Research On The Market Equilibrium Of The Fixed Rent And The Percentage Rent For Platform Retail Enterprises

With the development of retail industry,the rent,which remain to be the main source of income for shopping malls,has been gradually paid more attention by the managers and become a hot spot for scholars to study.This paper,drawing on the ideas of foreign literature,introduces the concept of a platform-based retail system,in which there is a retail platform,also known as a developer,and a number of retailers.Among them,the retail platform builds shopping malls or platforms and divides them into multiple stores for rent to retailers.They don't sell products by themselves,but only provide a trading environment for transactions between retailers and consumers.While retailers sell their products through the platform,they pay a fixed rent or a percentage rent,or both.In this paper,the mode of payment of only one kind of rent is called the single-rent strategy,while the mode of payment of both rent simultaneously is called mixed-rent strategy.From this perspective,such as shopping centers and department stores,as well as the Alibaba and Jingdong are all included in the study of the retail platform.This article constructs the general rent-making mathematical model of the retail platform.A comparative analysis of the market equilibrium under the three kinds of rent strategies is to identify the equilibrium results of different rent strategies and provide a reference basis for mechanism designers to determine a more effective rent structure.Firstly,This paper analyses the equilibrium results of the retail platform using single-rent strategy: the fixed rent strategy and the percentage rent strategy.It reaches the conclusion that four factors including the operating input cost,the admission fees,the minimum sales determined by negotiations and the elasticity coefficient of leasing area will be taken into account when the retail platform decide the optimal fixed rental rate.And when determining the optimal sales sharing rate,the retail platform consider the price elasticity of product demand,the elasticity coefficient of leased area,the operating cost and the admission fee.In comparison,retailers set lower prices for their products under a fixed rent strategy and lease larger areas under the percentage rent strategy.Secondly,This article analyzes the optimal decision-making behavior of the retail platform under the mixed leasing rent strategy,and concludes that under this strategy,the equilibrium fixed rental rate is positively correlated with the operating input cost,and negatively correlated with the minimum sales,the admission fees and the elasticity coefficient of the number of leased areas.The percentage rent rate is determined by the price elasticity of product demand and the elasticity of leased area.Compared with the single-rent strategy,retailers leasing area and the equilibrium price is between the two rent strategies of the single-rent strategy under the mixed-rent strategy.Finally,A comparative analysis of the social welfare situation under the three rent strategies shows that the social welfare is the largest under the mixed rent strategy and the smallest under the percentage rent strategy.Producer surplus is the largest under the percentage rent strategy and the smallest under the fixed rent strategy,which also explains the phenomenon that the retail platform and retailers prefer to use a percentage rent strategy from another perspective.