Information sharing strategies in a hybrid-format online retailing supply chain

Abstract

This paper considers a hybrid-format online retailing supply chain in which a manufacturer sells products to an online retailer and an intermediary with a wholesale contract, the retailer sells them through the intermediary by paying a commission fee (i.e. agency selling format), and the intermediary resells products as an e-tailer (i.e. reselling format). We use a theoretical model to answer a key question: whether the intermediary has an incentive to share demand information with others, and if it shares, which strategy is most beneficial to each member? Four information-sharing models are established and the results show that the intermediary always has incentive to share information voluntarily, and the best strategy strongly depends on the channel competition intensity and proportional fee. In addition, the manufacturer (retailer) can obtain profit if the intermediary only shares information with him (her), and all members can achieve a Pareto improvement (i.e. win–win–win situation) when both the manufacturer and retailer are informed. We further examine the impact of platform cost to demonstrate the robustness of results. When manufacturer cooperates with the retailer, the intermediary always intends to share information, whereas it has no incentive to do so if the intermediary and retailer make a coalition.