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How to Maintain the Sustainable Development of a Business Platform: A Case Study of Pinduoduo Social Commerce Platform in China

Author

Listed:
  • Wu Zhao

    (School of Economics and Management, Xidian University, Xi’an 710126, China)

  • AnQi Wang

    (School of Economics and Management, Xidian University, Xi’an 710126, China)

  • Yun Chen

    (Salford Business School, University of Salford, Salford M5 4WT, UK)

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.

Suggested Citation

  • Wu Zhao & AnQi Wang & Yun Chen, 2019. "How to Maintain the Sustainable Development of a Business Platform: A Case Study of Pinduoduo Social Commerce Platform in China," Sustainability, MDPI, vol. 11(22), pages 1-26, November.
    • Handle: RePEc:gam:jsusta:v:11:y:2019:i:22:p:6337-:d:285981
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    2. Hsi-Peng Lu & Yi-Hsiu Cheng, 2020. "Sustainability in Online Video Hosting Services: The Effects of Serendipity and Flow Experience on Prolonged Usage Time," Sustainability, MDPI, vol. 12(3), pages 1-20, February.
    3. Shumei Wang & Yaoqun Xu, 2022. "Complex Network-Based Evolutionary Game for Knowledge Transfer of Social E-Commerce Platform Enterprise’s Operation Team under Strategy Imitation Preferences," Sustainability, MDPI, vol. 14(22), pages 1-34, November.
    4. Yu Xiang Xia & Seong Wook Chae, 2021. "Sustainable Development of Online Group-Buying Websites: An Integrated Perspective of ECM and Relationship Marketing," Sustainability, MDPI, vol. 13(4), pages 1-20, February.
    5. Xu Chen & Yingliang Wu & Rujie Zhong, 2023. "Optimal strategies of social commerce platforms in the context of forwarding and bargaining," Operational Research, Springer, vol. 23(2), pages 1-28, June.

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