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| Supplier Encroachment Strategies with Customer Switching |
| DAI Bin，DU Yuwen，YANG Qingbei，ZHANG Jiajie |
| 1. Wuhan University, Wuhan, China；2. University of Chinese Academy of Sciences， Beijing, China |
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Abstract Considering the problem of the supplier encroachment in the cross-border e-commerce industry, the direct-to-customer strategy model and platform agency selling strategy model are respectively constructed, both with and without the customer switching behavior. The impact of customer switching behavior on the channel encroachment strategies are analyzed. The results show that considering customer switching, when the wholesale price is high, with the increment of the proportion of non-loyal customers, the type of supplier’s optimal distribution channel strategy will first transfer from direct-to-customer to platform agency selling, and then end up with direct-to-customer. When the wholesale price is low, the supplier will always prefer direct-to-customer strategy. Furthermore, the results indicate that customer switching behavior would induce the supplier to select direct-to-customer strategy. In addition, customer switching behavior will promote differentiated pricing between the supplier and the platforms, and mitigate the price competition between them. Moreover, when the supplier and platform adopt differentiated pricing, the supplier’s optimal distribution channel strategy will make both the supplier and the platform better off, creating a win-win outcome.
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Received: 01 November 2022
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