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Monday, July 24, 2006

Flat World, Long Tail and Blue Ocean


You may not have noticed but the recent top sellers are actually talking about the same economic phenomenon: clicks are starting to emulate bricks and become the major sales channel.

The popularity of internet has introduced more opportunity to merchants of niche markets to reach a broader range to customers, effectively reducing the edge and advantages of the big brands over the small ones. Owing to such phenomenon the emphasis on the 80/20 rule may have changed: when 20% of customers can contribute to 80% of profit, we are drived to research on who these 20% of customers are; now the market is getting even and the other 80% (ie. the long tail) is starting to unleash their sales potential, forming a market with huge power and opportunities, that’s where the blue ocean lies.

Relating the above with the recent affair of Paypal and Google Checkout, I start to think the global purchasing habit is about to facing an inevitable shift. The era of online purchases will soon dominate the market and it’s time for merchants to get prepared: for it is either an opportunity for a better market position, or a deadly weapon that can get them out of the market.