Author:
Ren Buxin,Wu Di,Zhang Jiayi
Abstract
Promotions are the driving force of consumption for E-commerce platforms, such as the “Double Eleven” shopping carnival in China, in which major e-commerce platforms participate, which has been setting new records for its volume over the past decade. Statistics from the People’s Bank of China (PBOC) show that online payment services exceeded ¥1.4 trillion in the shopping frenzy in 2019 (PBOC, 2019). The same is true in other parts of the world. For example, “Prime Day” in the United States is equivalently attractive for American shoppers. In addition to policy support and market dividends, discounting is an important stimulus for shopping campaigns to achieve such brilliant results. In order to make the discounts more attractive to consumers, merchants continue to push the boundaries of the traditional discounts, adding “direct discount”, “quantity discount”, “bundle discount”, “coupon discount”, and other diversified means of discounts. In recent years, the discount method of stacking multiple discounts together is becoming increasingly popular, and merchants often choose more than one discount at the same time, forming a multiple discount scheme. This paper studies how exactly multiple discounts affect consumers’ purchasing decisions. In particular, this paper explores the impact of multiple discount schemes on consumers’ purchase intentions through ordinary least-squared (OLS) linear regression and difference-in-difference (DID) techniques. The conclusion reached shows that the most effective discount strategies are quantity discounts and coupon discounts, giving an insight to online platform merchants on a potential way of boosting sales.