An Empirical Investigation of Manufacturers’ Operations Innovations in New Product Development Enabled by E-Commerce Platforms

Abstract

E-commerce platforms are playing an increasingly important role in influencing manufacturers’ supply chain and product decisions. An emerging supply chain innovation, known as the platform-based consumer-to-manufacturer (PC2M) model, has been initiated by several large e-commerce platforms based on established digital links between consumers and manufacturers. These links enable consumer inputs into manufacturers’ operations, indirectly by capturing consumer preferences from platform-accumulated big data and directly by enabling consumer interaction with manufacturers through the e-commerce platform. Although manufacturers are increasingly integrating PC2M into new product development (NPD), there is little research on operations innovations in connection with the PC2M model and its impact on manufacturers’ new product success. To fill this research gap, we investigate the PC2M model of JD.com, a leading e-commerce platform in China that launched the PC2M model in 2018. We first identify two uses of PC2M by manufacturers to facilitate product development—platform-enabled big data analytics (PBA) and platform-enabled simulated product trials (PST)—and explore how PC2M enables operations innovations in NPD. Next, drawing on the knowledge-based view, we develop research hypotheses and empirically examine whether PC2M adoption improves new product performance using a large-scale, transactional dataset from JD.com. Through a series of carefully executed analyses, our study consistently finds that use of either PBA or PST in manufacturers’ NPD processes improves new product performance. We also explore how these effects vary across product types and markets with varying new product introduction rates. The findings offer important managerial insights for improving new product success in today's data-rich environment.