Legitimacy building and e-commerce platform development in China: The experience of Alibaba

Abstract

Although existing studies have connected the emergence and development of e-commerce with infrastructure, culture, and regulations, we approach technological and platform acceptance from the perspective of legitimacy building. In our study, legitimacy is categorized into market, relational, and social legitimacy, and the link between each type of legitimacy and acceptance is explored. We select the case of Alibaba and argue that Alibaba was especially competent in building legitimacy. Alibaba's continuous efforts to build legitimacy facilitated platform evolution despite its exposed weakness in intellectual property rights. These efforts rendered Alibaba as a de facto standard e-business model. This research suggests that any firm that wants market acceptance for its platform or e-commerce technology should focus more on building legitimacy among stakeholders than on anything else.

Highlights

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  Legitimacy building is considered critical for e-commerce development.

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  We study the legitimacy building through the case of Alibaba's e-commerce platform.

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  Market legitimacy is crucial to break the bottleneck in the business model.

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  Relational legitimacy is obtained when a firm is recognized to be trustworthy.

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  Social legitimacy requires firms or technologies to serve the benefits of society.