This study explores whether and when e-commerce platforms should extend the sale of private label products to third-party platforms, and how this strategic decision interacts with manufacturers' sales mode choices.
We constructed a two-stage game theory model to explore the strategic interactions between e-commerce platforms and manufacturers. By comparing the profits of e-commerce platforms and manufacturers under different distribution strategies, we identified the key factors influencing their strategic decisions.
The results show that platform entry into third-party platforms is jointly driven by two key factors: the potential market size of the private label brand and the intensity of competition for private label brand products across platforms. Specifically, e-commerce platforms are more likely to enter third-party platforms when the potential market for their private label brand is substantial and cross-platform competition for private label brands is intense. Moreover, extending the sale of private label brand products to third-party platforms can mitigate the double marginalization.
This study shifts focus from the introduction of private label brands on e-commerce platforms to the cross-platform distribution of private label brand products, thus advancing research in the areas of platform competition and private label strategy. This research reveals the trade-offs between brand expansion and market competition. The findings provide theoretical support and practical guidance for platforms designing private label brands' distribution strategies and for manufacturers choosing sales modes in an increasingly competitive market environment.
