The Research On Pricing Model Of B2C Platforms Based On Two-sided Markets Theory

Nowadays, online shopping has become a new business model, which has been widelyaccepted by consumers and suppliers because of its wide coverage and convenience. Withonline payments and logistics systems improving, consumers have more requirements forhigh-quality products. At this point, the B2C e-commerce which provides high-qualityproducts is favored by consumers, and is becoming the main driving force of the onlineshopping development in C hina. In our country, there exist two kinds of B2C e-commercewebsite (merchant model and two-sided platform model) according to their different profitmodels. Our research focuses on the two-sided platforms. We build models to study thepricing strategy of B2C e-commerce platforms based on two-sided market theory.The article is organized as follow. Chapter one introduces the development history andthe status of B2C e-commerce in China. Then we classify the existing B2C e-commercewebsite into two categories: merchant model and two-sided platform model. We identify thestrengths and weaknesses of each one, and clear that our study is about two-sided platforms.Chapter two briefly reviews previous studies related to two-sided market and platform pricingstrategy. Chapter three summarizes the operating model and two sided market features of B2Ce-commerce platforms. Then in chapter four, we build two-sided market pricing models ofmonopoly platform based on service mode(single service and differentiated service) Thestudy shows that:1) the price charged by platform is dependent on the strength ofcross-network externality.2) the monopoly platform can get extra users and profits byoffering differentiated service.3) in order to maximize the profits, the platform should chargeless for the low-quality service and more for the high-quality service. In chapter five, bybuilding Hotelling model, we analyze the duopoly competition based on accessing mode(single-homing and multi-homing). The study shows that:1) when all users are single-homing,the price charged to one user is equal to his transportation cost minus the value he gets fromusers on other side.2) when part of the users in one side are multi-homing, the price chargedto the single-homing side is related to users’ transportation and cross-group networkexternality, while the price charged to the multi-homing side is only related to cross-group network externality. In the final part, we summed up the whole thesis, and showed thedeficiency of this research as well as research direction.