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The battle between channel distribution and traffic purchases: a perspective of the mobile application market

Author

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  • Jingzhe Gao

    (Zhejiang Gongshang University)

  • Haixiao Wei

    (Hangzhou Dianzi University)

Abstract

Against the backdrop of rapid mobile internet evolution, managing the virtual supply chain of mobile applications (apps) is increasingly critical. This study compares the impacts of two operational modes—traditional channel distribution and the rapidly emerging traffic purchase mode, fueled by the prevalence of information flow advertising—on mobile app market performance. It considers two types of mobile apps: one-time payment and continuous payment models. By constructing and deriving mathematical models, this research explores the game equilibrium between mobile app developers, channel distributors, and traffic purchase platforms under both channel distribution and traffic purchase modes. We also analyze the performance of different virtual supply chain operation modes for varying types of mobile apps. Furthermore, this study investigates the role of app quality and user retention rate in supply chain decision-making. The results indicate that app pricing is lower under the channel distribution mode compared to the traffic purchase mode. Developers should opt for the traffic purchase mode when consumer retention rates or quality preferences are low; otherwise, the channel distribution mode is preferable. By considering different operational modes' game structures, this study provides valuable managerial insights for practitioners in the mobile app field.

Suggested Citation

  • Jingzhe Gao & Haixiao Wei, 2025. "The battle between channel distribution and traffic purchases: a perspective of the mobile application market," Operational Research, Springer, vol. 25(2), pages 1-25, June.
    • Handle: RePEc:spr:operea:v:25:y:2025:i:2:d:10.1007_s12351-025-00909-1
    DOI: 10.1007/s12351-025-00909-1
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