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The Optimal Logistics Distribution Service Strategy of the E-commerce Closed-Loop Supply Chain Network under Blockchain Technology and the Government Blockchain Subsidy

Author

Listed:
  • Yan Zhou

    (Business School, Qingdao University, Qingdao 266071, China)

  • Cong Liang

    (Business School, Qingdao University, Qingdao 266071, China)

  • Kar-Hung Wong

    (School of Computer Science and Applied Mathematics, University of the Witwatersrand, Johannesburg 2000, South Africa)

Abstract

The booming development of e-commerce has promoted the diversified development of logistics distribution services (LDS). For LDS, e-commerce retailers (e-retailers) often choose either the outsourced logistics distribution services strategy (OLDSS) or the self-built logistics distribution services strategy (SBLDSS). Although there are problems such as products getting lost and damaged during the logistics distribution process, the high transparency and traceability characteristics of blockchain technology (BT) can help solve the problem of products being lost and damaged in the logistics distribution process. However, due to the high cost of BT, e-retailers may encounter reduced sales, which causes the supply chain corporate profits to decrease. To encourage the BT investment enthusiasm of the e-retailers and regulate corporate profits, the government implements subsidies for e-retailers’ BT, namely, the government blockchain subsidy (GBS). In addition, in recent years, environmental degradation has become increasingly severe, causing negative impacts on people’s lives. To promote sustainable development, we use variational inequality to establish an e-commerce closed-loop supply chain (E-CLSC) network equilibrium model in which the network equilibrium decisions of e-retailers choosing the OLDSS and those choosing the SBLDSS are obtained. Then, we analyze the impact of the BT input cost and the GBS quota on equilibrium decisions by studying their properties and verifying the theoretical results by performing numerical examples. Finally, we analyze the profits of the e-retailers to obtain the impact of the BT input cost and the GBS quota on e-retailers’ choice of the optimal LDS strategy; in this way, we provide a scientific basis for e-retailers to choose the optimal LDS strategy. The results show that increasing the BT input costs reduces e-retailers’ product sales under the two LDS strategies, which decreases the production rate and the recovery rate of the products. When the BT input cost is low, SBLDSS is the best choice for e-retailers. When the BT input cost is high, OLDSS is the best choice for e-retailers. Moreover, there is a positive correlation between GBS and e-retailers’ product sales; thus, GBS is conducive to expanding market demand, regulating the profits of manufacturers, increasing the e-retailers’ profits, improving the enthusiasm of the e-retailers for BT investment, and promoting the overall development of supply chain enterprises. For e-retailers, choosing the OLDSS can lead to a better development of the E-CLSC.

Suggested Citation

  • Yan Zhou & Cong Liang & Kar-Hung Wong, 2024. "The Optimal Logistics Distribution Service Strategy of the E-commerce Closed-Loop Supply Chain Network under Blockchain Technology and the Government Blockchain Subsidy," Sustainability, MDPI, vol. 16(15), pages 1-29, July.
    • Handle: RePEc:gam:jsusta:v:16:y:2024:i:15:p:6294-:d:1441088
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    References listed on IDEAS

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