First, customers matter more than competitors. E-commerce has transferred a great deal of power to customers. The balance of power has shifted from the business to the customer because buyers are in a better bargaining position. They can quickly compare products and prices of different e-commerce platforms when online. The access to information is a key determinant of a customer’s bargaining power in commercial transactions in the businesses world, and since the internet provides a wide array of it, the bargaining power of customers is high. For example, according to Pang, (2015), the bargaining power of buyers at Alibaba’s e-commerce business is strong (p.15). This is because other online platforms exist as well and the users can check their prices in comparison to Alibaba’s. Due to this, their prices have to be quite competitive.
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