Leadership Structure, Key Opinion Leaders’ Influence, and Coordination Mechanisms in Live Streaming E-Commerce

A combination of factors, such as supportive government policies, rapid development of internet technology, and the unprecedented impact of the epidemic, has significantly accelerated the adoption and expansion of the live streaming + e-commerce business model. These developments create new opportunities for businesses to engage with consumers in real-time, leading numerous suppliers, manufacturers, and retailers to incorporate live streaming operations into their sales and marketing strategies. However, the influence of Key Opinion Leaders (KOLs) within this context varies depending on the leadership structure in place. This variation, in turn, influences crucial decisions regarding investments in KOLs and the allocation of associated costs, shaping the overall effectiveness and profitability of the live streaming e-commerce model. This paper develops a live streaming e-commerce model involving a supplier/manufacturer and a retailer, examining KOL-driven decisions across various channel leadership structures. Furthermore, a revenue-sharing mechanism is introduced to facilitate supply chain coordination. The key findings are as follows: (1) Demand and profits positively correlated with the KOL effect and negatively correlated with consumer rationality; (2) The manufacturer’s profit under its own leadership consistently surpasses that under retailer leadership, while the retailer’s profit, depending on leadership, is influenced by the cost scale of the KOL effect; (3) The highest overall profit in a centralized live streaming e-commerce business model also leads to the maximization of social welfare, and a revenue-sharing contract effectively coordinates the supply chain, resulting in a “win-win” outcome for both the supplier/manufacturer and the retailer.