Competition in e-Commerce Parcels Delivery – A Disaggregated Approach

Pernilla Ivehammar, Linnea Tengvall and Peter Andersson

Competition and Regulation in Network Industries, 2024, vol. 25, issue 4, 192-206

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.

Keywords: e-commerce parcels; B2C; competition; delivery companies (search for similar items in EconPapers)
Date: 2024
References: Add references at CitEc
Citations:

Downloads: (external link)
https://journals.sagepub.com/doi/10.1177/17835917251392503 (text/html)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:sae:crnind:v:25:y:2024:i:4:p:192-206

DOI: 10.1177/17835917251392503

Access Statistics for this article

More articles in Competition and Regulation in Network Industries
Bibliographic data for series maintained by SAGE Publications ().