The industry of e-commerce is particularly interesting, as it has been growing rapidly over the past years. It offers an opportunity for companies to sell products to people in different parts of the world. As Chen and Zhang (2015) stated, the electronic commerce industry has a significant effect on people’s lives as the technology is developing more and more. Therefore, researching the e-commerce industry is essential for understanding the currents trends, competitive advantages, and economic factors that influence it.
Industry Overview
E-commerce has been among the industries that have shown a rapid growth worldwide (Louis, 2015). Many companies have chosen to sell their products or services online. However, according to Stock (2018), the primary opportunity for growth in the industry is moving towards selling through smartphone apps. “The future of retail isn’t e-commerce or omnichannel or pop-up shops or geo-fenced flash sales (Stock, 2018, para. 4). Current economic events that determine the development are millennials in rich countries that are accustomed to online shopping. In addition, in developing nations, the incomes are rising, and smartphones are becoming available to nearly everyone. One of the recent news regarding the industry is the sales of Alibaba that have totaled $18 billion in a day (Howard, 2018).
As Howard (2018) stated, the industry accounts for only 8.5% of retail sales worldwide. However, the analytics predict that the percentage will be growing each year. The competitive strategies, according to Louis (2015) are details such as “navigation, setting a price point, and remarkable branding” (para. 3). Therefore, in order for a company to gain a competitive advantage, it has to differentiate itself from others by creating a unique brand and an easy-to-use interface. Typical customers in the industry of e-commerce vary depending on the nature of a particular product or service due to the fact that nearly anything can be sold online.
Other factors in the industry are the fact that in 2015 nearly 40% of people of the world were engaged in online shopping (Louis, 2015).
Company Overview
Etsy is among the companies that offer customers a platform for purchasing products online. In addition, it provides services to sellers by providing a place for selling unique products. As the company states, “Etsy is the global marketplace for unique and creative goods.” (About Etsy, n.d., para. 1). The company’s pricing policy is commission based, meaning that for each purchase a customer makes, the website receives a certain percentage. In addition, a company charges sellers for listing a product (Boorstin, 2015). It contributes to the success because the customers do not have to worry about the fees and sellers who are interested in placing their products on Etsy do not have to pay a yearly fee in advance. The strategy is typical for the e-commerce business appears to be sustainable over time as it is beneficial for both the marketplace and the consumer. The table displays the growth numbers that Etsy has had in 2018. Table 2 displays the percentage of growth Etsy had in the second quarter of 2018 compared to the second quarter of 2017. Together, the tables showcase the financial results of the company. It can be concluded that Etsy maintains financial success. One of the main factors that contribute to the success is a unique niche – the company is focused on handmade and vintage products. In addition, the easy-to-use the system for sellers and worldwide delivery allows selling the products to a broader audience.
Table 1
Table 1. Etsy Financial Growth (Etsy, Inc. Reports Second Quarter 2018 Financial Results, 2018)
Table 2
Table 2. Etsy Financial Results in 2018 (Etsy, Inc. Reports Second Quarter 2018 Financial Results, 2018)
Conclusion
Overall, the e-commerce industry has been developing and will continue to evolve. The current growth opportunity for companies is mobile apps. Etsy, an online marketplace, is part of the e-commerce industry. The company has demonstrated significant growth over the past year.
References
About Etsy.(n.d). Web.
Boorstin, J. (2015). Can Etsy make money and do good at the same time?.CNBC. Web.
Chen, Q., & Zhang, N. (2015). Does e-commerce provide a sustained competitive advantage? An investigation of survival and sustainability in growth-oriented enterprises. Sustainability, 7(2), 1411-1428. Web.
Etsy, Inc. Reports Second Quarter 2018 Financial Results. (2018). Web.
Howard, C. (2017). E-commerce takes off.The Economist. Web.
Louis, M. (2015). 5 ways to create a highly competitive e-commerce business. Web.
Stock, K. (2018). Running a $500,000 retail empire by iPhone. Bloomberg. Web.