Supply chain strategies in the presence of livestream e-commerce: channel leadership and low-carbon promotion

Livestream e-commerce is an emerging phenomenon. However, its impact on supply chain operations is largely unknown. Motivated by this important growing market, we propose an analytical model to study a decentralized supply chain with an upstream manufacturer (he) and a downstream retailer (she). Both supply chain members may choose to sell the manufacturer’s product to consumers through a livestream e-commerce channel besides their existing traditional e-commerce channels. In our base model, we consider a manufacturer-led market, i.e., the manufacturer decides his retail price and livestream effort (if under the livestream mode) first, followed by the retailer’s decisions. By comparing the equilibrium solutions under both the traditional e-commerce mode and the livestream mode, our result shows that the traditional e-commerce mode is always dominated by the livestream mode such that both parties are more profitable when participating in the livestream e-commerce. In addition, our sensitivity analysis shows an interesting result that both the manufacturer and the retailer may mutually prefer a high (or low) pre-determined wholesale price transferred between the two parties. Furthermore, we analyze two other market scenarios: a retailer-led market and a market with simultaneous decision-making. Surprisingly, we find that both members may be more profitable by being a game follower than being a game leader. Finally, we extend our model to consider consumers’ low-carbon awareness and uncover that promoting the product’s green and sustainable characteristics in livestream may further enhance the profitability of both the manufacturer and the retailer in the livestream e-commerce.