Global Marketplaces ISSIP Service Innovation Weekly Speaker Series Webinar, October 5th , 2016 Professor Lasse Mitronen (Aalto University, Helsinki Finland)

1. Global
Marketplaces
ISSIP Service Innovation Weekly Speaker Series
Webinar, October 5th , 2016
Professor Lasse Mitronen

2. GlobaMa research project 2016-2017
• Project studies the alternative business
models and ecosystems to operate in a
platform economy
• Focus on the retail sector and the leading
retail platforms in Europe, Asia and the
US
• The research project is conducted at the
Aalto University School of Business
• The project is funded by the Tekes,
Finnish Funding Agency for Innovation,
Kesko retailing company, Finnish Post,
Unilever and ICT company Solteq
GlobaMa research project LMi
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3. Global Marketplaces in the World
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GlobaMa research project LMi
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4. Topics of interest: Global marketplaces and digital platforms
• To which customer segments global marketplaces are creating value?
• How global marketplaces define their value propositions? What kind of value or benefits
do they deliver to their customers? What kind of products and services do they offer to
their customers?
• How do global marketplaces maintain their customer relationships? How do they e.g.
enhance customer satisfaction and reward their loyal customers?
• Through which channels global marketplaces aim to reach their customer segments?
• What are the most critical resources and capabilities for they?
• What are the most critical activities or business processes for them?
• What kind of partner network they have and how do they manage this network?
• How do global marketplaces make money? What are alternative revenue models?
• What kind of is typical cost structure? What are the biggest expenses in global
marketplaces?
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5. Alibaba Amazon eBay Rakuten
Typeof Platform B2B, B2C, C2C Platform
and Marketplace
B2C Marketplace C2C and B2C Platform B2C Platform
Market Value
(Forbes May 2015)
$201.7 billion $175.1 billion $68.9 billion $24.7 billion
Year Founded 1999 1994 1995 1997
CEO Daniel Zhang Jeff Bezos Devin Wenig Hiroshi Mikitani
Headquarters Hangzhou, China Seattle, USA San Jose, USA Tokyo, Japan
Number of
Employees
(2014)
34 985 154 100 36 500 11 723
Revenue
(2015)
$12,293 million $107,007 million $8,692 million $6,567 million
Net Income
(2015)
$3,923 million $596 million $1,725 billion $408 million
GMV
(2015)
$476 Billion $225.6 Billion* $81.7 Billion $64 Billion**
Main Global Marketplaces
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6. 6

7. Value Categorization of Digital Retail Platforms - Examples
Service Process Value Created by Retail Platform Service
Processes
Opportunities (+) and Challenges (-) for
Retail Platforms
Implications for traditional online &
offline retailers
Big Data & Marketing Epistemic: Creating novelty through
personalized and customized real-time
content
+ Providing data analytics for merchants
+ Utilizing entire ecosystem and obtaining
necessary skillset
- Staying within privacy legislation
- Putting effort to creating sophisticated and
customized omni-channel consumer
experience
- Using data as much as possible for
marketing purposes
Discussion forums & feedback
systems
Social: Enabling interaction and facilitating
trust between ecosystem participants
+ Reducing the barrier between offline and
online retailing
- Balancing the influence of the users in
decision-making
- Emphasizing social aspect of retailing,
including investing in customer service in
offline retailing
Ecosystem Emotional: Horizontal diversification
extends and enriches the shopping
experience for consumers
Epistemic: Providing consumers with new
content also outside of the retail platform
+ Diversifying the ecosystem outside retail
+ Creating complementary services to the
retail platform
+ Taking a larger role in the entire lives of
consumers
- Maintaining focus on retailing
- Making the platform/ecosystem too large to
manage or control
- Creating partnerships outside of retail, in
order to horizontally diversify
- Communicating actively with consumers in
order to emphasize retailers service portfolio
Loyalty Programs Functional: Generating direct monetary
benefits from centralizing purchases through
loyalty points
Emotional: The vast ecosystem allows
retailers to enrich the shopping experience
and customize services
+ Giving incentives for consumers to use the
entire ecosystem
+ Creating long-term consumer loyalty
- Expensive to expand ecosystem if fully
owned/controlled by platform owner
- Generating appealing benefits throughout
the ecosystem
- Diversifying existing loyalty programs to
many different service sectors
- Making sure that consumers have enough
incentives from loyalty program in order to
concentrate purchases to retailer and partners
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8. Next Research Questions
1. Customer Experience in retail platforms?
2. Control systems and governance structures
of the retail platforms – vertical and
horizontal business groups platforms?
3. Last Mile Potential?
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