Product line strategy for green and non-green products in hybrid platform retailing

Abstract

With the burgeoning success of platform retailing and increasing consumer environmental awareness, numerous green product manufacturers have opted to collaborate with e-tailers, leveraging hybrid channels for product distribution. While this practice holds significant promise, it poses substantial challenges for firms in formulating optimal product line strategies. In recognition of this, we develop a platform supply chain model in which the manufacturer and e-tailer cooperate to distribute green or non-green products through hybrid channels, aiming to comprehensively elucidate optimal product line strategies within this framework. Our analysis reveals that for the manufacturer, when the commission rate is low, a decline in green investment efficiency leads to a transition from a two-product line that distributes green products through marketplace channel to a green product line; conversely, when the commission rate is high, the optimal strategy evolves from a two-product line distributing green products via reselling channel to a green product line. For the e-tailer, a two-product line distributing green products through reselling channel is typically the optimal strategy in most scenarios. Notably, when both the commission rate and green investment efficiency are high, a two-product line distributing green products through marketplace channel, under conditions of mild channel competition, can create a win–win-win outcome for the manufacturers, e-tailer, and consumers.