Supplier Encroachment in the Supply Chain in the E-Commerce Age: A Systematic Literature Review

Huijie Li,Zhiguo Li

doi:10.3390/jtaer16070146

Abstract

The evolution of e-commerce drives suppliers to develop online direct selling channels to encroach on the retail market, in addition to the traditional distribution channels through the retailer. A systematic literature review (SLR) approach is adopted in this paper to review the existing studies using theoretical models to capture supplier encroachment behavior, as well as the related industry practice phenomena and strategic factors in the supply chain. We present the major research streams according to the selected encroachment literature from two aspects: channel conflict and coordination as well as information structures. We also generalize the significant practical strategies and strategic factors that have been investigated, combined with supplier encroachment, such as investment and spillover effects, the retailer’s store brand introduction, strategic inventory, and contract mechanism designs. More importantly, we summarize the classical theoretical models which include the basic models, the signaling game model, and the Hotelling model, and these have been widely used by scholars to capture the supplier’s encroachment behavior. Finally, we provide several suggestions which may be valuable for researchers to identify future potential research directions.

Highlights

E-commerce has become increasingly prevalent in recent decades
We introduce the structure of the basic model characterizing supplier encroachment from the following aspects: supply chain structures, the demand function, necessary assumptions to promote the model’s integrity, and the game model’s timing sequence
This review summarizes supplier encroachment literature using theoretical models through a systematic literature review approach to make the topic more understandable and transparent for practitioners and researchers

Summary

Introduction

E-commerce has become increasingly prevalent in recent decades. As the NationBureau of Statistics showed in the report of “statistical bulletin of national economic and social development in 2020”, the annual online retail sales of physical goods reachedCNY 9759.0 billion, an increase of 14.8% over the previous year and accounting for 24.9%of the total retail sales of social consumer goods. Electronic product suppliers, such as Apple, Dell, HP, and Samsung, sell their products through third-party retailers and have adopted online channels to conduct retail operations directly [5,6,7,8,9,10,11]. Another example is the fashion apparel industry, in which firms, such as Calvin Klein, Tommy Hilfiger, and Coach, sell through traditional retailers as well as their own direct selling channels [12,13,14,15]

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