Back to Papers

Impact of Platform Owner’s Entry on Third-Party Stores

Shu He, Jing Peng, Jianbin Li, XU Li-pingInformation Systems网络安全UTD24
Information Systems Research2020-10-30University of Connecticut; Huazhong University of Science and TechnologyDOI
Citations88

One important decision faced by the owners of online marketplaces is whether they should enter the market and sell products directly to customers. In this study, we provide data-driven insights to managers by empirically investigating the impact of a platform owner’s entry on the demand of third-party stores and their potential reactions using transaction level data from a large e-commerce platform. Contrary to previous studies in mobile app platforms, our study shows that the demand of competing third-party stores decreases with the entry of the platform, especially for large third-party stores. We further show that the demand reduction is significant only in the offline channel and the reduction results from third-party stores’ defensive strategy to divert their offline customers away from the platform (i.e., disintermediation). Our findings indicate that platforms should carefully evaluate the nature of their markets before entering the market to compete with complementors, because they may lead third-party sellers to disintermediate from the platform. On the other hand, from the perspective of third-party sellers, disintermediation might be an overreaction to the entry of the platform, because their online demand is not significantly affected by platform entry based on our analyses.

DisintermediationThird partyBusinessDatabase transactionE-commerceTransaction dataIndustrial organizationCommerceComputer scienceInternet privacyFinanceWorld Wide Web
Related Papers (8-Dimension Scoring)

Spillover Effect of Consumer Awareness on Third Parties’ Selling Strategies and Retailers’ Platform Openness

Wen Song, Jianqing Chen, Wenli Li · Information Systems Research

Score: 80

Estimating the Impact of “Humanizing” Customer Service Chatbots

Scott Schanke, Gordon Burtch, Gautam Ray · Information Systems Research

Score: 70

Does Identity Disclosure Help or Hurt User Content Generation? Social Presence, Inhibition, and Displacement Effects

Jingchuan Pu, Chen Yuan, Liangfei Qiu, Hsing Kenneth Cheng · Information Systems Research

Score: 70

Understanding Physicians’ Online-Offline Behavior Dynamics: An Empirical Study

Liuan Wang, Lu Yan, Tongxin Zhou, Xitong Guo, Gregory R. Heim · Information Systems Research

Score: 70

Appealing to Sense and Sensibility: System 1 and System 2 Interventions for Fake News on Social Media

Patricia Moravec, Antino Kim, Alan R. Dennis · Information Systems Research

Score: 65

An Empirical Investigation of the Antecedents and Consequences of Privacy Uncertainty in the Context of Mobile Apps

Sameh Al‐Natour, Hasan Cavusoglu, Izak Benbasat, Usman Aleem · Information Systems Research

Score: 65

Editorial for the Special Section on Humans, Algorithms, and Augmented Intelligence: The Future of Work, Organizations, and Society

Hemant Jain, Balaji Padmanabhan, Paul A. Pavlou, T. S. Raghu · Information Systems Research

Score: 60

Too Good to Be True: Firm Social Performance and the Risk of Data Breach

John D’Arcy, Idris Adjerid, Corey M. Angst, Ante Glavas · Information Systems Research

Score: 60