Dual-channel Strategy Selection in Multinational Supply Chain in E-Commerce

Abstract

With the globalization of the economy and the rise of e-commerce, cross-border transactions have become increasingly prevalent, enabling consumers to access high-quality products from brands worldwide, and brands to open new market overseas. In order to examine the overseas market development strategy of domestic manufacturers on the basis of traditional retail, this paper applies game theory to establish two dual-channel models including a domestic manufacturer and an e-retailing platform, and analyzes the channel selection of the manufacturer based on analytical deduction as well as numerical calculations. According to the analysis, though the introduction of dual-channel can alleviate the double marginalization in the multinational supply chain, the Nash equilibrium only exists in the scenario where the domestic manufacturer chooses the agency sales channel, due to the profit compensation of commission. Overall, these results shed light on the operation of multinational supply chain and bring some valuable insights on overseas market development in the era of e-commerce.