In this paper, we examined the interaction between live streaming investment and store-brand (SB) encroachment in a supply chain comprising a national-brand manufacturer and an e-commerce platform. By developing a game-theoretic model, we analyzed how the platform utilizes live streaming to enhance the perceived quality of its SB and the subsequent strategic response from the manufacturer regarding wholesale pricing. Our analysis characterized three distinct equilibrium regimes: no encroachment, false encroachment, and substantive encroachment. Unlike studies that explain false encroachment through information asymmetry or manufacturer technology investment, we show that platform-controlled live-streaming investment can generate and reshape false encroachment by improving the SB's perceived quality and changing the encroachment thresholds. The results demonstrated that live streaming investment significantly elevates the cost threshold for encroachment and expands the feasible region for substantive encroachment. Notably, the impact of live streaming effort on the manufacturer's wholesale price is non-monotonic, reflecting a complex trade-off between the market expansion effect and the cannibalization effect. Furthermore, we derived the optimal live streaming effort in the extended analysis. Extended analyses also revealed that sales formats (reselling vs. agency selling) and pricing sequences (sequential vs. simultaneous) critically moderate the platform's encroachment incentives. Specifically, under agency selling, a higher commission rate strengthens the platform's incentive to introduce an SB, while simultaneous pricing facilitates the emergence of substantive encroachment. These findings provide a theoretical framework for platforms to optimize resource allocation between marketing investments and product positioning strategies.
Citation: Xiaoya Han, Mengdie Li, Xin Liu. Leveraging live streaming for effective platform encroachment: Overcoming product quality disadvantages[J]. Journal of Industrial and Management Optimization, 2026, 22(11): 6089-6123. doi: 10.3934/jimo.2026205
In this paper, we examined the interaction between live streaming investment and store-brand (SB) encroachment in a supply chain comprising a national-brand manufacturer and an e-commerce platform. By developing a game-theoretic model, we analyzed how the platform utilizes live streaming to enhance the perceived quality of its SB and the subsequent strategic response from the manufacturer regarding wholesale pricing. Our analysis characterized three distinct equilibrium regimes: no encroachment, false encroachment, and substantive encroachment. Unlike studies that explain false encroachment through information asymmetry or manufacturer technology investment, we show that platform-controlled live-streaming investment can generate and reshape false encroachment by improving the SB's perceived quality and changing the encroachment thresholds. The results demonstrated that live streaming investment significantly elevates the cost threshold for encroachment and expands the feasible region for substantive encroachment. Notably, the impact of live streaming effort on the manufacturer's wholesale price is non-monotonic, reflecting a complex trade-off between the market expansion effect and the cannibalization effect. Furthermore, we derived the optimal live streaming effort in the extended analysis. Extended analyses also revealed that sales formats (reselling vs. agency selling) and pricing sequences (sequential vs. simultaneous) critically moderate the platform's encroachment incentives. Specifically, under agency selling, a higher commission rate strengthens the platform's incentive to introduce an SB, while simultaneous pricing facilitates the emergence of substantive encroachment. These findings provide a theoretical framework for platforms to optimize resource allocation between marketing investments and product positioning strategies.
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 jimo-22-11-205-s001.pdf |
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Figures(12) / Tables(5)
Xiaoya Han, Mengdie Li, Xin Liu. Leveraging live streaming for effective platform encroachment: Overcoming product quality disadvantages[J]. Journal of Industrial and Management Optimization, 2026, 22(11): 6089-6123. doi: 10.3934/jimo.2026205
The sequence of events
Demand analysis for the platforms under different consumer valuations (i.e., $ {\theta }_{1} $, $ {\theta }_{2} $)
Wholesale price of the manufacturer under Model ES
NB sales volume under Model ES
Profit under substantive encroachment
The equilibrium decisions under the Model ES
SB and Total sales volume
Impact of $ \lambda $ on encroachment thresholds
Platform profit across different $ {c}_{s} $ under Model ES
The platform profits when live streaming effort is endogenous
The equilibrium decisions under Agency selling mode
Platform profit and wholesale price under two scenarios
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