Service sharing, profit mode and coordination mechanism in the Online-to-Offline retail market

Qi Xu, Guanghua Fu and Dandan Fan

Economic Modelling, 2020, vol. 91, issue C, 659-669

Abstract: How does the sharing economy affect the retail industry? This study investigates the impact of service sharing on the decisions and profits of two profit modes in the Online-to-Offline (O2O) retail market. We find that service sharing always improves the profit of the brand supplier as a service demander in both two profit modes, and improves the profit of the offline franchisee as a service provider in the profit-sharing mode under certain circumstances, but always reduces its profit in the non-profit-sharing mode. This is associated with the double marginalisation effect of the non-profit-sharing mode which leads to channel conflicts. Thus, a service-cost sharing mechanism is introduced to coordinate conflicts and achieve a win-win strategy, thereby improving the performance of the entire O2O supply chain.

Keywords: O2O supply chain; Profit-sharing mode; Non-profit-sharing mode; Service-cost sharing mechanism; Pareto improvement (search for similar items in EconPapers)
JEL-codes: C61 C72 L11 L14 L81 (search for similar items in EconPapers)
Date: 2020
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (4)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:ecmode:v:91:y:2020:i:c:p:659-669

DOI: 10.1016/j.econmod.2019.12.006

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