Competition or co-opetition: Optimal fresh produce delivery mode strategy for livestreaming platform

Abstract

In recent years, selling fresh produce online has become increasingly popular, for instance, many e-tailers (e.g., Amazon and JD) with self-built delivery systems and livestreaming platforms (e.g., East Buy) have launched their private fresh produce labels. Moreover, some e-tailers are adopting livestreaming technology (e.g., JD Live) to sell private fresh produce labels. In these contexts, livestreaming platforms need to make strategic decisions about which delivery mode to use: PDM (platform delivery mode operated by e-tailers) or TDM (third-party delivery mode). To address these challenges, this study develops four theoretical models and provides key managerial insights. The findings indicate that, regardless of whether e-tailers enter the livestreaming market, delivery service level difference and base market potential will have a significant impact on livestreaming platforms’ optimal delivery mode strategies. Specifically, livestreaming platforms should choose PDM for their private fresh produce labels with relatively large base market potential. For fresh produce with relatively low base market potential, the delivery mode choice between PDM and TDM depends on the difference in delivery service levels. Furthermore, e-tailers entering the livestreaming market will lead livestreaming platforms to be more willing to choose TDM. These findings hold robust when considering the unit production cost of fresh produce, quantity loss of fresh produce, two independent departments owned by e-tailers and different freshness-keeping effort cost coefficients.