Why don’t similar e-commerce companies choose similar logistics distribution system? : a case study of two e-commerce companies in China based on transaction cost theory

Abstract

During the last decade, the importance of “last mile delivery” has become increasingly prominent due to the booming development of e-commerce. Logistics services have become the bottleneck of the development of e-commerce in China. This thesis focuses on the research of self-built and outsourced logistics distribution system. The main research objective is to identify why two similar e-commerce companies have chosen different logistics distribution system In this study, two e-commerce companies were selected as cases to analyze two different types of logistics distribution systems in order to develop an understanding of the reasons for different choices of logistics distribution system. Jingdong Mall represents the self-built logistics distribution system while Taobao Mall represents the outsourced logistics distribution system. The two companies are the most representative of Chinese e-commerce industry. The case study is used as the main research method. This study investigates the critical factors for these two e-commerce companies in adopting either self-built logistics or outsourced logistics from transaction cost theory perspective. Within-case and cross-case analyses are simultaneously applied to further analyse these two logistics distribution systems. This research demonstrates the utility of transaction cost theory. Though a case study of Jingdong Mall and Taobao Mall, it highlights that the important factor of relational adaptation drove Taobao Mall to maintain its preference for logistics outsourcing. Furthermore, this study reveals that the degree of CEOs’ risk preference had a significant impact on their choice of logistics distribution systems for their respective e-commerce companies.