Brand spillover and information disclosure in the presence of a co-opetitive supplier

When a retailer outsources its private brand to a national brand firm, the retailer can leverage this relationship to promote its private brand product, which is referred to as brand spillover. Additionally, the retailer can provide detailed private brand information to alleviate consumers’ uncertainty about their preference for the product. We build a game-theoretic model to examine the information disclosure and brand spillover strategies in the context where an e-commerce platform sells products of two brands: its private brand (weak-brand) and a national brand (strong-brand) supplied by a co-opetitive supplier. The e-commerce platform outsources its private brand’s (weak-brand) manufacturing to the supplier. The equilibrium analysis shows that the platform’s choice of optimal strategy profile depends on two effects: the Consumer-heterogenization effect and the Brand-homogenization effect. Information disclosure can trigger the Consumer-heterogenization effect mitigating the intensity of price competition between the supplier and the platform, while brand spillover can cause the Brand-homogenization effect, enabling the platform’s private brand product to be more attractive. Both substitution and complementary relations are found between information disclosure and brand spillover depending on the cost efficiency. There exists a win–win outcome that both the platform and supplier can be better off from information disclosure and brand spillover, therefore, these strategies can serve as effective tools for supply chain coordination.