Impact of different platform promotions on online sales and conversion rate: The role of business model and product line length

Facing fierce competition, e-commerce platforms are implementing various promotional strategies to attract consumers. Based on real-world transaction data from the largest online retailer in China, JD.com, this study builds a three-level hierarchical promotion structure and evaluates the impact of different platform promotions on sales and conversion rate. We find that monetary promotions have a stronger impact on sales than gift promotions. Among monetary promotions, standard promotions are more influential than coupon promotions. And among standard promotions, direct and quantity promotions are more effective than bundle promotions. Moreover, we find that the platforms' business model (i.e., reseller or marketplace) and product line length have significant moderating effects on the impact of quantity promotions on both sales and the conversion rate, while the moderating effects on direct promotions are only observed on its impact on sales. Our findings offer guidelines for e-commerce platforms to implement efficient promotion strategies to improve their performance by generating online consumer purchase intention and behavior based on the business model and product line length.