How Can E-Commerce Businesses Implement Discount Strategies through Social Media?

Junjie Lv, Zichen Wang, Yuqing Huang, Tong Wang and Yuanzhuo Wang
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Junjie Lv: School of E-Business and Logistics, Beijing Technology and Business University, Beijing 100048, China
Zichen Wang: School of E-Business and Logistics, Beijing Technology and Business University, Beijing 100048, China
Yuqing Huang: College of Liberal Arts and Sciences, Northern Illinois University, DeKalb, IL 60115, USA
Tong Wang: School of E-Business and Logistics, Beijing Technology and Business University, Beijing 100048, China
Yuanzhuo Wang: Institute of Computing Technology, Chinese Academy of Sciences, Beijing 100049, China

Sustainability, 2020, vol. 12, issue 18, 1-19

Abstract: In the context of the global economic downturn caused by COVID-19, e-commerce has become the first choice for people to shop. Many merchants choose to launch promotion activities through some social media platforms. Price discounts can dramatically increase sales volume in social e-commerce due to the interaction of online consumers. It is urgent for e-commerce merchants to learn rules about discount information dissemination in social media, so as to formulate reasonable discount strategies and achieve sustainable business. This paper constructs an evolutionary game model for e-commerce platforms and merchants when they implement promotion strategies through social media, investigates discount information dissemination among consumers under multiple situations by introducing price discount parameters, and further discusses the influence mechanism of discount size and platform reputation on consumers’ purchase behavior. Results show that in low-reputation e-commerce platforms, the price discount is the main motivation to purchase. Consumers’ preference for the high discount is weakened by the increase in platforms’ reputation. Discounts should be set according to the different reputations. Businesses in a high-reputation environment are relatively more profitable. E-commerce businesses should work together, apply reasonable pricing, and improve their quality to create a green and healthy shopping environment, in order to get benefits and sustainable development.

Keywords: purchase behavior; information dissemination; evolutionary game; behavior modeling; price discount; social e-commerce; e-commerce reputation (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2020
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (7)

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