Manufacturer's channel strategy in live streaming E‐commerce supply chain

Abstract

AbstractThis study investigates the manufacturer's live streaming sales strategy. Considering the vertical differences in products, we build a live streaming sales model for an e‐commerce supply chain. We examined different live streaming channel strategies for the manufacturer, with the base strategy being no live streaming sales and the manufacturer only reselling a high‐quality product on the e‐commerce platform. The manufacturer's strategies for choosing live streaming include selling a high‐ or low‐quality product on independent and e‐commerce platform channels. We solve the solutions under different scenarios, comparing the equilibrium solutions and discussing the impact of live streaming under different channel models. We find that live streaming channel encroachment by the manufacturer can achieve a win–win situation for both the manufacturer and e‐commerce platform, and the encroachment of a low‐quality product can achieve a larger win–win situation. In the independent live streaming channel, the manufacturer chooses to sell a high‐quality product under the quality and cost advantages. In the e‐commerce platform's live streaming channel, the presence of commissions further influences the manufacturer's strategy. In the extended model, we analyze the spillover effect of live streaming sales. A multi‐agent‐based simulation model is developed to validate the conclusions of the main model.