Abstract:

With the rise of live streaming and the boom in online shopping， many manufacturers have opened up live streaming distribution as a new marketing channel. Such live streaming leads to intense competition with the manufacturer’s official online store. However， consumers may be interested in the product and also purchase it in the official online store due to the spillover effect of the live streaming. Therefore， it is important to investigate how the spillover and competition effects of the live streaming channel impact the manufacturer’s pricing strategy. In practice， the contract between manufacturers and live-stream carriers is generally classified into two different types： resale model and commission model. Thus， it is also worth investigating the contract selection for the manufacturer.Based on the above background， this paper establishes a supply chain system consisting of the manufacturer and the live-stream carrier. A game-theoretic research approach is applied to examine the interaction between the manufacturer and the live-stream carrier. First， the manufacturer will decide to introduce the live streaming business with a live-stream carrier by selecting two types of sales contracts： （1） resale contracts （2） commission contracts. Second， the live-stream carrier will decide its subsidy price， and the manufacturer will decide the selling price of its products in its official online store. Finally， consumers generate purchase behavior in different channels based on price competition between channels. The innovations of this article are： First， it is one of the few to consider the channel competition between the online store and live-streaming distribution for this article. Second， the spillover effect in the live streaming is explained， which extends the interaction knowledge between spillover effect and sales contract selection. Third， the discount coupon of the live carrier and the impact of sales contracts on its profitability discussed， which further reveals the sustainable development of the live streaming supply chain.Some interesting results are obtained by comparing the equilibrium results in terms of the optimal product price， subsidy， and profit. First， the results show that there always exists Pareto gains for the entire supply chain. Specifically， when the commission rate is moderate， if the competition degree between two channels is low， the manufacturer and the live-stream carrier are willing to adopt the commission contract. If the competition degree is high， both parties are willing to choose the resale contract. However， enhancing the spillover effect will expand the “win-win” region of two parties. Second， the extended situation is considered where the manufacturer offers a mixed live-streaming contract. The extended situation shows that under certain circumstances， both parties still willing to choose the commission contract， which proves the robust of this study. Interestingly， the preference of the two parties for the mixed contract may cause the other party to become worse. The numerical simulation is also given to further prove our results and strategic guidance is provided for manufacturers， live-stream carrier， and relevant practitioners on management to achieve more profits. For example， it is proposed that the profit of the entire supply chain can be improved by reducing the negative impact of subsidies. It is also advocated that those laws and regulations related to live streaming should be perfected and formulated.

Key words: live-streaming business, discount coupon, spillover effect, channel competition