🚴 Your Order of Network Effects Has Arrived: Lessons from China’s Delivery War

9

October

2025

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Hi, Everyone!

As of lately, I’ve been fascinated by the evolving world of food delivery providers and how these systems move our cities through logistics, route algorithms, and digital ecosystems.

Each one of us on our way to Woudestein campus will cross bike paths with food riders slipping through traffic. By observing this everyday convenience we can understand how innovation, human behaviour and pricing strategies shape these platforms. Today, I will share an example that offers a glimpse into digital platform economics.

In early 2025, China’s food delivery market mainly represented by Meituan, Alibaba’s Ele.me and JD experienced a frenzy of coupons, near-free meals, and there in 30 minutes or free delivery promises.

For weeks, users were flooded with deals, riders earned record wages, and restaurants struggled to keep up with surging demand. Here we see in action indirect network effects as the mutual dependency between consumers and restaurants. As more restaurants joined, users gained variety, convenience, and faster delivery. This surge in demand was only initially sustainable by Meituan and Ele.me who subsidized both sides heavily, hoping to lock users into their ecosystems.

The result? Well, as imaginable an exponential user growth but collapsing margins. Meanwhile, same-side network effects were also observable. As more users joined, platforms benefited from richer data, social coupon sharing, as well as users positive word of mouth that built trust.

However, in this delivery war between Meituan, Ele.me and JD, customer loyalty went down as digital platforms allowed easily for multi-homing and forced even deeper discounts. That is when negative network effects became visible through rider oversupply, restaurants facing price pressure, and consumers questioning service reliability.

Each company offered layered membership programs, flash discounts, and bundled services. For once, Meituan’s premium pass, and Alibaba’s integration with Taobao remind us of bundling and price discrimination dictated by algorithms favouring recurring transactions.

Luckily, regulators such as the China Securities Regulatory Commission stepped in to stop these predatory pricing strategies and protect small businesses. Moreover, JD started curating the supply side more by offering social security coverage for full-time and part-time riders, signalling a turn toward long-term sustainability. Briefly after, also Meituan announced similar benefits adjustments.

This episode shows that network effects can both build and break digital platforms. Where do you see the future of delivery ecosystems here in Europe, one of sustainable growth or one driven by endless price wars?

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Clash between Titans: A Breach in Apple’s Unbreachable Platform Flow

24

September

2025

5/5 (1)

As defined by MIT’s Center for Information Systems Research (CISR), a “mono-home” is a digital platform strategy that aims to keep users within its ecosystem (Woerner & Weill, 2025). The most famous company to have built and relied on that method has been Apple. This blog post aims to exhibit the unique case where Epic Games broke Apple’s tightly regulated platform flow breaching outside its ecosystem. Thereby, I will be focusing specifically on Apple’s value loss, the company’s response strategy and which steps it could have taken to prevent the status quo.

Apple’s Unmatched Mono-Home Ecosystem
Through a dense ecosystem and a close product tie, Apple has been able to achieve unmatched customer loyalty and an extraordinary value stream. New research now shows how this effect has been amplified with each additional Apple purchase by the consumer. With a growing product tie come increased transition costs in case users wish to exit Apple’s platforms and increased sunk costs, as previous Apple purchases lose their value (Chang, 2025).

One of Apple’s largest platform-integrated services has always been its app store. To leverage network effects and stay competitive to platforms such as Google’s play store or the Microsoft Store, Apple allows external app developers to publicly provide their applications (Lindenmayr & Foerderer, 2022). Nevertheless, the tech giant has established guidelines and arguably anti-competitive practices to keep not only users, but also developers from operating on competing platforms.

Keeping this so-called “walled garden” – meaning the practice of tightly controlling a closed platform ecosystem – ensures that Apple has control over everything which could constitute a leak in its platform flow. Such practices have included limiting developers to their Swift coding language or a limited pool of pre-approved third-party coding frameworks, and prohibiting the sideloading of apps (the process of installing apps from outside of Apple’s official app store) (Yun, 2021).

Epic Games’ Breach on Platform Flow & Apple’s Counter Strategy
In 2022, Epic Games first used a process called “steering” by leading users outside of the app store and allow them to make purchases, which excluded Apple’s 30% commission and thereby effectively circumvented Apple’s In-App Purchasing (IAP) system. The impact was significant. Other apps like Spotify followed suit shortly after and Bloomberg has estimated that the loss over the platform flow could result in Apple losing around $4,1 billion in revenue to app developers (D’Anastasio, 2025).

Apple, realizing the thread to one of their core income cash flows, went ahead and removed Epic’s most popular app Fortnite from their app store. Epic Games then subsequently suit Apple over anti-competitive practices. According to Epic, Apple ended up spending a total of $100 million on the lawsuit proceedings (Owen, 2025) to set the tone for other (smaller) developer through a landmark legal case.

 This strategy follows the playbook for digital leaders as outlined in “How platform leaders win”. Through the lawsuit, Apple aims to act as an enforcing orchestrator that set the “rules of the game” (Hidding et al., 2011), not only for Epic Games, but for similar developers thereafter.

In addition, Apple adjusted to the threat by changing the way transactions outside of the app store work. After the settlement concluded that Apple had to allow apps to offer payment outside the store’s ecosystem, they implemented a mandatory 27% commission on all of such purchases on the web and banned any kind of marketing within apps to encourage users to exit the app before paying. Notwithstanding the new disclosure screen that must be shown before leaving the app, warning the user about potentially unsafe websites.

All in all, Apple succeeded in mitigating the threat by leaving developers the freedom to “steer”, whilst enforcing its legacy monetarization system practically rendering the method useless. However, its practices left a mark on all app store providers in the industry and have gotten the beloved brand under unprecedented scrutiny.

Conclusion and Revision of Apple’s Strategy
In hindsight of this and the respective lawsuits fought against Apple’s competitor platforms; it can be said that Apple risked nearly being labelled a “monopoly” in the US case and decreased overall value in the market as developers have been uniquely exposed to the predatory practices that have been quietly utilized by platforms for a long time. This outrage therefore directly pressured Apple into the creation of the small business program for instance, where apps with revenue under $1 million must only pay 15% commission (Apple Inc, n.d.).

Thus, Apple would have been wise to value feedback and transparency early on and negotiate a lowered commission rate with Epic Games instead of going so far as to ban its apps outright. This would have avoided a public lawsuit and the risk of hurting its overall customer loyalty. Lastly, the platform could have implemented security measures such as the disclosure screen and out-of-app commissions on its own terms, ensuring to future-proof its “walled garden”.

References

Apple Inc. (n.d.). App Store Small Business Program. Apple Developer. Retrieved September 24, 2025, from https://developer.apple.com/app-store/small-business-program/

Chang, J.-H. (2025). Secret power of the product ecosystem: A network perspective from the case of Apple. Journal of Business Research, 200, 115641. https://doi.org/10.1016/j.jbusres.2025.115641

D’Anastasio, C. (2025, May 29). Mobile-Game Makers Poised for Windfall Following Win Over Apple. Bloomberg.Com. https://www.bloomberg.com/news/articles/2025-05-29/mobile-game-makers-poised-for-windfall-following-win-over-apple

Hidding, G. J., Williams, J., & Sviokla, J. J. (2011). How platform leaders win. Journal of Business Strategy, 32(2), 29–37. https://doi.org/10.1108/02756661111109752

Lindenmayr, M., & Foerderer, J. (2022). Qualitätssicherung in Digitalen Plattform-Ökosystemen: Implementierung von Kontrollsystemen am Beispiel von Apple iOS. HMD Praxis der Wirtschaftsinformatik, 59(5), 1312–1322. https://doi.org/10.1365/s40702-022-00904-6

Owen, M. (2025, July 5). Billion dollar battle: Picking an App Store fight with Apple cost Epic Games greatly. AppleInsider. https://appleinsider.com/articles/25/05/07/billion-dollar-battle-picking-an-app-store-fight-with-apple-cost-epic-games-greatly

Woerner, S., & Weill, P. (2025, May 12). Top-Performing Companies Reuse Four Digital Platform Designs | MIT CISR. https://cisr.mit.edu/publication/2025_0501_DigitalPlatformDesigns_WoernerWeill Yun, J. M. (2021). App Stores, Aftermarkets, & Antitrust. Arizona State Law Journal, 53(4), 1283–1328.

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Who Will Own TikTok? What the U.S.–China Deal Teaches Us About Platforms and Competition

18

September

2025

5/5 (1)

Context

Back in 2020, President Donald Trump announced the plans to ban TikTok in the United States. At the same time, the justification was national security concerns over the potential access of data by the Chinese government through TikTok’s parent company, ByteDance. The ban was never materialized, but it marked the first moment when a social media app became the center of a geographical standoff. Fast forward to today, with Trump now back in power, he is once again pushing for a “solution”. This time, according to CNN News, the proposed deal with Chinese President Xi is that the majority of the shares would be transferred to the American investors, like Oracle, while ByteDance would only retain a minority stake. The arrangement is meant to resolve concerns without killing the app that has 139 million active American users (Castmagic, 2025)

But, as U.S. Treasury Secretary Scott Bessent revealed this week, China was clearly not in favor of the “deal” and resisted giving up control of such a valuable platform. According to Bessent:

“What turned the tide was a call that Ambassador Jamieson Greer and I had with President Trump the night after the first day of negotiations, and President Trump made it clear that he would be willing to let TikTok go dark,” Bessent told CNBC on Tuesday.

In other words, the threat of a complete shutdown forced China back to the table and created a path for the current ownership deal, which is going to be announced in the coming weeks.

Comparison with TikTok vs. Kwai

This global drama reminds me of the case we studied in class about Douyin (Chinese TikTok) versus Kuaishou (Kwai) in China. Both platforms benefited from strong network effects: more content creators attracting more viewers, which attracted even more creators, reinforcing a positive feedback loop. But the competition also showed how differentiation matters. TikTok is relying on its recommendation algorithm and global expansion, while Kwai has built more community-driven interactions and is turning its focus to lower-tier Chinese regions. That rivalry was shaped by market forces and strategy. In the U.S., TikTok’s rivalry is not with another substitute app, instead, it is with the government itself. Here, geopolitics has become the real “competitor” reshaping the platform’s future.

Further Discussion

My personal opinion regarding this geopolitical tension between China and US is balanced. While the new deal may reduce the immediate tensions, it does not fully solve the deeper issue below the surface. The algorithm that drives TikTok’s content is still developing in China and liscensed out, which means concerns about influence and data insecurity won’t simply vanish in America or any parts of the world. Meanwhile, splitting ownership or separating TikTok and Douyin could reduce TikTok’s innovation cycle since ByteDance is no longer involved or barely involved, this could give more rooms for rivals to grow and expand.

What I found most intriguing is whether this U.S.-China split will create a two-parallel TikTok and Douyin world, similar to how TikTok and Kwai co-exist in China. Could the US-owned TikTok evolve differently from Douyin in China, with separate features, rules, and communities? Or will this separation weaken TikTok’s vision, strategies, reputation, network effects, and so on until the point where potential competitors (e.g. RedNotes) finally catch up and replace it?

References

Castmagic. (2025). TikTok Users by Country in 2025: Global Stats & Rankings. Castmagic.io. https://www.castmagic.io/post/tiktok-usage-by-country#which-country-has-the-most-tiktok-users

Treene, A., & Goldman, D. (2025, September 16). We now know who the new owners of TikTok will be – if Trump gets his deal done with Xi. CNN. https://edition.cnn.com/2025/09/16/tech/tiktok-ban-extension-trump

Imran Rahman-Jones. (2025b, September 16). TikTok to stay in the US as Donald Trump says deal is done. BBC. http://www.bbc.com/news/articles/c7847q9xvwgo

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The Transformation of Supermarkets: From Products to Digital Platforms

18

September

2024

5/5 (2)

Purchasing goods in bulk, stocking shelves, and selling to customers; this is how supermarkets used to operate as they were using a traditional product-based business model. Over time, supermarkets evolved by integrating technology, such as self-service, price scanners, and loyalty programs (Sundarabharathi & Muthulakshmi, 2023). The landscape is changing rapidly as supermarkets shift toward a digital platform business model. This shift focuses on personalized experiences, with data analytics predicting consumer behavior and adapting to innovations (Sundarabharathi & Muthulakshmi, 2023). One key player embracing this transformation is Albert Heijn, a Dutch supermarket chain leading the way in digital innovation.

Albert Heijn was the first Dutch supermarket who took the omnichannel approach where in-store meets online (Albert Heijn Launches Subscription, ‘My Albert Heijn Premium’, 2021). The introduction of digital tools, like Albert Heijn’s bonus card and mobile app “AH app”, have transformed the way customers interact with the brand. Their bonus card initially started as a loyalty card for discounts, but has since evolved into a sophisticated data-gathering tool. The combination of the bonus card and the multifunctional AH app, lets Albert Heijn track customers’ shopping habits. With the use of artificial intelligence, the supermarket can recommend personalized offers, recipes based on what you buy, and even predict future purchases. This personalized shopping experience keeps customers engaged while generating valuable data.

As these apps and digital tools grow in functionality, they are part of a broader trend where supermarkets collect an increasing amount of data. Every interaction, from the products scanned to online searches, feeds into algorithms that help supermarkets optimize inventory, suggest new products, and refine marketing strategies. This approach transitions supermarkets from merely being places to purchase goods to digital platforms that provide value-added services based on consumer behavior.

The future allows supermarkets to become even more platform oriented due to new technological innovations and upcoming trends. There are different opportunities around the corner for supermarkets to make this transformation. Examples are the replacement of barcodes with QR codes in 2027 in the Netherlands and Artificial Intelligence becoming more sophisticated (DigitalTrends, 2023)(NOS, 2024).

As supermarkets adopt these technologies, their business models will need to continue evolving towards more digitally-driven, data-powered operations. It is interesting to see how it affects the business models of supermarkets like Albert Heijn right now, and how it will develop in the future years. How far can we transform to this digital platform model and will the traditional physical supermarket as we know disappear completely in the future?

References:

Albert Heijn launches subscription, ‘My Albert Heijn Premium’. (2021, 27 oktober). https://www.aholddelhaize.com/en/news/albert-heijn-launches-subscription-my-albert-heijn-p

remium/

DigitalTrends. (2023, 19 juli). How Artificial intelligence (AI) is becoming increasingly sophisticated. Medium. https://medium.com/@digitaltrends1/how-artificial-intelligence-ai-is-becoming-increasingly-sophisticated-4b837f7e31ba

NOS. (2024, 26 juni). De streepjescode bestaat 50 jaar, maar het einde nadert. https://nos.nl/artikel/2526164-de-streepjescode-bestaat-50-jaar-maar-het-einde-nadert

SUNDARABHARATHI, M., & MUTHULAKSHMI, C. (2023). American Supermarkets – PAST, Present Vs. Future Trends and Technologies. In G. Venkataswamy Naidu College & Manonmaniam Sundaranar University, Res Militaris (Vol. 13, Nummer 2, pp. 6270–6271).

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Is freelancing the future of working?

11

October

2022

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Gig economy has caught a lot of attention in recent years. It can be defined as a labor market in which employers rely heavily on independent contractors and freelancers rather than full-time permanent employees (Chappelow, 2019). Growth of the gig economy is being fueled by digital platforms that allow contractors to connect with employers. Gross volume of the gig economy in the United States is projected to reach 455 billion U.S. dollars in 2023 (MasterCard, 2019). Currently, there are over 70 million freelancers in the US and they are forecasted to make up more than half of the country’s workforce in 2027 (Upwork, 2017).

Uber and Airbnb are the companies that are getting the most attention, however, the complexity of work done through freelancing is limited not only to transportation and accommodation industries. Very exciting part of the freelancing market are freelancing platforms which allow professionals from different fields to connect with exciting opportunities from all around the world and earn additional or even the main source of income. Some of the most popular skill areas for digital freelancers include IT, design, sales, marketing, writing, customer support, finance, engineering and legal. There are multiple platforms that allow for professionals to connect with companies, namely Toptal, Fiverr, Freelancer.com and Upwork. The last one is currently dominating the market, so it will serve as a basis for this evaluation.

Being a digital platform, Upwork facilitates the interactions between companies and freelancers. What made the company such a success story are its additional functionalities that make the process of signing the contract safe and simple. Firstly, hiring companies can see the portfolios of freelancers which serve as proof of the quality of their work. Additionally, employers bear any costs only after the work has been approved by them, so the risk of having to pay for work of inadequate quality is reduced virtually to zero. Moreover, the company emphasizes its focus on data security and privacy (Upwork, 2022). All these factors contribute to the fact that the average rating of professionals by clients stands at 4,9 out of 5. Main company’s values – freedom from the physical office, flexibility and efficiency – don’t come without their shortcomings (Popiel, 2017). Notable trade-offs of freelancing on the platform include the infrequency of work, intense global competition and barriers to high wages (Popiel, 2017).

Is freelancing the future of working, though? In 2020 the freelancers on Upwork earned $2.3 billion cumulatively – given the fact that there are millions of contractors registered on the platform, it does not seem like much (Upwork, 2022). My prediction is that freelancing will be becoming increasingly important in the coming years, but we won’t see 9-5 jobs coming away anytime soon. I believe that stable, indefinite employment contracts with all benefits that come with them will still be of preference for the substantial part of workers.

References

Chappelow, J. (2019). Gig Economy. [online] Investopedia. Available at: https://www.investopedia.com/terms/g/gig-economy.asp.

MasterCard. (2019). Projected gross volume of the gig economy from 2018 to 2023 (in billion U.S. dollars). Statista. Statista Inc.. Accessed: October 09, 2022. https://www.statista.com/statistics/1034564/gig-economy-projected-gross-volume/

Popiel, P. (2017). ‘Boundaryless’ in the creative economy: assessing freelancing on Upwork. Critical Studies in Media Communication, 34(3), pp.220–233. doi:10.1080/15295036.2017.1282618.

Upwork. (2017). Number of freelancers in the United States from 2017 to 2028 (in millions). Statista. Statista Inc.. Accessed: October 09, 2022. https://www.statista.com/statistics/921593/gig-economy-number-of-freelancers-us/

Upwork. (2022). Upwork | Hire Freelancers. Make things happen. [online] Available at: https://www.upwork.com.

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The Break-Up of Ant’s Alipay – When Platforms Become Too Powerful

1

October

2021

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Imagine powerful tech companies such as Google knew about every single item that you have purchased, both offline and online, in your entire life. Now skip the imagination, because if you were to use an online payment platform your entire life, they would. 

As more and more people use online payment services for their own convenience, online payment platforms are fast gaining in popularity. One of such online payment platforms is Alipay. Alipay is a Chinese mobile and online payment platform that was created as the payment arm of the large Chinese eCommerce website called Taobao (Ant Group). With over 1 billion users, Alipay says they have created “an inclusive digital ecosystem accessible to everyone” (Alipay, n.d.). 

They make it sound great. Yet, there are concerns that Alipay is so dominant that no one can compete with them (Ovide, 2020). As a result, China decided to break up Alipay last month (Yu & McMorrow, 2021). To understand how Alipay can be ‘broken up’, it is important to first understand how Alipay operates. The image shows the revenue streams of Alipay (Cuofano, n.d.). As you can see, their revenues consist of escrow fees, also known as transaction fees, ancillary services and credit pay instalment fees. The latter refers to the highly lucrative lending business and is, not surprisingly, the part China wants to separate from Alipay.
In addition to separating Alipay’s lending business from its main business, officials have stated they want the separated business to have its own independent app. Notably, this would require Ant Group to turn over the user data that determines its lending decisions to a new credit scoring joint venture, which would be partly state-owned (Yu & McMorrow, 2021). The main reason being that big tech’s monopoly of power comes from their control of data, and China wants to end that. 

Though it might seem just to control a company that becomes ‘too’ powerful due to possession of user data, it feels unjust that a government can restrict this way of operating by obliging an online platform to be split-up and most importantly, hand over the data. 

This raises the modern dilemma on data: who is morally justified to take data ownership, and thus become powerful?

References
Alipay. (n.d.). Accessible digital payments for everyone. Retrieved from https://global.alipay.com/platform/site/ihome
Cuofano, G. (n.d.). How Does Alipay Make Money? The Alipay Business Model in a Nutshell. Retrieved from https://fourweekmba.com/how-does-alipay-make-money/
Ovide, S. (2020). Don’t Even Try Paying Cash in China. The New York Times. Retrieved from https://www.nytimes.com/2020/10/27/technology/alipay-china.html
Yu, S., & McMorrow, R. (2021). Beijing to break up Ant’s Alipay and force creation of separate loans app. Financial Times. Retrieved from https://www.ft.com/content/01b7c7ca-71ad-4baa-bddf-a4d5e65c5d79

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