E-commerce platform dependence: a double-edged sword for born global firms?

Abstract This study enriches the resource dependence literature on the exploitation of critical resources owned by big-tech companies, examining a power-imbalanced relationship. We present a case study based on an Italian-born global firm (BGF) operating in China. In our case study, the power-advantaged firm is represented by a big-tech company (Alibaba), which owns an e-commerce platform. In contrast, the power-disadvantaged firm is represented by a BGF seeking access to the Chinese market (Mukako). We demonstrate how the use of e-commerce platforms can be viewed as a double-edged sword for BGFs. Indeed, those platforms represent a necessary external resource for accessing the Chinese market, and, at the same time, their use implies significant investments. Based on interviews with BGF founders and advisors, along with a SWOT analysis, we examine the relationship between Mukako and Alibaba, with a focus on the e-commerce platform business model. Theoretically, this study enriches understanding of how business models designed by powerful entities can limit strategic flexibility and intensify resource dependencies for smaller firms. Practically, BGFs must reach a critical firm size and possess sufficient bargaining power to negotiate with and effectively manage dependencies on such platforms. Our study suggests that strategic partnerships may be crucial for BGFs to achieve the necessary scale for these investments. These findings provide valuable insights for BGFs on strategizing around the constraints and opportunities presented by e-commerce platforms, contributing to broader debates on the power dynamics in digital platform economies.