Growing online-to-offline platform businesses: How Vytal became the world-leading provider of smart reusable food packaging

Abstract

Online platform businesses can grow massively and rapidly. But what if a company's business model features both an online platform application and a physical product, as is the case in logistics (e.g. container distribution), consumer retail (e.g. food delivery), or mobility (e.g. booking of shared rental vehicles)? Online-to-offline platform businesses must synchronise online platform growth with offline product transaction growth because online platforms may attract users, but value generation and capture occur through offline product transactions. If one outpaces the other, either demand cannot be satisfied, or costs increase disproportionally. How do online-to-offline platform businesses navigate this dilemma? We report on the exemplary case of Vytal, an innovative startup that has managed to become the world-largest provider of smart reusable packaging solutions in the food retail sector. Vytal couples the distribution of offline food containers with an online transaction platform application that connects restaurants, canteens, and supermarkets with consumers. We trace how Vytal strategically organised and orchestrated their growth online and offline. Based on our analysis, we offer a framework containing practical lessons for how companies can grow online-to-offline platform business models and navigate the trade-offs between the online and offline components of such business models.