E-Commerce Industry: A Comprehensive Analysis of its Competitive Advantages

Abstract

This paper confirms the importance of e-commerce by analyzing the definition and historical development of e-commerce. It also emphasizes the importance of cybersecurity and trust in online transactions for the development of e-commerce. Through the analysis of Porter's five forces model, it is concluded that the e-commerce market does have great potential because of obvious advantages compared with traditional commerce and but also has high competition due to the low barrier to entry. In addition, this paper analyzes companies including SHEIN, Cainiao, Xiaohongshu, Taobao, and TikTok, and summarizes five already existing comparative advantages for e-commerce companies, namely convenience, digital information, logistic network, marketing, and information tracking. The final conclusion is that for companies that want to enter e-commerce, this is a good opportunity, but it is very significant to identify market pain points and develop their own differentiation. It suggests that companies should leverage the advantages of e-commerce while also addressing the competition and developing their own unique value proposition to succeed in this fast-growing market.