MBA Education Management Center, UCAS

Recently, Prof. Shouyang Wang and his collaborators published their research results “The interplay between logistics strategy and platform’s channel structure design in B2C platform market” in the European Journal of Operational Research.

The work investigates the interplay between platform channel design and logistics strategy. In the practice of e-commerce platforms, there are three common ways of channel design: (1) marketplace mode, in which platforms earn commissions by facilitating transactions between consumers and merchants, as in the case of Taobao and Pinduoduo; and (2) reselling mode, in which platforms sell products wholesale from merchants, as in the case of Bestbuy.com; and (3) hybrid mode, in which the platform carries out both marketplace and self-operated business, such as Jingdong, vip.com and Amazon. In order to enhance the competitiveness of the platform, some platforms built their own logistics to improve the efficiency of logistics and distribution, and most platforms adjusted their channel structure after building their own logistics, e.g., Amazon and Jingdong shifted from reselling mode to hybrid mode after building their own logistics. Is this adjustment an optimal strategy for e-commerce platforms? Will the platform's logistics decision affect its channel design strategy? These have become important theoretical questions for platform managers.  

The study provides practical and effective management insights for platform managers. The study found that: (1) the platform's self-built logistics strategy affects the platform's channel selection. When the logistics level of self-built logistics is significantly higher than the level of third-party logistics, the optimal channel structure for the platform is hybrid mode. (2) The platform's channel selection affects merchants' choice of logistics providers. When the logistics level of self-built logistics is slightly higher than that of the third-party logistics, if the platform chooses the marketplace mode, the merchants will use the platform logistics; if the platform chooses the hybrid mode, the merchants will not use the platform logistics. (3) Platforms tend to establish platform logistics when the level of third-party logistics is low.

This study complements the research on e-commerce platforms and merchants competing and cooperating at the same time under the hybrid mode, and makes theoretical contributions to research in the fields of platform business model and platform supply chain management.