Digital Empowerment Strategies of E-commerce Platform and Competitive Merchants
With the development of digital economy,digital construction has attracted attention from all walks of life.The government is accelerating the digital reform to improve the modernization of government governance,and enterprises are accelerating digital transformation to seek a living space in a new market environment.Digital empowerment can improve the operational efficiency of enterprises,and better serve consumers and create greater business value through demand creation,value co-creation and supply chain reconstruction.For example,Alibaba's"Business Staff"data services,more than 30 million merchants have enjoyed the data services brought by Alibaba's big data technology.Amazon's"Selling Coach"allows merchants to track several key indicators on Amazon.com,including sales,traffic,and conversion rates.Therefore,it is of practical significance to study how e-commerce platforms implement digital empowerment strategies and whether the merchants choose to accept paid digital empowerment services.Two competitive merchants settled on an e-commerce platform are considered in this paper,and a digital empowerment strategy that is a fee-based data service provided by the e-commerce platform to merchants is studied.The Hotelling model is used to characterize the market demand,and the Stackelberg game models between the e-commerce platform and the competitive merchants are constructed in four scenarios:(i)No digital empowerment(ND);(ii)Digital empowerment is only accepted by the relatively superior merchant(DH);(iii)Digital empower-ment is only accepted by the relatively inferior merchant(DL);(iv)Digital empowerment are accepted by both merchants(DD).According to the game equilibriums,the implementation plan of the digital empowerment strategy of the e-commerce platform is discussed,and the two merchants'choices of the digital empowerment service are analyzed.Finally,the conclusions are verified by numerical examples,and the impacts of important parameters on the profits of all parties and the implementation and selection of the digital empowerment strategy are intuitively reflected.In this paper,the main conclusions and managerial implications are summarized as fol-lows:(i)Whether merchants decide to accept the digital empowerment service depends on the charging standard,and the level of the charging standard also affects the Nash equilibrium of the two competitive merchants.The game equilibrium conditions of only the relatively superior merchant and both merchants choos-ing to accept the digital empowerment service,and the conditions of both merchants choosing not to accept the digital empowerment service are obtained.(ii)The e-commerce platform can determine the digital empower-ment scenario based on the principle of profit maximization,and the optimal charging standard of digital empowerment service and the e-commerce platform's digital empowerment level under each digital empower-ment scenarios are obtained.Based on this,the e-commerce platform carries out strategic investment in the field of big data and implementation of digital empowerment strategies.(iii)The degree of difference between the superior and inferior merchants in the market(mainly refers to the difference between the level of data application by merchants and the unit production cost of products)is more conducive to promoting e-commerce platforms to invest in the field of big data,relatively speaking,e-commerce platforms prefer digital empower-ment for superior merchants to inferior merchants,and expect that the quality of merchants is different,rather than convergent.For example,the quality of merchants settled on e-commerce platforms such as JD.com and Tmall.com is diversified.(iv)To a certain extent,the digital empowerment strategy leads to intensifying the market competition.As far as the relatively inferior merchants are concerned,they need to improve their level of data utilization and reduce the unit production cost to narrow the gap with the superior merchants,thereby enhancing their competitiveness in the market.The e-commerce platform's digital empowerment strategy and competitive merchants'choices of the digital empowerment service are explored,which can guide the ecom-merce platform to implement digital empowerment strategies and help guide the formulation of charging standards and the investment intensity of digital empowerment.In addition,a reference for whether merchants choose to accept the digital empowerment service is provided,including relatively superior and inferior merchants.It enriches the theory of platform-based operations and supply chain management for this paper.
e-commerce platformdigital empowermentcompetitive merchantsHotelling model
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