Multi-Sided Market (Glossary)

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The term Multi-Sided Market is primarily encountered in the categories of digital marketplaces, e-commerce and digital trade, as well as digital disruption. It refers to a business model where at least two different groups of users are connected with each other. These groups benefit from each other because they can interact via a common platform.

A typical example of a multi-sided market is an online marketplace like eBay: sellers offer their products there, while buyers can find a large selection and compare prices. The platform itself brings both sides together, thus creating added value for everyone. Payment is usually made through fees levied on one or both user groups.

Platforms such as Airbnb, which bring guests and hosts together, or payment services like PayPal are also examples of multi-sided markets. The success of such business models depends heavily on as many members of both groups as possible using the platform. This is because the more participants there are on one side, the more attractive the platform becomes for the other side. Such markets are a central component of the digital economy and often enable entirely new forms of trade and collaboration.

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