Bonded-warehouse or direct-mail? Logistics mode choice in a cross-border e-commerce supply chain with platform information sharing

Abstract

A fast-growing number of overseas suppliers sell products via cross-border e-commerce (CBEC) platforms to enter new markets. Selecting an efficient logistics mode is essential for overseas suppliers to improve operational efficiency, but unfamiliarity with the local market makes this issue challenging. In this study, we focus on a CBEC supply chain constituted of a CBEC platform that holds market demand information advantage and an overseas supplier. The platform sells its self-owned product and also allows the overseas supplier to sell a substitutable product on the platform. By developing a game model, we investigate the platform’s information sharing strategy and the overseas supplier’s logistics mode choice. We find that information sharing can influence the overseas supplier’s logistics mode choice under certain conditions. The platform will choose non-information sharing to induce the overseas supplier to select the direct-mail logistics mode when the competition is fierce and the market fluctuation is medium. Otherwise, the platform chooses information sharing to make the overseas supplier select the bonded-warehouse logistics mode. Particularly, a larger market fluctuation can trigger a change in the information sharing equilibrium, and thus the overseas supplier’s profit may increase in market fluctuation. Furthermore, under certain conditions, information sharing and direct-mail logistics mode are more beneficial to both the platform and overseas supplier, but the strategies are not selected under equilibrium (i.e., a prisoner’s dilemma arises).