Access Mechanisms Of Retail Platform Based On Two-Sided Market Theory

In reality, large retailers implement different types of pricing and non-pricing mechanisms for access. They attract customers to the platform by reducing the transaction costs, and satisfy customers by creating or improving customer value. Specifically, there are four access mechanisms for retail platforms that give customers priority:the access mechanism of skewed pricing, the mechanism with collaboration of national-brand and private-label products, the mechanism of collaboration of physical and online channels, and the mechanism with a minimum brand value requirement. All these mechanisms are designed to attract more customers to the platform.What is the rationale of those four mechanisms that offer customers priority access? How to design those mechanisms? What are the factors and conditions which affect the implement of mechanisms? What are the management insights for both government and enterprise? All these questions are the important issues to study.From the industry's perspective, the retail industry is the one with the feature of "two-sided market", there are so-called "cross-group network externality" between manufacturers and customers. Based on the "two-sided market" theory and the characteristics of retail industry, this dissertation systematically studies the fundamental rationale, impact factors, implementing conditions, and the implications of four access mechanisms. In addition, it provides detailed explanation for traditional disputes, such as slotting allowances and related government regulations, and the development of private label. The research on the access mechanisms of retail platform based on the two-sided market theory is not only a supplement of the traditional retail economic theory, but also an expansion of the applications to general theory of bilateral market. Most importantly, it offers important theoretical implications for government as well as enterprises in operations and management.The specific research contains eight chapters as follows:Chapter1, Introduction. This chapter first provides motivations of this research, raises key questions to study, elaborates the theoretical and practical significance of these research questions, and defines the important concepts; secondly, this chapter describes the specific content of this research, establishes of a logical framework for analysis, outlines the research methods; and finally, this chapter highlights the contribution of this research and points out limitations.Chapter2, Literature Review. This chapter first distinguishes one-sided market from two-sided market. Secondly, this chapter summarizes the main subjects and key areas in two-sided market researches, and reviews existing research. Finally, this chapter organizes the main strategic behaviors of the retailers from the perspective of two-sided market.Chapter3, Introduction of retail platform and access mechanisms. Firstly, this chapter analyzes the micro-structure characteristics of the retail industry, demonstrates that the modern large retailers have already been transformed into the two-sided market platform theoretically, and point out the corresponding retail states. Secondly, this chapter analyzes the objective basis of the transformation mentioned above. Finally, the main competitive strategies have been summarized, which depend on the implement of access mechanisms including the skewed pricing, the brand collaboration, the dual-channel collaboration and the minimum requirement of brand value.Chapter4, Access mechanism one:skewed pricing. This chapter constructs monopoly and competitive retail platform pricing model, and deduces theoretical basis for two-sided pricing and the composites of that price. And this chapter explains why in our real life the retailer always charges the manufacturers the slotting allowances instead of the consumers. Then evaluates the economics effect of skewed pricing design from the price structure and the sum of two-sided price, analyzes the effects of intra-group network externality on pricing strategies of retail platform, discovers different combinations of two-sided customers will produce different manufacturers'price. Finally, this chapter provides countermeasures and suggestions for pricing strategies and regulations on slotting allowances based on above analysis. Chapter5, Access mechanism two:Brand collaboration mechanism. The development of private-label which produced differentiated advantage with national-label makes retail platform more attractive to consumers. The chapter constructs two-sided model and comes to the optimal boundary between private label and national-label and its influencing factors, demonstrates the motives and economic effects of private label, explains the reasons why private label in china are locked in low degree of development and foresees its trend.Chapter6, Access mechanism three:dual-channel collaboration mechanism. Firstly, how the dual-channel collaboration mechanism acheieve the customers' priority access is analyzed; Secondly, the writer builds the evolutionary game model of the dual-channel collaboration mechanism on the competitive retail platform. Finally this chapter analyzes the retail platform channel development strategies.Chapter7, Access mechanism four:minimum brand value requirement. First, the rationale of access mechanism to attract consumers is discussed. Secondly, a monopoly model is built to determine the optimal brand value requirement and its conditions as well as the impact factors. Thirdly, the model is expanded to derivate the equilibrium conditions of the brand value requirement mechanism on the competitive retail platform. Finally, suggestions are provided for implementing the access mechanism with a minimum brand value requirement.Chapter8, Suggestions and Recommendations. This chapter organizes and summarizes the main findings in details, points out the limitations, and provides several directions for future research.There are three contributions of this dissertation:First, this research extends the traditional economic theory with unilateral market structure to a bilateral market. It combines the realistic foundation with two-sided market theory which not only enables manufacturers, platforms and consumers to get into a unified framework, but also takes considerations to two-sided customers demand and complementarities and substitutes between them. Based on two-sided theory, this research provides a better explanation to analyze the vertical channel structure from social welfare perspective.Second, this research designs four mechanisms for operating:access mechanism, brand collaboration, channel collaboration, and minimum brand value requirement, then builds analytical models based on two-sided market theory. To the best of my knowledge, from the two-sided market point of view, the existing research is limited to the study on slotting allowances pricing strategy, and lack of papers that systematically study the four access mechanism in a unified framework. This dissertation builds theoretical models for customer-driven access mechanism under two-sided market theory, discusses the details of four access mechanism, and expands the scope of research of retail platforms.Third, this research provides a new explanation of the two-sided retail platform theoretical explanation. First, this study characterizes the significant impact of intra-group network externalities on retail platform pricing strategy. Secondly, the boundary of brand collaboration mechanism is obtained. Thirdly, the equilibrium of traditional retail platform for enterprises to implement the dual-channel coordination mechanism is calculated. Finally, it finds the optimal minimum brand value requirement and impact factors when manufacturer's brand value has a linear distribution.Some limitations of this dissertation:first, from a methodological point of view, the four access mechanisms are studied analytically not empirically, due to the difficulties in obtaining data in the field; second, the brand collaboration, channel collaboration, and the minimum brand value requirement might involve unfair competition and antitrust issues, which is beyond the scope of this dissertation but worthwhile for future study.