The development of digital platforms relies on third-party development from complementors. With the assistance of complementors, the focal platform continually provides new features and services for participants in the platform ecosystem, essentially creating new value. However, tensions arise within the platform ecosystem regarding who should capture the newly created value. Complementors seek to maximize their value capture based on their contributions, while the focal platform aims to retain most of the captured value within the platform. As value creation depends on complementors to materialize, the focal platform often loses control over newly created value and misses opportunities to capture value from it. To explore how digital platforms navigate the tensions between value creation and value capture, we conducted an in-depth, embedded case study of Douyin (known as TikTok in the global market), which continuously creates new value across various businesses while simultaneously capturing significant value. We found that complementarity, internalization, algorithmization, and algorithm-enhanced services constitute the core mechanisms for sustaining value creation and value capture. We contribute to the literature on digital platforms by offering a process model to conceptualize how to navigate the tensions between value creation and value capture in digital platforms.
