Supply strategies in live stream supply chains: The role of market overlap

Selling in live-stream channels can stimulate market demand by providing lower prices than manufacturers' online channels. Cooperating with streamers can bring extra markets for manufacturers. However, manufacturers should pay slotting fees to streamers before cooperating, and they may face market overlap and competition. One way to alleviate competition is to control the quantity of products for streamers. We develop an analytical model consisting of an online store channel operated by the manufacturer and a live-stream channel that may run out of stock operated by the streamer. Firstly, the results show that the manufacturer should base the quantity decision on the market overlap between the manufacturer and the streamer. When the market overlap is sufficiently low, the manufacturer should supply the streamer with an adequate quantity of product to enlarge the streamer's market. When the market overlap is sufficiently high, the manufacturer should supply the streamer with a limited quantity of products to promote consumer transfer. Secondly, the results show that as the slotting fee increases, the manufacturer requires a lower market overlap if cooperating with the streamer. Finally, we extend our basic model to the Nash Bargaining scenario. Negotiation will decrease consumer surplus, but increase social welfare compared to the basic model.