Two-period e-commerce platforms operation strategies considering the difference in product quality perception

Area of Science:

• Supply Chain Management
• E-commerce Strategy
• Consumer Behavior

Background:

• Consumer perceptions of product quality influence purchasing decisions across channels.
• This perception is critical for e-commerce platforms in competitive multi-channel environments.
• Understanding these differences is key to optimizing platform operations and profitability.

Purpose of the Study:

• To analyze the impact of differing consumer quality perceptions on pricing strategies.
• To compare commission-based versus self-operated e-commerce platform models.
• To determine optimal platform operational strategies in a dynamic pricing game.

Main Methods:

• A two-period dynamic pricing game model was constructed.
• Four scenarios were analyzed: simultaneous/successive decision-making under commission-based and self-operated models.
• The study modeled a supply chain with two e-commerce platforms, two manufacturers, and strategic consumers.

Main Results:

• Increased probability of consumers perceiving high-quality products allows both platforms and manufacturers to increase prices and profits.
• For simultaneous decision-making, the commission-based model is preferred.
• For successive decision-making, the leader platform should be self-operated, and the follower platform should be commission-based.

Conclusions:

• Platform operational models and pricing strategies must adapt to consumer quality perception differences.
• Sequential decision-making allows the leading platform to maintain market share by adjusting prices across periods.
• Strategic pricing and model selection are crucial for maximizing profitability in e-commerce supply chains.