How online retailers compete: duplication of purchase and natural monopoly in e-commerce

This study explores the application of two marketing empirical generalizations in the e-commerce context: the Duplication of Purchase Law, which posits that brands share customers in proportion to market share, and the Natural Monopoly Law, suggesting that popular brands dominate light buyer choices. Using a sample of 953 consumers, the study assessed purchasing patterns in online retail. The analysis revealed that online retailer brands exhibit a pattern consistent with the Duplication of Purchase, with customer duplication level in correlation with market share. Furthermore, large online retailers of electronic goods were found to benefit from a competitive advantage under the Natural Monopoly Law, marginalizing smaller competitors by attracting light buyers. These findings offer valuable insights into the e-commerce market dynamics, with implications for marketing strategies and competitive positioning.