Disruptive Innovation and a Multi-Sided Digital Marketplace

Abstract

A digital marketplace is a digital area or platform where demand and supply sides communicate and transact through the digital space or platform controlled by a digital marketplace provider. Digital marketplaces have become increasingly popular in recent years, particularly during the COVID-19 pandemic while disruptive innovation is a term used to describe a technology that has a major impact on the way a market or industry operates. Disruptive innovation is a positive force and process that changes a market of sophisticated and expensive services and products into one with simplicity, ease, accessibility, and affordability. This study employs a qualitative methodology by undertaking assessment of the relevant literature to examine how digital marketplace becomes disruptive innovation for traditional marketplace. This study reveals that multi-sided market enables digital marketplace to expand multi values co-creations that could not be achieved via physical business. The multi values co-creations distinctively disrupt the conventional physical marketplace.