Manufacturers’ social e-commerce channel selection strategy with social popularity concern

Social e-commerce has significantly changed consumers’ behavior in online purchasing and thus has become an important selling channel for businesses. Manufacturers see great opportunity in social e-commerce and are thus considering whether to use this approach as an entirely new channel to drive sales. Based on the social attributes of live streaming and social e-commerce, we construct a supply chain composed of a manufacturer, a traditional online retailer, and a social e-commerce retailer. The manufacturer can distribute his products in three ways: through two traditional online retailers, through a traditional online retailer and a social e-commerce retailer, or through a hybrid retailer that operates both traditional online retail and social e-commerce retail at the same time. Using a game-theoretic method, we compare the equilibrium results in three scenarios to seek the optimal strategy for the manufacturer. We find that, affected by market potential and considering the perspective of consumer surplus, social e-commerce does not necessarily bring higher profits to the manufacturer. When a social e-commerce retailer considers making changes to his pricing strategy, market potential and consumer surplus are significantly important elements. Counterintuitively, a social e-commerce channel may not provide lower prices than a traditional retail channel. However, for a retail platform that can carry out both traditional and social e-commerce retail business, we find that, when consumers' acceptance of social e-commerce is high enough, the commodity price of social e-commerce channel will be higher than that of the traditional retail channel. We discuss the strategic implications that may enable a retailer to overcome the shortcomings of the current business mode and help the industry to achieve more sustainable development.