Abstract
The sustainability of market performance of mobile applications (apps) updates is a vital goal for e-commerce firms to continuously innovate for products and functions. E-commerce firms must formulate effective app update strategies and tackle the temporal uncertainties associated with different types of app updates. However, the existing literature on app updates mainly focuses on the effects of update frequency. At the same time, scant attention has been paid to clarifying the temporal effects of different types of app updates. Accordingly, based on the framework of exploration vs. exploitation, we investigate the temporal effects of different kinds of app updates on market performance in the hypercompetitive context of online travel mobile applications. We collected data on release notes and downloads of seven Chinese online travel apps available from the Android Market from April 2013 to January 2015; conducted structured content analysis to identify different types of app updates; and adopted the feasible generalized least-squares (FGLS) estimation to test our model. We found that exploitative app updates have an instant and continuous positive impact on market performance, while explorative app updates have no significant effect in the short term but will have a positive effect on market performance in the long term. Moreover, competition intensity shortens the duration of the positive effect of exploitative app updates and delays the time that explorative app updates have to take effect. By studying the different impacts that two types of app updates have on market performance from a time dimension, this study helps resolve the mixed findings on the effects of app updates and guides e-commerce firms on how to effectively formulate app update strategies in a hypercompetitive context.
Highlights
Publisher’s Note: MDPI stays neutralWith the increasing penetration of digital technology and the maturity of mobile shopping, mobile applications provide essential opportunities for e-commerce firms to conduct business and make profits [1]
Explorative app updates refer to discovery-led updates that enter new product-market domains, while exploitative app updates refer to refinement-led updates that improve existing product-market fields [4,12]
Firms should take into account the time difference between explorative app updates and exploitative app updates when considering market performance and balance the two types of updates to maximize performance
Summary
With the increasing penetration of digital technology and the maturity of mobile shopping, mobile applications (apps) provide essential opportunities for e-commerce firms to conduct business and make profits [1]. To gain a sustainable market performance, firms usually have two options for continuous update strategies Still, they require different efforts and face uncertain benefits in terms of time [4]. We investigated the temporal effect of different types of app updates on market performance in the competitive context of online travel mobile applications. We applied a structured content analysis method and a distributed time lag model to empirically investigate the temporal effects of the two types of app update on market performance, as well as the moderating effect of competition intensity. Our work contributes to the app update literature by taking a time dimension in investigating the temporal effects of different types of app updates on market performance. Our empirical investigation of the moderating effect of competitive intensity on the effectiveness of app updates contributes to adding to empirical evidence on the effects of the competitive environment from previous studies
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