E-commerce platform’s customer-to-manufacturer mode choice: self-built or joint-development

We study the emerging customer-to-manufacturer (C2M) mode, in which the e-platform analyzes customer data and offers recommendations to manufacturers. We consider two types of C2M mode: the platform establishes its own brand (self-built mode) and the platform conducts joint development with the manufacturer (joint-development mode). We show that the manufacturer always benefits from a lower quality difference, whereas the platform does not. Interestingly, under the self-build mode, a smaller brand devaluation effect benefits not only the platform, but also the manufacturer. Further, we discover that a win-win situation exists if the manufacturer and the platform choose the same mode.