The Impact of Blockchain Technology Adoption on an E-Commerce Closed-Loop Supply Chain Considering Consumer Trust

Abstract

This paper analytically explores the value of blockchain technology in building consumer trust in recyclers. We focus on an e-commerce closed-loop supply chain composed of an online platform and a manufacturer. In the forward chain, the platform selects a reselling or marketplace model to sell products. In the reverse chain, the platform collects used products, and the unknown whereabouts of the used products will cause consumer mistrust and be detrimental to the corporate image. Blockchain technology can address these challenges by improving the visibility of the recycling chain. By constructing differential game models, we specify the conditions for blockchain implementation and explore its impact on the online sales model choice and the E-CLSC performance. The findings show that the manufacturer consistently benefits from blockchain technology, while the platform decides to adopt it when the long-term profits outweigh the initial investment costs. Interestingly, the sales model selection will not change with the advent of blockchain technology. We further show the benefits of blockchain-enabled recycling and provide tangible insights for related practitioners.