Content area
Full text
1. Introduction
E-commerce platforms have become vital marketplaces for buyers and sellers to conduct business transactions with each other. According to the data of Electronic Commerce Research Center in China, the global e-commerce market sales hit $1.316 trillion in 2014[1]. E-commerce platforms, which serve to facilitate trade and generate revenue by charging from the participants, are typical two-sided markets. The pricing strategy is important because it will directly affect the number of customers and sellers on the two sides of the EC market. To survive from the increasingly intensive competition, various kinds of pricing strategies have been explored to appeal to the sellers. For example, eBay.com charges a listing fee plus a per-transaction fee from each seller, while Tmall.com charges a fixed entry fee plus a per-transaction fee.
Besides pricing strategies, e-commerce platforms also try to gain advantages through seller classification. By classifying the sellers in the market into two types (the individual sellers vs the professional sellers), Amazon.com, one of the largest e-commerce platform in reality, adopts different pricing strategies for them. Specifically, Amazon.com charges a subscription fee from the professional sellers, provides them with more technique supports, and has higher requirement on the quality of products they sell. To attract more buyers, Amazon.com also introduces the individual sellers to join its platform without subscription fee, whereas it provides them with less technique supports and has lower requirement on the quality of their products. Similar practices can be found from Taobao.com and eBay.com who classify the sellers into new and experienced ones. However, some other e-commerce platforms (e.g. JD.com, Vipshop.com, etc.) choose to cooperate only with the professional sellers, i.e., not introducing the individual sellers into the platform. In this case, a wondering question is that, what are the conditions when one cooperation strategy is more beneficial than the other one, and what is the difference between the pricing decisions of firms choosing different cooperation strategies?
Two-sided markets have been a fertile area for operations management researchers in recent years. Many researchers have focused on the decisions in pricing and design for platforms under various backgrounds (e.g. Armstrong, 2006; Chang, 2008; Griva and Vettas, 2011; Goos et al., 2011; Zhang and Luo, 2012). However, most of the prior literature assumes that the platform...