Digital platforms are the defining business models of the 21st century, allowing brands to reach scale faster than ever before. Users of a platform benefit from compelling content, feedback from other users, and other services, while owners of platforms gain data, which allows for faster innovation, better products and more targeted promotions, which in turn brings more users, reducing customer acquisition costs. This report explores the power of platforms and their impact on premiumisation.
Whilst the marriage of product and service remains central to premiumisation, going forward, premium brands will need to control more and more of the path to purchase, from product discovery to leveraging user data.
The power of a platform is in the feedback loops it generates – strong user communities drive strong content, which drives better data, which creates new products, which steadily increases the size of the platform’s user base.
The most successful premium platforms are those with strong user communities which create authentic content and data in response to the value the platform creates for the user.
In markets like India and Southeast Asia, low spending on traditional premium categories, such as beauty and wellness, creates a powerful opening for platforms which can drive usage, and communities which can define what premium means in a local context.
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