Long Tail Effect

"Long tail effect" is a term used a more and more with the retail landscape's transformation by the Internet. The phrase was coined by Chris Anderson, the chief editor of Wired magazine, in 2004. Anderson argued that products with a low sales volume can be combined to form a market share that can compete with hugely popular goods if the distribution channel is large enough.

Internet companies like Google, Yahoo and online retailer Amazon, whose ad platforms are used by many small businesses, are examples of companies applying the "long tail" concept. Thus, the popularity of the Net and mobile Internet has helped businesses reach more consumers with unique demands.

Long Tail Effect in the News

The success of Internet financing services like Alibaba Group's Yu E Bao, which collects savings from a large number of small depositors to create a very popular investment product, can be explained by the "long tail" effect.