Live-streaming selling modes on a retail platform

To cater to consumers’ lifestyles and generate more demand, a manufacturer sells products by launching a live-streaming channel, in addition to a traditional online channel, on a retail platform. This paper studies two modes of live-streaming selling: merchant live-streaming and influencer live-streaming. Using linear demand functions, we model a game involving the manufacturer, streamers, and the platform. We derive the equilibrium results under these two modes: retail prices, streamer’s promotional effort level, and corresponding profits for all members. The results show that the appropriate mode of live-streaming adopted by the manufacturer is contingent on the commission rate of the streamer and the fixed signing bonus paid to the influencer. Secondly, introducing a live-streaming channel leads to more sales. However, the change in the retail price of the traditional online channel depends on the intensity of price competition between the traditional and live-streaming channels. Compared with the merchant live-streaming channel, although the influencer puts more effort into selling products, the retail price of the influencer live-streaming channel is not always lower, and the product sales are not always higher. Finally, by extending to the hybrid mode (i.e., merchant and influencer live-streaming channels are simultaneously adopted), numerical studies show that the manufacturer and the platform prefer the hybrid live-streaming mode but not streamers under certain conditions.