Competitions among online sellers on an e-commerce platforms has entered the era of “Red sea”. The highly transparent feature reduces the costs of learning and imitation, which breeds vicious competition on markets and increases product similarity. Hence, online sellers have to promote product iteration and innovation to meet the changes of market demands. However, how to measure the product innovative of online sellers, as well as the relationship between the posture of product innovation and online sales in changing competitive environment have barely been empirically revealed. This study intends to theoretical analyze the relationship between the posture of two different types of product innovation and online sales grounded on the red queen competition theory. The expected results are: First, compared with the average level of the industry, the better the posture of updated product innovation is, the higher the online sales are. Second, compared with the average level of the industry, the relationship between the posture of new product innovation and online sales is inversely U-shaped. This study not only expands the research scope on organizational competition mechanism based on the red queen competition theory, but also provides essential ideas for online sellers to develop product innovation strategies in competitive environments.
Zheng, Hua; Huang, Qiuyun; and Zhu, Zhen, "The Relationship between Product Innovation and Online Sales: A Red Queen Competition Perspective" (2020). WHICEB 2020 Proceedings. 49.