As Foolish investors, we're always looking for companies with competitive advantages, or "economic moats." A favorite characteristic of Warren Buffett, an economic moat is a structural advantage that makes it extremely difficult for competitors to steal away business, giving wide-moat companies the opportunity to generate eye-popping returns over time.

One such economic moat is a first-mover advantage, especially important for software, internet, and e-commerce companies. In e-commerce, gaining a critical mass of customers attracts more varied sellers, which in turn attracts more buyers, and the cycle starts again. In addition, having more historical customer data allows first-mover companies to improve their offerings for both buyers and sellers at a faster pace than their rivals.

It's thus no coincidence that the following first-mover e-commerce companies have generated such amazing long-term returns for shareholders that they're good bets to continue their success in the years ahead. 

Closeup of woman working a tablet and a shopping cart icon coming out of it.

These e-commerce companies have first-mover advantage and huge returns. Image source: Getty Images.

Amazon.com: This e-commerce granddaddy still looks young

The company that basically invented the concept of e-commerce was Amazon.com (NASDAQ:AMZN). Founded in 1994 by Jeff Bezos originally as an online bookseller, Amazon soon realized that it could sell just about anything on a new invention called "the internet."

Though Amazon is a juggernaut now, back in the early 2000s, It was just one of several e-commerce contenders. A watershed moment was Amazon's introduction of Prime in 2005. In a shocking move, Prime offered free two-day shipping on millions of items for just $79 per year -- an unheard-of bargain at the time.

Initially, the company lost money on Prime; however, Prime subscriptions eventually grew to a critical mass, turbocharging demand so much that Amazon was able to build out a massive distribution footprint across the country at a pace its rivals were unwilling to match.

That leading infrastructure and customer base thus attracted more third-party sellers that wanted into Prime, and who eventually began paying Amazon for storing and shipping their goods. Eventually, Amazon was also able to "rent out" its digital infrastructure of data centers to other companies, forming Amazon Web Services.

In other words, the Prime offering was able to jump-start Amazon's demand, which then attracted more sellers, which allowed Amazon to invest heavily in leading-edge technology and delivery capabilities others couldn't match, which in turn became new businesses in and of themselves.

Over time, Amazon has added more offerings to Prime, including original video, a credit card, and discounts at Whole Foods. Amazon has continued to raise the price of the Prime subscription, which now costs $119 and has over 100 million members. More recently, Amazon upped its game in making Prime goods eligible for free one-day shipping, down from two days.

While Amazon can be thought of as one of the early e-commerce companies, the real first-mover advantage came with free two-day shipping, which boosted demand and changed the U.S. e-commerce game forever.

Alibaba: Massive scale fends off upstarts

The first mover in Chinese e-commerce was Alibaba (NYSE:BABA). The company operates several e-commerce sites, including Alibaba.com, which connects manufacturers to businesses all over the world, Taobao, which facilitates customer-to-customer sales, a la eBay, and Tmall, which facilitates business-to-consumer sales for larger multinational brands.

Founded in 1999, Alibaba had such a first-mover advantage at the dawn of China's nascent internet economy, a lead it has been able to maintain even in the face of impressive competitors JD.com and Pinduoduo.

That's because Alibaba's critical mass and massively profitable business allowed it to invest in expanding the Alibaba ecosystem into payments, cloud, and food delivery. Important innovations included the introduction of Ant Financial, which enabled the Alipay digital payments platform in China. Today, Alibaba owns 33% of Ant Financial.

Although one could argue that JD.com, which owns its own delivery and logistics infrastructure, exceeded Alibaba in shipping, Alibaba's sheer size has enabled it to improve and keep pace. Alibaba recently bought a majority share of Cainiao, Alibaba's co-developed third party logistics platform, which coordinates deliveries among third-party carriers.

Like Amazon's purchase of Whole Foods, Alibaba also bought its way into groceries through its acquisition of Sun Art retail, the largest supermarket and hypermarket operator in China. By tying the online experience to these brick-and-mortar megamarkets, Alibaba has linked the digital and physical worlds in a concept it calls the "New Retail."

Finally, Alibaba's first-mover advantage allowed it to leap out front in the development of cloud computing in China, where it still has the No. 1 market share. The company's Yokou Tudou video offering is one of three leading video streaming services in China as well.

Despite intense competition and at an already massive size, Alibaba's first-mover advantage and sticky ecosystem has allowed it to continue growing at a fevered pace. In the recently reported June quarter, Alibaba's core commerce revenue grew 34%, with the "new retail" grocery business up a whopping 80%. Cloud revenue was up 59%, and Cainiao revenue surged 54%.

Etsy

Finally, Etsy (NASDAQ:ETSY) has shown the ability of niche e-commerce sites to also benefit from first-mover advantages. By limiting itself to being the go-to platform for handmade goods from small sellers, Etsy carved out a market segment that insulates it somewhat from Amazon. Whereas Amazon has become the go-to for all sorts of commercial goods, Etsy touts its first-mover advantage in the "special" segment of the market.

As of its recent quarter, Etsy has attracted 3.1 unique sellers and 60.3 million active buyers, with its recent growth turbocharged by the pandemic. Yet management still estimates Etsy only has 5% market share of a $100 billion market for "special" goods in the U.S., Western Europe, and Australia.

Given that many mom-and-pop retail stores have had to either close down or go online to supplement lower foot traffic, Etsy has benefited handsomely in the pandemic-fueled second quarter. Revenue jumped a stunning 137% last quarter on 147% growth in gross merchandise volume, with adjusted EBITDA growth of 279%. While of course some of that was driven by face mask purchases, Etsy's non-mask revenues were still up an impressive 93% in the quarter.

Etsy's success shows that in e-commerce, a first-mover advantage doesn't just apply to mass-market retail, but also to niche retail segments.