Researchers reveal suboptimal circumstances of platform bundling technique

The analysis group led by Prof. YU Yugang from University of Science and Technology of China (USTC) of the Chinese Academy of Sciences, collaborating with Prof. ZHANG Fuqiang from Washington University in St. Louis, studied the optimum bundling technique of retail enterprises below the platform provide chain construction. The outcomes have been revealed in Production and Operations Management.

With the assist of the brand new era of knowledge expertise and platform economic system, “platform” has turn out to be a typical characteristic of contemporary provide chain.

Previous research regarding the bundling technique principally targeted on the issues below the normal provide chain. In this examine, the researchers studied the company promoting of the platform with multi product bundling. Agency promoting is a gross sales mannequin the place suppliers pay a fee charge to the platform to realize entry and promote on to customers.

The researchers discovered that upstream suppliers would strategically enhance the retail worth of merchandise to compel the retail platform to make use of the bundling technique. In this case, when the fee proportion paid to the retail platform is within the center vary, the income of the platform would lower if the platform has bundling functionality, in contrast with the scenario with out bundling means. Also, the extreme retail worth of suppliers would scale back the residual worth of customers and harm social welfare.

Based on this discovering, the researchers proposed that the platform guarantees to not bundle gross sales prematurely to get rid of the damaging impact of bundle gross sales means on retail platforms and customers and to enhance social welfare.

This examine reveals the suboptimal characteristic of bundling technique within the operation of retail platform theoretically, which advantages the platform provide chain administration. The development and optimization of platform provide chain isn’t solely one of many main nationwide methods, but additionally an essential content material within the proposals for formulating the 14th Five-Year Plan (2021-2025) for National Economic and Social Development and the Long-Range Objectives Through the Year 2035.