It may be quite interesting to look at the similarities between a content platform ecosystem and a logistics platform ecosystem. Given my career experiences in both areas, I figured that it makes sense to use the above visual to simplify my understanding.
On Content Platforms, Attention is an easily traded resource
As consumers of content, we are also producers of what businesses crave — attention. If you’re struggling to understand this, I would highly recommend to check out books on marketing. Now, how is our attention traded like a commodity in this ecosystem?
I’m submitting that there are four key types of players in this ecosystem. Sit tight, for you are definitely going to fall in either one of them.
Attention Consumers: Businesses that are trying to sell to people like us
Demand Aggregators: e.g. Internet commerce platforms
Supply Directors: e.g. Social media platforms and internet search engines
Attention Producers: People like us
We inadvertently want to pay attention to something that benefits us or make our lives better. Don’t you want to read articles that enlighten or brighten up your day? We spend time on the internet searching for content, and technology has enabled us to have more options to access the internet. It can be through Facebook, Netflix or even Medium. These mediums are known as supply directors. They direct our attention to places that mean the most to us.
Like it or not, we are all part of the attention economy. Businesses would like to have a slice of our attention to sell us more things or services. To make their lives easier, businesses make use of e-commerce platforms, such as Amazon. They list their products at a one-stop platform for users, hoping to have more clicks or views on their online listings. This has enabled better reach for businesses to increase their sales and revenue. These platforms are known as demand aggregators — they essentially aggregate business demand for user attention.
In the content platform ecosystem, effectively managing roles of demand aggregation and supply direction reaps considerable business benefits and scalability. This is the reason why TikTok wants to be a Lazada and why Lazada wants to be a TikTok. That being said, capturing user attention is key. Hence, a TikTok that wants to be a Lazada will probably have an easier path towards growth and profitability. It’s probably better to be a supply director in this case. Given the proliferation of players in this space, the tricky problem to resolve are three-fold:
- Intelligent marketing (Getting users for newer players)
- User Privacy
- Trust and Safety
On Logistics Platforms, Courier Service is a resource for the capital-intensive
As consumers of delivery services, businesses that sell online always need logistics support. They chiefly have been driving up demand for logistics businesses. These businesses own courier resources. Courier resources require upfront set up costs (think about warehousing and courier fleet parking spaces) and regular maintenance costs (think about maintenance of productivity equipment that keep the warehouse running day and night).
Courier Service Consumers: Businesses that are selling physical goods online
Demand Aggregators: e.g. Internet commerce platforms
Supply Directors: Logistics service aggregators
Courier Service Producers: Courier companies that own logistics assets
In the Logistics Platform ecosystem, effectively managing roles of demand aggregation and supply direction reaps considerable business benefits and scalability. Because courier services are relatively expensive to procure than attention, these benefits need a longer time to realise. Firms in logistics need to have enough cash to provide for a longer runway towards profitability. Therefore, in the next few years, given the increasing costs and slowing economy, we may see further consolidation and/or alliance of smaller logistics start ups that need to be accountable to their funding VCs.
