The Effects of Agency Selling on Reselling on Hybrid Retail Platforms

ABSTRACT

Numerous online retail platforms have begun to operate in a hybrid mode, which blends the use of a traditional reselling mode (operated by the platform owner) and increasingly prevalent agency-selling mode (operated by the affiliated agency sellers) to leverage internal and external resources. Two types of sellers interact and cooperate to improve the competitiveness of the hybrid platform in the online market. Although the hybrid mode is an inevitable trend that helps alleviate the burden of product expansion for reselling, reselling may also face sales cannibalization from agency selling. We empirically explore the effects of agency selling on reselling by using panel vector autoregression. Findings show that agency selling has a positive effect on reselling. The number of agency sellers may strengthen, whereas the market concentration of agency selling will weaken such effect. Furthermore, agency- selling participation is harmful to the positive effect of agency selling on reselling but is statistically marginally significant. These findings have important theoretical implications to enrich the two-sided market and extend the interorganizational relationship and coopetition theories. Moreover, our results also offer several crucial managerial implications for platform owners.

KEY WORDS AND PHRASES:

• Agency selling
• retail platform
• hybrid mode
• market structure
• online retail
• product competition
• reselling
• two-sided market

Acknowledgments

This research was supported by the National Natural Science Foundation of China under Grant #71922012, Grant # 71872082, and Grant #71472083.

Additional information

Notes on contributors

Qi Li

QI LI ([email protected]) is an assistant professor in the Department of Marketing at the School of Business, Zhejiang Gongshang University, China. She received her Ph.D. in business administration from Nanjing University, China. Her research interests include platform strategy, social media, and operations management. Her work has been published in Journal of Strategic Information Systems.

Quansheng Wang

QUANSHENG WANG ([email protected]) is a professor in the Department of Marketing and E-Commerce at the School of Business, Nanjing University. He received his Ph.D. in business administration from Nanjing University. Dr. Wang’s areas of expertise include platform strategy, online consumer behavior, and multichannel marketing. His work has been published in Information & Management, Journal of the Association for Information Systems, Journal of Strategic Information Systems, Journal of Electronic Commerce Research, and Electronic Markets.

Peijian Song

PEIJIAN SONG ([email protected]; corresponding author) is an associate professor in the Department of Marketing and E-Commerce at the School of Business, Nanjing University. He received his Ph.D. in management science and engineering from Fudan University, China. His research interests include platform strategy, electronic commerce, and IT innovation. His work has been published in such journals as MIS Quarterly, Production and Operations Management, Decision Support Systems, Information & Management, IEEE Transactions on Engineering Management, and Journal of International Marketing. He serves on the editorial review boards of Journal of Global Information Management and Electronic Commerce Research and Applications.