On July 15, 2024, the E-commerce Department of Shenzhen University invited Professor Jian Chen from Tsinghua University to participate in the Enlightenment Forum. In the morning, Professor Chen delivered an academic report on quality and private label cannibalization strategies at Room A302, Mingli Building. It was hosted by Professor MA Lijun, head of the E-commerce Department of the College of Management, with attendance from teachers Lin Meiyan, Sun Hao, Wang Gangqiao, and postgraduate students.
Professor Chen is the Lenovo Chair Professor at the School of Economics and Management, Tsinghua University, and director of the Tsinghua University Modern Management Research Center, a key research base for humanities and social sciences under the Ministry of Education. He holds or has held significant academic positions including member of the Academic Evaluation Group for Management Science and Engineering under the State Council, vice president of the Production and Operations Management Society, and chair/co-chair of many international conferences such as the 2012 INFORMS International Conference. He serves as editor-in-chief, editorial board member, or advisor for over ten international academic journals.
His research focuses on system engineering, enterprise operation management and supply chain coordination optimization, emerging business model analysis and optimization, decision theory and methods, among others. He has published more than two hundred papers in high-level academic journals both domestically and internationally, authored six books, and led over fifty projects commissioned by national ministries and local governments or enterprises.
The private label cannibalization strategy primarily involves target customer analysis, differentiation and positioning strategies, pricing strategies and promotional activities, channel selection, and monitoring and adjustment. The core of this strategy lies in clearly defining product differentiation features and aligning them with the needs of target customers, enhancing market share and sales through appropriate pricing and promotional activities. By setting clear goals, analyzing the market, identifying target customers, and formulating and implementing monitoring strategies, companies can develop a successful cannibalization strategy plan.
Retailers can sell both their own branded products and those of brand manufacturers; one-quarter of retailers in China have their own brands. Professor Chen studied a national brand manufacturer and a retailer, aiming to determine the optimal cannibalization strategy for the retailer. Through research on the costs and quality of introducing only low-quality private labels versus only high-quality ones, he determined the best cannibalization strategy for retailers. Additionally, Professor Chen confirmed that introducing higher-quality private labels can increase channel profits and consumer welfare. Finally, he encouraged teachers and students to continue exploring and addressing challenges and discovering interesting research questions.
After the presentation, Professor Chen patiently answered questions from the audience, providing corresponding solutions, greatly benefiting the attending teachers and students.
