| Abstract: |
It is well-established that faster delivery in e-commerce increases consumer demand. However, the impact of faster delivery on how consumers place orders (their order frequency and basket sizes) and the subsequent environmental implications are not known. To investigate these questions, we leverage a quasi-experiment involving the opening of a new local warehouse by Alibaba Group, which led to a half-day improvement in the delivery speed for local orders. Through a difference-in-differences analysis, we find that the delivery speed improvement not only increased consumers' monthly purchasing amount by 6.70%, but also increased monthly order frequency by a higher percentage (i.e., 7.74%) and reduced the average order basket size by 0.79%. These results collectively suggest that with faster delivery, consumers purchase more on the platform but do so in more frequent and smaller orders, which implies more packaging and transportation costs for each unit of product sold. Based on these results, we conduct a detailed calibration using both public and company-specific data to estimate the increase in the platform's carbon emissions due to faster delivery. We also explore and identify two mechanisms contributing to the phenomenon: order-splitting and category expansion. We combine these insights with heterogeneous treatment effect analysis to derive managerial implications for the e-commerce platform. In particular, we find that for a platform that implements a threshold shipping policy, raising the free shipping threshold may be more effective than raising the shipping fee to reduce the environmental and operational costs associated with faster delivery.
|
|
Biography:
|
Jiankun Sun is an Assistant Professor of Operations Management at Imperial College Business School, Imperial College London. Her research focuses on data-driven operations management in digital platforms, retail, and supply chain management. She applies both data analytics and theoretical modeling techniques to address practice-driven operational problems in her research. Jiankun Sun obtained her Ph.D. in Operations Management from Kellogg School of Management, Northwestern University, and her B.E. in Industrial Engineering from Tsinghua University.
|
