Blockchain Technology Application in an E-Commerce Supply Chain: Privacy Protection and Sales Mode Selection

This article investigates the impact of blockchain technology adoption for consumer privacy protection on an e-commerce supply chain and explores the sales mode selection when adopting blockchain technology. Stackelberg game models are set up to maximize the supply chain member profits, and backward induction is used to derive the equilibrium solutions. The results indicate that supply chain members and consumers can benefit from blockchain technology adoption if the operating cost is low or the consumer privacy concern cost is high. The supply chain members can achieve win–win outcomes in the resale mode if the operating cost is sufficiently low, or if the production cost is low, the commission rate is high and the operating cost is moderate. They can also achieve win–win outcomes in the market mode when the production cost is low, the commission rate is low, and the operating cost is moderate, or when the production cost is high and the operating cost is moderate. An important managerial implication is that the platform can interfere with the supplier sales mode selection by adjusting the commission rate, thereby achieving a win–win outcome if the production cost is low or the operating cost is moderate.

I. Introduction

In recent years, online shopping has become increasingly popular [1], [2], [3], [4], [5], [6]. According to eMarketer,1.

https://baijiahao.baidu.com/s?id=1707263479035371715&wfr.

over 2.56 × 10⁹ customers worldwide shopped online, and the total e-commerce retail sales exceeded $5.00 × 10¹² in 2022. The e-commerce retail sales are estimated to exceed $6 × 10¹² by 2024.2.

http://www.199it.com/archives/1191410.html.

However, consumers often face the risk of privacy leakage when shopping online [7], [8], [9], [10]. There are two main ways to leak consumer personal information. One way is for e-commerce platform employees to steal the consumer personal information.3.

http://www.199it.com/archives/1415238.html.

For example, several Amazon employees stole consumer personal information in 2020.4.

https://www.bitdefender.com/blog/hotforsecurity/amazon-fires-employee-for-leaking-customer-data/.

The second way is for cyber hackers to attack the information storage systems of e-commerce platforms [11], [12].5.

https://baijiahao.baidu.com/s?id=1702330539540525551&wfr=spider&for=pc.

For example, a hacker stole approximately 1.2 × 10⁹ pieces of user data from Taobao.com using crawler technology in 2020.6.

https://baijiahao.baidu.com/s?id=1702446753930474041&wfr=spider&for=pc.

Once privacy leakage occurs, lawless individuals can use consumer personal information to engage in illegal and criminal activities, such as fraud, selling or disseminating personal information, and overdrafts using consumer credit information. Privacy leakage can cause significant losses to consumers and has negative impacts on profits and reputations of e-commerce platforms [12], [13]. According to the IBM Cost of a Data Breach Report 2023, the average global cost of a security breach was $4.45 × 10⁶ in 2023.7.

https://www.ibm.com/reports/data-breach.

Therefore, consumer privacy protection has become an important issue faced by enterprises.