Abstract:

In recent years， E-commerce has continued to develop rapidly， and online shopping has become one of the most important shopping choices for consumers. However， with the rapid growth of E-commerce market and the expansion of the sales scale of E-commerce platform （such as JD.com， Amazon）， the problem of product returns is becoming more and more serious. Relevant studies show that the average return rate of E-commerce is as high as 22%. To address the above issues， a supply chain consists of one E-commerce platform and one manufacturer with product returns， the E-commerce platform marketing strategy selection and its influence are investigated.According to the consumers' uncertainty about whether the product meets their needs and the possible return behavior， the consumer utility function and the product demand function are established. Two supply chain game models are constructed in the presence of consumer return behavior， which are E-commerce platform provide marketing services and manufacturer provide marketing services. With the solutions， the optimal profit of supply chain and the equilibrium pricing， marketing effort， demands， are derived under different scenarios profits for each supply chain participant. On this basis， the optimal marketing strategy of the e-commerce platform and the optimal contract design of the manufacturer， and the impact of the choice of marketing strategy on supply chain equilibrium， consumer purchasing behavior， and consumer welfare are analyzed.The results show that， given a supply chain consisting of one E-commerce platform and one manufacture， the E-commerce platform is always motivated to provide marketing service， but at the same time， the E-commerce platform also need to adjust the level of marketing effort based on product return rate and residual value of returned product. Compared with the situation where the manufacturer provides marketing service， the marketing service provided by the E-commerce platform will not change the wholesale price， resulting in an increase in the number of product returns. Further， the effect of consumer return behavior on supply chain equilibrium is discussed. It is found that in the face of consumer return behavior， the E-commerce platform will increase the level of marketing effort as the residual value of returned products increase. The impact of consumer return cost on marketing effort depends on the residual value of returned product. In terms of optimal pricing， consumer returns may prompt the E-commerce platform to implement high-price strategy， which is always detrimental to the E-commerce platform， and may improve the manufacturer’s profit level and consumer welfare. Moreover， the product return rate will not be affected by the marketing service of the E-commerce platform， but will only affect the profit of the cooperation between the E-commerce platform and the manufacturer， as well as the loss of consumer welfare.Finally， the original model is further expanded from the manufacturer bearing the loss of product return， and the impact of the manufacturer bearing the return loss on the supply chain equilibrium is analyzed. It is found that， when the manufacturer bears the loss of product returns， the level of optimal marketing effort and the profit of each enterprise will change. In this case， the manufacturer can accurately know the residual value of the returned product， and there is no information asymmetry between the manufacturer and the E-commerce platform， so the manufacturer will be motivated to take the initiative to bear the loss of return. In addition， depending on the residual value of the returned product， the manufacturer will strategically increase or decrease the level of marketing efforts， but not necessarily to the benefit of the e-commerce platform.In summary， the problem of consumer return along with the rapid development of e-commerce， reasonable pricing， marketing and other decisions can not only alleviate the adverse impact of consumer returns on the supply chain， but also improve consumer welfare and reduce unnecessary losses. The theoretical analysis results obtained in this paper can provide a theoretical basis for the practice of E-commerce operation management.

Key words: E-commerce platform, marketing strategy, product returns, consumer welfare