Coordination of a dual-channel e-commerce platform supply chain with fairness concerns and financial constraints

Besides the existing offline channels, micro, small, and medium-sized enterprises (MSMEs) are likely to open new online channels in the digital economy era. Since an e-commerce platform (ECP) can assist MSMEs in overcoming technological and financial constraints, this article investigates a new coordination problem of a dual-channel e-commerce platform supply chain with MSMEs’ fairness concerns and financial constraints. Considering whether the ECP’s decision-making power is higher than or equal to the MSME, we formulate mathematical models of the Stackelberg game or simultaneous game for the wholesale price contract (WP) to derive optimal decisions of channel members when the ECP is unwilling to share the MSME’s cost. To enhance the performance, a new online cost-sharing and two-part tariff contract (OCTT) is developed for partial coordination when the ECP agrees to share only the MSME’s online cost. For perfect coordination, a revised revenue-cost-sharing and two-part tariff contract (RRTT) is proposed to achieve the best outcome of the centralized scenario when the ECP agrees to share both the MSME’s online and offline costs. Analytical findings reveal that under WP and OCTT with a fixed slotting fee, the ECP benefits from financial constraints but suffers from fairness concerns. To enhance the ECP’s profitability under OCTT and RRTT, appropriately varying the slotting fee with key parameters is significant. In this case, reducing fairness concerns or interest rates and promoting a relatively high online channel preference benefit the MSME. Interestingly, the ECP benefits from the high decision-making power under WP and the equal decision-making power under OCTT or RRTT. From the supply chain’s perspective, RRTT demonstrates superior performance and robustness to variations of critical factors, making it the best option.