Be more discerning when patronising digital platforms

 A man using his phone on Sept 20, 2018.
A man using his phone on Sept 20, 2018.PHOTO: ST FILE

It is sobering to read about yet another digital platform that has folded (Online wine platform shuts down abruptly, May 31), leaving in its wake distressed customers, and adding to an already long list of similar "platformania" casualties that include the likes of ofo and Uber.

Caveat emptor - or buyer beware - should clearly apply to digital platforms.

According to thought leaders of the digital economy, the business models driving many digital platforms are not sustainable.

To put this into context, only 43 digital platforms count among the top global companies, and even fewer manage to stay afloat - the average life of failed digital platforms is less than five years, with many folding within two to three years.

Many of these failed digital platforms simply did not adequately address both the technology and commercial levers of the platform business, with mistakes such as poor execution and sub-optimal pricing decisions.

On the other end of the spectrum, though, several digital platforms have got it right - with effective pricing, the right architecture and robust collaboration with users and partners - and are consequently thriving.

To avoid more "platformania" casualties, it is time for platform-enamoured consumers to better gauge and temper their infatuation with digital platforms, perform adequate due diligence, and be more discerning about which digital platforms to patronise with their hard-earned money.

Woon Wee Min

A version of this article appeared in the print edition of The Straits Times on June 04, 2019, with the headline 'Be more discerning when patronising digital platforms'. Print Edition | Subscribe