E-Commerce has no borders: Myth or reality?

One of the issues usually mentioned when talking about e-commerce is that it has served to break the frontiers. Consumers often look for specific things, products that they want, and it really gives them a little equal where the sellers sell them if what they offer them is what they want and if they make it arrive quickly and efficiently.

This has created a boom in so-called cross-border trade (for example, we have to think about how we buy books today and where they come from nowadays: online bookstores sell all over the world, some of them even with free shipping no matter where you are) and has made consumers open their range of options. There are those who buy directly from Chinese e-commerces, although the products end up taking much longer to arrive than if they are bought in a geographically close online store.

But is this principle absolutely true? Are consumers really so foreign to geography? I mean, are we buying without really caring about the physical location of who sells us?

A study has just called into question this principle and has just pointed out that reality does not fit so well into that idea. The study, conducted by Professors Gianvito Lanzolla and Hans Frankort, used consumer behavior in a B2B marketplace to determine the factors that ultimately determined consumer buying decisions. And one of its conclusions, and perhaps the most surprising one, is that physical location is important.

Consumers are influenced by where the seller is when making their buying decisions, as they do in the field of offline shopping. On the internet, the location is also taken into account when staying with a seller or with a completely different one.

Marketplaces are not fair

Another of the ideas that are usually taken into account when establishing how the way of consuming electronic commerce has changed is that marketplaces have created another dynamic of consumption. That is, it is now possible to access many brands and do it in an absolutely simple way. These tools allow consumers to connect with many products, many brands and many companies and generate a certain equality in the process. Everyone is, in the end, there.

The study also attacks that principle and points out that far from what may seem marketplaces are not at all fair.

While it is true that in theory these scenarios increase the likelihood that brands and products have more opportunities to connect with consumers, in fact and when you get to the reality part of business the thing is not exactly like that. The authors actually come to the conclusion that digital marketplaces create more divisions and more segmentations than traditional markets create.

This is because the principle that products compete on the basis of meritocracy principles (that is, the better the more prominent product appears), that is not the case. What is produced is an effect of the 'winner takes it all': a few winning companies are the ones that sell the most among all the offered.

In addition, certain details and certain issues are taken into account in the course of the purchase decision. It is not an innocent purchase at all, based on the benefits of the product, but the consumer takes into account several messages and signals and applies the prejudices and beliefs that they have. For example, considering that one product or another will be better by the reputation of the brand or by what it associates with its geographic location.

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E-Commerce has no borders: Myth or reality?