E-Fairs: A Cyber-Physical System for Aggregation and Economy of Scale in e-Commerce

In recent years, the e-commerce arena has deeply changed because of the advent of new business models and the growing weight of huge global actors like Amazon. Some business models create competition between users, and the product price tends to rise (e.g., online auctions); other models, including group-buying, make users cooperate, and the price tends to go down. The present study extends the group-buying model and proposes a cyber-physical system called e-fair, in which both sellers and buyers are grouped to negotiate on a specific product or service. E-fairs minimize the global purchase price and the shipping resources respectively with the aggregation of demand and supply as well as origins and destinations. E-fairs aggregate sellers and buyers, sources and destinations in what we call double-side aggregation. As the aggregation regards independent actors, which do not trust each other and join e-fairs in dribs and drabs, we employ a promising distributed technology as the blockchain to make the aggregation. We validated the e-fair model through a system prototype and a simulator and understood how economies of scale apply to e-fairs in different usage scenarios.