Selling format selection under different consumption payment modes in an e-commerce supply chain

LIN Qiang, FENG Jiali, LUO Xinggang, LIN Xiaogang

Systems Engineering - Theory & Practice ›› 2021, Vol. 41 ›› Issue (11) : 2913-2928.

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Systems Engineering - Theory & Practice ›› 2021, Vol. 41 ›› Issue (11) : 2913-2928. DOI: 10.12011/SETP2020-3063

Selling format selection under different consumption payment modes in an e-commerce supply chain

  • LIN Qiang1, FENG Jiali1, LUO Xinggang2, LIN Xiaogang1
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Abstract

With the rapid development of e-commerce, various online platforms launch consumer credit services to attract more customers. This new consumption payment method, in turn, affects the e-commerce supply chain members (including online platforms and suppliers)' selling format selections. Under different selling formats (i.e., reselling model and agency selling model), this paper considers an e-commerce supply chain with one platform and one supplier, and builds the Stackelberg game models in which the platform provides cash payment and credit payment for consumers, respectively. We investigate the impacts of credit payment factor and commission rate on the optimal decisions, expected profits, and selling format selections of the platform and supplier. Our main results suggest that:(i) Under the reselling model, the platform's expected profit under credit payment is always higher than that under the cash payment, while the supplier's expected profit under the credit payment would be lower if the credit payment factor is small; (ii) Under the agency selling model, both the platform and supplier can earn more profits under the credit payment. Moreover, their expected profits and commission rate satisfy the inverted U-shaped relationship under the credit payment; (iii) Under the cash payment scenario, it is beneficial for both the platform and suppliers to adopt the reselling (agency selling) model if the commission rate is intermediate (high). Under the credit payment scenario, however, employing the reselling model always benefits the supplier, and both of them would choose the reselling model if the commission rate is sufficiently low or high.

Key words

e-commerce supply chain / selling format selection / payment mode / credit payment / cash payment

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LIN Qiang , FENG Jiali , LUO Xinggang , LIN Xiaogang. Selling format selection under different consumption payment modes in an e-commerce supply chain. Systems Engineering - Theory & Practice, 2021, 41(11): 2913-2928 https://doi.org/10.12011/SETP2020-3063

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Funding

National Natural Science Foundation of China (71601053, 72001048, 71831006, 71771070); Guangdong Basic and Applied Basic Research Foundation (2019A1515011767, 2019A1515110848); Guangdong Planning Project of Philosophy and Social Science (GD19YGL12)

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