Abstract:

In recent years， B2C e-commerce has become the main driving force of online retailing， and plays an increasingly important role in the national economy. Incumbent manufacturers usually have better partnerships with retail platforms， who purchase products from these manufacturers and resell them to consumers. In contrast， external manufacturers that are not well recognized by consumers usually have their cooperation standards raised by retail platforms， making it difficult for them to be included in the purchase list. Therefore， an external manufacturer that cannot sell products through retail platforms may have to encroach on the retail market through a direct channel， which will hurt the interests of the retail platforms. To avoid this， retail platforms have begun to lower their cooperation standards with those external manufacturers， or implements the opening-up strategy to attract them to set up direct-sale stores on their platforms. However， relevant research on the impact of platform’s opening-up strategy on external manufacturer encroachment is lacking， and the interaction mechanism between the two entities is unclear.In this study， the following questions are discussed： （1） Should a retail platform choose an opening-up strategy or a laissez-faire strategy to deal with the external manufacture’s encroachment？ （2） How can a platform retailer use its influence to intervene in the approach sequence to obtain more benefits？ （3） What are the influences of product characteristics， direct selling cost， and platform profit sharing ratio on the retail platform’s opening-up strategy？ （4） How does the retail platform's opening-up strategy interact with the manufacturer’s encroachment？To this end， a supply chain consisting of an incumbent manufacturer， an external manufacturer， and a platform is constructed in this study. The retail platform is powerful and determines whether to open its platform and the approach sequence for the two manufacturers. The external manufacturer decides whether to encroach on the retail market by opening a direct channel. Game models are constructed and solved by backward induction. The influence of product quality， product substitution coefficient and profit-sharing ratio on retail platform's strategy choice are analyzed， and the interaction mechanism between retail platform's introduction strategy and the external manufacturer's encroachment behavior is discussed.Results indicate that　（1） the external manufacturer encroachment will definitely hurts the incumbent manufacturer， but not necessarily the retail platform； （2） the product quality improvement does not mean that the external manufacturer can sell a higher wholesale price nor can gain a higher payoff， but may benefit the incumbent manufacturer in some cases； （3） when the direct selling cost is low， the retail platform will choose the laissez-faire strategy， and the external manufacturer will always encroach into the retail market； （4） the retail platform can effectively prevent manufacturer encroachment by using the opening-up strategy in certain cases.

Key words: platform retailing, manufacturer encroachment, channel competition, game theory