The behavioral, operational and sustainability effects of fast delivery in e-commerce
File(s)
Working paper
Author(s)
Hu, Chenshan
Long, Xiaoyang
Sun, Jiankun
Zhang, Dennis J
Type
Working Paper
Abstract
It is well-established that faster delivery in e-commerce increases consumer demand. However, the impact of faster delivery on how consumers place orders (their order frequency and basket sizes) and the subsequent operational and environmental implications are not known. To investigate these questions, we leverage a quasi-experiment involving the opening of a new local warehouse by Alibaba Group, which led to a half-day improvement in the delivery speed for local orders. Through a difference-in-differences analysis, we find that the delivery speed improvement not only increased consumers’ monthly purchasing amount by 11.05%, but also increased monthly order frequency by a higher percentage (i.e., 15.00%) and reduced the average order basket size by 1.14%. These results collectively suggest that with faster delivery, consumers purchase more on the platform but do so in more frequent and smaller orders, which implies more packaging and transportation costs for each unit of sales. We explore and identify two mechanisms contributing to the phenomenon: order-splitting of existing consumer demand and category expansion into new demand. Based on these results, we conduct a detailed calibration using both public and company-specific data to estimate the increase in the platform’s operational costs and carbon emissions due to faster delivery. Our results suggest that any assessment of faster delivery initiatives need to take into account potential changes in
consumers ordering behavior. As delivery becomes faster, to maintain platforms’ profit margins, parallel initiatives such as incentives for order consolidation (either by warehouses or by consumers) may become more relevant.
consumers ordering behavior. As delivery becomes faster, to maintain platforms’ profit margins, parallel initiatives such as incentives for order consolidation (either by warehouses or by consumers) may become more relevant.
Date Issued
2024-04-17
Citation
2024
Publisher
SSRN
Copyright Statement
© 2026 The Author(s).
Subjects
Carbon Emissions
Delivery Speed
E-commerce Logistics
Platform Operations
Shipping Policy
Sustainable Operations
Publication Status
Submitted