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Competition in e-Commerce Parcels Delivery – A Disaggregated Approach

Pernilla Ivehammar et al.

Competition and Regulation in Network Industries2024https://doi.org/10.1177/17835917251392503article
ABDC B
Weight
0.30

Abstract

The market for delivery of e-commerce parcels to consumers in Sweden is considered to exhibit high competition. Aggregate data from the Swedish Post and Telecom Authority shows the market shares, with the Universal Service Provider as the dominant actor with 50 %. We identify the market structure according to the dominant-fringe-firm model. In this study, we employ a disaggregated methodology to analyse the competitive situation concerning e-commerce delivery for consumer goods. We observe the delivery options provided by the 200 largest e-commerce companies, measured by turnover in 2022, to the urban parts of a medium-sized town in Sweden. By making ‘fake’ purchases online, we register the delivery companies offered by the different e-commerce companies, prices for delivery, and the purchase limit for free delivery. Consumers mostly have a maximum of three delivery companies as options, and in almost one third of the cases only one available option. Our study shows that the number of delivery companies significantly covariates with lower delivery prices for consumers. E-commerce companies without free delivery have a higher delivery price than those who have, and the limit for free delivery correlates positively with the delivery price. It seems that some e-commerce companies offer a low delivery price and a low purchasing limit for free delivery and others do not. Our study indicates that the market may be progressing to a more ordinary oligopoly with a few companies that might end up like intensive Bertrand price competition or like a Cournot one, with higher prices and profits. Regulatory authorities and competition authorities must carefully monitor the competitive conditions before allowing mergers; review and possibly advise against governmental subsidies; consider price or profit limitations, but at the same time protect the Universal Service Obligation.

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https://doi.org/https://doi.org/10.1177/17835917251392503

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@article{pernilla2024,
  title        = {{Competition in e-Commerce Parcels Delivery – A Disaggregated Approach}},
  author       = {Pernilla Ivehammar et al.},
  journal      = {Competition and Regulation in Network Industries},
  year         = {2024},
  doi          = {https://doi.org/https://doi.org/10.1177/17835917251392503},
}

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Evidence weight

0.30

Balanced mode · F 0.40 / M 0.15 / V 0.05 / R 0.40

F · citation impact0.00 × 0.4 = 0.00
M · momentum0.50 × 0.15 = 0.07
V · venue signal0.50 × 0.05 = 0.03
R · text relevance †0.50 × 0.4 = 0.20

† Text relevance is estimated at 0.50 on the detail page — for your query’s actual relevance score, open this paper from a search result.