Competition in the online platform: impacts of blockchain technology adoption

Consumers typically have a higher preference and trust for traceability products, which makes many online platforms (e.g., JD.com, Tmall Global) and food manufacturers (e.g., BeingMate, Mengniu, Moutai) use blockchain-enabled traceability to improve product transparency and trust. This paper systematically analyzes the effects of constructing blockchain-based information traceability systems (BITS) on supply chains led by different members in a dual-channel supply chain consisting of a manufacturer and an online platform. We studied the optimal operational strategy for dual-channel members in two scenarios without blockchain technology and different members (i.e., manufacturer and online platform) as leaders in building BITS. We find that BITS adoption can effectively improve the performance of supply chain members, but the value added to blockchain depends on the level of consumer goodwill toward BITS, the level of competition, and the proportion of cost sharing. We show that either the manufacturer or the online platform can be more profitable as a leader in building BITS. Further, we showed that either the manufacturer or the online platform, as the leader of BITS construction, should bear more construction costs so that the nonleader builder can gain more profit to achieve a win-win result. Interestingly, as the leader of BITS construction bearing more construction costs can achieve higher system total profit.