Abstract
This study examines the pathways to growth of digital multisided platforms in an emergent e-commerce industry, and identifies the institutional forces and decision making choices which confront the major actors in the industry. A systems thinking approach has been used in this study for analyzing the evolution of two digital multisided platforms, Alibaba in China and Flipkart in India from 1999 to 2007 respectively till date. The findings show that the national e-commerce regulator in a country has the primary role for shaping the environment of a nascent industry, and the digital multisided platform leader benefits from aligning its vision with that of the regulator, and in focusing on building a sustainable e-commerce ecosystem. Competition in the e-commerce sector is between ecosystems developed by platform leaders. A relational view of competition on the part of the platform leader, rather than a rivalrous view is critical to making the ecosystem viable and competitive.
This is a preview of subscription content, log in via an institution to check access.
Similar content being viewed by others
Data Availability
All data generated or analyzed during this study are included in this article.
References
Abrutyn S (2012) Toward a theory of institutional ecology: the dynamics of macro structural space. Rev Eur Stud 4(5):167–180
Agnihotri A, Bhattacharya S (2014) Hypercompetition in e-retail: Flipkart.com. Ivey Publishing, Ontario, Canada
Alvarez SA, Barney JB (2007) Discovery and creation: alternative theories of entrepreneurial action. Strateg Entrepreneurship J 1(1–2):11–26
Anwar ST (2017) Alibaba: entrepreneurial growth and global expansion in B2B/B2C markets. J Int Entrepreneurship 15:366–389
Armstrong M (2006) Competition in two-sided markets. RAND J Econ 37(3):668–691
Baez B, Abolafia MY (2002) Bureaucratic entrepreneurship and institutional change: a sense-making approach. J Public Adm Res Theor 12(4):525–552
Baldwin CY, Woodard CJ (2009) The architecture of platforms: a unified view. In: Gawer A (ed) Platforms, markets and Innovation. Edward Elgar, London, pp 19–44
Baly O, Kletz F, Sardas JC (2016) Collective sensemaking: The cave within the cage. Paper presented at the 76th Annual Meeting of the Academy of Management, Anaheim, United States
Bakos Y, Katsamakas E (2008) Design and ownership of two-sided networks: implications for internet platforms. J Manage Inform Syst 25(2):172–202
Bertalanffy LV (1972) The history and status of General Systems Theory. Acad Manag J 15(4):407–426
Beer S (1972) Brain of the firm. John Wiley & Sons, Chichester, England
Beer S (1974) Designing freedom. CBC Publications, Toronto
Beer S (1985) Diagnosing the system for organizations. John Wiley & Sons, New York, U.S.A.
Boudreau KJ, Jeppesen LB (2015) Unpaid crowd complementors: the platform network effect mirage. Strateg Manag J 36:1761–1777
Brocklesby J, Cummings S (1996) Designing a viable organization structure. Long Range Plann 29(1):49–57
Brown AD, Colville I, Pye A (2015) Making sense of sensemaking in Organization Studies. Organ Stud 36(2):265–277
Bu L, Wang J, Wang KW, Zipser D (2019) China digital consumer trends 2019. McKinsey Digital. Retrieved from
BS (2016) Forget Flipkart & Snapdeal, Amazon’s real plan is to beat Alibaba. Business Standard 2016. Retrieved from https://www.business-standard.com/article/companies/forget-flipkart-snapdeal-amazon-s-real-plan-is-to-beat-alibaba-116060900486_1.html
Caillaud B, Jullien B (2003) Chicken & egg: competition among intermediation service providers. RAND J Econ 34(2):309–328
Cardoso-Castro P (2019) The viable system model as a framework to guide organisational adaptive response in times of instability and change. International Journal of Organizational Analysis 27 (2)
Checkland P (2000) Soft Systems Methodology: a Thirty Year Retrospective. Syst Res Behav Sci 17:S11–S58
C.C.I (2018) Case no. 20 of 2018 – All India online vendors association vs. Flipkart India Pvt. Ltd Competition Commission of India. Retrieved from https://www.cci.gov.in/sites/default/files/20-of-2018.pdf
C.C.I (2019) Case no. 40 of 2019 – Delhi VyaparMahasangh vs. Flipkart India Pvt. Ltd Competition Commission of India. Retrieved https://www.cci.gov.in/node/4905
Cusumano MA, Gawer A (2002) The elements of platform leadership. Sloan Manag Rev 43(3):51–58
Chen MJ, Miller D (2015) Reconceptualizing Competitive Dynamics: a Multidimensional Framework. Strateg Manag J 36:768–775
Chen J, Chen J, Goh K, Xu Y, Tan BCY (2014) When do sellers bifurcate from Electronic Multisided Platforms? The effects of customer demand, competitive intensity, and service differentiation. Inf Manag 51:972–983
Colville ID (1994) Searching for Karl Weick and reviewing the future. Organization 1(1):217–236
Colville I, Brown AD, Pye A (2011) Simplexity: Sensemaking, organizing and storytelling for our time. Hum Relat 65(1):5–15
Daft RL, Weick KE (1984) Toward a model of organizations as interpretation systems. Acad Manage Rev 9(2):284–295
David J, Mann A (2007) The emergence of on-demand software aggregators: Implications for developers, customers, and software companies. AMCIS 2007 Proceedings, AISel. Retrieved from https://aisel.aisnet.org/amcis2007/194/
Dawson A, Hirt M, Sanlan J (2016) The economic essentials of digital strategy.McKinsey Quarterly
deReuver M, Sørensen C, Basole RC (2018) The digital platform: a research agenda. J Inform Technol 33:124–135
DiMaggio PJ, Powell WW (1983) The iron cage revisited: institutional isomorphism and collective rationality in organizational fields. Am Sociol Rev 48:147–160
D.IP.P (2018) Press Note No. 2 (2018 series). Department of Industrial Policy and Promotion, Govt. of India.Retrieved from https://dipp.gov.in/sites/default/files/pn2_2018.pdf
Dutton JE, Duncan RB (1987) The creation of momentum for change through the process of strategic issue diagnosis. Strateg Manag J 8(3):279–295
Eggers JP, Kaplan S (2013) Cognition and capabilities: a multi-level perspective. Acad Manage Annals 7(1):295–340
Emery F, Emery M (1997) Toward a logic of hypotheses: everyone does research. Concepts and Transformations 2(2):119–144
Espejo R, Reyes A (2011) Organizational Systems. Springer, Heidelberg, Germany
Espinosa A, Harnden R, Walker J (2008) A complexity approach to sustainability—Stafford Beer revisited. Eur J Oper Res 187:636–651
E.T Flipkart’s Sachin Bansal reiterates call for a level-playing field. Economic Times 2017.Retrieved from http://economictimes.indiatimes.com/small-biz/startups/flipkarts-sachin-bansal-reiterates-call-for-a-level-playing-field-amazon-indiahead-says-it-is-an-indian-company/articleshow/57875852.cms#
Editor (2020) 7 key things Binny Bansal said about Flipkart’s position, rivalry, valuation, FDI & growth. Indian Online Seller. Retrieved from https://indianonlineseller.com/2016/05/7-key-things-binny-bansal-said-about-flipkarts-position-rivalry-valuation-fdi-growth
E.T Will place draft ecommerce policy in public domain for comments soon: DPIIT Secretary. Economic Times 2020. Retrieved from https://economictimes.indiatimes.com/news/economy/policy/will-place-draft-ecommerce-policy-in-public-domain-for-comments-soon-dpiit-secretary/articleshow/76107615.cms
Flood RL, Carson ER (1988) Dealing with complexity. Plenum, New York
Foss NJ, Klein PG, Kor YY, Mahoney JT (2008) Entrepreneurship, subjectivism, and the resource-based view: toward a new synthesis. Strateg Entrepreneurship J 2:73–94
Friedland F, Alford RR (1991) Bringing society back in: Symbols, practices, and institutional contradictions. W.W. Powell, P. DiMaggio, eds. The New Institutionalism in Organizational Analysis. University of Chicago Press, Chicago
Gawer A (2014) Bridging differing perspectives on technological platforms: toward an integrative framework. Res Policy 43:1239–1249
Gawer A, Cusumano MA (2014) Industry platforms and ecosystem innovation. J Prod Innov Manage 31(3):417–433
George E, Chattopadhyay P, Sitkin SB, Barden J (2006) Cognitive underpinnings of institutional persistence and change:a framing perspective. Acad Manage Rev 31:347–365
Gioia DA, Chittipedi K (1991) Sensemaking and sensegiving in strategic change initiation. Strateg Manag J 12:433–448
Gupta S, Narayandas D, Tahilyani R (2018) Flipkart: the ongoing battle for India’s e-commerce market. Harvard Business School Publishing, Boston, U.S.A.
Gooptu B (2019) Chain of subsidiaries may help skirt curbs for etailers. Economic Times Bureau Retrieved from https://economictimes.indiatimes.com/small-biz/startups/newsbuzz/chain-of-subsidiaries-may-help-skirt-curbs-for-etailers/articleshow/67826342.cms
Ghosh Sharma T, Desikan R, Narasimhan L, Jain S (2014) Flipkart.com Ivey Publishing. Richard Ivey School of Business Foundation, Ontario, Canada
Hagiu A, Wright J (2013) Do you really want to be an eBay? Harvard Business Rev 91(3):102–108
Hagiu A, Wright J (2015) Multi-sided platforms. Int J Ind Organ 43:162–174
Hallerbach IP, Barrett M, Faraj SA (2013) Emergence in nascent online communities: An affordance perspective. International Conference on Information Systems (ICIS 2013): Reshaping society through information systems design, 2, 1412–1423
Henneberg SC, Naudé P, Mouzas S (2010) Sensemaking and management in business networks – some observations, considerations, and a research agenda. Ind Mark Manage 39:355–360
Hildbrand S, Bodhanya S (2015) Guidance on applying the viable system model. Kybernetes 44(2):186–201
Hill RC, Levenhagen M (1995) Metaphors and mental models: sensemaking and sensegiving in innovative and entrepreneurial activities. J Manag 21(6):1057–1074
Hongfei Y (2017) National report on e-commerce development in China. Inclusive and sustainable industrial development. WP 17/2017, UNIDO, Vienna. Retrieved from https://www.unido.org/sites/default/files/2017-10/WP_17_2017.pdf
Hoverstadt P (2008) The fractal organization. John Wiley & Sons Ltd, Chichester, U.K.
Huang L, Hu G, Lu X (2009) E-business ecosystem and its evolutionary path: the case of the Alibaba Group in China. Pac Asia J Association Inform Syst 1(4):25–36
I.B.E.F (2019) E-commerce report March 2019.Report of India Brand Equity Foundation, retrieved from https://www.ibef.org/download/e-commerce-report-mar-2019.pdf
Jackson MC (2003) Systems thinking: creative holism for managers. John Wiley & Sons Ltd, Chichester, U.K.
Jayakumar T, Srivastava S (2019) Walmart’s acquisition of Flipkart: a showstopper deal ? Ivey Publishing, Ontario, Canada
Ketchen DJ, Ireland RD, Snow CC (2007) Strategic entrepreneurship, collaborative innovation, and wealth creation. Strateg Entrepreneurship J 1:371–385
Khan LM (2016) Amazon’s antitrust paradox. Yale Law Journal 126(3):710–802
Kim S, Zhang XA, Zhang BW (2016) Self-mocking crisis strategy on social media: focusing on Alibaba chairman Jack Ma in China. Public Relations Review 42(5):903–912
Kumar HP (2017) Inclusive and Sustainable Industrial Development.Working Paper Series WP 15–2017. United Nations Industrial Development Organization. Retrieved from https://www.unido.org/sites/default/files/2017-10/WP_15_2017_.pdf
Maak T (2007) Responsible leadership, stakeholder engagement, and the emergence of social capital. J Bus Ethics 74:329–343
Maitlis S (2005) The social processes of organizational sensemaking. Acad Manag J 48(1):21–49
Maitlis S, Christianson M (2014) Sensemaking in organizations: taking stock and moving forward. Acad Manage Annals 8(1):57–125
Medlin CJ, Ellegard C (2015) Conceptualizing competition and rivalry in a networking business market. Ind Mark Manage 50:131–140
Ministry of Commerce, People’s Republic of China (2006) China Market Overview of the Ministry of Commerce, People’s Republic of China. Retrieved from http://english.mofcom.gov.cn/article/pressconferenceinyears/2017/201710/20171002656548.shtml
Ministry of Commerce, People’s Republic of China (2017) Regular Press Conference of the Ministry of Commerce, People’s Republic of China. Retrieved from http://english.mofcom.gov.cn/article/pressconferenceinyears/2017/201710/20171002656548.shtml
Muralidharan N (2010) An Interview with Sachin Bansal.Book Shop Blog. Retrieved from http://bookshopblog.com/2010/05/24/an-interview-with-sachin-bansal/
Narayandas D, Gupta S, Tahilyani R (2018) Flipkart (a): transitioning to a marketplace. Harvard Business School Case
Nigam A, Ocasio W (2010) Event attention, Environmental Sensemaking, and change in Institutional Logics: an inductive analysis of the Effects of public attention to Clinton’s Health Care Reform Initiative. Organ Sci 21(4):823–841
Nguyen-Chyung A, Faulk E (2014) Amazon in emerging markets. WDI Publishing, Ross School of Business, University of Michigan, Michigan, U.S.A.
Oliver C (1988) The collective strategy framework: an application to competing predictions of isomorphism. Adm Sci Q 33:543–561
Pablo AL, Reay T, Dewald JR, Casebeer AL (2007) Identifying, enabling and managing dynamic capabilities in the public sector. J Manage Stud 44(5):687–708
Pandza K, Thorpe R (2009) Creative search and strategic sense-making: missing dimensions in the concept of dynamic capabilities. Br J Manag 20:118–131
Park SH, Zhao Z (2016) Alibaba Group: fostering an e-commerce ecosystem. Ivey Publishing, Ontario, Canada
Parker GG, Van Alstyne MW (2005) Two-sided network effects: a theory of information product design. Manage Sci 51(10):1494–1504
Pérez Ríos J (2012) Design and diagnosis for sustainable organizations: the viable system method. Springer, Berlin
P.I.B DIPP Clarification regarding Press Note 2 (2018). Press Information Bureau Government of India, Ministry of Commerce & Industry. Retrieved from http://pib.nic.in/newsite/PrintRelease.aspx?relid=187156
Poulis K, Poulis E, Plakoyiannaki ME (2013) The role of context in case study selection: an international business perspective. Int Bus Rev 22(1):304–314
Punit IS (2014) Organizational structure to keep evolving, says Flipkart. Retail in Asia. Retrieved from https://retailinasia.com/in-trends/news/human_resource/organizational-structure-keep-evolving-says-flipkart/
P.T.I RSS affiliate says Flipkart, Amazon circumventing laws, demands robust e-commerce policy. Press Trust of India. Retrieved from https://economictimes.indiatimes.com/news/politics-and-nation/rss-affiliate-says-flipkart-amazon-circumventing-laws-demands-robust-e-commerce-policy/articleshow/67643251.cms
P.T.I Draft e-com policy for comments soon: DPIIT. Press Trust of India. Retrieved from https://www.thehindu.com/business/Industry/draft-e-com-policy-for-comments-soon-dpiit/article31712814.ece
Rochet JC, Tirole J (2006) Two-Sided Markets: a Progress Report. RAND J Econ 37(3):645–667
Ruutu S, Casey T, Kotovirta V (2017) Development and competition of digital service platforms: a system dynamics approach. Technological Forecast Social Change 117:119–130
Sarkar J (2019) Govt. Accuses Amazon, Flipkart of influencing prices; companies deny charge. Times News Network
Sen S (2013) Bansal’s divest risk, move Flipkart to Singapore for growth. The Economic Times. Retrieved from https://economictimes.indiatimes.com/blogs/Whathappensif/bansal-s-divest-risk-move-flipkart-to-singapore-for-growth/
Scott WR (2004) Reflections on a half-century of organizational sociology. Ann Rev Sociol 30:1–21
Shane SA, Venkataraman S (2000) The promise of entrepreneurship as a field of research. Acad Manage Rev 25(1):217–226
Sindhwani S, Kanchan M, Appasamy L (2020) Walmart-Flipkart: a deal worth its price? Indian School of Business, Hyderabad, India
Tan B, Pan SL, Lu X, Huang L (2009) Leveraging Digital Business Ecosystems for Enterprise Agility: The TriLogic Development Strategy of Alibaba.com. ICIS 2009 Proceedings.171.Retrieved http://aisel.aisnet.org/icis2009/171
Tan B, Pan SL, Lu X, Huang L (2015) The role of IS capabilities in the development of multi-sided platforms: the digital ecosystem strategy of Alibaba.com. J Association Inform Syst 16(4):248–280
Tan FTC, Tan B, Pan SL (2016) Developing a leading digital multi-sided platform: examining IT affordances and competitive actions in Alibaba.com. Commun Association Inform Syst 38(36):738–753
Thornton PH, Ocasio W (2008) Institutional logics. R. Greenwood, C. Oliver, K. Sahlin, R. Suddaby, eds. Handbook of Organizational Institutionalism. Sage Publications, London
Tolbert PS, Zucker LG (1983) Institutional sources of change in the formal structure of organizations: the diffusion of civil service reform, 1880–1935. Adm Sci Q 28:22–39
UNCTAD (2019) Making digital platforms work for development. Policy brief no. 73, United Nations Conference on Trade and Development. Retrieved from
https://unctad.org/en/PublicationsLibrary/presspb2019d2_en.pdf
Van deVen AH, Poole MS (2005) Alternative approaches for studying organizational change. Organ Stud 26:1377–1404
Verma S, Dalal M (2014) Inside Flipkart’s complex structure. Livemint. Retrieved from https://www.livemint.com/Companies/VXr8oJzNJ4daOYSO5wNETN/Inside-Flipkarts-complex-structure.html
Ward PR (2017) Testing for multisided platform Effects in Antitrust Market Definition. Univ Chic Law Rev 84(4):2059–2102
Weber K, Glynn MA (2006) Making sense with institutions: Context, thought and action in Karl Weick’s theory. Organ Stud 27:1639–1660
Weick KE (1969) The Social psychology of Organizing. Addison-Wesley, Reading, MA
Weick KE (1988) Enacted sensemaking in crisis situations. J Manage Stud 25:305–317
Weick KE (1995) Sensemaking in organizations. sage Publications, Thousand Oaks, CA
Weick KE, Sutcliffe KM, Obstfeld D (2005) Organizing and the process of sensemaking. Organ Sci 16(4):409–421
Wulf J (2010) Alibaba Group. Harvard Business School Case Study # 9-710-436, Harvard, Cambridge, M.A
Xie RS, Sethi V (2018) Flipkart vs. Amazon vs. Snapdeal: winner-take-all battle in India. Nanyang Business School Case, The Asian Business Case Centre, Singapore
Xu F (2016) Alibaba vs. Amazon: A business model comparison. Masters Thesis of Lovain School of Management, Lovain. Retrieved from http://hdl.handle.net/2078.1/thesis:7258
Yi L (2017) National report on e-commerce development in China.Inclusive and sustainable industrial development working paper series, WP 17/2017, UNIDO, Vienna
Retrieved from https://www.unido.org/sites/default/files/files/2018-01/WP16.pdf
Yin RK (2003) Case Study research – design and methods, 3 edn. .ed.SAGE Publications, Thousand Oaks, U.S.A.
Yuan L (2020) Why China turned against Jack Ma. The New York Times. Retrieved from https://www.nytimes.com/2020/12/24/technology/china-jack-ma-alibaba.html
Zeng M (2018) Alibaba and the future of business: lesson’s from China’s innovative digital giant. Harvard Business Rev 96(5):88–96
Zhang AH (2021) Why is China cracking down on Alibaba? Project Syndicate. Retrieved from https://www.project-syndicate.org/commentary/chinese-government-alibaba-antitrust-investor-confidence-by-angela-huyue-zhang-2021-02
Funding
No funds, grants, or other support was received for this study.
Author information
Authors and Affiliations
Corresponding author
Ethics declarations
Informed Consent
No human research subjects or animals were involved in the study.
Disclosure of Potential Conflict of Interest
The author has no relevant financial or non-financial interests to disclose.
The author has no competing interests to declare that are relevant to the content of this article.
The author certifies that he has no affiliations with or involvement in any organization or entity with any financial interest or non-financial interest in the subject matter or materials discussed in this manuscript.
The author has no financial or proprietary interests in any material discussed in this article.
Additional information
Publisher’s Note
Springer Nature remains neutral with regard to jurisdictional claims in published maps and institutional affiliations.
Rights and permissions
Springer Nature or its licensor (e.g. a society or other partner) holds exclusive rights to this article under a publishing agreement with the author(s) or other rightsholder(s); author self-archiving of the accepted manuscript version of this article is solely governed by the terms of such publishing agreement and applicable law.
About this article
Cite this article
Dutta, K. Exploring Digital Multisided Platforms: A Systems Thinking Approach. Syst Pract Action Res 36, 851–876 (2023). https://doi.org/10.1007/s11213-023-09631-5
Received:
Revised:
Accepted:
Published:
Issue Date:
DOI: https://doi.org/10.1007/s11213-023-09631-5