Why is the U.S. e-commerce company the only one

"Bible, New Testament, Gospel of Matthew": "Whoever has will be given to him, and he will have more; whoever does not have, even what he has will be taken away." This is the Matthew effect that the Internet economy believes in. Why do Internet companies believe in the Matthew effect of the strong Hengqiang? According to Mark Sellers, the former chief analyst of Morningstar, there are four types of barriers to corporate competition: network effects, cost advantages, intangible assets and switching costs. The network effect is the cornerstone of the Matthew effect in the Internet industry.

The network effect shows that the value provided by Internet companies to users will increase with the increase of the number of users. For example, the more users of WeChat, the better the user experience (unilateral network effect); Willing to settle in, the b2b data more merchants, the more willing consumers are to use (two-sided network effect). Before 2015, China's Internet industry has always followed this pattern of development. However, after 2015, the concentration of the Internet industry began to decrease, especially in the e-commerce industry. Alibaba’s market share dropped from 87% in 2010 to 61% in 2019. Pinduoduo, Douyin, and Kuaishou successively landed on the beach. Compared with the other side of the Pacific Ocean, Amazon dominates the US e-commerce industry,

with its market share rising from 23.3% in 2011 to 32.1% in 2020. Old rivals eBay and Walmart are almost powerless to fight back. Under the influence of network effects, why does the US e-commerce industry have a dominant position (Amazon), while the Chinese e-commerce industry has a pattern of two superpowers (Alibaba, JD.com)? The root cause is that the transaction cost structure of the e-commerce industry in China and the United States is undergoing different changes. This article will explore the following three questions: How transaction costs affect e-commerce and even retail What is the difference between the transaction cost structure of the e-commerce industry