Optimal combination of platform channel contract and guarantee financing strategy in e-commerce market

Abstract

With the development of economy and technology, e-commerce platforms can connect consumers and online channel suppliers providing transportation services through third-party logistics (3PL). To help these suppliers, especially small- and medium-sized enterprises (SMEs) with financing dilemmas, this paper proposes evidence on the members of the e-commerce supply chain providing procurement and financial assistance. Many partner enterprises offer various innovative financing schemes, such as guarantee financing. To examine the advantage in practice, we study the guarantee financing in the online channel of e-commerce market, which includes capital constrained SME suppliers, e-commerce platforms, 3PLs and banks. We analyze the equilibrium of the optimal combination strategy with channel sales mode and guarantee financing scheme, and explore the conditions under which this innovative financing scheme will benefit all members. It is more feasible for the SME supplier to seek the e-commerce platform (or the 3PL) guarantee financing with high (low) platform service construction cost compared with bank loans without guarantee. This preference comes from the trade-off between the potential market demand risk in sales season and the financing risk of the debtor. We further determine how the release on the sales mode of platform is affected by the guarantee financing scheme. No matter who guarantees, the platform tends to provide the reselling (marketplace) mode when the market demand risk is flat (high). With the increasing of investment in platform’s service construction, the platform is more (less) willing to switch the role from the non-guarantor to the guarantor in the reselling (marketplace) mode. The reason is that the e-commerce platform and the 3PL prefer to act as non-guarantor to obtain free-riding benefits, especially in the marketplace mode. Results of this paper provide theoretical support for the innovative financial practice of the e-commerce industry. The insights are relevant to the e-commerce platform and the 3PL managers who aim to promote the applicability of financing scheme to debtors under two channel modes and increase the revenue through construction investment and business expansion.