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

Abstract

The difference in consumer perceptions of product quality influences consumers’ propensity to purchase through various channels, thereby affecting the profit of e-commerce platforms and manufacturers. This factor is a critical consideration for e-commerce platforms when formulating their operational strategies in a multi-channel competitive environment. This study focuses on a product retail supply chain comprising two e -commerce platforms, two manufacturers, and strategic consumers. Innovatively, we construct a two-period dynamic pricing game model to compare commission-based and self-operated models for the platforms and deeply explore the impact of consumers’ product quality perception differences on pricing strategies and platform operation model choices. Four scenarios are considered: self-operated model under simultaneous decision-making, commission-based model under simultaneous decision-making, self-operated model under successive decision-making, and commission-based model under successive decision-making. Results show that as the probability of consumers perceiving high-quality products increases, both e-commerce platforms and manufacturers can enhance their profit by raising prices. Moreover, when platforms make decisions simultaneously, they should choose the commission-based model. In contrast, when platforms make decisions sequentially, the leader platform should choose the self-operated model, while the follower platform should choose the commission-based model. In particular, in the context of successive decision-making, after attracting consumers through the low-price strategy in the first period, the leader platform can still effectively maintain market share even if the price is raised in the second period.