Introduction to Online Marketing and E-commerce models

Online marketing also known as internet marketing is defined as using internet platform to market products, services or brands. Online marketing is supported by internet media such as affiliate marketing, website, social media, and search engine (Barolli, et al., 2017, p. 74). Online marketing allows businesses to understand the behaviour and needs of their customers, their competitors and the market at large.  Therefore, online marketing gives businesses to expand their market growth and expansion as well as their competitive edge (Wang, 2015, p. 111).

With the evolution of online marketing, three different electronic commerce (e-commerce) models were developed. The models are;

 Business to Consumer (B2C) which refer to the end to end trade between a company and consumers who use its products (Seybold & Marshak, 1999, p. 79).

Business to Business (B2B) which refer to the end to end trade between two companies/ businesses which transact together (Brinck, 2002, p. 132).

Peer to Peer (P2P) refers to a decentralised internet platform that allows to people to interact by buying and selling with each other. Buyers and sellers are permitted to transact directly without the intervention of a third party (Buford, et al., 2009, p. 331).

This paper seeks to compare and contrast two online financial services companies in Australia. Considering the emergency of cryptocurrency exchange platforms, this important segment of the service market will be addressed. Two competing websites, that is, the CoinSpot and Coin Base have been chosen for comparison basis.

1. Chosen e-commerce business model

The Peer-to-Peer (P2P) business model has been selected for the study. The introduction of cryptocurrency such as Bitcoin has seen many people engaging in P2P by buying and selling the currency. Bitcoin P2P business model uses websites and other internet platforms to facilitate the relationship between the buyers and sellers (Milne & Parboteeah, 2016, p. 23).

There are several platforms in Australia that facilitate cryptocurrency P2P business. The most famous platforms are Independent Reserve, Coin Base, eToro, CoinSpot, Bitcoin OTC, Coinmama, and CoinJar (Eyers, 2015); (Holderness, 2018). The study seeks to compare the Independent Reserve P2P platform and Coin Base P2P platform.

1. Business Name

Business 1: CoinSpot

Business 2: Coin Base

1. Homepage URL

The Homepage URL for CoinSpot is https://www.coinspot.com.au/ while its website is www.coinspot.com.au. 

• Homepage Screenshot

1. CoinSpot    

1. Why the website belongs to P2P business model

As mentioned earlier, Peer to Peer (P2P) refers to a decentralised internet platform that allows to people to interact by buying and selling with each other. In other words, P2P is an online market that facilitates buying and selling between two end users without interference from an intermediary (Liang, et al., 2011, p. 13).

1. CoinSpot

CoinSpot Pty. Ltd is an online bitcoin trading Company which is located in Melbourne, Australia. CoinSpot was established in 2013 and provides end users with a platform and wallet of buying and selling bitcoins among other currencies (CoinSpot, 2018). Users are required to register through the company’s website www.coinspot.com.au before they can gain login access and trade among themselves (Bloomberg, 2018). CoinSpot is considered to be the largest online platform in Australia based on the number of cryptocurrencies bought and sold on a daily basis. CoinSpot is an online trading system that uses a multicoin wallet and Australian dollar to store, send and receive tokens and cryptocurrency coins. An end user can communicate, receive and access cryptocurrencies such as Bitcoin, Dogecoin and Litecoin instantly into their wallet accounts after transacting (Dervojeda, 2013, p. 58).

Peer-to-Peer (P2P) Business Model for Cryptocurrency Trading

CoinSpot meets the description of a Peer to Peer business model. First, it provides a platform where an end user can interact and undertake the business transaction. Second, there is no involvement of the third party. And third, all the activities are done online without a physical meeting between the buyer and seller.

1. Coin Base

Coin Base Ltd Company was founded in 2012 in San Francisco in the United States. The company operates in over thirty-two countries including Australia. Under the leadership of CEO Brian Armstrong, Coin Base realised revenue of I billion USD in 2017. Coin Base is an online broker who specialises in the exchange of Cryptocurrencies. Just like CoinSpot, Coin Base provides end users with a platform to facilitate the buying and selling of bitcoins among other currencies. Users are required to register through the company’s website www.coinbase.com before they can gain login access and trade among themselves (Coin Base, 2018).

Coin Base is the largest and highly popular online cryptocurrency exchange platform which facilitate an exchange of at least $ 150 billion on a single day. Although users shy away from Coin Base because of its high fees, the company offers security assurance and quality exchange. Some of the cryptocurrencies that the company trade in are Ethereum, Bitcoin, Ethereum classic, Litecoin, and Bitcoin cash (Eyers, 2015).

Coin Base meets the description of a Peer to Peer business model. First, it provides a platform where an end user can interact and undertake the business transaction. Second, there is no involvement of the third party. And third, all the activities are done online without a physical meeting between the buyer and seller (Dervojeda, 2013, p. 15).

1. Principal business goal (s)

The demand for cryptocurrencies has increased globally over the last five years. Today Bitcoin and other digital currencies are available in over 190 countries. The growth in the global digital currency industry has been attributed to by the forces of demand and supply. With the increasing growth on the online market, consumers wanted a common currency that would facilitate smooth trade. The existing currencies such as US Dollar, Australian Dollar, and Pound were affected by transactional risks. In other words, the currencies would lose value when exchanged from one currency to the other (Milne & Parboteeah, 2016, p. 12). Therefore, there was the need for common digital currencies hence the invention of the cryptocurrencies. More people were willing to transact using the currencies such as Bitcoin which resulted in high demand. Companies such as CoinSpot and Coin Base show this as an opportunity to expand their business. Online financial service platforms have ensured that the demand for cryptocurrencies has been met through adequate supply (Ivory, 2013, p. 57). Therefore, the general objective of platforms provided by CoinSpot and Coin Base is to enable the end users to transact at their convenience by enhancing the security of their money and reducing the time it takes before a transaction is completed (Barolli, et al., 2017, p. 213).

1. CoinSpot

The main objective platform is to facilitate currency exchanges. CoinSpot provides each user with a secured wallet/ account containing their details which allow them to send, receive and store coins. To facilitate seamless operations, CoinSpot provides users with a variety of digital currencies at their disposal. Generally, CoinSpot allows wallet owners to trade online irrespective of their location globally (CoinSpot, 2018).

1. Coin Base

The primary objective of Coin Base is to be the largest online exchange platform. With its presence in over 32 countries, Coin Base is in a right direction towards achieving its objectives. Lastly, Coin base strive to be a platform that provides quality online exchanges besides assuring the security of the users’ information and money (Coin Base, 2018).  

1. Assessing the websites using  on a five-point semantic differential scale

The questions have been assessed using the semantic differential scale below;

1. CoinSpot

1. Coin Base

1. Compare and contrast your chosen websites: which website is more likely to be successful than the other, and why?

Five main factors can be used to evaluate a website. The elements are Speed, navigation, text clarity, functionality and appearance.

1. Speed: Refer to the time it takes for a website to load. Both websites take approximately 20 seconds to load.
2. Navigation: Refers to how easy is it to access information on the website. A website can either have an easy to navigate or clumsy structure. CoinSpot can easily navigate because related information is captured under one tab. On the other hand, Coin Base has a poorly organised layout hence clumsy (Maier, 2008, p. 34); (Ivory, 2013).

• Text clarity: Both websites have used simple language that can easily be understood by users without much interpretation. Contact and Support Centres have provided for follow up assistance. CoinSpot targets a wide coverage (global) while Coin Base target the Australian market for now. Therefore, CoinSpot uses a simpler language to meet the needs of a huge market compared to Coin Base (Tate, 2009, p. 17); (Martinez, 2011, p. 33).

1. Functionality: Refers to how effective is the website to meet its primary objectives. Although both websites have adequately presented products in line with its objectives, CoinSpot is more outstanding (Steinmetz & Wehrle, 2005, p. 172).
2. Appearance: Refers to how easy is it to access the website from the homepage to the support centre. The CoinSpot is well laid out, considering its layout, compared to Coin Base. CoinSpot’s website is easy to scan (Nelson, 2009, p. 99).  

References List

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