Abstract
Big data technology and analytics makes the e-commerce platform obtain more accurate demand information from large-scale customer data. In this paper, we consider a dual-channel supply chain including a manufacturer with risk preference, a traditional retailer, and an e-commerce platform in which the manufacturer adopts an encroachment strategy, adding a direct channel through the e-commerce platform beside the ex-traditional channel. The game model approach is used to analyze the intention of the e-commerce platform's information sharing with the manufacturer and the impact of demand-information sharing on the channel conflict brought by manufacturer encroachment. The results show the manufacturer's encroachment strategy always creates channel conflict. The e-commerce platform is always glad to share its demand information with the online manufacturer, for the information value must be realized through the online transaction. More important, whether the demand information could ease the channel conflicts brought by manufacturer encroachment depends on the degree of the manufacturer's risk aversion, fluctuation of market demand, and the accuracy of the demand information. When the fluctuation of market demand is fixed, the demand information will ease the channel conflicts if the manufacturer is risk-neutral but increase the conflicts if the manufacturer is risk-averse. At the same time, we also find that the manufacturer's risk-aversion level can ease the channel conflicts. The higher the manufacturer's risk aversion, the more he relies on the traditional channel. When the manufacturer's risk aversion level reaches a certain point, manufacturer encroachment may even produce a “win-win” situation for the manufacturer and retailer in some conditions.
Highlights
In the last two decades, e-commerce has grown strongly, and worldwide retail e-commerce sales are estimated to grow by 27.6% in 2020, reaching $4.280 trillion [1]
LITERATURE REVIEW Our research mostly relates to three streams of literature in the supply-chain operation, including: (1) the channel conflict brought by manufacturer encroachment, (2) big data analytics and demand-information sharing in the supply chain, and (3) influence of supply-chain members’ risk preference on decision and profits
We consider the manufacturer’s risk preference and explore whether the demand information provided by big data on the ecommerce platform can eliminate the channel conflict
Summary
In the last two decades, e-commerce has grown strongly, and worldwide retail e-commerce sales are estimated to grow by 27.6% in 2020, reaching $4.280 trillion [1]. Manufacturers cannot only open direct sales channels through e-commerce platforms, but they can get more market information This market information cannot only be used in the manufacturers’ online channels but it can be passed on to traditional retailers through the manufacturers’ and retailers’ partnerships. The online manufacturer’s risk preference is bound to affect the tradeoff in his two-sell channels when the e-commerce platform shares demand information. We study the impact of the e-commerce platform’s big-data information on the channel conflict brought by manufacturer encroachment.
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