The strategic analysis of logistics service sharing in an e-commerce platform. (April 2020)

• Record Type: Journal Article
• Authors: Qin, Xuelian; Liu, Zhixue; Tian, Lin
• Is Part Of: Omega. Volume 92(2020)
• Publication Date: 2020-04
• Subjects: Logistics service sharing -- E-commerce -- Hybrid platform -- Coopetition; Management -- Periodicals; 658.4005
• DOI: 10.1016/j.omega.2019.102153
• Languages: English
• ISSNs: 0305-0483

Abstract

Highlights: We develop an analytical model to investigate the emerging phenomenon of logistics service sharing between a hybrid platform (i.e., e-tailer) and its seller. We identify the effects of logistics service sharing by comparing service-sharing mode with no-service-sharing mode. We examine the equilibrium mode by considering the strategic interactions between the e-tailer and the seller. Our findings provide executable managerial insights for the platforms (e.g., Amazon.cn, JD.com, and Suning.com) and the sellers in the e-commerce market. Abstract: In e-commerce, the success of hybrid online platforms is well documented where the platform not only works as a retailer but also offers online marketplace services to sellers. Logistics service is one of the most expensive operations for e-commerce and plays a critical role in promoting online purchases. In most cases, the platform builds a self-supporting logistics service system to deliver its own products, and the seller outsources the logistics service to third-party logistics service providers (TPLPs). Recently, the e-commerce market has emerged with a new trend of business-to-business logistics service sharing—the platform shares its logistics service system with the seller. In this paper, we first analyze the strategic and economic impacts of logistics service sharing. Our analysis shows that whereas logistics service sharing will lead to a lose-win situation for the platform and the seller when the TPLP's logistics service level and the market potential are low, it will lead to a win-lose situation when the TPLP's logistics service level or the market potential is very high. Furthermore, a win-win situation can be achieved when the TPLP's logistics service level and the market potential are in the middle regions. Then, we examine the equilibrium mode by considering the strategic interactions between the platform and the seller. We find that when the TPLP's logistics service level and the market potential are relatively low, the equilibrium mode is No-Service-Sharing . As the TPLP's logistics service level, the market potential, or both increase, the equilibrium mode will evolve from No-Service-Sharing to Service-Sharing.