Platform and pricing strategy in two-sided market with symbiosis between suppliers: a discussion about EV charging operation industry in China

Abstract

In two-sided markets, intra-group externalities usually refer to competition between agents in same group, but there is another type of intra-group externality observed in EV charging operation industry, which might be positive. An undividable group of suppliers including grid, property and charging owner form a business symbiosis in the supply side, and there is a possibility for charging operator to act both as platform builder, and owner of charging stations in the symbiosis. This paper shows that in the situation operator takes both positions as 1) platform builder and 2) supplier in symbiosis, the other parties in the supply side cannot be overpriced as they can be when operator only acts as platform builder. The two-position platform strategy loses the economies of scale in profitability due to the existence of symbiosis, but has more advantages against threat of envelopment. This paper also analyzes the conditions for such symbiosis to exist in a two-sided market: 1) Product and service cannot be detached from each other. 2) Product and service can be provided by different parties.