This article explores the peer-to-peer (P2P) platform business model to discover the best practices for the start-up company name "BABYHOPPERS". The success of collaborative consumption means that entrepreneurs see an opportunity to develop a similar business model in their field. The United States can be considered the birthplace of the concept of collaborative consumption, as it is the origin of many successful peer-to-peer companies.
That's why there are many startups in this concept, including BABYHOPPERS, whose business model is based on collaborative consumption.
Research objectives
Research methodology
For BABYHOPPERS, its activity information is gathered through the researcher's direct experience working with the company and by interviewing the company founder, customers and partners.
LITERATURE REVIEW
Sharing Economy
Due to a development of digital communication, sharing economy is improved by various technological driving forces. New systems such as online payment, navigation system GPS and mobile devices are critical tools that contribute to the development of the sharing economy (Botsman & Rogers, 2012). Provider and user can benefit from sharing economy in a way that the provider will utilize their own resource which probably rarely use and make money from it by having a collaborative online platform to provide the mechanism to manage marketing.
People are increasingly considering the sharing economy as a new source of income and have started joining the platform.
Sub-Market of Collaborative Consumption
- Redistribution markets
- Product service system (PSS)
- Collaborative lifestyles
However, the sharing economy is impossible if it is not enabled by an intermediary, especially an online platform. Therefore, the company needs to understand the nature of the sharing economy and then connect with the business aspect to further shape the added value.
E-Commerce Business Model
- Product innovation
- Infrastructure Management
- Customer Relationship
- Financial Aspect
The relationship capital the company creates and maintains with customers in order to satisfy them and create sustainable income. Target customer: The company must select customer segment to define the market scope where the company competes and does not compete. Value Proposition: It refers to highlighted value that the company is considered to develop from its ability to offer to a targeted customer.
The new way of doing business through an online platform has given the company various opportunities to create value. Information and communication technology enables the company to easily manage the customer's unique order so that the customer himself places the order according to his wishes in an immediate time and place. Capabilities: The company must be confident that it is capable of delivering the intended value to the customer.
Activity configuration: The company must create added value for its product at a price that the customer is willing to pay. Partner network: Business activity is distributed among partners so that the company can focus primarily on its core competencies. Information and communication technology enables the company to better develop and maintain relationships with customers, as follows;
Revenue Model: An element that measures how a business delivers value to a customer and in turn becomes a source of revenue. Cost Structure: The element measures the company's production costs from creation to the moment it achieves and delivers value to the customer.
PEER-TO-PEER (P2P) PLATFORM BUSINESS ANALYSIS
- Product Innovation
- Target customer
- Value proposition
- Capabilities
- Infrastructure Management
- Activities Configuration
- Partner network
- Resource and asset
- Customer Relationship
- Information strategy
- Distribution channel
- Trust, safety, and loyalty
- Financial aspect
- Platform business analysis summary
- Product innovation
- Infrastructure Management
- Customer relationship
- Financial aspect
Similar to the traditional company, peer-to-peer platform business also needs to clarify its target customer. Targeted customer of peer-to-peer platform company always refers to two sides of customer, the seller and the buyer. Peer-to-peer platform company will not usually limit its target buyer by age, gender or profession, but rather target a wider range regardless of the said element.
Many peer-to-peer platform companies are quick to recognize this unique value and adapt to its value in other ways. The most important and important activities for a company that wants to operate in peer-to-peer platform business is to focus on growing the seller side, followed by natural growth on the buyer side. Usually, peer-to-peer platform companies prefer to ignore offline marketing as it requires a high budget and the outcome is still questionable.
In this regard, almost all peer-to-peer platform companies today outsource call center customer service by increasing customer satisfaction. Peer-to-peer platform business also recognizes a power of word-of-mouth; therefore, the company regularly launches advertising campaigns that not only aim to sell the product, but communicate the societal value. The main source of income for peer-to-peer platform companies is a service fee charged on the value of each transaction.
Peer-to-peer platform business divides its customer into two sides, seller side (or supply side) and buyer side. The value proposition of peer-to-peer platform business like Airbnb and Uber is to use trivial resource or unused capacity to make customers live better than a. Due to the nature of peer-to-peer platform business, revenue is from transaction fees which are a percentage charge on each transaction value.
Therefore, peer-to-peer platform business is dependent on the frequency of transactions, in other words, the business earns more when the number of transactions are made.
STRATEGY FOR BABYHOPPERS
Company Overview
BABYHOPPERS's e-business model analysis
- Product innovation 1. Target customer
- Infrastructure management 1. Activities configuration
- Customer relationship 1. Information strategy
- Financial aspects
The community should be a travel with baby resource for parents to share experiences and discuss through the company's social networks. However, since the company is very new to the market, the first priority would be to increase brand awareness. Therefore, due to the limited budget, the company adopts the digital marketing method to spread the brand.
In addition, the company should launch a mobile application that would allow an immediate connection between the user and the owner, as they must come into contact during the collection of the rented equipment. Therefore, a company should use a survey method to understand customer needs and identify specific features on the platform to respond to those requests. In this case, BABYHOPPERS must charge Paypal for each transaction, which means that it splits the profit that the company should receive from its customer.
It created an official social media account that the company plans to revolve around three main platforms; WordPress, Facebook and Instagram and two others;. The company strived for a consistent frequency of releases to appear very dynamic, but without boring followers. The company uses the online resource to promote and connect with a customer because it is cheaper and able to reach people internationally.
Therefore, due to the fact that the company is small and has insufficient capabilities to partner with all major transaction service providers such as VISA and MasterCard, BABYHOPPERS must partner with online payment processing company. Meanwhile, the company also practices offline marketing by collaborating with a community and offers a coupon.
Main competitors
Indeed, there are few forum posts, few subscribers and many areas with no offers at all. In conclusion, although there are various peer-to-peer platforms that offer similar products and services as BABYHOPPERS, however, none of them offer exactly the same product and service, meaning different target customers, different product offerings and some of them are no more. active on the platform. Therefore, BABYHOPPERS is considered to be one of the first players to offer baby equipment rental to traveling parents on a peer-to-peer platform.
RECOMMENDATIONS
Recommended strategy for BABYHOPPERS
- Develop partnership with relevant business
- Optimize search engine and social media sharing
- Credibility
- Safety standard
- Product pick up and return policy
The company should carry out content development such as relevant articles, images and video that will attract new visitors. Furthermore, to encourage people to provide feedback, the company should send an email to express appreciation for using the service and encourage them to share experience by providing a direct URL link . In order to encourage people to join the platform, the company tends to simplify the registration process as much as possible.
Thus, a profile identification fails to generate trust when the company is unable to manage and justify. However, what should be concerned in this sharing system is the quality and reliability of the product. Although it is impossible for the peer-to-peer concept company to perform a quality check on every product listing, the company should act as an intermediary to listen to any negative feedback from the user.
In reality, a user who has a negative experience would tend to call the company instead of people who have a positive experience. For BABYHOPPERS, the company probably partners with an insurance company to provide insurance for the product that is more than 100 euros. Additionally, the company may wish to consider arranging deposits as a guarantee for the owner.
However, the company should be more concerned about this issue as it is inconvenient to receive and return the product. Therefore, providing an exact location on Google Map seems to be appropriate for this small business, which the owner and the user will communicate themselves to the most convenient place to pick up and return the product.
Business model conclusion
The company should conduct a thorough market research to clarify the market needs and highlight the needs and wants of the target customer. Once the needs and wants of both customers are identified, the company will be able to develop a platform with the appropriate technical features that can offer value to the target customer. Platform development is a core practice of online business; however, there are also different activities that need to be performed at different stages of the business.
First, the marketing campaign should focus more on the supply-side customer or owner rather than the demand-side customer or user. Due to the nature of the sharing economy, demand-side customers will come naturally when there is supply. In addition, the company also requires to control the quality of the product list, otherwise strong word-of-mouth phenomena would damage a brand.
In this regard, the company should educate or train the supply side customer with the necessary tools to make their product listing efficient and more attractive to demand side customers. Therefore, the company must continue to improve a platform and its business to satisfy customer needs as well as perform better than competitors. To be able to improve the business, the company must recognize the changing needs of the customer by performing data collection and data analysis to understand user behaviors and modify the platform features accordingly.
Also, the outsourcer should have easy-to-understand statistics so that they can improve their listing to better serve the end customer. From an analysis, BABYHOPPERS has potential to grow in this industry, but the company needs a sophisticated business plan to equip managers with direction to carry out ongoing business operations.
CONCLUSION
Conclusion
Any lessons learned from the cases that businesses have collected to analyze and use to explore best practices. Moreover, four months working in the BABYHOPPERS company gives a researcher a vision to be able to show the problem and the obstacle that needs to be improved. Therefore, together with the lessons learned from the case strategies and practices, the current business and strategy of BABYHOPPERS derives a new business model for BABYHOPPERS.
Limitation of the study and suggestion for further research
