Demand- vs. Supply-Driven Innovation: A Case Study of Alipay Credit Renting Platform

Abstract

This study updates the source of innovation theories by investigating the relationship between demand- and supply-driven innovation through a study of a fresh Chinese case of Alipay credit renting platform. Based on the primary data collected via interview and focus group discussion, as well as the secondary data from the company’s website and media report, three main findings were obtained. First of all, from this case, we identify an unseparated relationship between demand- and supply-driven innovation and problems arose when one side is isolated and not given full attention. This adds new insights to the research on the source of innovation. Secondly, we propose that blue ocean strategical framework can help connect the demand side with the supply sides and facilitate the innovation. This provides some managerial guidelines to deal with the challenges as observed in this case. Lastly, this paper analyzes this new renting model (Alipay credit renting platform) from both lessors and lessees’ perspectives, representing the first study to investigate the credit renting market systematically.