The long tail thesis

Abstract

PurposeThis paper aims to explore the functionality of long tail markets (LTM), where the consumers cannot be reached or are ignored by the traditional mainstream businesses, in new products and business development.Design/methodology/approachFirst, the authors review two Chinese entrepreneurial practices in the Fintech sector and low-speed electric vehicles (LSEV) and describe their stylized facts; second, they explore a possible theoretical LTM framework to underscore these practices; third, they make a connection between LTM and existing business models and analyze its significance and practical implications in business, in particular, in developing economies.FindingsThe LTM business approach has helped Chinese companies in the Fintech sector and LSEVs gain global attention. The success factors of LTM for businesses are identifying a specific customer base, being aware of localization products and playing skillfully with regulations; the LTM approach has several overlaps with existing studies on niche products and base of the pyramid market.Originality/valueBased on some emerging and attractive business practices in China, this paper offers a valuable attempt to theorize them as long tail phenomenon. The LTM thesis provides a potential framework to reference for similar methods elsewhere and may illuminate entrepreneurship to be explored in similar markets.