direct-externality. TVSE is the temporal effect and cross-externality&direct-externality are the spatial effect, which are important in e-commerce platform development.(3)This paper takes deep insight into the pricing of e-commerce platform by using TVSE, cross-externality and direct-externality and finds that high TVSE will enhance the direct-externality among sellers, which causes fierce competition and thus platform could charge high from sellers. As for the self-support platform, sellers’ scale will be smaller and causes weak cross-externality, in result, restricting platforms charging higher price to sellers and lessen the profits.(4)Different structures of e-commerce platforms produce different TVSE which forms the differentiation competition.This paper bases on the model of Armstrong(2004,2006), according to the user’s homing ways,platform’s structure and type to study the competition among platforms.Research shows that the cross-externality and direct-externality of e-commerce externality should be worked together with TVSE so that platforms can get higher profits. Higher t TVSE brings higher cross-externality and direct-externality. Weak TVSE and higher direct-externality among consumers will influence platform’s profit,because more consumers butmore time spent will lower consumer’s utility and lower the consumer scale, thus platform’s scale and profits will be influenced.This is caused by the change of correspondence with physical time-space and economic time-space,which makes consumers and sellers scale expands,consumers’utility will reduce if platform could not satisfy consumption time value,thus making users transfer and reduce platform scale.(5) The change of correspondence with physical time-space and economic time-space causes the business model innovation of e-commerce platforms. The time and space motivation lies in:the spatial effect caused by interaction with economy of scale and economy of scope between supply side and demand side,TVSE satisfying the value added in consumption time. And the platform business innovation includes income mode innovation, value creation mode innovation and factor-sustaining system innovation, these different business exerts different TVSE.