Singapore group buying industry - the multi-homing dilemma : should platforms allow for multi-homing?

• Main Authors: Lee, Jie Sheng., Teo, Kai Xiang., Sou, Ewan Xuan Hao.
• Other Authors: School of Humanities and Social Sciences
• Format: Final Year Project
• Language: English
• Published: 2012
• Subjects: DRNTU::Social sciences::Economic theory::Microeconomics; DRNTU::Social sciences::Economic development::Singapore
• Online Access: http://hdl.handle.net/10356/50799
• Institution: Nanyang Technological University

Group buying is a global trend that had taken over the e-commerce industry by storm in recent years. With abundance of competition in this two-sided market, consumers often experience facing similar deals being offered on different group buying sites. Such phenomenon, also known as multi-homing, spurs the motivation for the empirical investigation of this paper. This paper will focus on investigating the effect of multi- homing on the sales of group buying sites, specifically in the Singapore context. The authors are particularly interested in how the 3 variables; market share, age and the strength of positive electronic word-of-mouth, affect the impact multi-homing have on the sales of group buying sites. Through this paper, the authors showed that increased multi-homing by group buying sites does adversely affect sales. This negative effect is reinforced with increasing market share, and mitigated when the site’s strength in positive electronic word- of-mouth increases. Another valuable insight from the results is that the impact on sales caused by the number of deals offered outweighs that of multi-homing. This paper will serve as a good foundation for future research work to empirically investigate the factors influencing platform competition in a fast-evolving web economy.