Platform domestication: An Internet Reportage From China
Based on our inquiry, there are three main factors for having a successful digitalization in different companies. These three factors are velocity, personalization, and innovation. In 2008 china had a grand experience of developing its digital resources and facilities due to the invention of new technologies, fast mobile internet, and the government willingness and investments in these areas. According to reliable researches, the digital growth in China was about 20 percent between 2008 and 2019 which was the biggest one comparing to all other companies. The digital income has augmented on a very large scale as well.
Not only the Coronavirus pandemic didn’t stop the digitalization but also it was like a catalyzer for this issue. Visiting and the revenue of online shops, online training, and teleworking have increased a lot. We have discovered an unbeatable platform pattern in China that could be considered as the main infrastructure for digitalization. This pattern has consisted of the accumulation of resources, extending the amount of data, technology capability, and operational capability.
There’s one question that needs to be answered! Why this specific platform pattern is so popular and widespread in China? First of all, as said before, the government has invested in improving the digital infrastructures and has reshaped the supply and demand on all sides. Second, China has a smart digital perception consumer center that is more capable of sharing datum, which has assisted in creating big databases and used items that can speed up digitalization. Third, those companies that couldn’t resist modeling the new platform pattern or were suffering from old-fashioned technologies, have searched for external aid to resolve their problems. The last one is because of the famous and powerful internet users and corporations. These firms and users have helped and encouraged both people and the government to invest in digitalization and propagate internet-based infrastructures and their capabilities.
What is the role of these factors for a successful digitalization platform?
we could admit that both the digital economy and the client goods profession are mingled with each other. It is like discovering new oil resources in a region but this one is in the digital area, hence other companies must be looking for new development records and compete with each other. Consider a chain fast food restaurant. All the sectors and employees of the organization must try their best to provide millions of different ingredients and food packages for the clients each day. Digital stores like Alibaba (a company like Amazon) in China have used this factor in the best way and delivers the goods in the hands of thousands of its clients as soon as possible. Many other brands like Sina Weibo, Youku, and Tmall have plenty of subscribers due to the high traffic speed.
clients’ ideas and needs are getting personalized these days so companies must provide individual items that only fit some particular clients. For instance, one client may need a specific item for face washing or another one may require a unique digital component for his/her laptop. Even colors are personalized and any customer might want to choose a preferable one. On the other hand, some companies can observe the reviews and comments of the clients, and then they will make goods that are close to certain customers’ desires based on platform. For example, due to this personalization, L’Oreal has increased its income on a large scale via Alibaba in China. Even some companies like internet radios will collect your data, your habits, your likes and based on your favorite channels they can offer you new programs that might sound suitable for your character or even based on your region, some music internet radios can suggest you a variety of music in your language.
always a new technology can change the manners of shopping, learning, commerce and making new patterns, and forming new situations. Innovation plays a significant role in digitalization. Old-fashioned methods may not work anymore in this era and organizations must seek new ways to attract more clients. For example, in China, Starbucks is collaborating with Alibaba and nowadays people can order different things online via visiting the webpage of Alibaba instead of going to one of the real chain cafés and do a face-to-face order!
Another example: the NIO organization has done something new. It has brought virtual reality facilities for buying cars. The old style of purchasing a car is expired and from now on, anybody who wants to buy a car can easily experience the exterior, interior and even drive the car virtually just by downloading an application so the buyer can make up his/her mind.
The modern platform patterns in China has four special features
being able to gather enough supply and demand was always an important task for businesses. By accommodating the number of supplies with the required demands, organizations can improve their sufficiency and make more valence. This modern platform exactly does the same thing. It provides and matches the supply with the demand and therefore, many obstacles will be eliminated.
Increasing the datum valence:
while trying to digitalize everything, one of the important things in creating a special platform is to build end-to-end data connections. End-to-end means a procedure that takes a system or service from the beginning to end and makes it deliver a complete functional solution and it is mostly without needing to obtain anything from a third party. This indeed increases the datum valence.
this platform can obtain help and investments from technology giants to the small and local companies which of course can reduce the innovation because the main plot of localization is somehow a copy.
an inimitable platform gives us end-to-end operations so users can benefit from its integrated solutions and supporting recommendations.
Formidable platform users can improve the platform business patterns. They can easily send advice to start-ups and companies to fix their problems and strengthen their weaknesses. These giant platform users helped their partners to increase their performances and decrease the additional expenditures. Then they assisted the companies to make their brands popular and well-known among people. Also, internet platform providers in China are profited from independence in developing new technologies. By doing all these tasks, platforms can augment the value chain and improve the trading, branding, logistics, and efficiency of different companies.
Since 2000, internet users in China are moving from PCs to sell-phone services so the modern internet industry is growing day by day. It is expected that new opportunities will be created and the potential of digitalization will be increased on a huge scale soon. By reviewing the events we understand that the combination of the government will and attempts of organizations and various internet service providers have created a prosperous and inimitable platform business pattern in China. This inimitable and successful platform has a significant role in the digital economy development in this country. We are sure that most of the firms and organizations have sufficient courage to welcome digitalization, innovation, and new technology and even be the pioneer in these matters. But unfortunately, those companies that are not willing to accept these modern changes may jeopardize their whole community and increase the risk of getting eliminated by their competitors. So, we suggest that enterprises take digitalization and practical platforms seriously.
Article by Amir Masoud Navidi
Adapted from: Bain and company.