The Adoption and Openness of Livestreaming on the Retail Platform with Third-Party Sellers

Abstract

Observing the fast development of livestreaming, this paper investigates its adoption on the retail platform and examines its impact on merchants. We develop a game-theoretic model in which a leading retailer and a third-party seller engage in price competition. Our model fully considers the initiative of live streamers in this asymmetric competition. We find that the streamer’s cost and the seller’s initial awareness are two key factors affecting the adoption of livestreaming. Specifically, when the streamer’s cost is low, or it is intermediate and the seller’s initial awareness is high, the retailer adopts and opens livestreaming and the seller also adopts it; when both factors are intermediate, the retailer adopts livestreaming but does not open it to the seller; when both factors are high, the retailer adopts and opens livestreaming but the seller does not adopt it; otherwise, the retailer does not adopt livestreaming. Our results also suggest that the presence of livestreaming benefits the retailer but may hurt the seller especially when the seller’s initial awareness is high. Our findings provide relevant and useful implications for both the platform retailer and third-party seller in their livestreaming decisions.

Keywords

• e-commerce
• livestreaming
• retail platform
• competition