Romance Of The Electronic Commerce:Based On Contest Theory

We regard B2C electronic commercial enterprises which are autonomous management as the research object, besides, we use CSF function and competition model to analysis the competition of B2C electronic commercial enterprises. It is thought that in order to winning market share and improving the reward, the enterprises have expended too much investment, and the enterprise which is in low cost has expended even more. The analysis of welfare about price reduction behavior and advertising in competition shows that short-term price reduction can improve consumer welfare, however, the improvement of consumer welfare about the ones who pay more attention to quality and service and other factors is not clear, it is depended on the preference of consumers. In the long term, malignant underselling will force some enterprises out of the B2C internet shopping market, and it will create a monopoly, which certainly harms the consumers’welfare. In order to increasing winning probability, the enterprises launched a lot of advertising, they will make a profit because of sales increase, but if the advertising cost is beyond a certain limit, it will do harm to the social welfare, because it is mainly connected with the searching cost.The phenomenon of the winner in a contest get all reward is named "winner-take-all". B2C online shopping market in china gradually appears "winner-take-all" phenomenon. This thesis analyzes its causes and impacts."Winner-take-all" phenomenon universally exists in network economy. Due to this effect, many e-commerce enterprises with excessive confidence participate in the contest. Once the contest starts, the contest will continue constantly until some companies cannot run business and exit the market. This effect causes waste of resources and raises "Winner-take-all" phenomenon in the investment field.The contest between B2C e-commerce companies lead many problems in online shopping market, such as lack of trust, fake and shoddy products, fraud, etc. The complaints and worries from consumers increate. In order to promoting the development of B2C electronic commerce, on the one hand, the e-commerce companies should change the idea of deprecation and focus on building their own core competitiveness by improving the logistic and after-sales service level and upgrading the consumers’trust and loyalty to the enterprise. Besides, electronic commercial enterprises should carry on different competitive strategy, innovate and establish their own characteristics, and avoid taking part in contest by market segments. E-commerce companies also can implement cooperation strategy and develop strategic alliance to realizing the development of the industry. On the other hand, the government should formulate corresponding policies and measures to improve the current legal system, at the same time, the government should encourage scientific research and innovation, make use of the third party assessment institutions and the third party payment system so as to perfect the credit system. The government should increase supervision dynamics and punish illegal and criminal behaviors severely to protecting consumers’rights and increasing consumer’s faith to online shopping, so as to increasing the market demand and promoting the development of economy.