How online platforms have changed the game

Here, we look at how four online platforms have disrupted the sector in which they operate.

It’s hard to imagine a time when shopping for clothes, books or food meant having no other choice but to get dressed, make yourself presentable and get down to the stores to pick up your intended purchase. Luckily, we’re way past all of that, and we can happily lounge around in our pyjamas, shopping for groceries, booking holidays and checking out the latest sales conveniently from the screen of our mobile phone. The effects that this surge in online platforms and online services has had has been interesting, to say the least. From job disruption to job creation, increased competition and plummeting commodity prices, the market as a whole has undergone a rapid change in recent years, and it shows no sign of slowing down.

One of the main disruptions that the internet has had on businesses and the market in general has been cost reduction. The proliferation of e-commerce has seen the price of certain goods lowered drastically. This has happened for a number of reasons. Since advertising and marketing transitioned online almost completely, the need for a brick and mortar location to allow customers to view and handle goods has disappeared. This means no need for the owners to pay expensive rent and utility bills, taxes, repairs and maintenance, not to mention the salaries of employees needed to keep the store operating smoothly. The cost of maintaining a virtual business is a fraction of what a physical one costs, and this lack of overheads translates directly to a lower-priced product.

The companies changing things

Almost all companies have benefited from this decentralisation of physical stores. It has allowed a number of different start-ups to flourish remotely, often finding their footing from their college dorm room or basement. Some of these have gone on to disrupt major industries to the point where they themselves are now the market leaders. Below, we’ll take a look at a few of companies who started small and changed the game.

Deliveroo: How one company changed food delivery

Perhaps the most noticeable and obvious industry to be affected by the internet was the food delivery sector, but the impetus behind that change was led by one company: Deliveroo. Launched in 2013, Deliveroo was the brainchild of Will Shu after he moved from New York to London and was dissatisfied with the food delivery culture in the city. The model is fairly simple: customers order from local restaurants via the Deliveroo app and deliverymen on bicycles, scooters and cars then deliver the food for a small charge and restaurant commission. While it wasn’t an overnight success, Deliveroo managed to do what many startups only dream of, and quickly spread to over 84 cities in 12 countries. It’s now valued at over £1.5 billion and shows no signs of slowing down.

Eve: Revolutionising sleep

Another company that hasn’t been snoozing in the wake of the e-commerce tidal wave is Eve. In recent years, consumers have been taking sleep a lot more seriously – the hundreds of sleep apps and wearable devices to monitor and improve sleep are at least some testament to this. Eve has been at the forefront of developing a quality mattress that can be ordered and shipped from their online store. Instead of merely being a middleman that sells mattresses, Eve shaped their business model around developing one product to perfection. The company has now expanded their range by also selling pillows, bed frames, and bedding. Since its induction in October 2014, Eve has enjoyed an average monthly growth of 25 per cent and ships to over eight countries, with plans to expand further to the point of becoming a ubiquitous name synonymous with sleep and comfort.

Uber: Disrupting roads without a single traffic jam

Love it or hate it, Uber is hugely popular. Although it has been criticised for its treatment of drivers, the ride-sharing app is available in 633 cities worldwide. The company was first founded in 2009 and has been a pioneer in the sharing economy in the same vein as companies such as Airbnb. Its dynamic pricing system – in which fares are higher during certain periods to accommodate for supply and demand of requested rides – has been subjected to a lot of criticism, but ultimately has been responsible for ensuring that ride demands have always been met. Although initially started from an investment of just $200,000, Uber has raised huge amounts of money from various funders – including Google, which in 2013 invested a whopping $258 million – and is now estimated to be worth over $50 billion.

Airbnb: The stay-at-home start-up

Another giant that hardly needs any mentioning, Airbnb started as a humble idea between roommates to make some extra cash. No one could have predicted the way they absolutely shook the hotel industry, however. Later, when owners Brian Chesky and Joe Gebbia saw that they had a profitable business model on their hands, they sourced funding and expanded. The expansion came rapidly with Airbnb doubling their business from 5 million bookings to 10 million in a matter of five months. Nowadays, the company has more than 3,100 employees, operates offices in over 20 cities and has close to 150 million users.

Further reading on online platforms

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