Page 22 - IBT August 2021 Issue

The Foundation CONNECTING
THE DOTS

top-ranked companies by market number of employees to provide in a business to consumer (B2C) to place supply or demand. within the platform economy there is a
capitalization are Apple, Microsoft, their accommodation services. context, it is the business to Examples of this are listing a
Alphabet (Google’s parent Instead, they hugely benefit from business (B2B) world that is property on Immobilienscout24 or triangular relationship between three parties -
company), and Amazon. Facebook, their external resources (i.e. their currently seeing the most activity posting job advertisements on the platform, the worker and the customer. It
Alibaba, and Tencent are not far hosts). And lastly, the thing that in terms of platform adoption. We Monster. Often different packages
behind. As of last year, these seven separates them from ‘brick and are all witnessing the emergence of (5 or 10 packages) are offered in is the job of the platform to connect people
companies represented more than mortar’ businesses is their reliance B2B and B2C platforms in many addition to the one-time use. The with demand (the customer) to people that
$6.3 trillion in market value, and on network effects. That is, the sectors globally including retail, admission fee is mainly used to provide supply (the worker).
all of them are platform higher number of hosts there are education, healthcare, transport, monetise the supply side and to
businesses. on the platform, the higher the agritech, fintech and real estate. bring standardised price structures
These platform businesses vary number of guests that incur; and it Global small and medium-sized onto a platform with infrequent,
from one another in terms of their continues as an exponential loop. business trade is on the rise, inhomogeneous or individualized
operational structure and how they Putting these unique traits of the driven by the growth of platforms transaction units. monetization of data generated by persuasive offerings. The
function as entities. Google and platform economies aside, there such as Alibaba, which allow much Transaction Fee: Through actors on the platform serves the streaming platform Spotify for
Facebook are digital platforms that are fundamental differences in smaller enterprises to participate transaction fees, platform sponsors platform sponsor as a secondary or example also finances its freemium
offer search and social media, but which they create and capture in global trade, without the need to benefit from every transaction that even primary source of income. For model by monetizing data through
they also provide an infrastructure value from the customers. invest in their own supply chains. is enabled between two or more the data-generating actors, the use advertisements in the free package.
on which other platforms are built. Typically, a digital platform that As these platforms scale, control actors. This pattern occurs most of the platform, as in the case of Freemium appears particularly
On the other hand, Amazon, Etsy uses the internet to connect over trade could shift from frequently in the analysis and Facebook for example, is often free promising if the marginal costs for
and eBay are marketplaces for dispersed networks of individuals countries to these digital addresses the supply and demand of charge. By accessing the data, additional actors on the platform
While smartphone usage is on a rise numerous categories of products; to facilitate digital interactions platforms. Many experts even side in similar proportions. In the the platform sponsor enables third are low for the sponsor.
globally, tech-based companies have either directly sold by the platform between people. Therefore, within suggest that in a world dominated case of very dominant platforms parties, among other things, to Service and product sales: The
also started to emerge all across the or by third-party sellers. Airbnb the platform economy there is a by platform companies that offer such as AirBnB, both parties carry access relevant actors or valuable platform sponsor’s activity as a
globe. But the interesting pattern to and Uber are the newest additions triangular relationship between ways for customers and companies part of a combined transaction fee. information. For platform sponsors complementary actor on its own
be noted is that many of the in the league of platform three parties - the This pattern is particularly useful who use data monetization for platform is particularly interesting
company’s today are not solely businesses; where they use these platform, the worker in cases of high transaction value capture, the value capture if the respective company already
reliant on selling products or newly available cloud tools to force and the customer. It is frequencies, with similar potential increases with increasing has the necessary expertise and
services that they manufacture on deep changes in a variety of the job of the platform transaction sums and with little richness and relevance of the infrastructure and sets up a new
their own. Instead, they create a incumbent businesses. Gone are to connect people with manual effort for the platform collected data from interactions platform to include other players
network, where service providers are the days of staying at a fancy demand (the customer) sponsor to drive the respective and transactions between the from its own industry. Companies
enabled to offer the value to the end resort during a holiday or waiting to people that provide transaction to success. actors. such as Amazon initially act as
customer. And while ensuring the to hail a taxi for the daily supply (the worker). Arbitrage: In the arbitrage model, Membership fee: In a platform sponsor, generate an
seamless completion of these commute. Instead, these Traditional linear the platform sponsor exploits a membership model, actors pay for information advantage over the
transactions, these ‘intermediary’ companies have built the systems business models create very widely separated relationship a particular or unlimited use of the suppliers on the basis of their data
companies tend to capture some of that enable home owners to value through creating between actors on the platform, platform infrastructure. The sovereignty and then compete with
the value for themselves. These are become rental home owners, while products and services often associated with physical Fitness Startup Urban Sports Club, their own complementors in
often termed as “platform enthusiastic commuters with that are sold to a products, and creates its own for example, offers its members promising product categories. The
economies”. Companies such as private cars can share the available customer. Platform position of power controlling the three packages of services with latter approach is often seen as
Amazon, Etsy, Facebook, Google, seats of his or her vehicle. based business models on the to connect, countries that want to access between the actors. different membership fees. This inadequate use of the
Salesforce, and Uber are creating So what makes these platforms other hand, create their value by act as global trade hubs must Although this position can also be pattern is particularly interesting infrastructure operator’s market
online structures that enable a wide have a competitive edge over their connecting users (both consumers think like a platform nation. recognized for most other patterns, for models in which the number of power and is rightly
range of human activities. This ‘traditional’ counterparts? Firstly, and producers) on an online Now many might think that the arbitrage model actively emerging transactions per actor controversially discussed.
opens the gateway for radical these companies are very asset network. The platform does not platform economies operate as contributes to maintaining the can be reliably predicted or the As the world continues to evolve,
changes in how we live our everyday light, which allows them to scale own the means of production, but intermediaries and facilitate position of power to the extent that transaction goods can be technology backed companies are
lives; starting from how we work, at an unimaginably fast pace. rather creates the means of seamless transactions. So, the the platform sponsor takes on not efficiently scaled. radically changing how we operate
socialize, create value in the While hotel companies will be connection. The strength of the revenue models are supposed to only an orchestrating but also a Freemium: Freemium is a in our everyday lives. Platform
economy, and compete for the spending billions on infrastructure platform economy lies in its ability follow a similar pattern. But in price-setting role on the platform modified form of membership in economies are not only making our
resulting profits. Their effects are and constructing the hotels to to eliminate trade barriers by using reality, there are multiple ways in by acting as an intermediary. The which a certain part of the lives more connected and
distinct and identifiable, though accommodate their rising number increased information sharing which platform economies can model seems to be particularly platform products and services are seamless, but are also redefining
certainly not the only part of the of guests, Airbnb simply increases between different players and capture value from the ecosystem applicable for physical goods that made available to certain actors how human species act, live and
rapidly reorganizing global economy. their number of hosts in a new circulation of data to its that it has established. Some of the are not subject to a short-term free of charge. An initially free interact as a whole. For now, all we
The world’s most valuable public country – thus expanding in a way advantage. This creates a much various types of revenue models decline in value. The access for the activity on the platform lowers the can hope is that these radical
companies and its first trillion-dollar that is simultaneously faster and more open economic system, with adopted by platform economies supply side to the demand side entry barrier and creates the differences can lead to
businesses are built on digital cost-effective. These companies much greater participation of its have been mentioned below - often appears to be the strongest opportunity to convince actors to transformative positive impact in
platforms that bring together two or also have zero marginal costs. For users. Admission fee: In the Admission sales argument for the platform access the full range of services the days to come, as we implement
more market actors and grow example Airbnb does not have to While many might think that fee model, the platform sponsor sponsor. associated with the payment of a technology to unlock a better
through network effects. The recruit, train and onboard a large platform models are only relevant charges a fee for individual actions Data monetization: The indirect membership fee through future for us all.

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