E-commerce channel encroachment and logistics integration strategies considering product quality differences

To study the channel encroachment problem in the e-commerce supply chain, a game theory model of a supply chain consisting of a manufacturer and an e-commerce platform is developed in this paper. We examine the manufacturer's channel encroachment strategy and the e-commerce platform's logistics integration strategy given vertical differences in product quality. By discussing six different scenarios, we find that the e-commerce platform can prevent the manufacturer from channel encroachment with the basic product by integrating logistics. The manufacturer's channel encroachment, however, stimulates the e-commerce platform to integrate logistics, and the encroachment by the high-quality product has the strongest impact. In the extended model, the robustness of the main model's conclusions is verified by discussing the scenario of partial encroachment by manufacturers, unit production costs, manufacturers' altruistic preferences, and multi-period games.