When E-Commerce Platforms Operate as Blockchain Service Providers: The Optimal Combination between Blockchain and Selling Modes

Motivated by the growing trend wherein a myriad of e-commerce platforms offers blockchain services to their upstream suppliers to improve supply chain traceability, we theoretically examine the interplay between an upstream supplier's strategy in adopting blockchain technology and the platform's choice of selling mode. Our findings indicate that a supplier's inclination towards blockchain adoption correlates closely with his capability in quality management. Specifically, suppliers exhibiting a high level of quality management are poised to benefit more significantly from the adoption of blockchain compared to those with lower capabilities. Furthermore, the platform's selling mode decision is notably influenced by the integration of blockchain technology. In instances where the supplier's quality management capability falls below a specific threshold, implementing blockchain technology prompts the platform to shift from an agency mode to a wholesale mode. Conversely, surpassing this threshold encourages the platform to opt for an agency mode post blockchain adoption. Our study optimizes the "blockchain & selling mode" combination by examining the interactions between suppliers and platforms. The result demonstrates that equilibrium conditions are contingent on intricate interdependencies among the commission rate, quality management capability of the supplier and the proportion of novice consumers.