Maintaining E-commerce supply chain viability: Addressing supply risks with a strategic live-streaming channel

Abstract

Under the recent COVID-19 pandemic and operational disruption, we have witnessed the importance of maintaining supply chain viability. Exploring the channel effect (e.g., the use of innovative sales channels) in addressing supply risks is essential to understanding the viability of e-commerce supply chains. Motivated by the emergence of live-streaming channels in the “new normal”, in this study, we consider an e-commerce supply chain facing supply risks. Capturing supply risks by a random supply viability, we investigate the channel decision on whether to introduce live streaming and the platform's optimal selling format selection (between reselling and marketplace). We prove that live streaming can help address supply risks because it can utilize the streamer's sales effort to impact the live-streaming retail price and create more flexibility. We confirm that a sufficiently high live-streaming efficiency is crucial for introducing a live-streaming channel. Interestingly, we uncover that high volatility of supply risks incentivizes the adoption of live streaming. We also find that incorporating live streaming may change the e-tailer's selling format preferences because the reselling format exhibits a higher acceptance of live streaming than the marketplace one, which is further influenced by the combined influence of live streaming and supply risks. Our results imply that live streaming plays a positive role in maintaining supply chain viability by enhancing the supply chain's overall ability to address supply risks. This paper provides scientific evidence on the importance of having a live-streaming channel in addressing supply risks in the new normal.