Impacts of Brand Spillover Effect on Sourcing and Quality Disclosure of the Platform’s Store Brand Under Asymmetric Information

In reaction to evolving consumer preferences, prominent platforms, such as Amazon and JD, have progressively established proprietary store brands. However, the problems related to the sourcing of store brands and the disclosure of their quality information remain uncertain. To fill this gap, this paper utilizes game theory to develop a supply chain consisting of a national brand manufacturer, a third-party manufacturer, and a platform, focusing on the platform’s optimal sourcing strategy—determining whether to source its store brand from the national or third-party manufacturer—while also considering its quality disclosure strategy. We then examine how essential elements, specifically the brand spillover effect and the disclosure cost, influence these strategic decisions. Our research reveals that the quality information disclosure of the store brand occurs when the product quality surpasses a predetermined threshold. Additionally, although the elevated disclosure cost consistently diminishes quality disclosure, the impact of the brand spillover effect on quality disclosure is nonlinear. Finally, the platform’s sourcing strategy depends greatly on the brand spillover effect and the disclosure cost. Specifically, when the brand spillover effect is relatively large (small), the platform prefers to source the store brand from the national (third-party) manufacturer; with a moderate brand spillover effect, a higher (lower) disclosure cost encourages the platform to source from the national (third-party) manufacturer.