Optimal Strategies for E-Commerce Platform Supply Chain: Carbon Emission Reduction and Financing

Abstract

In the context of global carbon emission reduction (CER) targets and slowing economic growth, it is imperative for suppliers to make informed choices regarding CER and financing strategies. However, limited research has explored the impact of financing strategies on CER. This paper develops a supply chain model that includes a supplier, a manufacturer, an E-commerce platform (E-C platform), and consumers with a preference for low-carbon products. The supplier sets the wholesale price, while the manufacturer controls both the production quantity and the unit amount of CER. We examine whether the manufacturer will invest in CER with sufficient capital or under various financing scenarios, namely (1) traditional production with sufficient capital (Scenario ST); (2) CER implementation with sufficient capital (Scenario SG); (3) CER implementation with E-C platform financing (Scenario EG); (4) CER implementation with bank financing (Scenario BG). Through comparative analysis, the analysis reveals that, regardless of the financing method chosen, the supplier’s profit and the manufacturer’s production quantity increase when the manufacturer invests in CER technology innovation compared to the traditional scenario. Furthermore, in terms of the manufacturer’s profit, if the service cost of bank financing exceeds a certain threshold, the manufacturer should either seek financing from the E-C platform or abandon the CER investment. Additionally, with respect to CER outcomes, Scenario BG outperforms Scenario EG. These findings provide a theoretical foundation and decision-making support for supply chain participants when addressing carbon reduction and financing strategy decisions.