Digital platforms: understand their importance in the new economy

Do you know what a digital platform is? Discover in this article how they operate and why they are among the most valuable companies in the world.

The advancement of technology brings a new business model, driven by the connection between people through digital platforms

Technological revolutions also tend to change the way companies operate in the market. An example of this is that digital innovations in recent years have driven the emergence of a new model of business: digital platforms

The more people have access to the internet on computers and smartphones, the greater the connectivity between them. In this scenario, digital platforms arrive to connect people, organizations and workers around the same purpose or to share a common resource through applications, software and other online channels.

iFood, for example, is a digital platform that connects consumers and restaurants, cafeterias, markets and other establishments — and which also offers work to delivery people who take orders to people's homes.

What are digital platforms?

Digital platforms are software and hardware infrastructures, private or public, fueled by data, automated and organized through digital algorithms.

Furthermore, they are business models based on technology, which connect users and consumers to companies and service providers from the most varied niches and sectors.

This range of services available on the internet includes e-commerce, social networks, applications, payment systems and services known as the collaborative economy.

Platforms make everyone's life easier, whether through quick and instant communication or the strengthening of commercial, social and/or professional relationships.

Are all platforms the same?

Digital platforms are divided into three categories, point out the authors of the book “The Business of Platforms”:

  • Transaction platforms: They are those that facilitate transactions between people and companies that would not otherwise connect so easily, such as iFood, Mercado Livre and Airbnb. Its main advantage is to reduce search and transaction costs for users and entrepreneurs.
  • Innovation platforms: they serve as a basis for innovators to develop complementary technology products and services — this is the case of Linux, iOS and Google Android, for example.
  • Hybrid platforms: combine the characteristics of transaction and innovation platforms, such as Google, Amazon, Microsoft, Apple and Facebook.

Another peculiarity of digital platforms is that their growth is determined by network effects, which are the impact that each new user of a product or service (or participant in an interaction) has on the perception of value of the platform by other users.

In this universe, the more people use a platform's products and services, the more valuable this business will be.

To get a sense of the importance of this model in the economy, seven of the ten most valuable companies in the world in 2021 operate as digital platforms. After number 1 in this ranking — Apple — come Microsoft, Amazon, Alphabet, Facebook (all from the United States), Tencent and Alibaba (both Chinese).

Socioeconomic impacts of digital platforms

These new companies are also advancing in the job market. In Brazil, a IPEA study estimated that, in the transport sector alone (passengers and goods), more than 1.4 million Brazilians worked for digital platforms in 2021.

Joining iFood, for example, helped restaurants across the country create 10,472 jobs per month between 2015 and 2019, points out another survey, carried out by Fipe.

Other data collected by Fipe show that iFood created 730 thousand jobs in 2020 — equivalent to 0.72% of the country's employed population.

Furthermore, it contributed R$ 31.8 billion to the national GDP, which means a share of 0.43% of the total wealth generated in the country.

Types of digital platforms

The most common types of business models for digital platforms are subscription, advertising and open access.

In the subscription model, it involves the service provider and the user who pays a subscription to access that service, such as online video and music platforms.

Meanwhile, in the advertising model, platforms receive indirect revenue via advertising and commercialization of information, leaving the user exempt from any payment.

And the open access model consists of connecting suppliers of goods or services with users, who may or may not have subsequent costs, functioning as a market.

Discover the most used platforms

The most used digital platforms in Brazil in 2021 were social networks, according to the website Digital Results. 

In first place is Whatsapp, with 165 million users, followed by Youtube, with 138 million users.

In third and fourth place are Instagram and Facebook, with 122 million and 116 million users respectively.

Examples of digital platforms

Examples of digital platforms are social networks, marketplaces, e-commerce, applications for various uses, such as mobility, videos, productivity and education.

iFood, for example, is a digital platform that connects consumers and restaurants, cafeterias, markets and other establishments — and that offers work to delivery people who take orders to people's homes.

Amazon Mercado Livre, Dafiti, B2W, Shopee and Shein are other examples of digital retail platforms. In addition, there are e-commerces and marketplaces, Netflix, Amazon Prime, GloboPlay are digital video streaming platforms.

Spotify and Resso are music platforms. Mobility applications such as Uber, 99 and Waze are examples of digital platforms.

4 tips on how to sell on digital platforms

To sell on platforms, the business must be well engaged and aligned with its product, customers and supplier base.

See 4 tips on how to sell on digital platforms, based in this article from Sebrae.

  1. Research which channel or channels the target audience is most present on, which facilitates relationships and consequently increases sales.
  2. Invest in quality content that is of interest to the target audience, using an editorial calendar to provide rich and useful material that will make a difference in the lives of the client and potential clients.
  3. Run attractive campaigns to increase sales and brand reach. An example of an attractive campaign is the giveaway.
  4. Create paid ads on social networks like Instagram, Facebook and Google.

Read too:

What is conscious capitalism in the New Economy?

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