The Profitability of Store Brand Introductions by E-commerce Platforms Selling Competing National Brands

Abstract

This paper studies the profitability of a store brand introduction by an e-commerce platform offering competing manufacturers’ products. We develop a game-theoretic model and obtain equilibrium quantity and pricing solutions for the manufacturers and the platform. We compare equilibrium strategies and profits in games where the platform does and does not offer a store brand. Our main findings indicate that the platform benefits from introducing a strong store brand to the detriment of manufacturers.