IDEAS home Printed from https://ideas.repec.org/a/gam/jsusta/v15y2023i4p3350-d1065682.html
   My bibliography  Save this article

Decision-Making of Cross-Border E-Commerce Platform Supply Chains Considering Information Sharing and Free Shipping

Author

Listed:
  • Libin Guo

    (School of Management, Qufu Normal University, Rizhao 276826, China)

  • Yuxiao Shang

    (School of Management, Qufu Normal University, Rizhao 276826, China)

Abstract

For cross-border e-commerce companies with high shipping costs, the existing retailer and the new entrant retailer on the platform are usually concerned with information sharing and free shipping due to the uncertainty of market demand. For this, by establishing a Stackelberg game model between two competing retailers, we analyze the strategy of retailers and explore the business strategies of the cross-border e-commerce platform. The study shows that regarding information-sharing strategies, retailer A’s willingness to share information is positively related to initial market potential and negatively related to market competition intensity. Moreover, retailer B is willing to spend higher information costs to purchase information when the necessity of the product is more elevated. As for a free shipping strategy, if the existing retailer offers free shipping, the new entrant retailer should also offer free shipping service to consumers when the initial market potential is larger. Conversely, when the initial market potential is smaller, the retailer’s willingness to offer free shipping decreases when the intensity of competition in the market increases. When the market tends to be perfectly competitive, the new entrant retailer will not choose a free shipping strategy, and the platform is most profitable when information sharing and free shipping occur simultaneously. However, when the carrier charges a higher shipping fee to customers, the existing retailer is more profitable when the new entrant does not offer free shipping. Therefore, in order to achieve a win-win situation for all parties, the platform needs to develop appropriate operational strategies to influence the decisions of retailers and carriers. Some numerical experiments are made to test the validity of the model and the effect of the parameters involved in the model.

Suggested Citation

  • Libin Guo & Yuxiao Shang, 2023. "Decision-Making of Cross-Border E-Commerce Platform Supply Chains Considering Information Sharing and Free Shipping," Sustainability, MDPI, vol. 15(4), pages 1-22, February.
    • Handle: RePEc:gam:jsusta:v:15:y:2023:i:4:p:3350-:d:1065682
    as

    Download full text from publisher

    File URL: https://www.mdpi.com/2071-1050/15/4/3350/pdf
    Download Restriction: no
    File URL: https://www.mdpi.com/2071-1050/15/4/3350/
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Alison J. Kirby, 1988. "Trade Associations as Information Exchange Mechanisms," RAND Journal of Economics, The RAND Corporation, vol. 19(1), pages 138-146, Spring.
    2. Jagmohan S. Raju & Abhik Roy, 2000. "Market Information and Firm Performance," Management Science, INFORMS, vol. 46(8), pages 1075-1084, August.
    3. Lode Li & Hongtao Zhang, 2008. "Confidentiality and Information Sharing in Supply Chain Coordination," Management Science, INFORMS, vol. 54(8), pages 1467-1481, August.
    4. Albert Y. Ha & Shilu Tong & Hongtao Zhang, 2011. "Sharing Demand Information in Competing Supply Chains with Production Diseconomies," Management Science, INFORMS, vol. 57(3), pages 566-581, March.
    5. Xing, Wei & Li, Qiankun & Zhao, Xuan & Li, Jialu, 2020. "Information sale and contract selection under downstream competition," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 136(C).
    6. Hua, Guowei & Wang, Shouyang & Cheng, T.C.E., 2012. "Optimal order lot sizing and pricing with free shipping," European Journal of Operational Research, Elsevier, vol. 218(2), pages 435-441.
    7. Niu, Baozhuang & Dai, Zhipeng & Zhuo, Xiaopo, 2019. "Co-opetition effect of promised-delivery-time sensitive demand on air cargo carriers’ big data investment and demand signal sharing decisions," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 123(C), pages 29-44.
    8. Nirvikar Singh & Xavier Vives, 1984. "Price and Quantity Competition in a Differentiated Duopoly," RAND Journal of Economics, The RAND Corporation, vol. 15(4), pages 546-554, Winter.
    9. Bian, Wenliang & Shang, Jennifer & Zhang, Juliang, 2016. "Two-way information sharing under supply chain competition," International Journal of Production Economics, Elsevier, vol. 178(C), pages 82-94.
    10. Niu, Baozhuang & Xu, Haotao & Xie, Fengfeng, 2021. "Free shipping in cross-border supply chains considering tax disparity and carrier’s pricing decisions," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 152(C).
    11. Mukhopadhyay, Samar K. & Yue, Xiaohang & Zhu, Xiaowei, 2011. "A Stackelberg model of pricing of complementary goods under information asymmetry," International Journal of Production Economics, Elsevier, vol. 134(2), pages 424-433, December.
    12. Baozhuang Niu & Zhipeng Dai & Lei Chen, 2022. "Information leakage in a cross-border logistics supply chain considering demand uncertainty and signal inference," Annals of Operations Research, Springer, vol. 309(2), pages 785-816, February.
    13. Song Huang & Xu Guan & Ying†Ju Chen, 2018. "Retailer Information Sharing with Supplier Encroachment," Production and Operations Management, Production and Operations Management Society, vol. 27(6), pages 1133-1147, June.
    14. Weixin Shang & Albert Y. Ha & Shilu Tong, 2016. "Information Sharing in a Supply Chain with a Common Retailer," Management Science, INFORMS, vol. 62(1), pages 245-263, January.
    15. Baojun Jiang & Kinshuk Jerath & Kannan Srinivasan, 2011. "Firm Strategies in the "Mid Tail" of Platform-Based Retailing," Marketing Science, INFORMS, vol. 30(5), pages 757-775, September.
    16. Bai, Qingguo & Xu, Jianteng & Gong, Yeming & Chauhan, Satyaveer S., 2022. "Robust decisions for regulated sustainable manufacturing with partial demand information: Mandatory emission capacity versus emission tax," European Journal of Operational Research, Elsevier, vol. 298(3), pages 874-893.
    17. Dominguez, Roberto & Cannella, Salvatore & Barbosa-Póvoa, Ana P. & Framinan, Jose M., 2018. "OVAP: A strategy to implement partial information sharing among supply chain retailers," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 110(C), pages 122-136.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Albert Y. Ha & Huajiang Luo & Weixin Shang, 2022. "Supplier Encroachment, Information Sharing, and Channel Structure in Online Retail Platforms," Production and Operations Management, Production and Operations Management Society, vol. 31(3), pages 1235-1251, March.
    2. Tian Li & Hongtao Zhang, 2023. "Gaining by ceding ‐ bounded wholesale pricing for information sharing in a supply chain," Production and Operations Management, Production and Operations Management Society, vol. 32(3), pages 829-843, March.
    3. Zhong, Qinjia & Wang, Jianjun & Zou, Zongbao & Lai, Xiaofan, 2023. "The incentives for information sharing in online retail platforms," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 172(C).
    4. Zhang, Chu & Liu, Bin & Cai, Gangshu George & Huang, Tao, 2023. "When ignorance is bliss: The retailer’s intelligence hazard under information sharing and exchanging," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 180(C).
    5. Yong Zha & Quan Li & Tingliang Huang & Yugang Yu, 2023. "Strategic Information Sharing of Online Platforms as Resellers or Marketplaces," Marketing Science, INFORMS, vol. 42(4), pages 659-678, July.
    6. Guan, Zili & Zhang, Xumei & Zhou, Maosen & Dan, Yiran, 2020. "Demand information sharing in competing supply chains with manufacturer-provided service," International Journal of Production Economics, Elsevier, vol. 220(C).
    7. Zheng, Shiyuan & Ge, Ying-En & Fu, Xiaowen & (Marco) Nie, Yu & Xie, Chi, 2020. "Demand information sharing in port concession arrangements," Transportation Research Part B: Methodological, Elsevier, vol. 138(C), pages 118-143.
    8. Guo Li & Lin Tian & Hong Zheng, 2021. "Information Sharing in an Online Marketplace with Co‐opetitive Sellers," Production and Operations Management, Production and Operations Management Society, vol. 30(10), pages 3713-3734, October.
    9. Guan, Xu & Huang, Song & Chen, Ying-Ju, 2022. "Acquisition transparency and induced supplier encroachment," Omega, Elsevier, vol. 108(C).
    10. Zhou, Maosen & Dan, Bin & Ma, Songxuan & Zhang, Xumei, 2017. "Supply chain coordination with information sharing: The informational advantage of GPOs," European Journal of Operational Research, Elsevier, vol. 256(3), pages 785-802.
    11. Shi, Chun-lai & Geng, Wei, 2021. "To introduce a store brand or not: Roles of market information in supply chains," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 150(C).
    12. Niu, Baozhuang & Dong, Jian & Liu, Yaoqi, 2021. "Incentive alignment for blockchain adoption in medicine supply chains," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 152(C).
    13. Niu, Baozhuang & Li, Qiyang & Mu, Zihao & Chen, Lei & Ji, Ping, 2021. "Platform logistics or self-logistics? Restaurants’ cooperation with online food-delivery platform considering profitability and sustainability," International Journal of Production Economics, Elsevier, vol. 234(C).
    14. Wu, Jiang & Zou, Liuxin & Gong, Yeming & Chen, Mingyang, 2021. "The anti-collusion dilemma: Information sharing of the supply chain under buyback contracts," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 152(C).
    15. Yu, Yanan & He, Yong & Guo, Xiaotong & Li, Dong & Huang, Hongfu, 2024. "Quality disclosure strategy with asymmetric demand information in food supply chains," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 183(C).
    16. Niu, Baozhuang & Chen, Lei & Xie, Fengfeng, 2020. "Production outsourcing for limited-edition luxury goods with consideration of consumers’ origin preferences," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 140(C).
    17. Gong, Canran & Ignatius, Joshua & Song, Huaming & Chai, Junwu & Day, Steven James, 2024. "The Impact of Platform’s Information Sharing on Manufacturer Encroachment and Selling Format Decision," European Journal of Operational Research, Elsevier, vol. 317(1), pages 141-155.
    18. Lu, Jizhou & Feng, Gengzhong & Shum, Stephen & Lai, Kin Keung, 2021. "On the value of information sharing in the presence of information errors," European Journal of Operational Research, Elsevier, vol. 294(3), pages 1139-1152.
    19. Cai, Jianhu & Sun, Haining & Shang, Jennifer & Hegde, Gajanan G., 2023. "Information structure selection in a green supply chain: Impacts of wholesale price and greenness level," European Journal of Operational Research, Elsevier, vol. 306(1), pages 34-46.
    20. Yanli Tang & Suresh P. Sethi & Yulan Wang, 2023. "Games of supplier encroachment channel selection and e‐tailer's information sharing," Production and Operations Management, Production and Operations Management Society, vol. 32(11), pages 3650-3664, November.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:gam:jsusta:v:15:y:2023:i:4:p:3350-:d:1065682. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: MDPI Indexing Manager (email available below). General contact details of provider: https://www.mdpi.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.