Eco‐Labels and Sales Mode Selection Strategies for E‐Commerce Platform Supply Chain

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Abstract

ABSTRACT The E‐commerce platform supply chain (EPSC) is maturing as a result of the platform economy's growth, and an increasing number of eco‐friendly producers are joining E‐commerce platforms to increase the sales of their eco‐friendly goods. However, without an information disclosure mechanism, customers find it challenging to completely comprehend or grasp the green information on items. Eco‐labels, as a green declaration symbol, can effectively reduce the information asymmetry between consumers and manufacturers. This paper establishes four game models for the EPSC under industry and government labels, considering the reselling and agency selling modes. The effects of consumers' green perceptions, eco‐label credibility, and R&D cost coefficient on the operation of EPSC, consumer surplus, environmental quality improvement, and social welfare were analyzed. We find that the enhancement of consumers' green perceptions and eco‐label credibility are beneficial for improving the product's greenness, increasing the profit of the E‐commerce platform, consumer surplus, environmental quality improvement, and social welfare, but it may not necessarily be beneficial for the manufacturer and the overall profitability of EPSC. Additionally, the profitability of the E‐commerce platform, consumer surplus, environmental quality improvement, and social welfare are more susceptible to shifts in consumers' green perceptions, whereas increasing the eco‐label credibility is more beneficial to the revenues of the manufacturer and EPSC. From the perspective of pursuing profits, the industry label is often chosen by the manufacturer, whereas the E‐commerce platform tends to choose the government label. Whether the optimal sales mode selection strategy of the manufacturer under the eco‐label is beneficial to the E‐commerce platform also depends on the size of unit production cost, commission rate, and consumers' green perceptions (eco‐label credibility). Moreover, EPSC benefits most from the reselling mode under the industry label, whereas consumer surplus, environmental quality, and social welfare are better served by the reselling mode under the government label. Conversely, the manufacturer is more likely to decide to resell the product under the government label when the R&D for green products is highly challenging.

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