New brand introduction and selling mode choice for online retailers with network effect

Zhong, Boyuan; Shen, Houcai

doi:10.1002/mde.3458

Cited by 6 publications

(10 citation statements)

References 24 publications

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“…Chen, Zhuo, and Li (2022) analyze the introduction of the online channel when it comes to different retail solutions by using bilateral bargaining. Zhong and Shen (2022) investigate the introduction of new brands and the choice of selling models for online retailers in the context of a network effect. They find that online retailers prefer the agency selling model when they decide to introduce a new brand, even though the commission may become very small or even negligible.…”

Section: Platform Business Modelmentioning

confidence: 99%

Impact of the introduction of marketplace channel on e‐tailer's logistics service strategy

et al. 2023

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We recently observe that some giant e-tailers (e.g., Amazon and JD.com) introduce marketplace channels by allowing third-party sellers to sell products through their platforms. Logistics service acts as a vital role in the operation of online platforms. In practice, the platform can outsource logistics service to third-party logistics providers (named as a third-party logistics strategy) or establish a self-run logistics network to distribute products (named as a self-run logistics strategy). This paper investigates the e-tailer's logistics service strategy in the presence of the marketplace channel's introduction. We reveal that the cost of logistics service plays a major role in determining the optimal logistics strategy. The self-run logistics strategy provides a low logistics service cost to the platform, which results in a higher consumer surplus in comparison with the third-party logistics strategy. Further, we find that when the logistics service cost is low, the platform prefers to establish self-run logistics in the presence of the marketplace channel. Finally, our results show that under the thirdparty logistics strategy, the platform benefits from the marketplace channel in the presence of an intermediate commission fee and a low discount factor. Based on game-theoretic models, some managerial insights are suggested for online retailers to choose the optimal logistics service strategy in the presence of introducing the marketplace channel.

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Section: Platform Business Modelmentioning

confidence: 99%

Impact of the introduction of marketplace channel on e‐tailer's logistics service strategy

et al. 2023

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“…Tian et al (2018) examined the upstream competition between suppliers and found that the online retailer prefers the reselling format when the competition becomes severe. Zhong and Shen (2022) explored the retailer's selling format choice for the introduction of a new brand in the presence of brand competition. The present paper also proceeds from the retailer's perspective to investigate the selling format choice.…”

Section: Literature Reviewmentioning

confidence: 99%

On selling format choice and quality differentiation in dual‐channel supply chains

2023

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When suppliers sell products through a direct channel and an indirect channel, they usually differentiate the two channels by quality to alleviate channel conflicts. The quality choice for different channels poses a great challenge to the suppliers, which also bears implications for the online retailer's choice between the reselling format and the agency format. This paper uses a game‐theoretic model to investigate the interaction between the supplier's quality differentiation strategy and the online retailer's selling format choice in dual‐channel supply chains. Different from the previous literature, we endogenize the supplier's quality decisions and find that the supplier always chooses to sell the high‐quality product through the direct channel and sell the low‐quality product through the online retailer. Moreover, compared with the reselling format, the quality level of the low‐quality product is reduced but that of the high‐quality product is lightly increased under the agency format. The intuition is that the supplier tends to highlight the advantage of each channel to acquire more profit. Regardless of the supplier's choice, the online retailer always prefers the agency format. We further extend our model in several important directions, which lend robustness to our core insights.

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“…Finally, this paper is also closely related to the literature on online sales mode choice under competition. Existing literature focuses on supplier competition (e.g., Hagiu & Wright, 2015; Zennyo, 2020; Zhong & Shen, 2021), platform competition (e.g., Abhishek et al, 2016; Liu, Guo, et al, 2021), product competition (e.g., Li et al, 2021; Zhang & Hou, 2022) and channel competition (e.g., Chen et al, 2022; Ha et al, 2021; Yu et al, 2020). For instance, Chen et al (2022) study the sales mode choice of a manufacturer that sells products through the direct channel and the e‐commerce platform.…”

Section: Literature Reviewmentioning

confidence: 99%

“…They reveal that it is beneficial for the manufacturer to adopt agency selling on the platform. Considering that the online retailer may introduce a competing supplier through the agency or reselling mode, Zhong and Shen (2021) explore the retailer's introduction strategy and selling mode choice. By incorporating a manufacturer selling products through the direct or indirect channel, Yu et al (2020) analyze the influence of consumers' channel preferences on the manufacturer's sales mode choice of indirect channel.…”

Section: Literature Reviewmentioning

confidence: 99%

Supplier encroachment and information transparency on fresh produce e‐commerce platform: Impacts on the traditional channel

et al. 2022

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As fresh produce e‐commerce develops, some suppliers with traditional channels begin to encroach online through agency or reselling mode of the platform. This paper studies the supplier's entry mode choice and the platform's information sharing strategy and analyzes impacts on the traditional channel. It reveals that the platform may voluntarily share information. However, increasing commission fees may inhibit the sharing motivation. The supplier may choose entry with agency selling to induce information sharing even at high commission fees. Under equilibrium strategy, the traditional channel demand and the retailer's profit may increase, indicating that supplier encroachment may achieve all‐win situation.

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New brand introduction and selling mode choice for online retailers with network effect

Cited by 6 publications

References 24 publications

Impact of the introduction of marketplace channel on e‐tailer's logistics service strategy

Impact of the introduction of marketplace channel on e‐tailer's logistics service strategy

On selling format choice and quality differentiation in dual‐channel supply chains

Supplier encroachment and information transparency on fresh produce e‐commerce platform: Impacts on the traditional channel

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