The Strategic Adoption of Platform Schemes and Its Impacts on Traditional Distributors: A Case Study of Gree

Houru Hu, Mingxia Li (), Sifan Xiao and Zhichao Zhang ()
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Houru Hu: College of Civil Aviation, Nanjing University of Aeronautics and Astronautics, Nanjing 210016, China
Mingxia Li: School of Economics and Management, Yanshan University, Qinhuangdao 066000, China
Sifan Xiao: School of Economics and Management, Yanshan University, Qinhuangdao 066000, China
Zhichao Zhang: College of Economics and Management, Anhui Polytechnic University, Wuhu 241000, China

Mathematics, 2025, vol. 13, issue 10, 1-28

Abstract: This article is motivated by the challenge of the increasing power of e-commerce compared to traditional commerce. An online retail platform can provide both agency selling and reselling schemes, while the supplier can adopt one scheme or both. For a case study of Gree, we formulate four cases based on the channel structures to investigate the adoption strategies of platform schemes and their impacts on a traditional distributor, Jinghai. Firstly, we discuss the impacts of the slotting fee, the revenue-sharing proportion earned by the supplier, and the market competition intensity on the profits and decisions of members. A more intense market and a higher revenue-sharing proportion for the supplier will lead to a lower price in the traditional distribution channel. Secondly, we study how a supplier should employ the platform schemes with a traditional distributor. Particularly, the extremely low extra market demand driven by the online platform and the sufficiently low market intensity may not lead to a motivation for suppliers to adopt the agency scheme. Finally, Gree’s introduction of an agency scheme does not always spell disaster for traditional distributors, and it may not be such a bad thing for Jinghai to agree to Gree adding the online reselling scheme.

Keywords: platform schemes; agency selling; game theory; traditional distributor; supply chain management (search for similar items in EconPapers)
JEL-codes: C (search for similar items in EconPapers)
Date: 2025
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