Project Details
Funding Scheme : General Research Fund
Project Number : 11502222
Project Title(English) : Startup Survival on Digital Platforms: An Examination of Amazon's Influence over E-Commerce Entrepreneurs 
Project Title(Chinese) : 初創公司在電子平台的生存狀況:亞馬遜對其平台電商企業影響的研究 
Principal Investigator(English) : Dr HSHIEH, Shenje 
Principal Investigator(Chinese) :  
Department : Department of Economics and Finance
Institution : City University of Hong Kong
Co - Investigator(s) :
Panel : Business Studies
Subject Area : Business Studies
Exercise Year : 2022 / 23
Fund Approved : 354,867
Project Status : On-going
Completion Date : 30-6-2025
Abstract as per original application
The growth and development of online retail giants such as Amazon.com has given many startups online platforms to conduct a large portion of their sales over the Internet. Using Amazon's retail platform, startups theoretically have access to millions of customers, can set their own prices, and determine how their products are shipped, all without the need to invest in expensive physical overhead (e.g., physical stores, warehouses). However, with nearly 40 percent of all U.S. online sales occurring on its platform, Amazon possesses significant clout over all its third-party sellers. For example, Amazon has recently been reported to not only have coerced several startups to remove products from other platforms that are listed at lower prices, but to also have introduced private-label brands that compete directly with third-party products. The breadth and depth to which these actions influence platform-dependent startups has yet to be systematically explored in the academic literature. In this project we fill this knowledge gap by determining whether Amazon's anticompetitive interventions in its own platform undermine startup performance and survivability. The current knowledge gap may be caused by decreased scrutiny from regulators of the online retail marketplace secondary to the benefit of lower product prices afforded to online consumers which likely overshadows the financial struggles of online platform-using startups. Unfortunately, platform-dependent sellers cannot afford to lose access to a platform's massive customer base and are financially constrained to the point where they must comply with any changes to the platform's rules and conditions, many of which may discourage competition and product innovation. Amazon's retail platform is an ideal environment to evaluate this likelihood since we observe the product sales channel. Using the universe of product information, sales, prices, and startup seller information, we study the economics of Amazon's digital platform and the role it plays in facilitating or hindering entrepreneurship. We seek to determine whether Amazon's unilateral changes in its platform's ecosystem has a detrimental impact on startup survival and performance. Specifically, we investigate how startup product sales, product innovation, likelihood of securing venture capital financing, and likelihood of going bankrupt or being acquired are affected by Amazon's private-label brand introductions and the removal of the "Buy Now" button on the webpages of certain products for which Amazon's algorithms detect lower prices from other online retailers. Our goal is to establish empirically a source of potential sales risk born on startups that are locked to a particular digital platform.
Amazon.com 等在線零售巨頭的發展和成長使得許多初創公司透過在線平台實現了其大部分的銷售。使用亞馬遜的零售平台,初創公司理論上可以接觸到數百萬客戶,可以自行定價,並確定產品的運輸方式,而不需要投入較多資金在實體開銷(例如實體店、倉庫)。然而,由於近 40% 的美國在線零售都透過亞馬遜,亞馬遜對其所有第三方賣家擁有巨大的影響力。例如,據報導,亞馬遜最近不僅要求幾家初創公司將他們在其他平台價格較低的產品下架,且引入了亞馬遜自有品牌產品,與旗下第三方產品直接競爭。亞馬遜的舉措對依賴其平台的初創公司的影響的廣度和深度尚未在學術文獻中被系統地探討。在這個項目中,我們通過確定亞馬遜對其自身平台的反競爭干預是否會破壞初創公司的業績和生存能力來填補這一知識空白。當前的知識差距可能是由於在線零售市場監管機構的審查減少,其次是在線平台給消費者提供了較低價格的產品,可能掩蓋了使用在線平台的初創公司的財務困境。不幸的是,依賴平台的賣家不能失去來自平台的龐大客戶群,並且其在財務上的限制使得他們不得不遵守平台規則和條件的任何變化,其中許多可能會阻礙競爭和產品創新。亞馬遜的零售平台是評估此課題的最佳管道,因為我們觀察了產品銷售管道。通過產品信息、銷售、價格和初創賣家信息,我們研究了亞馬遜數字平台的經濟及其在促進或阻礙創業方面所起的作用。我們試圖研究亞馬遜對其平台生態系統的單方面變化是否會對初創企業的生存和業績產生不利影響。具體而言,我們調查了亞馬遜的自有品牌產品介紹,以及亞馬遜網頁上“立即購買”按鈕的移除,亞馬遜算法從其他在線零售商處檢測到較低價格的某些產品,將如何影響初創公司的產品銷售、產品創新、獲得風險投資融資的可能性,以及破產或被收購的可能性。我們的目標是憑經驗研究鎖定在特定在線平台的初創公司的潛在銷售風險來源。
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