The incentives for information sharing and online expansion strategy in medical supply chains

Department of Electronic Business, South China University of Technology, Guangzhou, P.R. China

^* Corresponding author: yqshi@scut.edu.cn

Received: 8 November 2023
Accepted: 7 January 2025

Abstract

Recently, online shopping for medical products has gradually normalized, promoting the acceleration of medical e-commerce. This improves the channel layout, subsequently broadening the consumer market and augmenting enterprise performance. Considering a two-stage supply chain com- posed of a medical manufacturer and a dealer with more accurate demand information, this paper focuses on the online channel expansion strategy with information sharing. Four distinct sales modes are developed: traditional sales, dual-channel, O2O and multi-channel. For each modality, an inves- tigation of the information sharing motivation and impact of online expansion on enterprise profits and patient surplus is conducted. Intriguingly, a dealer may be incentivized to share information ex- clusively under multi-channel mode, accompanied by either a moderate level of public welfare or high online preference. Moreover, the online entry decision is independent of information sharing strategy. Specifically, O2O and multi-channel are more conducive to dealer, whereas manufacturer prefers the dual-channel. In addition, online expansion can not only prove to be a “win–win” situation for both manufacturer and dealer, but can also increase patient surplus.