Abstract
At present, the ‘platform business model’ has indicated innovative potentials not just in traditional industrial sectors such as telecommunications, IT and retail, but also other sectors like social commerce. However, ‘Platform’ is not static as it is firmed at the beginning. Using Pinduoduo as a case study, this research conducts in-depth interviews and surveys in China to analyze the dynamic change of the platform provider’s role for successful platform operation via the lens of platform business models. As a “2.0 generation eCommerce platform”, Pinduoduo platform has become the largest social commerce platform in China with continuous growth at a high speed. The study found that stabilisation of the platform has experienced two stages: spread and evolution. At the spread stage, the role of platform provider focuses on forming “incentive to participants” through “Low price + Social contact” strategy and “Gamification + brand channel” strategy. At the evolution stage, the provider’s role is transformed into manager of products/services quality and revenue structure. Pinduoduo’s quality control is composed of three levels, including front-end quality control, middle-end quality control and back-end quality control. Besides, platform revenue structure strategies are sponsor-type. The purpose of this study is to enlighten the current players in the market on how they might utilize the underlying rationales in framework to further develop their platform business models. From the perspective of a platform, sustainable development of a theoretical framework is proposed based on these findings to facilitate future research in this area.
Highlights
China’s eCommerce sector has been dominated by several eCommerce giants such as Tmall, Taobao and JD for a long time
Central Question: How do the dynamic roles of platform providers change over time? As indicated in the diagram, platform providers motivate all participants to enter the platform in spread stage
The role of platform providers shifts to quality control and revenue structure design. This demonstrates that the development of Pinduoduo platform conforms to the original conceptual model, but at the same time, Pinduoduo platform reflects its unique characteristics in various stages
Summary
China’s eCommerce sector has been dominated by several eCommerce giants such as Tmall (https://www.tmall.com/), Taobao (https://world.taobao.com/) and JD (https://www.jd.com/) for a long time. The maturity of social media development has offered a potential solution and enabled eCommerce to form the platform based on social networking. The social commerce model may effectively solve the problem of customer cost, and is an important development direction of the eCommerce industry in the future. The report predicts the social commerce market will reach three trillion RMB in Commerce platforms (such as ador (https://www.ador.com/), yunjiglobal (https://www.yunjiglobal.com/), beidian (http://www.beidianw.cn/), and the huge market growth share in the future indicates that this new economic field has huge potential and business opportunities. Social commerce has grown rapidly in recent years, and more customers, business partners and investors have joined in this industry, the existing research on social commerce platforms is still limited. Few scholars have the holistic view on platform development strategy and the effect of the platform provider’s role on social commerce
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