Limited attention has been given to how product, process and organisational modularity interact to enable effective platform development. This study investigates how modularity, particularly influenced by AI-driven complexity, supports the successful creation and implementation of digital platforms. It specifically explores how varying degrees of complexity influence modularity choices, thereby offering new insights for platform development.
The study focuses on three embedded cases of platforms with increasing levels of complexity, developed by a leading Chinese e-commerce conglomerate. The extensive data collection involves 38 formal interviews, 26 informal follow-up interviews and supplemental documentary evidence.
The findings identify that a novel strategy, Zhongtai, a complex interplay between organisational, process and product modularity is central to managing innovation in digital platforms. It offers a framework for dynamic flexibility that balances stability and agility during development. The Zhongtai strategy became so successful that the conglomerate changed its organisational structure to mirror the architecture of its digital platform.
The research contributes to the understanding of digital platform innovation in multiple ways. It demonstrates specifically how the Zhongtai strategy has addressed various development problems for digital platforms, including resource wastage, duplication, uneven service performance and silos. It also extends the modularity and platform literature, by adopting a dynamic and long-term perspective concerned with achieving economies of scope and repetition.
