Green investment and e-commerce sales mode selection strategies with cap-and-trade regulation

Abstract

The development of e-commerce economy and the upgrading of ecological consumption demand are stimulating more consumers to pursue green products through e-commerce platforms. This paper theoretically studies the green investment strategy of the e-commerce company (ECC) and the interaction between this strategy and the e-commerce sales mode selection strategy of supply chain members from the perspective of profit maximization. We examine a dual-channel supply chain consisting of an e-commerce company (ECC) and a manufacturer of green products. The ECC has two green investment strategies: invests in green promotion services or not. This study examines the influence of green investment strategy on the ecological governance efficiency of carbon emission reduction policy and consumer market through four scenarios, based on the government’s cap-and-trade mechanism, and using Stackelberg game structures. A computational analysis of the case study reveals that participation of the ECC in green investment is more beneficial to the overall profits of the supply chain and more environmentally friendly. In the self-run sales mode, ECC’s participation in green investment is better for both profits and the environment, while the green investment behavior of the ECC is not always beneficial to the manufacturer. Only if the manufacturer is the weaker party or has the cost advantage, the manufacturer tends to choose the platform sales mode. Otherwise, the manufacturer tends to choose reseller sales mode. In platform sales mode, green investment behavior of the ECC is beneficial to the environment, the manufacturer’s profit and the whole system, but only when the manufacturer’s marketing ability is strong, the ECC can benefit from this green investment.