The Impact of Online Sales on Consumers and Firms: Evidence from Household Appliances

Arbeitspapier

In this paper, we estimate a differentiated products demand model to ask three questions regarding the introduction of e-commerce. First, we ask whether the online distribution channel has increased total sales, or only diverted sales from traditional channels. We find that there is some market expansion effect but also a considerable sales diversion. Second, we ask who benefited most from online sales: consumers or firms. We find that consumers benefited more, which is entirely due to the appearance of an additional distribution channel and not due to increased competition. Third, we ask how the online channel has affected European market integration. We find that international price differences for identical products are larger in the traditional channel than online. However, there is still substantial market segmentation in the online channel between the EU countries. The introduction of e-commerce therefore did not influence price levels and price dispersion in the traditional channel.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: Institute for Prospective Technological Studies Digital Economy Working Paper ; No. 2015/15

Classification and Topics

• Classification: Wirtschaft ; Oligopoly and Other Imperfect Markets ; Appliances; Furniture; Other Consumer Durables ; Information and Internet Services; Computer Software
• Subject: e-commerce ; online sales ; substitution ; consumer welfare ; nested logit

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Duch-Brown, Néstor ; Grzybowski, Lukasz ; Verboven, Frank
• Event: Veröffentlichung
• (who): European Commission, Joint Research Centre (JRC)
• (where): Seville
• (when): 2015

Further information

• Handle: http://hdl.handle.net/10419/202216
• Last update: 10.03.2025, 11:43 AM CET