Seminar (Dept. of Marketing)

Theme：The Value of Own Delivery Service by Retailers in Emerging Markets

Speaker：Banggang Wu（Business School, Sichuan University）

Time：2022-03-16 10:00

Address：Room 712, Mingde Business Building

Language：Chinese/English

Abstract：

Why do retailers go beyond their core business of retailing to offer own delivery service in emerging markets? In this paper, we argue that using own delivery service, online retailers can build trust among their customers, which is critical for retailers in emerging markets. We empirically test this theory using the quasi-experimental data on 250,055 customers’ transactions, over ten years, across 416 cities, and 49 product categories from JD.com, the largest online direct sales retailer in China. Based on difference-in-differences models, we find that individual customers’ monthly spending increases by 7.7%, purchase frequency by 3.7%, and the number of items purchased by 9.1% due to own delivery service. We find evidence that own delivery service builds customers’ trust in the retailer’s business, especially for infrequent buyers, from low commercial credit cities, and product categories with higher uncertainty.

Keywords: own delivery service, online retail, trust, emerging market, and quasi-experiments.