Intelligent E-Vendor Relationship Management for Enhancing Global B2C E-Commerce Ecosystems

Intelligent E-Vendor Relationship Management for Enhancing Global B2C E-Commerce Ecosystems

H. Y. Lam, Y. P. Tsang, C. H. Wu, C. Y. Chan
Copyright: © 2021 |Pages: 25
DOI: 10.4018/JGIM.2021050101
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Abstract

Recently, global e-commerce businesses have been blooming due to the convenience they offer, their product range, and the individualized products and services they offer. To maintain an entire ecosystem, effective platform-vendor relationships should be considered, through which e-commerce platforms can provide collaborative packages to vendors. E-vendor relationship management (eVRM) should then be developed to identify, attract, retain, and develop existing and new vendors so that groups of loyal vendors can be managed. However, eVRM in e-commerce is an area that has received less attention. This paper proposes an adaptive e-vendor relationship-management system (AVRMS) to provide decision-making support for the formulation of vendor management strategies. The contribution of this study is that it addresses the missing link of platform-vendor relationship management in global e-commerce environments, while integrating data-driven approaches and artificial intelligence techniques to generate a new synergy for the facilitation of eVRM.
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1. Introduction

Numerous e-commerce platforms have been developed in quick succession, aimed at global e-commerce environments and designed to enable electronic transactions involving general commodities and day-to-day services. Most of these platforms (and research) has focused on customer relationship management (CRM) in e-commerce, in order to maintain and attract a loyal and active customer base (Mazzarol, 2015; Wang et al., 2016). Effective CRM can identify, attract, retain and develop a loyal and active customer base, promoting engagement through activities on e-commerce platforms, which improve profitability and business reputations in a sustainable manner. Apart from the customer perspective, some e-commerce platforms (particularly those operating global e-commerce businesses) also pay attention to vendor and supplier management in order to create a trusting and reliable business environment (Hamidi and Moradi, 2017; Kim and Peterson, 2017). The differences between vendors and suppliers in e-commerce are shown in Table 1, i.e., their main business objective, transaction type, sales purpose and sales quantity. Entities that sell their products and services to business-to-customer (B2C) e-commerce businesses are classified as vendors, and these provide manufactured, processed or re-packed products and services to end customers (different service packages and varying levels of quality), which affect customer perceptions and satisfaction with e-commerce platforms. There is, therefore, a need to develop an effective e-vendor relationship-management (eVRM) system which can locate and maintain vendors that provide a high quality of products and services, in order to strengthen the functions of e-commerce businesses and foster a positive atmosphere in B2C e-commerce ecosystems.

Existing theories have demonstrated the essence of relationship quality in B2C e-commerce (Zhang et al., 2011). In view of this, the particular contribution of this paper is to the domain of relationship management (RM), which is a systematic process for coordinating interactions between business entities, in order to increase trust and interdependence and to enhance engagement (Bullen et al., 2017). B2C e-commerce ecosystems need to maintain an effective platform-vendor-client relationship, based on well-researched platform-client and vendor-client relationships (Durai and Stella, 2017; Saunila et al., 2019). This paper contributes to the field by exploring systematic development of eVRM (rarely discussed in existing literature), drawing upon RM theories, in the context of global B2C e-commerce. However, managing a diverse group of vendors is an enormous challenge in terms of contract management and cost optimization (e.g., determining the most appropriate strategies for e-vendors and controlling costs incurred) (Majumder et al., 2017; Cleary and McLarney, 2019). Worse still, the above challenges become even more problematic due to the complexity of the global B2C e-commerce environment, with e-vendors offering a wide range of products and services on e-commerce platforms, in different cultural contexts and with different behavioural norms. The commercial activities of e-vendors can also be wide-ranging and frequently updated, such that data analytics in relation to e-vendors becomes relatively difficult. To effectively analyse a large group of vendors, a data-driven analytics technique is used to assign vendors to various clusters, and an artificial intelligence technique is used to establish specific and customized vendor-management strategies. In view of this, an adaptive e-vendor relationship-management system (AVRMS) is proposed here, which adopts the fuzzy c-means (FCM) clustering approach and case-based reasoning. Unlike k-means clustering and c-means clustering, FCM clustering is more flexible when it comes to cluster formulation, and it can investigate the degree of belongingness rather than showing a Boolean result. Entities may not belong in only one cluster, and the relevance between entities and clusters should be quantified. Consequently, FCM clustering is deemed to be promising for assigning e-commerce vendors to a number of clusters according to several measurement dimensions, such as sales volume and product variety. Having done this, appropriate vendor management strategies can be established, aimed at attracting and maintaining positive relationships between vendors and e-commerce platforms using case-based reasoning. Previous strategies can be used as a reference when new strategies are being established for the management of e-vendor groups, whereas a closed-loop mechanism can be formulated for the eVRM. Thus, global B2C e-commerce businesses can be operated and developed in a holistic manner, taking into account the concerns of both vendors and customers so that their ecosystems can be more profitable and sustainable.

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