Winning markets via live-streams: Competitive manufacturers' channel strategies

Live-streaming shopping—a rapidly emerging sales format—has evolved into a mainstream consumption channel. To meet increasingly diverse consumer needs, many manufacturers now augment their traditional resale channels by collaborating with live-streaming influencers to boost digital sales. In this paper, we examine what factors shape manufacturers' decisions to adopt live-streaming channels and how competitive dynamics factor into those choices. We develop a game-theoretic model that compares different scenarios of live-streaming decisions. In particular, when a competitor does not adopt live streaming, a manufacturer's choice to do so hinges largely on product substitutability. By contrast, if a competitor has already adopted live streaming, the focal firm will likely follow suit-regardless of product differentiation. Higher commission rates and more pronounced market expansion effects further solidify the case for opening a live-streaming channel, although these factors can also reduce traffic in the traditional channel. Collectively, these insights furnish nuanced managerial guidance on selecting sales channels, setting prices, and investing in digital marketing, underscoring key trade–offs in multi–channel competition.