Electronic Commerce Research

, Volume 19, Issue 4, pp 915–941 | Cite as

“Product + logistics” bundling sale and co-delivery in cross-border e-commerce

  • Baozhuang Niu
  • Jingmai Wang
  • Carman K. M. Lee
  • Lei ChenEmail author


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.


Cross-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).


  1. 1.
    Adner, R., Chen, J. Q., & Zhu, F. (2016). Frenemies in platform markets: The case of Apple’s iPad vs. Amazon’s kindle. Harvard Business School Technology and Operations Mgt. Unit Working Paper No. 15-087.Google Scholar
  2. 2.
    Agatz, N., Fleischmann, M., & Nunen, J. (2008). E-fulfillment and multi-channel distribution—A review. European Journal of Operational Research,187, 339–356.CrossRefGoogle Scholar
  3. 3.
    Barsh, J., Crawford, B., & Grosso, C. (2000). How e-tailing can rise from the ashes. McKinsey Quarterly,3, 98–109.Google Scholar
  4. 4.
    Cao, J., So, K. C., & Yin, S. Y. (2016). Impact of an “online-to-store” channel on demand allocation, pricing and profitability. European Journal of Operational,248, 234–245.CrossRefGoogle Scholar
  5. 5.
    Chakravarti, D., Krish, R., Paul, P., & Srivastava, J. (2002). Partitioned presentation of multi-component bundle prices: Evaluation, choice and underlying processing effects. Journal of Consumer Psychology,12(3), 215–230.CrossRefGoogle Scholar
  6. 6.
    Chen, B., & Chen, J. (2017). When to introduce an online channel, and offer money back guarantees and personalized pricing? European Journal of Operational Research,257(2), 614–624.CrossRefGoogle Scholar
  7. 7.
    Cho, J., Ozment, J., & Sink, H. (2008). Logistics capability, logistics outsourcing and firm performance in an e-commerce market. International Journal of Physical Distribution and Logistics Management,38(5), 336–359.CrossRefGoogle Scholar
  8. 8.
    Dahana, W. D., Shin, S. J., & Katsumata, S. (2018). Influence of individual characteristics on whether and how much customers engage in showrooming behavior. Electronic Commerce Research,18(4), 665–692.CrossRefGoogle Scholar
  9. 9.
    Delfmann, W., Albers, S., & Gehring, M. (2002). The impact of electronic commerce on logistics service providers. International Journal of Physical Distribution and Logistics Management,32(3), 203–222.CrossRefGoogle Scholar
  10. 10.
    Geng, S., Li, W., & Qu, X. (2017). Design for the pricing strategy of return-freight insurance based on online product reviews. Electronic Commerce Research and Applications,25, 16–28.CrossRefGoogle Scholar
  11. 11.
    Greenleaf, E., Johnson, E. J., Morwitz, V., & Shalev, E. (2009). The price does not include additional taxes, fees, and surcharges: A review of research on partitioned pricing. Journal of Consumer Psychology,26(1), 105–124.CrossRefGoogle Scholar
  12. 12.
    Gujo, O., & Schwind, M. (2007). Bid formation in a combinatorial auction for logistics services. Berlin: Springer.Google Scholar
  13. 13.
    Huang, G. Q., & Xu, S. X. (2013). Truthful multi-unit transportation procurement auctions for logistics e-marketplaces. Transportation Research Part B: Methodological,47, 127–148.CrossRefGoogle Scholar
  14. 14.
    Jin, M., & Wu, S. D. (2006). Supplier coalitions in on-line reverse auctions: Validity requirements and profit distribution scheme. International Journal of Production Economics,100(2), 183–194.CrossRefGoogle Scholar
  15. 15.
    Lai, G., Liu, H., & Xiao, W. (2018). “Fulfilled by amazon”: A strategic perspective of competition at the E-commerce platform. Working paper. Available at SSRN 3270958.Google Scholar
  16. 16.
    Lantz, B., & Hjort, K. (2013). Real e-customer behavioral responses to free delivery and free returns. Electronic Commerce Research,13(2), 183–198.CrossRefGoogle Scholar
  17. 17.
    Lim, G. G., Kang, J. Y., Lee, J. K., & Lee, D. C. (2011). Rule-based personalized comparison shopping including delivery cost. Electronic Commerce Research and Applications,10, 637–649.CrossRefGoogle Scholar
  18. 18.
    Michalak, T., Tyrowicz, J., McBurney, P., & Wooldridge, M. (2009). Exogenous coalition formation in the e-marketplace based on geographical proximity. Electronic Commerce Research and Applications,8, 203–223.CrossRefGoogle Scholar
  19. 19.
    Özener, O. Ö., & Ergun, Ö. (2008). Allocating costs in a collaborative transportation procurement network. Transportation Science,42(2), 146–165.CrossRefGoogle Scholar
  20. 20.
    Özener, O. Ö., Ergun, Ö., & Savelsbergh, M. (2011). Lane-exchange mechanisms for truckload carrier collaboration. Transportation Science,45(1), 1–17.CrossRefGoogle Scholar
  21. 21.
    Peng, L., Liao, Q., Wang, X., & He, X. (2016). Factors affecting female user information adoption: an empirical investigation on fashion shopping guide websites. Electronic Commerce Research,16(2), 145–169.CrossRefGoogle Scholar
  22. 22.
    Ramanathan, R. (2010). The moderating roles of risk and efficiency on the relationship between logistics performance and customer loyalty in e-commerce. Transportation Research Part E: Logistics and Transportation Review,46, 950–962.CrossRefGoogle Scholar
  23. 23.
    Shang, W. X., & Liu, L. M. (2011). Promised delivery time and capacity games in time-based competition. Management Science,57(3), 599–610.CrossRefGoogle Scholar
  24. 24.
    Song, B., & Li, M. Z. F. (2018). Dynamic pricing with service unbundling. Production and Operations Management, 27(3), 1334–1354.CrossRefGoogle Scholar
  25. 25.
    Song, J. Z., Yin, Y. H., & Huang, Y. F. (2017). A coordination mechanism for optimizing the contingent-free shipping threshold in online retailing. Electronic Commerce Research and Applications,26, 73–80.CrossRefGoogle Scholar
  26. 26.
    Song, J., & Regan, A. C. (2003). An auction based collaborative carrier network. University of California Transportation Center Working Papers 43.Google Scholar
  27. 27.
    Song, Y., Maher, T. E., Nicholson, J. D., & Gurney, N. P. (2000). Strategic alliances in logistics outsourcing. Asia Pacific Journal of Marketing and Logistics,12(4), 3–21.CrossRefGoogle Scholar
  28. 28.
    Stank, T., & Daugherty, P. (1997). The impact of operating environment on the formation of cooperative logistics relationships. Transportation Research Part E: Logistics and Transportation Review,33(1), 53–65.CrossRefGoogle Scholar
  29. 29.
    Wang, Y., & Sang, D. (2005). Multi-agent framework for third party logistics in e-commerce. Expert Systems with Applications,29(2), 431–436.CrossRefGoogle Scholar
  30. 30.
    Wang, F., Zhuo, X., Niu, B., & He, J. (2017). Who canvasses for cargos? Incentive analysis and channel structure in a shipping supply chain. Transportation Research Part B: Methodological,97, 78–101.CrossRefGoogle Scholar
  31. 31.
    Xiao, B., & Benbasat, I. (2011). Product-related deception in e-commerce: A theoretical perspective. MIS Quality,35(1), 169–195.CrossRefGoogle Scholar
  32. 32.
    Xing, Y., Grant, D. B., Mckinnon, A. C., & Fernie, J. (2011). The interface between retailers and logistics service providers in the online market. European Journal of Marketing,45(3), 334–357.CrossRefGoogle Scholar
  33. 33.
    Xu, J., Feng, Y., & He, W. (2017). Procurement auctions with ex post cooperation between capacity constrained bidders. European Journal of Operational Research,260, 1164–1174.CrossRefGoogle Scholar
  34. 34.
    Yao, Y. L., & Zhang, J. (2012). Pricing for shipping services of online retailers: Analytical and empirical approaches. Decision Support Systems,53, 368–380.CrossRefGoogle Scholar
  35. 35.
    Zhang, Z., Nan, G., & Li, M. (2016). Duopoly pricing strategy for information products with premium service: Free product or bundling. Journal of Management Information Systems,33(1), 260–295.CrossRefGoogle Scholar

Copyright information

© Springer Science+Business Media, LLC, part of Springer Nature 2019

Authors and Affiliations

  1. 1.School of Business AdministrationSouth China University of TechnologyGuangzhouPeople’s Republic of China
  2. 2.Department of Industrial and Systems EngineeringThe Hong Kong Polytechnic UniversityHong KongPeople’s Republic of China

Personalised recommendations