Research on Selection of Obstruction Strategy and Sales Mode under Competition in E-commerce Platform

The rapid development of internet technology has led to a large number of suppliers shifting their sales channels online through joining e-commerce platforms. In this paper, we study the obstruction strategies employed by suppliers who have already joined e-commerce platforms in response to potential suppliers, as well as the sales mode choices of these potential suppliers. We construct a two-stage supply chain model consisting of an e-commerce platform and two suppliers. We find that when the opportunity cost of potential supplier is moderate, incumbent supplier can effectively deter their entry by adjusting sales volume or pricing strategies. Successful implementation of these obstruction strategies lead to a reduction in the incumbent supplier’s own profit. We also find that regardless of whether opportunity cost is considered, potential supplier tends to choose the merchant model when their limited capability is low. This preference contradicts the selection of the e-commerce platform. When the potential supplier joins the e-commerce platform in the merchant model, the e-commerce platform always benefits. When product substitutability is high or the commission rate is low, the e-commerce platform’s revenue is lower if the potential supplier enters with an agency model.