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Strategic live streaming choices for vertically differentiated products

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  • Lu, Yusheng
  • Duan, Yongrui

Abstract

Live streaming as a new shopping channel can disclose revealing information on quality preference. With this channel, viewers can obtain additional product details along with entertainment utility from streamers' product showcasing. This paper examines live streaming strategies for vertically differentiated firms that sell products of high or low quality. We obtain the optimal pricing strategies for the high-quality, low-quality firms under a particular live streaming strategy (i.e., (N,N); (S,N); (N,S); (S,S)). We identify how the competing firms should set their live streaming strategies. As the entertainment value increases, firms with a competitive edge are more willing to adopt live streaming. If the “quality-adjusted cost†is lower than 12, then the high-quality firm is prone to adopt live streaming; otherwise, the low-quality firm is prone to adopt live streaming. The entertainment value greatly influences the adoption decision. When the streamer is more popular and charges a medium fixed cost, the competitive firm (i.e., small marginal cost, high quality) should adopt live streaming to expand its marketplace. The other firm should refuse live streaming and emphasize improving its product quality and competitiveness. Interestingly, live streaming is not always beneficial to firms when the competitive advantages dominate the impact of live streaming and the informative degree is improved little.

Suggested Citation

  • Lu, Yusheng & Duan, Yongrui, 2024. "Strategic live streaming choices for vertically differentiated products," Journal of Retailing and Consumer Services, Elsevier, vol. 76(C).
    • Handle: RePEc:eee:joreco:v:76:y:2024:i:c:s0969698923003338
    DOI: 10.1016/j.jretconser.2023.103582
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    Cited by:

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    3. Chen, Yue & Wang, Yong & Zheng, Jing & Song, Yimin & Wen, Yue, 2025. "Self-reliance vs. Dependence: Optimal live streaming strategies selection for E-retailers at different developmental stages," Journal of Retailing and Consumer Services, Elsevier, vol. 84(C).
    4. Zhang, Haiyue & Sui, Ronghua & Zha, Xiaoyu, 2025. "The key opinion leader introduction and pricing strategy for live streaming e-commerce platforms considering the impact of network effects," Journal of Retailing and Consumer Services, Elsevier, vol. 82(C).
    5. Yue Yu & Songshi Shao & Mingli Yuan & Minghe Sun, 2025. "Traditional online and live-streaming dual-channel strategies and pricing policies," PLOS ONE, Public Library of Science, vol. 20(1), pages 1-24, January.
    6. Dong, Jingyang & Guan, Zhimin & Yu, Tianyang & Guan, Xingrui & Zhang, Jun, 2025. "Manufacturer encroachment through live streaming considering consumer disappointment aversion," Journal of Retailing and Consumer Services, Elsevier, vol. 83(C).
    7. Li, Qingying & Zhu, Shuo & Choi, Tsan-Ming & Shen, Bin, 2025. "Maintaining E-commerce supply chain viability: Addressing supply risks with a strategic live-streaming channel," Omega, Elsevier, vol. 133(C).
    8. Zhen, Xueping & Wang, Ping & Li, Xinran, 2024. "The Streamer's sales strategy choice considering sales effort," Journal of Retailing and Consumer Services, Elsevier, vol. 78(C).
    9. Gaoke Wu & Wensheng Yang & Xinru Hou & Mengze Chen, 2025. "Selection of Live‐Streaming Sales Methods for the Manufacturer and Streamer: The Role of the MCN Institution," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 46(4), pages 2540-2561, June.

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