Establishing successful e-commerce ecosystems: Evaluating strategies for reaching a critical mass of participants

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Abstract

Although e-commerce in general and platform business models in e-commerce report steadily increasing revenues, establishing e-commerce ecosystems is not a guaranteed success per se. Potential platform owners must carefully plan the ignition of the ecosystem to reach a critical mass of customers. This critical mass is crucial for the platform to benefit from direct and indirect network effects. However, research so far has not provided clear guidance and strategies on how to successfully establish ecosystems in e-commerce. Therefore, we evaluated and demonstrated generic platform ignition strategies in e-commerce. Our evaluation is thereby based upon an established mathematical model for two-sided markets considering utility gains from indirect network effects and costs. The heterogeneity of the individual market sides is reflected in the form of sigmoidal distribution functions. Applying this model, we show that subsidies, seeding, marquee, single side, micro market, piggybacking, opening up, and big bang marketing are potential strategies for reaching a critical mass of participants in e-commerce ecosystems. We provide guidance for practitioners on how to establish successful e-commerce ecosystems. We contribute to the body of knowledge strategies in e-commerce ecosystems by bridging critical mass and network effects.

Keywords: E-Commerce Ecosystem, Platform, Two-Sided Market, Ignition Strategies, Critical Mass, Design Science

Authors’ individual contribution: Conceptualization — T.W.; Methodology — T.W. and B.D.; Validation — B.D.; Formal Analysis — B.D.; Investigation — T.W. and B.D.; Resources — T.W.; Data Curation — B.D.; Writing — Original Draft — T.W. and B.D.; Writing — Review & Editing — T.W. and B.D.; Visualization — B.D.; Supervision — T.W. and B.D.; Project Administration — T.W.

Declaration of conflicting interests: The Authors declare that there is no conflict of interest.

JEL Classification: D51, M30, L14

Received: 04.03.2023
Accepted: 15.05.2023
Published online: 17.05.2023

How to cite this paper: Wulfert, T., & Dennhardt, B. (2023). Establishing successful e-commerce ecosystems: Evaluating strategies for reaching a critical mass of participants. Corporate Ownership & Control, 20(3), 130–145. https://doi.org/10.22495/cocv20i3art9