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Chinese Journal of Management Science ›› 2024, Vol. 32 ›› Issue (5): 325-334.doi: 10.16381/j.cnki.issn1003-207x.2021.1736

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Research on Pricing Strategy of Competitive E-commerce Platforms Considering Return Freight Insurance

Jizhou Zhan1,2(),Yaqi Jin2   

  1. 1.School of Engineering Audit, Nanjing Audit University, Nanjing 211815, China
    2.School of Business, Nanjing Audit University, Nanjing 211815, China
  • Received:2021-08-29 Revised:2022-03-14 Online:2024-05-25 Published:2024-06-06
  • Contact: Jizhou Zhan E-mail:jzzhan@aliyun.com

Abstract:

In recent years, more and more E-commerce platforms have cooperated with insurance companies to carry out return freight insurance services to solve return freight disputes, which are divided into buyer's version and retailer's version. For different types of return freight insurance, insurance companies charge different premiums, which will directly affect the pricing strategy of E-commerce platform. Based on two-sided market theory, the impact of different return freight insurance schemes on the pricing strategy of the competitive E-commerce platform is studied. The research questions are: (1) What is the impact of different return freight insurance schemes (SS, CC and SC cases) on the equilibrium pricing, market share and revenue of the E-commerce platform? (2)Which return freight insurance scheme does the E-commerce platform should adopt to obtain a higher income?The Hotelling model is utilized to describe the utilities of sellers and buyers, as well as the insurance company and platform during the transactions. The optimal premium of return freight insurance of insurance company and optimal registration fee of platform are given under different return freight insurance schemes. Comparing the operational policies and profits of each member, the results are: (1) When the two platforms have great differences, the registration costs that sellers should pay for two platforms are consistent under the case of CC, the platform with lower average return probability charge higher registration fee under the case of SS, and platform charges higher registration fee when buyer pays the premium under the case of SC. (2)When the two platforms exist complete competition and have the same return probabilities, the balanced quantity proportions of sellers or buyers in the competitive platforms are consistent under SS case and CC case, and the premium charged by insurance company is higher under SS case and CC case.

Key words: return freight insurance, pricing strategy, two-sides market, E-commerce platform, Hotelling model

CLC Number: