Conclusion

 

This paper examined a new breed of Internet companies that can be identified as “social shopping” websites. In particular, it offered a closer look at four companies: Kaboodle, ThisNext, Crowdstorm, and Stylehive. Our analysis intended to offer an overview of the state of the competition in this industry and to evaluate the position of social shopping sites. Following Michael Porter's (1979) analysis framework, our goal was to measure the strength of competitive forces in order to identify a position for social shopping companies where they could better defend themselves or influence these forces in their favour.

 

The future of these companies is very unpredictable at this point because of their short history, the novelty of their business model, and the constant changes in the environment. Clearly, the success of social shopping sites is related to the traffic they generate, which depends on the number of users visiting the sites or joining the communities. Indeed, a large community has been identified as a strong factor in developing competitive advantage.

 

It is evident from the analysis that the social shopping scene is highly competitive. Already established social networking sites place a serious threat on the success of these new companies. As first movers, these companies possess a significant advantage over emerging companies. However, social shopping websites may have found a well grounded concept that could be particularly attractive to other companies looking to exploit word-of-mouth advertising. As users are conducting more activities online and participating more often in online communities, the concept behind social shopping websites seems promising. If social shopping websites find a way to secure enough critical mass—even by a merger or an acquisition—there may be an opportunity for some of them to achieve sustainability.