2013-Chapter 4 Platform Services Abstract

The e-commerce industry In Taiwan consists mainly of platforms that are oriented toward ordinary consumers, i.e. the B2C, B2B2C and C2C platforms. There are two principal modes available for establishing an online shopping presence. The first one is the B2C marketing and sale model, which involves the platform operator acting as the distributor, with product vendors supplying merchandise to the platform operator and utilizing the uniform sale and customer service mechanisms provided by the platform. Product vendors are responsible only for merchandise shipments and returns and do not come into contact with customers directly. These buyers are usually brand name manufacturers or buyers of well-known products, and the way the merchandise is supplied is similar to that of hypermarkets and discount stores.



The second mode for setting up an online store is the B2B2C model, which resembles how a department store operates. Each product vendor acts as a department store counter, which is responsible for managing its own online presence. The online shopping platform provides vendors with the necessary tools to operate an online store, and it occasionally organizes joint marketing activities. Each vendor, however, is an independent business entity and is able to obtain buyers' information, interact with buyers and offer them products discounts and special deals directly. The platform operator is not involved in a vendor's business operation in any way.

E-commerce activities in Taiwan consist mainly of online shopping platforms. The B2B2C model enables the integration of the industry chain "Suppliers → Manufacturers → Distributors → Consumers." The entire supply chain takes advantage of the capabilities offered by the Internet to achieve comprehensive integration of resources associated with production, sales and retail terminal. The manner in which the Internet platform functions helps vendors to not only reduce operating costs but also improve service capacity. It also increases the opportunity for customers to receive added value. The online shopping platform makes it possible for vendors to interact with consumers face-to-face, enabling product manufacturers to retain more profits and allowing them to invest their capital on technologies and product innovation. Consumers are the ultimate winners.