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In the industrial era, the docking of supply and demand is in a normal “vacancy”, resulting in the waste of some supply resources and unsatisfied demand. In the Internet era, the development of electronics and the proposal of long tail theory provide theoretical support and practical innovation for the satisfaction and docking of niche markets. In this paper, the Pareto optimization is put forward as the starting point, and the direction of welfare improvement in ideal state is analyzed as the theoretical origin of the long tail theory. At the same time, this paper analyzes the present situation of the survival and development of small and medium-sized enterprises in the Chinese market, and systematically analyzes the mode innovation and function of the development of e-commerce of small and medium-sized enterprises under the Internet economy, and finally summarizes and returns. The characteristics and direction of e-commerce development of small and medium-sized enterprises under the long tail theory are accepted.
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