Emerging Markets Business Models

1
Emerging Markets Business Models

• Team 21
• Chris Bartle, Geoff Benjamin, Ingo Piroth, Monica
  Sargon

2
The Emerging Markets Business Models

• What they have in common
• Building Brand Loyalty
• Creating Market Share
• New Services
• Lack of revenue-based strategy

• Differences
• Different Services
• Different Functions
• Different Futures

3

• Key Metrics
• Net Revenue for Q299 49.5M
• Changes from Q298 to Q299
• Registered Users 851,000 to 5.6M
• of Auctions 9.2M to 29.4M
• Sales/Marketing Costs/User -50
• Net Revenue per Auction -14
• Net Revenue per 1 of Trade 30

4

• Critical Success Factors
• First to market
• Viral Marketing
• Very low overhead
• Built loyalty through personalization
• Sticky site
• Available 24/7

5

• Competitors
• Increasing by the minute
• A Profitable Business Model
• Driving Factors
• Comfort with e-commerce
• Anywhere, anytime shopping
• Hold my hand please

6

• Key Metrics
• Revenue from 1996- 1998 0.00
• Sold for 287 million to AOL June 5, 1998
• Number of registered users 40 million.
• Number one downloaded software.

7

• Critical Success Factors
• First to market.
• Expanding user base, the fax machine effect.
• No Industry IM Standard Yet!
• Comprehensive community for users.
• Technical superiority.

8

• Competitors
• AOLs Instant messenger service (AIM)
• Yahoo.com
• Microsofts MSN Messenger Service
• Abbott Systems
• Driving Forces
• Fax machine effect
• No Industry IM Standard Yet!
• Dedicated founding group

9

• Key Metrics
• Annual Revenue estimate 60M
• 1999 unique visitors/month 12.6M Feb
• Promotional spending Virtually 0
• Critical Success Factors
• First to Market with free email greeting cards
• Birth Site of Viral Marketing - Each visit is
  an opportunity to send another card
• Loyal users - stick to principles and avoid
  mass-commercialization.

10

• Competitors
• Large established companies (Hallmark, American
  Greetings)
• New e-Commerce Startups (eCards, eGreetings,
  sparks.com)
• Driving Factors
• Hippie '60's counter-culture, anti-consumerism
  philosophy
• Minimize advertising

11

• Key Metrics
• Each of the 40 million MSN Hotmail users has a
  Passport Wallet
• 27 of online consumers abandon transactions
  before completion
• MasterCard to market IBMs Consumer Wallet
• Competitors
• IBM, CyberCash, Qwallet.com, Ewallet, Java Wallet

12

• Critical Success Factors
• Technological expertise
• Strength in relationships and strategic alliances
• Brand name recognition
• Large user base
• Vast marketing and advertising power

13

• Driving forces
• Need for ECML standard
• Desire for increased online revenues
• Importance of establishing developed and targeted
  online relationships
• Merchant sites can focus on core competencies

14
Conclusion

• Network spawns more users
• First to market
• Innovation
• All 4 models have significant competition
• Other emerging models exist and are coming soon

15
Questions?