Problem of practice

Digital marketplaces have become crucial for micro entrepreneurs, providing them with access to customers and enabling business expansion. Yet benefits are uneven: minority or disadvantaged sellers often receive fewer orders or rank lower in search results, even when their quality matches or exceeds others. A recent study by Alyakoob and Rahman highlights these discriminations on digital platforms, focusing on the case of Black-origin hosts on Airbnb.1 Their findings reveal how platform design choices, such as certification, can help mitigate discrimination. Extending their insights, this article examines why such disparities occur and persist. It outlines design solutions – certification systems, algorithmic adjustments, and capacity building initiatives – that leaders shaping the design, governance and growth of digital marketplace can use to build a more inclusive platform

Issue 1 Jan-Jun 2026

Platform design does more than organise information. It determines who gets seen, chosen or overlooked. What appears as a neutral algorithm or ‘objective’ ranking often amplifies existing advantages and marginalises newcomers and the underrepresented participants. Visibility compounds for some and vanishes for others. This is not just a fairness issue but also a strategic business concern. Underrepresented entrepreneurs lose income and exit, reducing the platform’s supply, diversity and innovation.

Real-world evidence reinforces this dynamic. In the US, the study by Alyakoob and Rahman found that ‘Superhost’ certification on Airbnb increased bookings by 17% for Black hosts, but only 7% for non-Black hosts, indicating the same platform feature can yield uneven benefits across different seller groups. Another study found that hosts with distinctly Asian names suffered approximately 20% drop in guest reservations during periods of heightened anti-Asian sentiment.2 Complementing these findings, research further illustrates how platform features can produce unintended effects. Airbnb’s ‘Instant Book’ option increases occupancy significantly for black and female hosts who forgo screening, even though their average review ratings decline. This suggests that relaxing certain screening constraints can help offset some disadvantages.3 Similarly, evidence on the Airbnb Plus badge reveals that while this certification raises the booking rates by about 6.8% on average, non-certified neighbouring listings experience temporary drops, and the service disproportionately boosts platform revenues in certain areas.4 Together, these studies highlight that seemingly neutral features such as badges, screening or premium certifications can disproportionately affect marginalised hosts, emphasising the need for intentional, inclusive platform design.

In India, Deloitte–FICCI reported that nearly three- quarters of purchase decisions are now influenced by digital marketplaces, yet users increasingly question the credibility of online reviews and search results.5 These reports underscore a vital opportunity– the indispensable value of digital marketplaces. It also highlights the persistent challenge of inclusivity. Evidence suggests that even skilled microentrepreneurs receive fewer clicks or bookings if they belong to minority groups.6 In India’s diverse context, similar biases may emerge around caste, region, language, or religion.

Management Practice Insights Vol 4

Issue 1 Jan-Jun 2026

Why sellers stay invisible

Customers in digital marketplaces face an excessive volume of information, product listings, ratings, reviews and pricing details. This creates information overload. To cope with this cognitive burden, users rely on heuristics such as favouring well-known sellers, highly rated products, or visually appealing profiles. While these shortcuts simplify decision-making, they also create predictable patterns that platform designers increasingly leverage through recommender systems and interface design.

Most recommendation algorithms prioritise popularity signals, amplifying what is already visible. Although this approach improves short-term engagement and reduces search costs, it also generates self-reinforcing feedback loops in which highly visible sellers receive disproportionate attention, while good or comparable alternatives remain hidden. This dynamic is called ‘statistical discrimination’, where group-level signals or stereotypes substitute for individualised assessment. As a result, platforms do not merely reflect preferences; they shape them, leading to persistent visibility gaps that distort competition and limit diversity.

For microentrepreneurs, this statistical discrimination translates into a frustrating reality. Despite improving quality, pricing or service, many remain buried in rankings dominated by incumbents with established review histories. Small gains yield limited visibility, pushing providers to rely on discounts or paid features, often at the cost of margins. Over time, this discourages participation, reduces diversity and weakens innovation—ultimately leaving platforms with fewer choices and less competitive ecosystems.

The causes of seller invisibility also shape the limits of the solutions. As Alyakoob and Rahman show, design choices such as certification can reduce discrimination by improving trust and visibility for disadvantaged sellers. But when these interventions are costly, optional, or unevenly accessible, they can reinforce the same inequalities they were meant to solve. Therefore, it is important to evaluate which tool broadens opportunity and which merely redistributes advantage.

What works & can backfire

When confronted with these dilemmas, managers often address them by adopting solutions such as badges or partnerships with community groups. However, the effectiveness of these methods varies based on the situation. A minor adjustment to a badge system or algorithm might help reduce inequalities, but it could just as easily make them worse. Evidence from recent studies and experiments highlights how these approaches can have differential impacts (see Table 1).

Management Practice Insights Vol 4

Issue 1 Jan-Jun 2026

Source: Compiled by the author from various sources

Management Practice Insights Vol 4

Issue 1 Jan-Jun 2026

Finally, equity solutions must adapt to local contexts. A design that works in the U.S. may not suit India or Southeast Asia, where caste, language, and rural–urban divides present distinct challenges, and where data protection laws and infrastructure limitations shape what is feasible. Table 2 summarises the implementation considerations for building an inclusive platform.

Sample metrics to capture:

1. Visibility: Frequency of certified vs non-certified sellers in search results.

2.Transaction Lift: Percentage increase in bookings or sales post-certification.

3.Retention: Duration certified minority sellers remain active on the platform.

4.Consumer Diversity: Growth in new buyer segments resulting from inclusivity efforts.

Platforms must collect data on group differences across geography, language, gender, caste and other protected attributes while ensuring privacy, because what gets measured gets managed

Digital platforms are often positioned as engines of access and opportunity, yet design choices around rankings, reviews and badges can just as easily exclude as include. Importantly, the same tools that generate inequities can also be redesigned to correct them. For managers, fairness is not charity; it is strategy. Inclusive platform design strengthens innovation, trust, and longterm competitiveness in an increasingly crowded digital economy.

This implies that platform leaders and managers should:

Ÿ Treat fairness as a core performance metric. Monitor equity and visibility indicators with the same rigour as engagement, churn, or revenue metrics.

Ÿ Design for balanced visibility. Adjust ranking and recommendation systems to prevent excessive concentration and ensure that capable new entrants can gain exposure.

Ÿ Make inclusivity features the default. Embed fairness mechanisms into standard platform architecture rather than offering them as optional add-ons.

Ÿ Align robust incentives for long-term ecosystem health. Reward practices that promote diversity, experimentation and sustainable participation among sellers and service providers.

Ÿ Communicate progress transparently. Publish regular reports on marketplace diversity and visibility outcomes to build trust with users and partners.

We welcome your thoughts – drop us a note at mpi@spjimr.org

Management Practice Insights Vol 4

Issue 1 Jan-Jun 2026