“Product + logistics” bundling sale and co-delivery in cross-border e-commerce
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When customers purchase products via cross-border e-commerce, they care about both the product quality and the logistics service quality. Actually, retailers are selling “product + logistics” to customers, although their contracted logistics service provider (LSP) might not be preferred by customers. In practice, it is observed that a retailer selling high-quality products tends to contract with multiple LSPs to ensure higher customer volumes and the overall high quality of “product + logistics”. However, interestingly, we find that the LSP’s profits might be negatively affected by serving two competing retailers, and preferences of the LSP and the retailer selling high-quality products through logistical cooperation result in two “prisoner’s dilemma” regions. We also identify the size of the system’s profit pie and the allocation rules among the competing LSPs and retailers. We show that it is possible to observe competing retailers’ co-delivery, which benefits both the LSP and the retailer selling high-quality products.
KeywordsCross-border e-commerce Logistics service Customer utility Prisoner’s dilemma
The authors are grateful to the editors and reviewers for their helpful comments. The first author’s work was supported by NSFC Excellent Young Scientists Fund (No. 71822202), NSFC (No. 71571194), Chang Jiang Scholars Program (Niu Baozhuang 2017), GDUPS (Niu Baozhuang 2017). Carman Lee is supported by ITF Project (No. K-45-35-ZM25). The corresponding author Lei Chen’s work was supported by the Joint Supervision Scheme with the Chinese Mainland, Taiwan, and Macao Universities from HKPolyU and RGC of Hong Kong (No. G-SB0T).
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