Formation and Failure of an E‐Marketplace Pioneer in a Developing Country

Abstract

The purpose of this study is to understand the formation and failure of an e-marketplace pioneer in a developing country. Much of the research on e-marketplaces focuses on the developed world. Within the limited literature on the developing world, the dominant focus has been on user adoption and related constraints. Little research thus exists on how emarketplaces are formed and whether they succeed or fail. This study therefore follows qualitative interpretive case study methodology to investigate the formation and failure of an e-marketplace pioneer in a developing country. The findings show that the e-marketplace was formed without a clear e-business model and without enough attention to the developing country environment. The failure was subsequently caused by inability to generate revenue and failure to renew domain name license. The paper advises potential entrepreneurs to pay attention to their local environment and develop e-business models with appropriate revenue options to guide their e-marketplace initiatives.KEYWORDS: e-business, e-business model, e-marketplace, interpretive case study, developing country, Ghana INTRODUCTIONThe purpose of this study is to understand the formation and failure of an e-marketplace pioneer in a developing country. Continuing growth of the Internet and related Web technologies offers entrepreneurial opportunities for advanced e-business models such as emarketplaces (Truong and Bhuiyan, 2011). E-marketplace generally refers to an electronic platform that enables multiple buyers and sellers to exchange information about products and services and engage in economic transactions (Molla and Deng, 2009;O'Reilly and Finnegan, 2009). Since the dot-com era from the late 1990s to the early 2000s, e-marketplace has attracted much research attention in the e-business literature (see Standing et al., 2010;Wang et al., 2008). However, the bulk of this attention has been on the developed world.Relatively little empirical research therefore exists on e-marketplaces from the developing world (e.g. Pare, 2003;Pucihar and Podlogar, 2006;Humphrey et al., 2003). Within the limited developing country literature, the dominant focus has been on adoption and use by buyers and sellers and the challenges involved. As a result, not much empirical research exists on how e-marketplaces are formed and whether they succeed or fail. Researching e-marketplace formation and outcome is important because the findings can help researchers to understand the developmental phase of the technology before its adoption and use. Moreover, the findings can offer rich insight to potential entrepreneurs on how to found e-marketplace innovation in developing countty context while avoiding failure.This study therefore investigates the formation and failure of E-GhanaMarket (pseudonym), a pioneer e-marketplace start-up in the developing country context of Ghana. The research question motivating the study concerns how e-marketplaces in developing countries get formed and why they may fail. To address the research ...

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