Business Model Innovation in e-commerce. A critical analysis of chances and challenges 2/2

Business Model Innovation in e-commerce. A critical analysis of chances and challenges 2/2

Master’s thesis on business model innovation in e-commerce.

Welcome to our series of articles on current theses by our students!

Alumna Grisilda Miftari wrote an outstanding Master’s thesis in the field of social commerce as part of her Master’s degree at the Fresenius University of Applied Sciences in Cologne. The topic: “Business Model Innovation in e-commerce. A critical analysis of chances and challenges, especially in social commerce“. The first important findings of the thesis are presented below. Read here for part 2!

Business Model


Social commerce relates to e-commerce businesses that use social media sites such as Instagram, Pinterest, and Facebook to promote and sell goods and services electronically. The usage of social media for marketing purposes is rising, owing to the huge opportunity that social media platforms offer in electronically branding, promoting, and offering goods virtually, as well as giving them with access to a massive market that they would not have been capable of reaching elsewhere. After more than a decade and a half since its inception, social commerce is rife on social media sites that, via inspiring and engaging content, make goods lucrative. Consumer mobile consumption habits are rapidly evolving, which is fueling de-elopement in the electronic commerce, mobile commerce, and social commerce businesses (Global Industry Analysts 2021).

Rapid rise in the use of 4G equipped cellphones, the expansion of 4G communications infrastructure, and the concomitant increase in the number of individuals accessing online media content via smartphones are all enhancing demand for online purchasing and social commerce.

Covid 19 has “dramatically advanced the path of eCommerce” and, by extension, social commerce. It needs to be seen if this expansion can be maintained. Whereas the possible advantages are enormous, companies will need to address persistent challenges with social media confidence and navigate an increasing complexity social commerce ecosystem in order to thrive. Despite the COVID-19 dilemma, the worldwide market for Social Commerce is expected to reach an estimated size of US$2.9 Trillion by 2026, rising at a CAGR of 30.8 percent throughout the analyzed period. One of the study’s sectors, B2C, is expected to increase at a 31.9 percent CAGR to reach US$2.2 trillion by the conclusion of the research era. Following a detailed examination of the commercial ramifications of the pandemic and the resulting economic meltdown, expansion in the B2B market is modified to a projected 29.6 percent CAGR over the following seven years. This sector of the market now holds 32.6 percent of the worldwide Social Commerce industry (Global Industry Analysts 2021).

There are various challenges and barriers accompanying social commerce, which might impact on implementation process to make it more complex and in need of expertise. Furthermore, a consideration of data sovereignty is required because the social commerce approach provides strong social media sites to capture enhanced consumer data and expand digital customer profiles. Online consumers’ activity, particularly their shopping habits and preferences, may therefore be better tracked. Some of the main challenges identified by Geibel & Kracht (2021) are creating trust; connections for affiliate marketing, intensive application, process understanding and a top level of know-how, and data sovereignty in terms of ownership, and what occurs to this data.


Future outlook

Companies should use the chances offered by the market in order to create new business models which provide innovated goods and processes. The advancement of processes and improvement of products should go along with the technological advancement. Internet is impacting our life daily and the social media platform presence is increased. Companies should identify the right target groups for their products and identify the right platform for their offerings. For potential consumers efficiency, in terms of time and cost is essential to get the good in the fastest and cheapest way. Therefore, businesses should use this opportunity to offer physical products, services, and digital goods ordered from the comfort of peoples’ house. Further, if the company offers products electronically through social media, has an increased access towards various segments of the market. However, organization should be aware of potential barriers and struggles associated with the implementation of business model innovation in social commerce. Therefore, companies should transform their offering in order to minimize the struggles that potential buyers face. They should spread awareness of the importance of change and digital transformation for all skeptics that are resistant to change. Further, firms should be transparent with potential buyers by offering products as advertised. Customers have the power to change brands fast and frequently, therefore in order for long-run success it is inevitable to offer products that meet needs and demands of customers, otherwise it cannot be discussed about brand loyalty.

There are highly crucial to implement some strategies in order to facilitate the process of selling via social media. For instance, using chatbots or even other automated tools to interact with consumers, to understand their concerns, to help them to decide to buy the product as fast as possible, etc.; streamlining the purchasing process via checkout options; introducing new advanced analytics to help understand the consumers; using novelty material, such as augmented reality software; collaboration with influencers to sell their product, create a community surrounding their brand. The latter represents an interesting way of promoting products by influences that receive free product and share with their social virtual community their thought and reviews. Over the last years, personal affiliated links are used by influencers and brands collaboration that offer their followers discounted prices in exchange to earning percentages (as paid partnership) from those direct purchases via the personal links. Apart from links, personal codes are created from these partnerships as moderns’ forms of sales promotion, where a discount and/ or offer is provided for a limited period of time, as an incentive to motivate potential buyers to purchase the product immediate in order to benefit from the discounted offer.

Additionally, to the business perspective recommendations, there are some recommendations towards scholars and authors for future potential areas to research on social commerce. Analysis in customer and business perspective on practical implementation of social commerce, for three different years in order to highlight differences, is an interesting suggestion proposed from experts to analyze and get best practices from the market. Further, an interesting area of study is considering the focus on technological management in firm’s perspective rather than business psychology and/ or legal aspects behind social commerce. Finally, e-payment and implementation of “own currency” from social media platforms is considered the future of social commerce and therefore is recommended from experts to be studied.




Huang, Z. & Benyoucef, M., 2013, ‘From e-commerce to social commerce: A close look at design features’, Electronic Commerce Research and Applications, 12(4), 246 – 259.

Wu, J., Xu, M., Mo, Z. & Liao, L., 2015, ‘The research of design based on social commerce’, International Journal of Social Sciences Studies, 3, 157.

Geibel, R., Kracht, R., 2021, “Scientifically supported definition of social commerce”, URL: Social Commerce Working Paper.


Read here for part 1. 

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