Sales data sharing to improve product development efficiency in cross-border e-commerce

Abstract

Product development is critical in production research, which requires the developer’s real-time knowledge of product sales. However, in cross-border e-commerce, the multinational firm (MNF) is in upstream and it is the e-commerce platforms such as JD.com who accumulate the sales big data. Then, whether the platforms have incentives to share the sales data vertically to improve the product development efficiency, especially when the MNF may establish a retail division that competes with the e-commerce platform? In this paper, we build a three-stage optimization model by incorporating a MNF’s product development effort, the constraint of arm’s length principle, the benefit of cross-border tax-planning, and the co-opetition relationship between the MNF and an e-commerce platform. We find that, both the MNF and its retail division benefit from the platform’s sales data sharing, but the platform’s data sharing decision critically depends on the value of its information advantage and the MNF’s product development efficiency. We find there exist “win–win–win” opportunities for all the supply chain parties with the platform’s sales data sharing.