Promised-delivery-time-driven reselling facing global platform's private label competition: Game analysis and data validation*

In e-commerce operations, many brands participate with global platforms such as JD.com under the reselling mode because of platforms' high-quality logistics service and consumers' preference for products sold in JD. com's retail channel. However, a brand's reselling through platform participation may be challenged by the competition from platforms' private label products. We therefore conduct a multi-methodological study to examine a brand's reselling decision using both game-theoretical analysis and big data validation based on JD. com's transaction-level data. We first validate the value of platform reselling through the batch gradient descent algorithm, and then develop a game-theoretical model to formulate the impact of the platform's private label competition. We find that echoing the data analysis results, the platform's significant channel advantage and the high logistics service level encourage a brand to adopt the reselling mode rather than the direct-selling mode through its self-channel. Interestingly, the impact of competitiveness of the platform's private label product is non-monotonic. The brand may prefer reselling through the platform only when the platform's private label competitiveness is moderate, as the brand's profit will be hurt by a small sales quantity /a low profit margin when the platform's private label competitiveness is low/high. We further identify a win-win situation between the brand and the platform when the brand chooses the reselling mode. This study uncovers the sophisticated interactions among channel advantage, logistics service level, and platform's private label competitiveness, as well as its impact on brands' sales strategies.

Automated summary

This study examines a brand's decision on reselling through a platform by using game-theoretical analysis and big data validation based on transaction-level data from JD.com. The study finds that the platform's channel advantage and high logistics service level encourage brands to choose the reselling mode, and the impact of the platform's private label competition is non-monotonic.