Impact of livestream selling on suppliers’ operational performance: an empirical study on an online retailer

Abstract

Purpose

Livestream selling is becoming an increasingly popular practice adopted by online retailers to develop a consumer-centric supply chain (CCSC). It improves consumer experience by integrating chat, watch and purchase functions, while also altering consumer behaviors by increasing impulse purchases. Online retailers’ responses to this change potentially impact suppliers’ operational processes. This study aims to empirically examine how livestream selling affects suppliers’ operational performance in terms of lead time and how suppliers’ product variety and order fulfillment capabilities moderate such an impact.

Design/methodology/approach

Using data from a leading online retailer in China, the authors use a least squares model with fixed effects to test the relationships. Both the two-stage instrumental variable model and the two-stage Heckman model are used to address potential endogeneity in this study.

Findings

The findings show that retailers’ usage of livestream selling can increase suppliers’ lead time. Furthermore, the negative impact is enhanced when a supplier has a higher level of product variety or a weaker order fulfillment capability.

Originality/value

This study explores how livestream selling alters consumer behavior, adversely affecting upstream suppliers’ operational performance. It underscores the need for a CCSC approach across all tiers, not just those closest to consumers. To achieve this, the research suggests that suppliers must align their capabilities with retailers’ consumer-centric practices to develop a CCSC, particularly by improving order fulfillment capability and cautiously expanding their product variety in livestream selling. The research further highlights the importance for retailers to consider changes in lead time to enhance the application of traditional inventory theory in the context of livestream selling.