The Path Constitution of Platform Evolution: An Organizational Momentum View

Abstract

Although the evolutionary pathways are critical to the success of platforms, extant literature has provided little insight into the dynamic processes of the platform evolution, let alone how platforms constitute the evolutionary pathways over time. Against this backdrop, this study examines the evolutionary path constitution of platforms by adopting an organizational momentum lens. Through an exploratory case study of Pinduoduo, it provides evidence of path dependence under the network effects and of path creation resulting from the deliberate actions conducted by the platform firms. Moreover, this study identifies three platform strategies to manage its momentum to facilitate platform evolution and sustainability. Furthermore, this study develops a holistic framework to explain the interactions between platform momentum and path constitution by considering the outcomes of these strategies. The findings and developed framework shed novel light on the path constitution of platform evolution and provide new insight into the sustainability of the platform firms and platform-based markets by leveraging momentum thinking.

1. Introduction

In recent years, platform-mediated networks have become increasingly prominent during the development of businesses [1]. Platform firms such as Apple, Facebook, and Alibaba have disrupted the existing industries by providing a common technological architecture for the interactions among diverse agents [2,3] and eventually forming the platform ecosystems, a specific structure of relationships among interdependent firms [4,5]. According to the United Nation’s Digital Economy Report, the total value of platform firms with a market capitalization of over $100 million was evaluated at more than $7 trillion in 2017 [6]. Looking at the platform phenomena, Yoffie et al. [7] even concluded that five of the six most valuable companies are built around the platforms. The success of these platforms has put platform ecosystems at a vital ranking in business [8]. Notably, the emergence of platform ecosystems is often associated with platform evolution.

Given the meanings of platforms [2,4], platform evolution (PE) could be understood as a dynamic process driven by continuous inputs from the various stakeholders under the actions of platform firms [6,9,10,11]. For instance, Google Android has captured the most market share by continuously promoting the increasing number of third-party developers to become complementors; Amazon continued to leverage the input from many active sellers to entrench their marketplace power. Consequently, the pathway to success for a platform is by no means easy or guaranteed. Furthermore, it is challenging for platform firms to develop strategies to orchestrate the evolution [12], while it is critical to its sustainability. This raises a noteworthy topic: How do platforms constitute the evolutionary pathways?

Although increasingly research on the platform phenomenon has been presented, much less work exists that considers the evolutionary processes of the platform [6,10,13,14]. Notably, these studies always view the network effects as a critical source of the competitive advantage to drive the processes of PE [15]. However, to date, the limits of network effects (NEs) have been neglected, and the nature of NEs as self-reinforcing feedback loops is understudied [16,17,18]. The feedback loops may result in path dependence [19] and eventually form lock-in that could make the platform ecosystem “out of control” [9]. For example, Myspace had a strong installed base with the support of NEs, but it led to a lack of flexible updates in product design, and the firm ultimately failed. In addition, these studies mainly focused on an aspect of PE, such as complementors and business models, and have provided little systematic empirical inquiry into the process of PE. Moreover, it may limit our understanding of the interplays between platform evolution and the environment [13,20]. Therefore, it is necessary to make sense of the implications of NEs for the evolutionary pathways of platforms, which may help platform firms take better actions to navigate the PE to increase the likelihood of sustainable development, particularly in the face of fierce competition with rivals.

In this article, we draw on the existing literature to approach the processes of platform evolution, which were driven by a mix of path dependence and path creation [19], and then we examine the evolutionary path constitution of the platform by adopting an organizational momentum lens. The organizational momentum describes the power to maintain continuous change [21,22,23], and it is relevant and appropriate to introduce the momentum thinking to the dynamic processes of platforms [9,24,25]. Therefore, this study focuses on the question: How does the evolutionary path constitute over time in platform contexts?

To answer the question, this study draws on the extant literature to provide two foundational concepts that describe the critical characteristics of PE’s path constitution and platform momentum, respectively. Then, based on the comprehensive data from multiple sources, this study conducts an in-depth case analysis of Pinduoduo Inc, China’s biggest e-commerce platform for agricultural goods. Finally, it provides evidence of path dependence and path creation during the processes of PE and further presents a holistic framework to show the interactions between platform momentum and path constitution of PE by identifying three momentum-managing strategies and their outcomes.

The article makes three main contributions to the extant studies. First, it enriches the literature on the platform ecosystem by considering the limits of NEs rather than only being viewed as a critical source of competitive advantage [3,15] and by emphasizing the interplays between platform evolutionary pathways and the environment from an organizational momentum view. Second, it provides new and systematic insight into platform strategies by introducing momentum thinking, which contributes to the sustainability of platform firms and platform-based markets [26,27]. Third, it also contributes to organizational momentum research by identifying three momentum-managing strategies to explore the interactions between momentum and processes of platform evolution instead of mainly focusing on the influences of momentum on organizational development [22,23,28].

The rest of the paper is organized as follows. Section 2 provides the foundational concepts based on the literature review. Section 3 describes the methodology. Then, the case analysis and findings are conducted in Section 4. In Section 5, a discussion and implications of this study are provided. Section 6 concludes the paper.

2. Literature Review and Foundational Concept Definition

2.1. Evolutionary Path Constitution in Platform Contexts

2.1.1. Platform Discussion in the Existing Literature

The term platform appeals to more and more scholars and practitioners, accompanied by the most valued firms gradually emerging in a short period, including Apple, Google, and Alibaba. In platform research, most studies pay attention to two distinct theoretical perspectives of platforms: economics and engineering design [2]. The economics perspective views platforms as the two-sided or multi-sided markets and mainly focuses on the mediate transaction feature of platforms providing services to two or more sides [29,30,31,32]. In contradistinction, the engineering design perspective sees platforms as technological designs and architectures which can provide the shared foundation for modular and complementary innovations [13,33,34]. Notably, both perspectives emphasize the roles of direct and indirect network effects in improving the platform transactional efficiency [6,35]. In this article, we made no distinction between these two perspectives and argued that platform is an organization that provides a common technological architecture for the interactions among diverse agents and improves transactional efficiency through the network effects.

Given the diversity of platform phenomenon and the surprising success of many platform firms, scholars increasingly focus on how the factors and strategic actions affect platform success [3]. Examples include the roles of complementors [36,37,38], the interactions between platform owners and complementors [39,40,41], and the competition among platforms [5,42,43]. However, prior studies mostly view platforms as a snapshot in time [24] and cannot even indicate how platforms evolve [2,44], which leads to a lack of a deeper understanding of the dynamic process of PE [2,3,9]. Notably, the platform evolution results from its strategic actions to create value and the continuous inputs from various stakeholders under these strategies [6,11]. Therefore, platform strategies are critical in increasing its sustainability and pursuing success [26]. Nevertheless, the existing literature paid little attention to the interaction between the strategies and their outcomes and the environment, which might limit the new and systematic insights into platform strategies and eventually hinder the sustainability of platform firms and platform-based markets [27].In addition, there is emerging literature on the platform ecosystems consisting of the platform and a set of complementary products [12], and it pays attention to how the platform owners strategically coordinate the multilateral interdependences within platform ecosystems [45]. Nevertheless, this stream of literature seems to ignore the co-evolution view of the ecosystem [13,20].

As a result, some scholars have recently started focusing on the evolution process of platforms. For instance, Ruutu et al. [14] developed a system dynamics model of platform development to examine the impact of different factors that affect resource accumulation in the scenarios. Zhao et al. [15] discussed how the business model of multi-sided platforms evolves and eventually succeeds in the competitive battle. Shi et al. [6] presented a framework to indicate that dynamic capabilities can enable appropriate business models and activities to emerge and develop innovation platforms in a nascent industry. However, these relevant studies have still neglected the limits of network effects and the interplay between the evolutionary pathways and the environment, leaving a research gap that we aim to fill to provide insight into the evolutionary path constitution in platform contexts.

2.1.2. Path Constitution of PE

The path constitution theory integrates the concepts of path dependence and path creation [46]. Path dependence refers to a stochastic process performed under both contingency and self-reinforcing mechanisms, and it forms a lock-in in the absence of exogenous dynamic shocks [47]. More specifically, it is difficult for organizations to escape from the path dependence, which can be increasingly constrained [48], and a lock-in occurs when organizations are unable to move to a new state which disregards preferences [49], or the managers take measured actions and responses [46]. Furthermore, organizations must create a new path for breaking out of the state of lock-in [47]. However, the prior studies of path dependence have excluded the agency role of the evolutionary pathways and neglected the difference in path processes about whether the strategic efforts of agents were taken into account [50,51]. Against this backdrop, some researchers have considered the influence of the strategic agency and proposed the concept of path creation. According to Garud and Karnøe [51], path creation refers to a process of mindful deviation that requires the help of the external environment and the right time. It also requires entrepreneurs to integrate resources and carry out learning to achieve the deviation from the development path. On the one hand, this mindful deviation is an ongoing process of continuous path-creating and stabilizing activities [52]. For instance, the development path of the Post-it notes continued for many years before it was stabilized. On the other hand, the agency could be understood as the distribution and emergence through the interactions of actors and artefacts that constitute action nets [49], emphasized in the path creation.

Observing that most prior studies have examined path dependence and path creation, respectively [49], the recent path constitution literature combines path dependence and path creation to attain a general understanding of path processes [50,52]. Specifically, the path constitution draws on the complementarity between path dependence and creation to view the path as a mixture of emergent processes and deliberate actions [52]. Moreover, it can explain how history and agency might intertwine during technological innovations [46] and provide a holistic perspective for the understanding of any evolution processes [19]. Additionally, Sydow et al. [50] provided a gradualist understanding of path constitution and employed multi-level thinking to analyze the technological paths in the networked organizational field. Jing and Benner [48] further emphasized the opportunity space and heterogenous institutional regimes in organizational path constitution.

Although these studies have made a significant contribution to the theory of path constitution, little insight has been provided into interactions between paths and strategic actions during organizational evolution. Moreover, it still needs to examine the propositions of organizational path constitution in other contexts [46]. Against this backdrop, this article focuses on the evolutionary path constitution in platform contexts and emphasizes the interactions between path constitution and strategic actions during the processes of PE.

In the context of platforms, it is well known that the powerful NEs could cultivate the rapid growth of platforms to increase values when the platforms have solved the “chicken or egg” challenge. Meanwhile, it is noteworthy that the nature of NEs as the self-reinforcing feedback loops [18,53], which could lead to path dependence [19] occurs during the process of PE. Furthermore, the lock-in brought by path dependence may make platforms and ecosystems “get out of control” [9], which naturally results in it is necessary to emphasize the role of agency and path-breaking during the evolutionary pathways of the platform [49]. Thus, this article draws on the theory of path constitution to examine the path dependence and the path creation in the PE and provides several foundational concepts of platform evolutionary pathways to deepen understanding of path constitution in the PE context (shown in Table 1). First, we follow the ongoing feature of paths [46] and define the platform evolutionary pathway as the dynamic progression over time of the survival and sustainability of the platform, which is similar to the views from Tiwana [12] and Inoue [27]. Furthermore, we propose the evolutionary path trajectory, the sequence or patterns through which the platform evolutionary pathway develops over a considered period, to depict the evolutionary progress over time.

Second, the triggering events play a substantial role in path constitution since these can constitute key crossroads and critical incidents or turning points [46]. Accordingly, we pay attention to developing the concept of the triggering events in PE and conceptualizing them as the critical events that challenge the evolutionary trajectory of the platform. Moreover, we view the episodes of path constitution as the period from when the platform evolution starts until the consequential changes in path trajectory have become manifest. Then, we make sense of how platform owners respond to the triggering events by introducing the concept of response mode, which may change with a continuum from emergent to deliberate [52].

Finally, we draw on the theory of platform and path constitution to define the path constitution of PE as the formation of the PE pathway through the network effects determined and the agency influences from platform owners. Furthermore, we follow the critical thinking of path dependence and path creation from the extant studies and highlight each episode’s impact on the evolutionary path trajectory in the platform context. On the one hand, the PE trajectory increasingly falls into the path dependence as self-reinforcing feedback loops from the NEs gradually work because the study of platforms mainly emphasizes the increased value of platform with the expansion of network scale brought by the NEs [3]. On the other hand, path constitution episodes in PE may transform the current trajectory, which is stabilized by the NEs in PE, because the platform owners optimize the business model to decrease the dependence of NEs and then break away from such evolutionary patterns [15,54].

Table 1. Foundational conceptualization: path constitution of PE.

Term	Definition	Variable	Variable Definition	References
PE pathway	The dynamic progress over time of the survival and sustainability of the platform	Evolutionary path trajectory	The sequence or patterns through which the platform evolutionary pathway develops over a considered period	[12,27,46]
Path constitution of PE	The formation of the PE pathway through network effects determined as well as agency influences from platform owners	Self-reinforcing impact	The stabilization of the current path trajectory through the reduction of available PE options (e.g., the self-reinforcing feedback loops from the NEs in the context of expanding network size)	[3,16,17,18]
		Transforming impact	The destabilization of the current path trajectory through the introduction of available PE options (e.g., the optimization of the business model by the platform owners)	[15,49,54]
The episode of path constitution of PE	The period from when the platform evolution starts until the consequential changes in path trajectory have become manifest	Evolutionary triggers	The critical events which challenge the evolutionary trajectory of the platform	[2,46,52]
		Response mode	The continuum of responses from the platform owners—varying from emergent to deliberate—to a triggering event during the PE

Table 1. Foundational conceptualization: path constitution of PE.

Term	Definition	Variable	Variable Definition	References
PE pathway	The dynamic progress over time of the survival and sustainability of the platform	Evolutionary path trajectory	The sequence or patterns through which the platform evolutionary pathway develops over a considered period	[12,27,46]
Path constitution of PE	The formation of the PE pathway through network effects determined as well as agency influences from platform owners	Self-reinforcing impact	The stabilization of the current path trajectory through the reduction of available PE options (e.g., the self-reinforcing feedback loops from the NEs in the context of expanding network size)	[3,16,17,18]
		Transforming impact	The destabilization of the current path trajectory through the introduction of available PE options (e.g., the optimization of the business model by the platform owners)	[15,49,54]
The episode of path constitution of PE	The period from when the platform evolution starts until the consequential changes in path trajectory have become manifest	Evolutionary triggers	The critical events which challenge the evolutionary trajectory of the platform	[2,46,52]
		Response mode	The continuum of responses from the platform owners—varying from emergent to deliberate—to a triggering event during the PE

2.2. Organizational Momentum and Platform Momentum

Momentum is a key concept relevant to the research of organizational change, which describes the power to maintain continuous change in an organizational context [21,22,23]. Early literature has tried to introduce the notion of momentum into organizational management research by connecting the trend of organizational changes with the tendency of moving objects from the physics phenomenon. For instance, Miller and Friesen [22] suggested that organizational momentum is a universal phenomenon and defined it first, through the normative research of the organizational momentum, as the power to keep the organization developing in the same direction. After that, many scholars have studied the organizational momentum in different research contexts. Specifically, some researchers conceptualize the organizational momentum as inertia or the tendency to maintain or enhance previous strategic behaviors in organizational change processes [55,56]. However, Jansen [23] believed that a more careful distinction needs to be made between the concept of inertia and the organizational momentum to better understand the organizational momentum during the change process. More recently, Beck et al. [57] proposed that the prior organizational change could also decrease the change tendency, which strongly responds to the repetitive momentum hypothesis of previous studies. However, these two arguments, the acceleration and deceleration, underestimate the steady pace during corporate development [58]. With the further development of momentum research, some scholars have different understandings of organizational momentum from various perspectives. Schubert et al. [59] argued that the momentum could be viewed as a form of stabilization consisting of the mass, velocity, and direction during the technological change processes, which results in the mutual stabilization of technological paths and organizational fields. In addition, Choi and McNamara [28] found that the strategic momentum will facilitate firms to repeat but also generate strategic actions which evolve from the previous actions. In addition, other scholars held that the concept of momentum could connect with the Shi in Chinese culture [21].

By integrating the extant literature on organizational momentum, we found that momentum plays a critical role in the growth and development of the firm and could leverage the momentum thinking to describe the dynamic process of platform evolution and its sustainable development because the nature of platforms is the unique organizations [2,4]. For example, recent studies have focused on how the momentum drives the creation processes for the ecosystem around platforms [9,25]. However, these studies are still insufficient to provide evidence of how the momentum interacts with the evolutionary processes of the platform and lack a comprehensive understanding of momentum in the platform context.

Accordingly, drawing on the prior research, we provide several foundational concepts of the momentum in the PE context (

Table 2. Foundational conceptualization: platform momentum.

Term	Definition	Dimensions	Coding Rules
Platform momentum	The outcome of the resultant forces was formed by enabling power and restraining power during the processes of PE	Positive momentum	When enabling power is larger than restraining power, it is coded as positive momentum
		Negative momentum	When enabling power is not larger than restraining power, it is coded as negative momentum
Momentum examination	Before conducting a specific strategy during the PE, it is appropriate to examine current momentum and forecast future momentum by platform owners	Examining current momentum	Current momentum can be coded as positive or negative status according to the coding rules of platform momentum
		Forecasting future momentum	Future momentum could be coded as positive or negative status according to the coding rules of platform momentum
Momentum-managing strategy	The strategy conducted by platform owners according to the result of momentum examination to manage the platform momentum to drive the processes of PE	Momentum-leveraging strategy	When the current momentum is positive, it is time to conduct the momentum-leveraging strategic actions by platform owners to drive the processes of PE in the current momentum
		Momentum-aiding strategy	When current momentum is negative and future momentum is positive, it is time to conduct the momentum-aiding strategic actions by platform owners to introduce the new positive momentum to drive the processes of PE
		Momentum-building strategy	When current and future momentum are both negative, it is time to conduct the momentum-building strategic actions by platform owners to create the positive momentum to drive the processes of PE

). First, we define the platform momentum as the outcome of the resultant forces formed by enabling power and restraining power during the platform evolution process by mainly integrating the two core arguments of organizational momentum and combining the organizational characteristics of the platform [21]. According to the definition, we further proposed that it is coded as the positive momentum when enabling power is larger than restraining power; otherwise, it is coded as the negative momentum [60]. In sum, we summarize that platform momentum can be viewed as a set of status and ability, which has a double-edged sword effect that can not only facilitate the prosperity of the platform but also hinder its survival and sustainable development during the PE.

Second, the existing literature found that momentum is critical in generating strategic actions [28]. Therefore, we suggest that it is appropriate to make the momentum examination, which can be conceptualized as the examination of current momentum and the forecast of future momentum, before conducting specific strategic actions during the PE. Moreover, we consider that both the current and future momentum could be coded as positive or negative according to the coding rules.

Finally, drawing on the pioneering research integrating with the Chinese culture [21], we further present that platform owners can conduct a momentum-managing strategy to drive the PE processes according to the result of the momentum examination. According to the results of the momentum examination (positive or negative), we then identify three types of strategies: momentum-leveraging, momentum-aiding, and momentum-building, as shown in Table 2.

In this section, we reviewed the prior studies systematically and found that prior studies still lack knowledge about how the platform momentum interacts with the path constitution during the processes of PE. Accordingly, we summarized several foundational concepts, which could help our more profound understanding of the path constitution and momentum in platform contexts and lay the foundation for the case study.

3. Methodology

3.1. Method and Case Selection

In this research, we conduct an exploratory case study to investigate the path constitution of the PE processes. The case study method is particularly appropriate for addressing “how” questions [61] and examining processes [62,63], which can provide a detailed description of events that facilitate our understanding of how the evolutionary path constitutes over time in platform contexts. Additionally, we chose a single longitudinal case to implement this new and exploratory investigation to ensure the dynamics and completeness of the case [64].

In the design of a single case study, unusual and extreme cases often chosen to explore a particular phenomenon [65]. Accordingly, we chose Pinduoduo Inc. (Nasdaq: PDD, so we call it PDD in the paper) as the specific platform owner for several of the following reasons:

First, PDD, founded in 2015, is a typical latecomer company in China’s highly consolidated e-commerce markets. Since its inception, PDD has faced fierce competition from powerful incumbents, such as Taobao and JD, and achieved amazing growth in past years, forming a unique evolutionary pathway.

Second, PDD is a veritable market disruptor by adopting the “Pin” model (buying together to enjoy lower prices) and was the second-largest e-commerce platform in China at the end of 2018, only lower than Taobao. Notably, PDD also saw a sharp slowdown during their evolutionary processes and overcame the difficulty by conducting effective strategic actions.

Third, due to the business location, it is convenient for us to make the tracking observations of PDD. Moreover, we can acquire the financial data and relevant information more easily because of the successful IPO of PDD on Nasdaq in July 2018.

3.2. Data Collection

To capture the longitudinal dynamics of the case organization, we chose the period from 2015 to 2019 as the observation window and conducted the data collection between 2017 and 2019 from multiple sources to fully present the case story, which can match the research topic in the paper. Specifically, we first searched for abundant secondary data to track the development history of PDD, such as the media reports, website information, annual reports, quarterly results, relevant industry reports, internal publications, and journal articles. Obviously, the data could serve to build a preliminary understanding of the evolutionary processes of PDD. Second, we recognized the most influential events during PDD’s evolution based on the secondary data analysis and developed the interview guide based on these events. Third, we performed a total of 24 semi-structured interviews with the firm’s top management members, the senior managers of sales, the operation departments, and the merchants, buyers, advertisers, and couriers that constituted this platform. Finally, we implemented triangulation to verify the data from different sources, ensuring the reliability and validity of the data [61].

Table 3. Description of collected data.

Case Company Name Case Industry Industry Development Level when Established	Pinduoduo Inc. E-Commerce Mature
Data Source	24 Semi-structured interviewees: Top management members; Senior managers of the sales department; Senior managers of the operations department; Merchants; Buyers; Advertisers; Couriers; Other sources: Archival materials; Documentations;
Data period	2015–2019
Characteristics of the case company	Latecomer and market disruptor; Amazing growth rate in a mature market since its foundation; Biggest e-commerce platform for agricultural goods in China; Having the complex evolutionary processes and obvious transformation of evolutionary pathways.

describes the basic information of data collected for this study.

With the support of the interview guide, all interviewees were required to answer open-ended questions, which could fully reflect on the evolutionary processes of their platform and strategies conducted during the platform evolution. For example, the interviewees were asked questions such as: What was the market situation when PDD was founded? Were there unmet needs in the market at the time? How do you describe the business model of PDD? How did PDD attract users and merchants in the beginning? How did PDD evolve over the years, is there momentum driving it, and what are some key milestones? Could you summarize the evolutionary processes and pathways of PDD? How did PDD sustain its growth over the years, and what were the key challenges for PDD during its evolution? How are the strategies for PDD’s evolution developed, and what is the rationale behind these strategies? How did the different strategies contribute to their evolution over the years? Furthermore, we digitally recorded these face-to-face interviews, which took approximately 75 min on average, and later transcribed them for the data analysis.

3.3. Data Analysis

We adopted the method described by Gioia et al. [66] to guide the data analysis. Moreover, we analyzed the data concurrently as we collected it, following the customary steps in such process research [9]. Specifically, according to the Gioia Methodology’s analytical procedure, we first identified the narratives associated with PDD’s evolutionary pathways and momentum emerging from the data and named them first-order concepts. Second, we followed a process of constant comparison of first-order concepts to examine the relationships among them and grouped them into categories which named second-order themes. Third, we further synthesized second-order themes into aggregate dimensions. Finally, we collectively conducted an iterative approach between emerging findings, the data, and existing literature, resulting in the data structure in Figure 1. Overall, this procedure helped us understand PDD’s evolutionary processes and their momentum, and the data structure can facilitate the emergence of our framework in Figure 2 [67].

4. Case Analysis and Findings

Based on the initial conceptualization and the data structure, we present our case analysis of path constitution and momentum-managing strategy during PDD’s evolution in this section. First, we identify the critical episodes in PDD’s evolutionary processes (2015–2019). Second, we provide evidence of how the evolutionary path dependence and path creation manifested along the evolutionary path. Third, we develop a holistic framework to illustrate how platform momentum interacts with the path constitution during the processes of PE.

4.1. Path Constitution and Momentum-Managing Strategy during PDD’s Evolution

Table 4. Key episodes in PDD’s evolutionary processes (2015–2019).

Episodes	Path Constitution			Momentum-Managing Strategy
	Evolutionary Triggers	Response Mode	Constitution Impact	Momentum Examination	Strategic Actions	Strategic Outcomes
1. Entering the e-commerce market in 2015	Lack of a company to cater to the unmet demand of the low-end markets in highly consolidated e-commerce markets in China (external) The bleft future of the development of mobile Internet and smartphones in China (external)	Deliberate	Transforming	Current momentum: negative Future momentum: positive	PDD developed the new model of ‘social interaction + e-commerce’ by leveraging the power of WeChat in China (Momentum-aiding strategy)	PDD has successfully entered the e-commerce market by attracting a lot of users in a short time
2. Merging with Pinhaohuo in 2016	The Chinese government continuously devotes resources to poverty alleviation (external) PDD attracted the attention of many people and also needs to promote the quality and shipping efficiency of perishable agricultural and fresh products (internal)	Mixed	Transforming	Current momentum: positive Future momentum: positive	PDD and Pinhaohuo were merged, and PDD integrated the resources and advantages of both parties (Momentum-leveraging strategy)	PDD fully transited into the platform model PDD achieved surprising growth by triggering the powerful network effects and attracted over 100 million users
3. Slow expansion of PDD that continuously leveraged the power of WeChat in 2018	WeChat developed the mini-program; still, the program did not allow jumping to the external links and cannot lead to the download of PDD’s app (internal)	Emergent	Reinforcing	N/A	N/A	N/A
4. Introducing Duo Duo Orchard as an in-app game of PDD in 2018	WeChat further limited PDD’s direct connection to user groups (external) Appeared on the e-commerce platform with the “Pin” model in markets (external) The establishment and implementation of the rural revitalization strategy by the Chinese government (external)	Mixed	Transforming	Current momentum: negative Future momentum: negative	PDD introduced entertainment into the online shopping process, which can also contribute to poverty alleviation and rural revitalization in China (Momentum-building strategy)	The operating revenues increased dramatically Bringing the momentum for the official list on the NASDAQ of PDD
5. Launching the campaign of New Brand Initiative and RMB 10 billion Subsidy (2018–2019)	The fiercer competition in the low-end markets (external) Users, from first and second tier cities, do not pay enough attention to PDD (external) PDD was caught in the negative public opinions about the allegations of peddling counterfeit products and intellectual property infringements (internal) The sufficient resources and momentum of PDD after listing on the NASDAQ (internal)	Mixed	Transforming	Current momentum: negative Future momentum: negative	PDD launched its first “New Brand Initiative” campaign to support 1000 factories and manufacturers in developing their brands and transforming from OEM to OBM, and then launched its first “RMB 10 billion Subsidy” to incentivize consumers (Momentum-build strategy)	PDD gradually reversed the negative public opinions and established a positive brand profile, which results in the surprising growth of their core indicators in 2019 Q2. Furthermore, PDD rapidly chase Alibaba through the speedy expansions in 2019

summarizes the critical episodes in PDD’s evolutionary processes (2015–2019). These episodes reveal how PDD responded to various evolutionary triggers, the response modes involved, and the constitution impacts of these responses. Moreover, these episodes also provide evidence of how PDD conducts various strategies to manage the platform momentum to drive its evolution. Additionally, it also manifests the momentum examination before conducting a strategy and the outcomes of this strategy.

4.1.1. Episode 1: Entering the E-Commerce Market

PDD officially appeared in the public view in September 2015, and it was positioned as an e-commerce company composed of buyers, merchants, and delivery companies. Like Taobao, Tmall, and JD, PDD can provide a wide range of products from daily groceries to home appliances. It is well known that China’s e-commerce market was highly consolidated in 2015, and most of the market share was occupied by these three powerful incumbents, which poses a big challenge for latecomers. However, the existing incumbents were not too focused on the low-end markets where users are sensitive to prices, such as the suburbs and rural areas, which is an excellent opportunity for new firms to enter the e-commerce market. In addition, the scene of mobile applications is greatly enriched, accompanied by the development of mobile Internet and smartphones in China. Therefore, it was leading to a critical change in the e-commerce market in China.

Based on these triggers, PDD tried to integrate social interactions into the e-commerce shopping process, which the firm describes as the “Pin” model. Specifically, the “Pin” model refers to when PDD opens the entrance for group buying, and users can invite their contacts to join the group to enjoy the extremely low price together for their purchase through social networks such as WeChat and QQ. Through the unique business model and market segmentation, PDD pinpointed the unmet need of low-end markets and quickly acquired the installed base at a very low cost with the support of ubiquitous WeChat, facilitating its rapid growth in this stage. A top management member of PDD explained:

Nowadays, Alibaba, the e-commerce version of Google, has become one of the most influential companies worldwide. It lets us pay attention to whether it is possible to emerge an e-commerce version of Facebook and where each person can be a dissemination node in the social network, Accordingly, this idea has guided us to explore the new model of ‘social interaction + e-commerce’ by leveraging the power of the giant WeChat in China. Meanwhile, we found that shopping is a part of human social activity, entertainment, and life. Thus, we are dedicated to bringing the shopping scene from offline to online through this new model, which makes shopping more enjoyable for more people.

4.1.2. Episode 2: Merging with Pinhaohuo

The Chinese government successively introduced a series of poverty alleviation policies from 2015 to 2016, supporting the e-commerce firms playing a significant role in the fight for poverty alleviation. For instance, it has proposed to implement e-commerce poverty alleviation projects in the Decision on Winning the Fight against Poverty in 2015. Moreover, the State Council issued the Guidance on Promoting the Accelerating Development of E-Commerce Industry in Rural Areas in 2015, which supports the development of e-commerce firms in rural areas. In sum, these policies facilitated the rapid development of China’s agriculture industry and provided political opportunities for PDD to increase the investment in perishable agricultural and fresh products. From its inception to February 2016, PDD’s GMV (Gross Merchandise Volume) of a single day exceeded RMB 10 million, and the number of paid users exceeded 10 million, which attracted the attention of people from all walks of life. However, some users began to complain about the poor quality of the products bought in PDD, especially the low shipping efficiency and perishability of fruits, which exposed the shortcomings of PDD in quality management and supply chain management of perishable agricultural and fresh products.

Based on these triggers, PDD targeted Pinhaohuo, another e-commerce firm with the “Pin” model, which only focused on providing perishable agricultural and fresh products for users. Most importantly, Pinhaohuo has expertise in quality management and supply chain management. Accordingly, to gather resources to improve the overall quality of products and the service of PDD, PDD and Pinhaohuo merged in September 2016 under the influence of the same founders and investors. As a result, PDD has integrated the resources and advantages of both parties and fully transitioned into the platform model. Thus, it could reach a critical mass easily, which triggered the powerful network effects [2] to make it easier for them to attract the merchants and buyers as well. According to PDD, the annual active buyers exceeded 100 million in 2016 Q3, and the GMV of a single day exceeded RMB 100 million in the first-anniversary campaign.

4.1.3. Episode 3: Slow Expansion of PDD which Continuously Leverages the Power of WeChat

In 2017, PDD achieved explosive expansions with powerful network effects, reflected in the dramatic growth of core indicators as an e-commerce platform. According to PDD, the quarterly LTM GMV (GMV over the last 12 months) in 2017 increased from RMB 20.9 billion in Q1 to RMB 141.2 billion in Q4. Furthermore, in the four quarters of 2017, the platform’s average MAUs (Monthly Active Users) reached 15 million, 32.8 million, 71.1 million, and 141.0 million, respectively. As a result, PDD almost became the third-largest e-commerce company in China after Alibaba and JD at the end of 2017.

Notably, it is evident that the “Pin” model of PDD needs the social interactions to make it work, which is observed from the nature of “Pin”. Thus, PDD has had to rely on WeChat, the giant of Chinese social media with nearly 1 billion users, to keep this model running. In 2017, PDD launched the e-commerce mini-program on WeChat to make more user groups use the “Pin” model more efficiently, and it is no doubt that the initiative contributed dramatically to the amazing growth of PDD that year. According to the top management member of PDD:

The mini-programs and PDD were both generated in the ecosystem of WeChat with almost 1 billion users, leading to their better integration. As a result, the mini-programs drove the dramatic growth of PDD by bringing convenience to marketing scenarios of PDD to meet the needs of user groups. Moreover, e-commerce will be more embedded in different scenarios in the future, and mini-programs can meet the needs of short-time but high-frequency application scenarios too. In sum, it is concluded that we should be used as a tool for users based on its core value, and all e-commerce firms should develop the mini-program on WeChat.

Although the mini-program vigorously helped the explosive expansions of PDD in 2017, it also reinforced the existing evolutionary pathway, mainly as the program did not allow jumping to the external links and could not lead to the download of PDD’s app. More importantly, the mini-programs on WeChat do not need to be downloaded or installed to be used, which continuously cultivates the “use it then go” habit of user groups and has seriously prevented PDD from increasing the user stickiness and switching costs.

4.1.4. Episode 4: Introducing Duo Duo Orchard as an In-App Game of PDD

Despite the amazing growth of PDD in 2017, it is notable that PDD is increasingly reliant on the powerful WeChat because WeChat further limited PDD’s direct connection of user groups with the rapid development of the mini-programs. As a result, it will be difficult for PDD to improve the user stickiness and switching costs and eventually lead to a slowdown in growth. According to PDD, core indicators’ growth rates dramatically decreased in Q1 2018 after the explosive expansions. For instance, the growth rates of LTM GMV declined from nearly 100% in 2017 Q4 to 41%, and the growth rates of average MAUs even decreased from nearly 100% to only 18%. These figures all reflected that PDD was experiencing a paradoxical slowdown in growth rates during the period of amazing growth. Moreover, several rivals with the “Pin” model, which are the same as PDD, have entered the e-commerce markets in China in a short time, accompanied by the dramatic growth of PDD in 2017. For example, Alibaba started testing of Taobao Special Offer Edition, which PDD’s business model most likely inspires; JD launched the first shopping festival of the “Pin” model with the support of WeChat. Thus, the emergence of these targeted competitors has brought new challenges to PDD. A buyer who frequently purchases on PDD described:

What PDD did well was provide many products with extremely low prices for me. Recently, I have tried to buy some products from another platform because I can acquire a similar product at a lower price than PDD sometimes, though it is a promotion strategy during their start-up period. Meanwhile, I also can get a better shopping experience sometimes. For instance, JD Pingou has a high delivery efficiency of goods, and I can receive the products very soon after I complete the group purchases.

In addition, the rural revitalization strategy has become one of the Chinese national strategies in the reports of the 19th CPC National Congress in November 2017. Then, the CPC Central Committee and the State Council jointly issued the Strategic Planning for the National Rural Revitalization (2018–2022) to propose the construction of an extensive infrastructure for the development of the rural e-commerce industry, which provides the foundation for the long-term development of PDD in rural areas.

Based on these triggers, PDD introduced Duo Duo Orchard as an in-app game that can contribute to poverty alleviation and rural revitalization in China. Specifically, PDD attracted users to water the virtual fruit trees to help them mature, and users can eventually receive a free box of fruit, which can lead to the profitability of all actors connected to the game: fruit farmers, merchants, users, and PDD. A month after the game launched, nearly 2 million new virtual trees were planted every day on the game, and PDD gave out over 500,000 kg of free fruit every day. As a result, Duo Duo Orchard became an effective channel for incentivizing users to browse and purchase on the app and allows users to interact and enjoy the fun of shopping with friends, which can eventually facilitate the increase in user stickiness and switching costs. A senior manager of the operations department explained:

We combined poverty alleviation and public welfare through the Duo Duo Orchard, and users automatically became a part of the poverty alleviation activities when users played this game. As more people joined the game, we inspired more people to participate in charity and poverty alleviation activities, fulfilling our social responsibility and increasing our societal value. Moreover, the Duo Duo Orchard is an effective attempt to make users happier in the shopping process. Furthermore, we hope all users can gain happiness in the shopping process through social interaction with PDD.

As a result, PDD stopped the trend of significant slowdown in the growth of the core indicators, and the operating revenues of PDD increased dramatically from RMB 1384.6 million in 2018 Q1 to RMB 2709 million in 2018 Q2. Moreover, the initiative proves that PDD can independently explore users’ potential value and brings much societal value to PDD through its contribution to poverty alleviation and rural revitalization. Along with that momentum, PDD was officially listed on the NASDAQ in the US in July 2018, successfully breaking the record for the fastest listing of Internet companies in China.

4.1.5. Episode 5: Launching the Campaign of New Brand Initiative and RMB 10 Billion Subsidy

After the official list on the NASDAQ, PDD attracted much attention from all walks of life. However, they were also facing increasing difficulties that influenced their sustainable development. First, PDD had to confront the fiercer competition in the low-end markets with increased investment from powerful rivals. For example, Alibaba repositioned the Juhuasuan as the top destination and selection of group purchases for Chinese consumers, especially those from lower-tier cities. Similarly, JD Pingou launched a new round of initiatives to attract many merchants after its rapid expansions in 2018 by continuously leveraging its advantages in retail, supply chain, and marketing. Thus, it is clear that these initiatives can intensify the competition among e-commerce companies for merchants in low-end markets. A “5-star” seller on PDD described:

When we joined PDD, they told us that “the only condition is that the price you set for similar products cannot exceed Taobao, and it is easiest to sell on PDD for products that price RMB 9.9 including the shipping fees”. It is the recipe for PDD to maintain the lower prices, which facilitated the amazing growth of PDD in past years. However, the current “forced exclusivity” was emerging in our market environment with the increasing investment in low-end markets by other platforms. From the Double 11 in 2018, some companies both started forcing us to choose only one e-commerce firm to sell our products, which can be understood as a method for them to fight PDD in low-end markets.

Second, it is difficult for PDD to attract enough attention from user groups of first- and second-tier cities. According to QuestMobile in Q3 2018, the proportion of all PDD users from first- and second-tier cities was only 8.1% and 24.4%, respectively, which is clearly below the average for the e-commerce industry. In a word, due to the different user demands, most products on PDD, especially with extremely low prices, cannot meet users’ primary needs from the first- and second-tier cities, which will significantly hinder the growth of PDD.

Third, after its official listing on the stock market, PDD had negative publicity about the allegations of peddling counterfeit products and intellectual property infringements. On the one hand, PDD has been accused by several well-known companies and celebrities of selling counterfeit goods and infringement of intellectual property. For instance, Skyworth, an influential television manufacturer, issued an official statement to require PDD to remove and stop selling counterfeit Skyworth products with immediate effect. Similarly, Yuanjie Zheng, a famous fairy tale author in China, demanded that PDD immediately stop selling pirated books and punish the sellers. On the other hand, the Department of Internet Supervision of the State Administration for Market Regulation took the lead in holding an administrative conference, which requested PDD to enhance the management and audit of the merchants and products and to achieve the real benefits for consumers. It shows that the relevant departments of the Chinese government were paying close attention to multiple media reports about counterfeit goods sold by PDD.

Based on these triggers, PDD, by leveraging the sufficient resources and momentum gained from listing on NASDAQ, concurrently expanded the investment on both sides of its platform. Specifically, on the merchant side, PDD launched its first “New Brand Initiative” campaign to support 1000 factories and manufacturers in developing their brands, which can promote industrial upgrading of counterfeits to quality and value for money products. On the user side, PDD started to give out coupons and subsidies to incentivize consumers, especially coming from first- and second-tier cities, which can attract new users and maintain the rapid growth of active users. According to a top management member of PDD:

PDD always was a company that puts the interests of its consumers and societal value first. We focus on users all over China, and our vision is to constantly provide them with quality and value-for-money products. Therefore, we have been concentrating on expanding user scale, gaining user trust, and upgrading our supply chain. Moreover, we can facilitate the supply chain upgrades and user adoption by leveraging our capabilities and resources, thereby creating a virtuous cycle on both sides that will help the C2M (Customer-to-Manufacturer) model run more efficiently on our platform. The efficient model can help many manufacturers with substantial capacity, and weak brands easily reach hundreds of millions of user groups and work on the customized production and brand upgrade according to the requirements. More importantly, the model can allow all users to obtain the actual quality and value for money products to meet their heterogeneous demands.

As a result, PDD gradually reversed the negative publicity and established a favorable brand profile, which resulted in the dramatic growth of their core indicators in 2019 Q2. For instance, the growth rates of average MAUs increased from about 6.3% in Q1 2019 to nearly 27%, and the growth rates of operating revenue even rose dramatically from only “−19.6%” to 60.4%, respectively. Furthermore, the GMV of PDD has grown to RMB 1006.6 billion, and the number of active buyers increased to 585.2 million by the end of 2019. It reflected that PDD, with the more efficient C2M model, was strengthening its dominance even more in the number of active users to rapidly chase Alibaba, which ranked first in the e-commerce market in China.

4.2. Evidence of Path Dependence and Path Creation

There is strong evidence to reveal the path dependence and path creation through the detailed account of the evolutionary path of PDD. Specifically, by observing the episodes during their evolution from 2015 to 2019, we examined whether self-reinforcing mechanisms put PDD into a lock-in with limited PE options after the triggering events to judge if path dependence occurred [46]. Meanwhile, for path creation, we also examined whether PDD’s deliberate and mindful actions in response to triggering events destabilized the current path trajectory, as shown in Table 4.

Accordingly, our analysis found that the evolutionary path of PDD became path-dependent and experienced a lock-in in episode 3 and also revealed the path creation consisting of episodes 1, 2, 4, and 5, respectively. Concretely speaking, PDD achieved dramatic growth and shaped an evolutionary path by triggering the powerful network effects after episode 2. However, the evolutionary path of PDD became increasingly path-dependent with the influence of the NEs after the triggering event in episode 3 because it is evident that the nature of NEs as self-reinforcing feedback loops [16,17,18]. Moreover, the triggering event forced the NEs to only concentrate on expanding the network size, reducing the available evolutionary options, which gradually caused the lock-in [46]. In episode 3, the mini-programs on WeChat did not allow jumping to external links and could not lead to downloading PDD’s app. Therefore, it continually cultivated the “use it then go” habit of user groups, which seriously prevented PDD from increasing user stickiness and switching costs and resulted in PDD having to rely on WeChat’s power continually. As the range of available PE options reduced and the process became increasingly irreversible under the NEs, PDD became increasingly path-dependent and experienced a lock-in with a restricted evolutionary path trajectory and no chance for an increase of user stickiness and switching costs.

Four episodes (1, 2, 4, and 5) reflect the path creation during PDD’s evolutionary path because PDD deliberately conducted strategic actions to respond to the triggering events and to introduce available PE options. In episode 1, the development of the “Pin” model resulted in PDD entering the markets to provide products to meet the demands of the low-end markets in China. Similarly, merging with Pinhaohuo (episode 2) increased the PDD’s PE options to provide more perishable agricultural and fresh products with high quality and shipping efficiency and fully transited into a platform model. Later, PDD introduced Duo Duo Orchard in episode 4, which significantly increased the PE options to improve the user stickiness and switching costs under the NEs. Finally, PDD upgraded of the user structure and established a favorable brand profile by concurrently expanding the investment on both sides of its platform in episode 5. This path creation enabled PDD to run the C2M model more efficiently and strengthen its dominance in the e-commerce market in China even more.

4.3. A holistic Framework for the Interactions between Path Constitution and Platform Momentum

Our analysis shows that path dependence and path creation occurred during the evolution of PDD. The strategic actions PDD conducted when it faced different triggering events, however, were quite indistinct and obscure in the process of path constitution. Thus, we then adopt the momentum lens to figure out the generating process of PDD’s strategic actions, exploring the influence of these strategic outcomes on the path constitution in different episodes during their evolutionary processes. Notably, the results of the path constitution still impact the subsequent triggering events, which simultaneously drive the PE process moving into the subsequent episode. In sum, we developed a holistic framework for the interactions between the path constitution and platform momentum by recapitulating PDD’s evolutionary processes, as shown in Figure 2.

Specifically, the evolutionary triggers are the original motivations, which can challenge the path trajectory and drive the evolutionary path constitution. Moreover, from the momentum thinking, the platform owners need to analyze the current and future momentum according to the triggers faced in the episode, which is the definition of momentum examination in this study. For example, PDD identified the negative current and positive future momentum according to the two triggering events in Episode 1: Entering into e-commerce markets (see Table 4 and Figure 2). The two dimensions of momentum examination together provided the direction for implementing strategic actions.

From the momentum view, platform owners can manage the platform momentum to drive the processes of platform evolution. Accordingly, once identified, the platform owners can conduct the specific strategic action based on the results of the momentum examination. For instance, PDD implemented the momentum-leveraging strategy to merge with Pinhaohuo and integrate the resources and advantages of both parties (also see Episode 2: Merging with Pinhaohuo as in Table 4 and in Figure 2). Then, these strategic outcomes naturally influenced the path constitution of the PE. Specifically, the strategic outcome can reduce the available PE options to stabilize the current path trajectory, which will result in a reinforcing impact on the PE pathway. On the other hand, the strategic outcome can introduce the available PE options to destabilize the current path trajectory, which will lead to a transforming impact on the PE pathways, which Table 1 shows.

Finally, the reinforcing impact can put the evolutionary pathway into path dependence in the subsequent episode when PE faces new triggers, which could cause the lock-in (see Episode 3: Slow expansion rate of PDD that leveraged the power of WeChat continuously as in Table 4 and Figure 2). In addition, the transforming impact resulting from the strategic actions deliberately conducted by platform owners reflects the creation of the PE pathway in this episode (see Episode 4: Introducing Duo Duo Orchard as an in-app game of PDD as in Table 4 and Figure 2). In summary, the path constitution in the current episode can fuel the PE to the subsequent episode, whether with reinforcing or transforming impact.

5. Discussion

This article opened with questions regarding the evolutionary path constitution of the platform. Specifically, we asked how does the evolutionary path constitute and how does the platform momentum interact with the path constitution during PE? Based on the observation and analysis of rich, longitudinal data from PDD, the answers lie in the impacts of momentum-managing strategies on the evolutionary pathways when the platform faced different triggers. The following section discusses how our findings contribute to the existing literature and practice. Finally, we conclude with limitations and future research.

5.1. Theoretical Implications

This article makes three theoretical contributions to prior studies, which are elaborated as follows.

First, this study contributes to the literature on the platform ecosystem by considering the limits of the network effects during platform evolution. Extant literature always views the NEs as a critical source of the competitive advantage that facilitates the rapid development of the platform [3,15] but neglects the limits of NEs, which may restrict our comprehensive understanding of the role of NEs in platform evolution. Thus, by drawing on the self-reinforcing nature of NEs [16,17,18], this study depicts that the evolutionary pathways are likely to become path-dependent and then experience a lock-in with the reduction of available PE options under the NEs. For instance, the triggering events result in the NEs only concentrating on expanding the size of the user network, which eventually leads to path dependence in episode 3 (see Table 4). Summarily, the study supports the critical role of NEs in reducing the uncertainty and facilitating amazing development of the platform [9,42] and provides further evidence on the limits of NEs, which could be viewed as a response to the “winner-take-all” during the platform evolution [3].

Second, this study shows the evolutionary path constitution of the platforms by adopting the organizational momentum lens, which is a valuable supplementation of the literature on platform evolution. Unlike prior studies, which mainly focus on an aspect of PE, such as complementors and business models [6,10,15], this study provides evidence that PE processes were driven by a mix of path dependence and path creation from a systematic perspective [19]. More importantly, this study develops a framework of the interactions between the path constitution and platform momentum during PE, which deepened our understanding of the dynamic processes of PE [2,3,9]. Furthermore, this research also emphasizes the role of triggering events and the impact of strategic actions during the platform evolution, which could deepen our understanding of the interplay between the platform evolution and the environment from the co-evolution view [13,20]. In addition, it also provides a systematic insight into platform strategies to contribute to the sustainability of platform firms and platform-based markets [26,27].

Third, this study also contributes to organizational momentum research by identifying three momentum-managing strategies to explore the interactions between momentum and processes of platform evolution. Existing literature on organizational momentum mainly focuses on the influences of momentum on organizational development [22,23,28]. However, it may underplay the bilateral relationships between the momentum and of firms’ development. Therefore, this study identifies the three momentum-managing strategies of platform firms and develops a framework to show the interactions between the platform momentum and the path constitution of PE to shed insights into the role of momentum in the processes of sustainable development.

5.2. Managerial Implications

In managerial terms, our findings can sensitize platform firms to understand how the evolutionary path constitutes in platform context from the dynamic perspective, which facilitates the flexible orchestration of their evolutionary processes. Most platform firms are focusing on how to trigger the network effects as soon as possible to facilitate the explosive growth of the platform during the platform evolution, which was named the “get-big-fast” strategy [42]. However, this study provides evidence that the powerful NEs may result in path dependence during PE. Thus, platform firms should be alert to the situation where their evolutionary path becomes path-dependent and eventually experiences a lock-in under the self-reinforcing feedback brought by the powerful NEs. Moreover, by following the framework developed in this study, platform firms will be able to analyze the details of evolutionary paths in terms of triggering events and consequential reinforcing and transforming impacts on the current path trajectory. Then, by linking triggering events to the platform momentum, the platform owners may implement the momentum examination according to the current triggering events and conduct the appropriate momentum-managing strategy to manage the constitution impacts in response to the triggering events.

5.3. Limitations and Future Research

There are also some limitations in this research. On the one hand, the case study must always face the issue of generalizability [15]. Precisely, like any qualitative case study, the conclusions are based on a single case, which may restrict our findings from applying to different contexts. However, our research provided an abundant description of the context and the evolutionary processes of PDD. Thus, it is beneficial for researchers to access our findings and apply them to other contexts further. Accordingly, we insist that these conclusions can deepen our understanding of the processes of platform evolution. On the other hand, this research is based on exploratory work, which is also expected to encourage subsequent studies. Future research work could conduct multiple-case study to develop our findings further. More broadly, researchers may implement the quantitative analysis to empirically test the relationships between three momentum-managing strategies and the evolutionary pathways in platform contexts.

6. Conclusions

In this research, we conducted a case study of PDD to shed further light on the path constitution of platform evolution. Specifically, we implemented the detailed description and in-depth analysis of the platform’s evolutionary processes based on the rich, longitudinal data and thus provided evidence of path dependence under the network effects and of path creation resulting from the deliberate actions conducted by the platform firms. More importantly, by introducing momentum thinking, we developed a holistic framework to show the interactions between platform momentum and the path constitution of PE. Our findings can provide some evidence for the evolutionary path constitution in platform contexts and provide new insight into the sustainability of the platform firms and platform-based markets.