E-market Consumer Responses to Platform Promotions: A Case of Korean E-marketplace

Abstract

This study empirically investigates e-market consumers’ responses to monthly platform discount coupons. Specifically, based on an archival data set obtained from a leading e-marketplace in Korea, our hidden Markov model reveals that there are two different types of consumers on the e-market, those who purchase relatively less but seek temporal seller discounts (Class 1) and those who buy relatively more but are less attracted by such discounts (Class 2). Class 1 consumers purchase products when platform coupons are available but are less likely to buy when platform coupons are all redeemed. On the other hand, Class 2 consumers are willing to purchase products even without platform coupons. Our latent groups demonstrate that the effect of platform promotion is not unidirectional but may depend on the consumer state and class. We discuss the theoretical contributions and managerial implications of our findings. © (2023). All Rights Reserved.