Strategic introduction of live-stream selling in a supply chain

Owing to the rapid development of live-stream e-commerce, firms are selling their products directly to consumers via live-stream (LS), a business practice known as LS selling. This paper analytically studies the introduction of LS selling in a supply chain wherein the manufacturer or the retailer should cooperate with streamers. By developing a game-theoretic model, we explore three possible modes for introducing LS selling and investigate the effects on supply chain members and consumers. Our main findings are as follows. First, retailer LS selling makes the retailer better off, and the manufacturer benefits from such mode only when the streamer's ability to sell is high. Second, manufacturer LS selling does not always hurt the retailer, which can result in a win-win outcome for all supply chain members. Third, we find that when the consumers' acceptance of LS selling is low, manufacturer LS selling is the optimal choice; when the acceptance is high, the optimal strategy depends on the streamer's ability to sell and streamer's popularity. Fourth, the result shows that consumers can exactly benefit from LS shopping if the retailer introduces the LS selling, while they would be worse off in some cases if the manufacturer introduces such selling channel. In addition, we also make some extensions to explore the effect of LS selling on firms and consumers.

Automated summary

This paper studies the introduction of live-stream (LS) selling in a supply chain and its effects on supply chain members and consumers. The research finds that retailer LS selling benefits both the retailer and the manufacturer. Manufacturer LS selling does not necessarily harm the retailer and can result in a win-win outcome. The optimal strategy for LS selling depends on the acceptance of consumers and the streamer's selling ability and popularity.