Research On The Pricing Mechanism Of China's Online Retail Platform From The View Of Two-sided Market

Online retail industry is an important component of the China's economy;it plays a significant role in stimulating domestic demand and promotes economic restructuring.Online retail platform is a carrier of retail transactions between the two sides and the core of the entire online retail activities.However,with the rapid development and application of Internet technology,the competition between the online retail platforms is becoming increasingly fierce.As one of the leading research hotspots in the theory of industrial organization,the two-sided market theory has broad market potential in the new economic form.Different from the one-sided market,the two-sided market has the characteristics of price structure non-neutrality,indirect network externality,complementarities and dependence;it mainly studies the pricing behavior and competitive strategy of enterprises.Online retail platform is one of the typical two-sided markets,but the scale of online retail transactions grow rapidly while the profitability of the platform is in a lower level,the platform needs to develop a reasonable price structure,in order to maintain the long-term operation.This paper constructs the pricing model of online retail platform based on two-sided market theory,and associated with the actual situations.It's advantageous to long-term sustainable development of online retail platform,and makes it play an important role in promoting economic transformation.This paper reviews the relevant content of the theory of two-sided markets,and analyzes the development status of China's online retail platform,which lays the theoretical and practical foundation for the following model.The key point of this paper is to study the price strategy of online retail platform that in order to obtain the maximum profit under the monopoly market structure and duopoly market structure.And the model comprehensively considers the influence of the indirect network externality,self network externality,and consumer's preference for the supplier's products or services,platform matching technology,user's multi-homing and other factors on the platform pricing mechanism.Then the paper divides the supplier group with the price elasticity of demand,and constructs a price discrimination model of the online retail platform to the suppliers,which to research the influence of the platform's price discrimination behavior on the user access scale,platform profit and social welfare.At the end of this paper,the research conclusions,suggestions and future research directions are pointed out.This paper comes to following conclusions: The pricing of a group is negatively correlated with the indirect network externality which the group to another group;Platform pricing for consumers is negatively correlated with self network externality,but the relationship between suppliers pricing and self network externality depends on the relative size of the “complementary effect” and “competitive effect”;The higher matching technology could improve the user's expected transactions,and the platform will reduce the user's pricing;The degree of differentiation on competitive platform could increase the platform's pricing and profit level,but it also cause the loss of total social welfare;The platform tends to charge higher fees to the single-homing users,and lower fees to the multi-homing users,the platform has the motivation to restrain the user's multi-homing activities;And platform's three level price discrimination for suppliers could meet the needs of different supplier levels,also increase the user access scale,platform profits and social benefits.