Research On Governance And Competition Policy Of E-Commerce Vertical Relationship

Over the past decade, the development of e-commerce industry catch the attention. According to released data from the China Electronic Commerce Research Center, in2013, Chinese online retail market scale reached1.8851trillion yuan, accounting for8.04%of total consumption of consumer goods; Particularly, Alibaba’s Taobao electronic business platform sales exceeded19.1billion yuan in one day, which had surprised the public. After one decade of tempered, e-commerce has been accepted by consumers, and integrated into people’s daily lives. Today, online shopping is not just fashion, and is increasingly becoming a fundamental part of the new economic growth point and the people’s livelihood. When being sought after and acclaimed,e-commerce has attracted the attention from the government, and Premier Li Keqiang in two sessions this year’s government work report had proposed to create a favorable environment that encourages innovation and development of e-commerce. In the context of a large e-commerce development, platform operators have become a common choice of many commercial enterprises. The e-commerce platform is also regarded as combined model, which is generally operated by the middleman,and includes the function of logistic,payment,security etc. For example, TaoBao,JingDong and Amazon has grown up to big platform firms.The development of e-commerce also led to the rapid growth of related support services industry. Logistic and payment industry developed rapidly. But we can see, for the difference of industrial characteristics, the e-commerce firms are not completely synchronized with their assistant industries. For example, the logistics bottle as well as payment of traps and other phenomena, reflects the e-commerce industry chain imperfect and immature. In order to solve the cooperated problems with the service provider industry, some e-commerce firms do a lot of changes and improvements. For example, Alibaba build a third-party payment platform named Alipay, which aimed to ensure the safety of the customer’s payment; JingDong and Amazon build logistics system to ensure that the product is safe and timely delivered. On the contrary, S.F. Express and ICBC involved in the field of electronic business. Thus, vertical integration in the e-commerce industry is increasingly distinct. Currently, e-commerce activities mainly include two types:one is based on B2C (Business-to-Consumer) and C2C (Consumer-to-Consumer) types of shopping sites as a representative to meet consumer demand for network-oriented product line retail activity; Another to B2B (Business-to-Business) website, which represented the relationship between enterprises based on supply and demand, in order to meet the needs of enterprise business-oriented online transactions. Unless otherwise noted, the main object of this study generally refers to a narrow-based online retail e-commerce activities.Although the electronic commerce industry appears platform and vertical integration trend, but, if these models and strategies are suitable for the current industrial real? E-commerce business model increasingly diverse face of these division change, complex business practices, how to explain the terms of economics? Most conventional economic theory is based on the industry’s focus on traditional industries, and proposed to adapt to different industrial environments vertical relationship governance model, or vertical integration model for the next internal hierarchical coordination or portrait mode split market transactions, or living in networked governance model between the two. In recent years, e-commerce integration and restructuring practice within the industry, and industry trends of traditional industries vary widely, even opposite. For example, most of the traditional industries move towards the emergence of modular longitudinal split or control type and other governance model, but the current trend of e-commerce industry is vertically integrated. Reflections on the e-commerce platform by vertical governance model, we will further find that the following issues for the leading manufacturers of electronic commerce industry chain, which the chain the vertical relationship governance model should be chosen in order to achieve synergy chain vertical relationship? How to deal with the relationship between the upstream and downstream service providers and customers for platform vendors? What factors do platform vendors and pricing gains mainly affected by? These questions need to be answered through theoretical studies,the study of this paper is on the basis of these problems unfolded.This paper mainly studies the vertical relationship management. Firstly, we analyzed the characteristics of e-commerce and the services providers, concluded the elements of the industry chain vertical relationship management, and build six different models of e-commerce industry leading ownership chain governance model on this basis; Then we separately proposed the vertical coordination mechanisms and bilateral market competition point of view, to study the differences between e-commerce vertical relationship with governance models. Finally, we did the comparative analysis through mathematical model to analyze the way, given the corresponding optimal decision-making and competitive strategy. The main work of this paper include the following aspects:(1) The paper did the theoretical studies from transaction costs, market forces and global value chains perspective, and intend to determine the mode of governance in the industry chain theory based on the value chain as a research framework. Domestic and international research in the field of e-commerce platform were summarized based on the dimensional business model, platform ownership, consumer behavior and pricing mechanisms, such as the platform to do a thorough analysis of the current situation and the lack of a clear platform for e-commerce-related research. In-depth interpretation of the research status of two-sided market theory, research scholars at home and abroad in the platform pricing strategy and platform for competitive differentiation and other aspects of the summary evaluation of this theory is to extract from the direction of innovation. It also described the application of the specific markets in the areas of two-sided market trade intermediary, bank card organizations, the media industry and operating system platforms, etc.(2) Under the SCP paradigm, we systematically analyzed the characteristics of e-commerce industry and its associated industries express industry and the online payment industry, based on this analysis the paper extracted the elements of e-commerce industry chain vertical relationship management, and then combined with the global value chain governance vertical relationships model and actual cases to build e-commerce platform Taobao (on behalf of third-party open platform mode), Jingdong e-commerce platform (on behalf of proprietary and open platform coexistence mode), SF e-commerce platform (on behalf of the leading logistics service provider model), business Bank e-commerce platform (on behalf of the dominant mode of payment service providers), COFCO e-commerce platform (on behalf of the whole industry chain model), Yintai Store e-commerce platform (on behalf of self-platform model),and made a comparative analysis of these models and evaluation.(3) Applying of the manufacturing sector supply chain contract theory, combined with newsboy model, we build the supply chain model to describe a service e-commerce platform. In the model, the logistics service products based on the assumption that the introduction of variable order logistics and logistics services prices, analyzing the material supplier, electronic business platform synergy and logistics service provider between the three. On this basis, we analyzed the e-commerce platform to market, network and vertical integration mode vertical coordination mechanisms, and three modes of coordination mechanism under the numerical analysis showed that networking and vertical integration governance model is superior to the market model.(4) Based on multilateral market characteristics of e-commerce platform, utilizing the two-sided market theory to study the relationship between the monopoly of a single longitudinal platform. We build an open platform for third-party (Taobao mode), self-oriented and semi-open platform (Jingdong mode), the leading platform for logistics service providers (SF mode), a leading payment service provider platform (ICBC mode) and other four chain form bilateral market model. In the platform revenue model, combined with the actual operations of the e-commerce platform, the introduction of overlay network effects, some new variable sales revenue, logistics revenue, advertising revenue and other income, so as to expand the platform revenue model established by current bilateral market theory. Then, on this basis, we analyzed their optimal pricing strategy and platform effectiveness of operational strategies such platforms and give constructive comments.(5) On the basis of the aforementioned studies, further study of the relationship between the two competing vertical electric business platform has been completed. On the bias of industrial organization theory Hotelling model, we build revenue model with differences (Taobao and Jingdong) and quality of service differentiation (Taobao ICBC) two dimensions, constructed the corresponding competition model, passing between them comparative analysis of earnings functions, the results show that, whatever the mode of competition, the platform can increase revenue differentiated competitive platform; revenue model in the case of differences, the introduction of other revenue model can increase profits competing platforms; differences in the quality of service, the platform profits and is directly proportional to its own network externalities.