Egle Tam

Egle is a 33-year-old Executive Master degree student at ISM University of Management and Economics in Vilnius, Lithuania. Her primary research focus is on the platform-based business models. 

Currently Egle works on her Master thesis “Disintermediation in the local farmers’ food purchase platform”. This subject got her attention because of increasing number of platform-based businesses and their high failure rate. The new companies are born platform-based and the old ones are transformed into it. Both of them face many challenges and disintermediation is one of the major ones. Next, talking about online fresh food shopping, this market sector is still far behind from others (like apparel or travel booking) where digitalization of the whole value chain is much deeper entrenched. 

Platform-based business is a new trend, so there is a lack of validated researches in literature. We do not know exactly, why they go down and what pro-actions should be taken to retain platform-based ecosystems alive. Understanding of the reasons why platform leakage happens will allow to develop a theoretical anti-disintermediation framework on platform-based business model design. 

Results

Research showed that price is the most disintermediation determining factor. The buyers are willing to accept some inconvenience caused by disintermediation, to avoid extra costs. Therefore, the platform business managers in order to discourage disintermediation, should either decrease the price or to increase the customer perceived value. The latter can be done either by improving core platform features (making the system more user-friendly and stable) or by adding extra features (standing-out from the competitors). The well-functioning basic features are hygienic factor which absence rather than presence has stronger effect to disintermediation decision. The extra features, oppositely, have greater impact to customer retention. However, the platform business managers should consider if it is worth to invest to the extra features. The results showed that users agree to pay 8% above the regular price to have extensive feedback system available. No statistically significant gender-based differences were found.