The effects of similarity in supplier referral programs on peer-to-peer platforms: From the coopetition perspective

Peer-to-peer platforms, such as Uber and Airbnb, are increasingly leveraging referral programs to attract new suppliers in addition to new customers (aka supplier-get-supplier campaigns and customer-get-customer campaigns). In contrast to customer referral programs where referrers and receivers mainly cooperate, supplier referral programs involve referrers and receivers sharing knowledge and competing for customers simultaneously, thereby obscuring the assessment of the receiver (new supplier) sales performance. Drawing from the literature on coopetition, this study investigates how the similarities between referrers and receivers in supplier referral programs impact the performance of receivers through coopetition. We based our investigation on a flash peer-to-peer social commerce platform in China, in which social media were leveraged to foster a dynamic and tension-filled coopetiton environment for individual suppliers. Analyzing a 2-month referral dataset from the platform through regression analyses, we find that while demographic similarity between referrers and receivers enhances the receivers’ performance, geographic similarity attenuates their performance. Moreover, the positive effect of demographic similarity on receivers’ performance decreases as the referrers’ experience increases. With an additional analysis, we have also uncovered the distinct effects of the aforementioned similarities on the performance of referrers. Collectively, these findings have important implications for both research and practice on extending referral programs from the demand side to the supply side.