When suppliers are short of money, should they borrow from ecommerce platform or banks?

Nov. 12,2018
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Internet finance has become a trend. Alibaba, Jingdong, Suning, Baidu and Tencent are all involved in this industry, which makes people believe that e-commerce finance has inherent advantages. Actually, eCommerce finance includes two modes, namely, the bank lending and the eCommerce platform lending.

In the bank lending mode, electronic business companies play a core crediting role between suppliers and banks, while in the eCommerce platform lending mode, with the knowledge of their suppliers’ capital flow, logistics and business flow as well as the massive data concerning the actual transactions and reviews, the eCommerce platform can turn the uncontrollable risks of finance products to the controllable risks in the supply chain business and provide loans for suppliers by setting up microfinance companies.

Electronic commerce platform-joint supply chain financing mode: bank lending vs. electronic commercial platform lending published on Chinese Journal of Management Science by YU Hui LI Xi WANG Yawen, the authors have built the model, to compared the wholesale price contract model of supplier financing under the bank lending mode and the eCommerce platform lending mode, and the optimal financing solution for both the supplier and the eCommerce platform was given.

The results indicated that the loan rate, the amount of self-owned funds and the cost of funds,financing mode are all important indicators of the profits of the supplier and the eCommerce platform. This paper identified the influences of different lending modes on the related node companies in the supply chain, providing scientific foundations and guidance for the decision-making on the introduction of external fund flow for the eCommerce platform and the supplier.

Corresponding Author: YU Hui
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CNKI Press Officer: ZHONG Ming
Email: zm6946@cnki.net

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