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ABSTRACT
The online-to-offline (O2O) business mode has on-demand features to offer consumers instant fulfillment from a local store upon their online order. The O2O mode has attracted many more consumers recently. Using empirical evidence from a leading O2O platform in China, our study focuses on the market entry issue in the O2O context. Upon the new entrant entering the market, existing listed sellers implement a higher overall promotion to their consumers by enlarging the direct promotion extent but reducing the other types of promotions, including coupon, bundle, quantity, and gift promotions. However, the O2O platforms reduce the promotions level to the consumer orders from the existing listed sellers. The platform’s and existing listed sellers’ promotions increase consumers’ purchase frequency but lower their purchase amount per order. The extent of these impacts depends on the geographic location of the new entrant. Our findings provide guidelines for the O2O platforms and listed providers to implement appropriate promotion strategies to attract consumers when considering the impact of certain new providers entering the O2O market.
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No potential conflict of interest was reported by the author(s).
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Notes on contributors
La Ta
La Ta ([email protected]) is a Ph.D. student in the Business School at the Central University of Finance and Economics, Beijing, China. His research interests include e-commerce, business analytics, and service operations. His work appears in such journals as Decision Support Systems.
Xun Xu
Xun Xu ([email protected]) is an associate professor in the Department of Information Systems and Operations Management at California State University, Dominguez Hills. He holds a Ph.D. in operations management from Washington State University. Dr. Xu’s research interests include service operations management, supply chain management and coordination, sustainability, e-commerce, data and text mining, and hospitality and tourism management. He has published over 70 papers in such journals as Computers and Industrial Engineering, Decision Sciences, Decision Support Systems, European Journal of Operational Research, Information and Management, International Journal of Electronic Commerce, International Journal of Production Research, Journal of Business Research, Journal of the Operational Research Society, and many others.
Hongyan Dai
Hongyan Dai ([email protected]; corresponding author) is a professor in the Business School, Central University of Finance and Economics, Beijing, China. She received her Ph.D. from Hong Kong University of Science and Technology. Dr. Dai’s research interest include sharing economy, O2O logistics network design, and data-driven optimization. She published over 20 papers in such journals as Management Science, Decision Support Systems, European Journal of Operational Research, International Journal of Production Economics, International Journal of Production Research, and Annals of Operations Research. She is the principal investigator for several national- and provincial-level projects, including the Major Research Plan of the National Natural Science Foundation of China, and several industry projects, such as Jingdong Daojia, State Grid, and Siemens. She serves as a research fellow of the China Society of Logistics and a review specialist of the National Natural Science Foundation of China.