The pricing strategy of group buying under a dual-channel supply chain with price discounts and waiting time

Abstract

PurposeAs an important form of the e-commerce industry, online group buying is under the spotlight from with two sides: cheaper price but longer waiting time. The purpose of this paper is to adequately investigate the interaction between saving and waiting time of group buying comprehensively.Design/methodology/approachTo fill the research gap, the authors elaborate a dual-channel supply chain (SC) with regular retail (individual buying) and group-buying channel, and formulate the demand based on the consumer utility with the positive effect of saving money and the negative effect of wasting time.FindingsThe authors find that power structure only changes the optimal prices, instead of the waiting time. The selling price mainly influences consumer demands, instead of the price discount of group buying. The SC profits are only positive to the channel preference, and it is the decisive parameter of consumers' choice. The price sensitivity lays a more remarkable impact on the SC compared to the time sensitivity. Above all, the price is the main factor of group buying, instead of time.Originality/valueThese results underscore the improvement for the dual-channel SC of group buying, providing managerial insights for the group-buying industry.