Installment Payment Strategy for Online Retailer Platform under Commercial Loan Financing

Recently, online dominant retailers have provided installment sales (IS) to their consumers to alleviate their financing pressure. Meanwhile, the upstream suppliers need financing to fulfill the procurement from their retailers. In this paper, we consider an online dominant retailer as an intermediation, that helps her suppliers get financing from banks, and provides installment payments to consumers simultaneously. In particular, we describe customer's willingness to buy through both consumer's preserved value and income level. By constructing game-theoretical models, we discuss the equilibrium strategies of both commercial loan only scheme(CL) and commercial loan with installment payment scheme. Under information asymmetry between supplier and bank, we find that the interest rate of the supplier's loan decision under CL will be higher than the risk-free interest rate. The retailer under CL will offer a higher wholesale price with IS than without IS due to larger sales under IS. Numerical experiment shows installment payments mode can improve supply chain performance by increasing both supplier's and retailer's profit. And the retailer's profit distribution growth from IS is far greater than that of the supplier. Copyright (C) 2022 The Authors.