The Sharing Economy Platforms in Rural China: Bridging Institutional Voids Through Institutional Entrepreneurship

Abstract

In this chapter, we explore how sharing economy platforms bridge institutional voids and engage in the divergent change to address poverty in the BoP communities. Based on an extensive review of the sharing economy literature, we identify two sharing economy models in China that differ in the degree of sharing economy activities. We label these platforms as the following: (a) the social-commerce-driven platform and (b) the access-driven platform. We then compare and contrast these platforms through two case studies: Pinduoduo’s group buying and selling model and NSB’s access to agriculture machinery model. Initial insights from the cases suggest that these platforms diverge from existing firms by utilising the online-offline social networks in the communities. Additionally, the social-commerce platform can help the rural farmers in building assets and capabilities needed for long-term growth and prosperity. However, this type of platforms can develop monopolistic tendencies and has a risk of mission drift. The access-based platform can facilitate access to necessary goods and services for BoP communities; however, they might be limited in building assets and capabilities of the rural communities without an explicit focus. We discuss the implications of these findings for the theory and practice.