Streaming into Competition: How Live Channels Reshape Power in Online Retail Duopolies

Abstract

Several retailers have adopted live streaming marketing (LM) channels to boost product sales. While LM can reduce consumer uncertainty and thus impact sales positively, it may also increase product returns due to impulsive purchases, thereby affecting retailer profitability. This paper develops an analytical model to explore the optimal pricing and channel strategies of two competing retailers. Our results show that: (1) symmetric adoption of LM can intensify price competition and distort price-quality signaling; (2) price competition makes the no-LM equilibrium unstable, with the weaker retailer more inclined to adopt LM; and (3) LM adoption, whether by one or both retailers, can lead to a win–win outcome for both retailers and consumers.

Keywords

live streaming e-commerce, multi-channel retailing, product return, purchase uncertainty