The theory has been discredited in the United States and other developed eCommerce markets, as it is only applicable for certain sub-sectors like price comparison and buying groups, but in others like social media it often goes wrong for the first mover.
There are several cases to suggest that this theory does not always work, the most notable was in recent memory MySpace, which lost its market share to Facebook that stole the entire industry.
However, in Iran, there are several instances that the first movers are not losing their market share even with the confluence of foreign investments coming in to tackle them.
Digital Technology
First case study would be Iran's own Amazonlike web store DigiKala.
It started operations in 2011 when the Mohammadi brothers were duped while buying a camera in Tehran Bazaar. This spurred the brothers to create an online platform to sell electronics hence the "Digi" part of the name.
However, the pair haven't let go since, by attracting funding from several sources, including Pomegranate Capital through local venture capital fund Sarava Pars.
According to Google Search trends, the website has gone from strength to strength outpacing copycats 100-to-1.
The closest competitor to DigiKala is Bamilo, a partially German-funded online store that has never managed to make a dent in the original online store's margins.
Other competitors in this sector in terms of market share are Zanbil (Basket) and Chare (Solution), all of which cannot compete with DigiKala for its size and now backing.
There are several other online stores competing to take a chunk out of the leader's offering, but they too are dwarfed by their small size and limited financial resources.
According to online price comparison website Emalls.ir, DigiKala rarely offers the best price for specific items. In fact, several independent retailers continue to offer lower prices, some without guarantees. For instance, the Samsung Galaxy S7 listing on Emalls.ir shows DigiKala doesn't make it to the first page of the website.
However, according to online search company SimilarWeb, Digikala's trust factor with consumers has helped it to stay in the lead. The website received 13.5 million views up to June 2016, with an average view time of 9:12 minutes. The bounce rate for the site is a relatively strong 25.36%.
Bamilo, on the other hand, has had a steady decline compared with its competitor, with a total of 4.2 million visits up to June 2016. Unlike DigiKala, it has suffered with average visit durations at 02:56 minutes. The bounce rate for this site was 59.22%, actually higher than the leader.
The money behind Bamilo is rather obvious, as 61.17% of visitors are directed through on-screen advertising, with only 19.53% of them visiting the site directly.
Automotive Sector
The automotive sector is much the same, with Bama.ir, one of the original automotive sales websites running away with the public when it comes to buying and selling cars.
Compared to its peers, Bama has retained its lead from the get-go in 2011 with a lead five times that of its nearest rival Start.ir, which is followed by another automotive website, Supap.ir that Financial Tribune covered in 2015.
Lastly, Machine Bazaar is another automotive website that has a much less noticeable brand in relation to its peer group.
According to SimilarWeb, Bama is now at 21st place in the country's rankings with 2.3 million visits in the year to June.
The average visit on this website is an impressive 10:25, which many website owners would clamor for. The car website has a 15.22% bounce rate for return visitors.
SimilarWeb also shows that 52.07% of visits to the site are direct hits with the next largest percentage coming via search (probably Google) at 31.34%.
Similarly, like previous estimates, the second most popular site for buying cars, Start.ir, is at 13,161st place inside Iran.
The website, according to the search index site, started in February 2016 and received 5,200 hits at that time. Unlike the leader of the pack, visitors to this site only view the site for an average of 3:44 minutes.
These two sectors both show that the current state of the industry favors the first mover rather than the innovator, as neither of the two leading examples have the best total offering.
Whether or not a newcomer can push through this lead looks ever more unlikely, as the initial companies look set to continue their market consolidation.
By Financial Tribune
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