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Research on the Influence of ODM Mode on
Consumer Decision
Ming Tian*,
School of Economics and Management, Beijing Jiaotong University, Beijing, China
Abstract. As an emerging new consumption model, the ODM e-commerce
model accurately locates consumers and uses consumers’ shopping needs as
the marketing strategy of the e-commerce platform. This is a huge impact
on traditional physical sales and existing e-commerce models. In order to
explore the relationship between ODM model products and consumer
decision-making, this article takes the NetEase selected represented by
ODM e-commerce model as the research object. The results found that there
is a significant positive correlation between the types of commodities and
ODM model and consumer decision-making. Consumer participation has a
positive regulatory effect on the relationship between ODM model and
consumer decision-making. The research conclusions provide theoretical
support for the ODM e-commerce model to increase user stickiness, increase
consumer decision-making weight, and expand marketing models.
1 Introduction
In recent years, our country's e-commerce industry has developed vigorously, and various
types of e-commerce websites have sprung up, greatly enriching consumers' shopping
methods and satisfying the shopping needs of different consumers. With the continuous
development and growth of the e-commerce industry, a series of new e-commerce sales
models have been born. Consumers have also experienced various vertical e-commerce
model changes from C2C to B2C to ODM new consumption. Online shopping gradually
become the new normal in the retail industry, especially the ODM e-commerce model
represented by NetEase selection. Once it emerged, it quickly became a new consumption
model leading other types of e-commerce platforms and grew into the most influential
vertical e-commerce brand at this stage.
2 The background and significance of the ODM model
With the continuous development of social economy, people's living standards are rapidly
improving, and more and more people are entering the new middle class. Consumers have a
higher pursuit of product style and quality, our country is in a new consumption era of
consumption upgrades. NetEase CEO Ding Lei mentioned: our country's consume r groups
are undergoing an evolution. In the past, everyone was pursuing how to buy, but now
* Corresponding author: 19125548@bjtu.edu.cn
© The Authors, published by EDP Sciences. This is an open access article distributed under the terms of the Creative Commons
Attribution License 4.0 (http://creativecommons.org/licenses/by/4.0/).
SHS Web of Conferences 96, 04009 (2021) https://doi.org/10.1051/shsconf/20219604009
IAFSM 2020
everyone is pursuing how to buy better and more tasteful. This phenomenon is called new
consumption, and it focuses on the changes in consumers' consumption view and
consumption behavior.
Simultaneously with the emergence of new consumer concepts, the e-commerce traffic
dividend period has faded, and it has begun to enter a bottleneck period and a transition period
when the growth rate is gradually slowing down, the structure is relatively solidified, and the
competition is significantly intensified. For early consumers, online shopping is a new thing.
Compared with offline shopping, the emergence of e-commerce enables consumers to choose
a variety of products online without leaving home. The C2C e-commerce model by TaoBao
has come into being, covering all aspects of life, and satisfying consumers’ willingness to
shop conveniently and quickly. When consumers are used to the e-commerce shopping model,
businesses will not hesitate to sell fakes in order to get higher profits. Ensuring that the
purchase of genuine products on the e-commerce platform has become a topic that consumers
really care about. In this context, the B2C e-commerce model represented by JD.com is
brand-oriented and caters to consumers' demand for authentic products.
The global market research company Euromonitor released a report on the top ten global
consumer trends in 2020, pointing out that with the increase in purchasing power, consumers
are pushing brands to accept their values, that is, consumers refuse mass production and
ordinary products, and tend to simple and return to basic needs1. Consumers expect truly
differentiated products and experiences2. At the same time, under the guidance of the supply-
side reform policy, our country’s manufacturing industry is also accelerating its
transformation and upgrading3. Many domestic manufacturers have already had the
production of higher-quality products and certain design capabilities. In this economic
context, the ODM e-commerce model represented by NetEase selected is more in line with
the psychological needs of modern consumers. This trend reflects the transformation of the
power relationship between sellers and consumers. In the past, consumers had to rely on
specific brands or information sources to buy the goods they needed. Now, companies must
continue to innovate, lower prices, improve and beautify products can attract consumers.
3 Brief description of the ODM model
With the development of China's manufacturing industry, it has been possible to produce
high-quality products with first-class equipment, production technology, management
capabilities and technical personnel, and the foundry has become a skilled factory in China.
The foundry is a manufacturer in the OEM model. Its full name is Original Equipment
Manufacturer. However, with the rapid development of OEMs in India, Vietnam and other
countries, low-cost labor changes in the international situation, China’s manufacturing
industry is facing the problem of reduced foreign trade orders, overcapacity, and the
continuous development of the domestic economy4. People are no longer just the pursuit of
low-cost products, but more of the high-quality products, so the foundry is facing an
extremely urgent need for transformation5.
At present, there are two main channels for factory transformation. One is to create its
own brand to realize the OBM production mode. Its full name is Original Brand Manufacturer,
which means that the factory operates its own brand, or the manufacturer creates its own
products, produces and sells products with independent brands. Since OEMs need to have a
complete marketing network to support OBM, the effort and cost required are much higher
than OEMs, and their own brands will conflict with their own OEM customers, few OEMs
can transform to create its own brand.
The other is to realize the ODM production mode. The full name is Original Design
Manufacturer, which means that after a manufacturer designs a certain product, it may be
favored by other companies, require the latter's brand to be used for production, or slightly
2
SHS Web of Conferences 96, 04009 (2021) https://doi.org/10.1051/shsconf/20219604009
IAFSM 2020
everyone is pursuing how to buy better and more tasteful. This phenomenon is called new
consumption, and it focuses on the changes in consumers' consumption view and
consumption behavior.
Simultaneously with the emergence of new consumer concepts, the e-commerce traffic
dividend period has faded, and it has begun to enter a bottleneck period and a transition period
when the growth rate is gradually slowing down, the structure is relatively solidified, and the
competition is significantly intensified. For early consumers, online shopping is a new thing.
Compared with offline shopping, the emergence of e-commerce enables consumers to choose
a variety of products online without leaving home. The C2C e-commerce model by TaoBao
has come into being, covering all aspects of life, and satisfying consumers’ willingness to
shop conveniently and quickly. When consumers are used to the e-commerce shopping model,
businesses will not hesitate to sell fakes in order to get higher profits. Ensuring that the
purchase of genuine products on the e-commerce platform has become a topic that consumers
really care about. In this context, the B2C e-commerce model represented by JD.com is
brand-oriented and caters to consumers' demand for authentic products.
The global market research company Euromonitor released a report on the top ten global
consumer trends in 2020, pointing out that with the increase in purchasing power, consumers
are pushing brands to accept their values, that is, consumers refuse mass production and
ordinary products, and tend to simple and return to basic needs1. Consumers expect truly
differentiated products and experiences2. At the same time, under the guidance of the supply-
side reform policy, our country’s manufacturing industry is also accelerating its
transformation and upgrading3. Many domestic manufacturers have already had the
production of higher-quality products and certain design capabilities. In this economic
context, the ODM e-commerce model represented by NetEase selected is more in line with
the psychological needs of modern consumers. This trend reflects the transformation of the
power relationship between sellers and consumers. In the past, consumers had to rely on
specific brands or information sources to buy the goods they needed. Now, companies must
continue to innovate, lower prices, improve and beautify products can attract consumers.
3 Brief description of the ODM model
With the development of China's manufacturing industry, it has been possible to produce
high-quality products with first-class equipment, production technology, management
capabilities and technical personnel, and the foundry has become a skilled factory in China.
The foundry is a manufacturer in the OEM model. Its full name is Original Equipment
Manufacturer. However, with the rapid development of OEMs in India, Vietnam and other
countries, low-cost labor changes in the international situation, China’s manufacturing
industry is facing the problem of reduced foreign trade orders, overcapacity, and the
continuous development of the domestic economy4. People are no longer just the pursuit of
low-cost products, but more of the high-quality products, so the foundry is facing an
extremely urgent need for transformation5.
At present, there are two main channels for factory transformation. One is to create its
own brand to realize the OBM production mode. Its full name is Original Brand Manufacturer,
which means that the factory operates its own brand, or the manufacturer creates its own
products, produces and sells products with independent brands. Since OEMs need to have a
complete marketing network to support OBM, the effort and cost required are much higher
than OEMs, and their own brands will conflict with their own OEM customers, few OEMs
can transform to create its own brand.
The other is to realize the ODM production mode. The full name is Original Design
Manufacturer, which means that after a manufacturer designs a certain product, it may be
favored by other companies, require the latter's brand to be used for production, or slightly
modify the design to produce. Among them, the manufacturer that undertakes the design and
manufacturing business is called the ODM manufacturer, and the product it produces is the
ODM product6. Different from traditional e-commerce, the ODM model goes beyond
intermediate channel providers and directly connects to high-quality upstream manufacturers.
It goes deep into the entire supply chain of product selection, production, sales, logistics, and
after-sales. It follows the pricing rule of "cost price + value-added tax + postage", eliminating
high brand premiums, advertising, and intermediary costs, and achieving the "de-branding"
of high-quality products7. Coupled with the impact of the COVID-19 this year, many sales
have moved from offline to online. It is also difficult for e-commerce companies to control
the construction period and quality of foundry products. Therefore, under the special
economic background, with the high-quality and low-price service concept, it can attract
more consumers, have a large number of audiences, and better reflect its characteristics.
Once the ODM e-commerce model represented by NetEase selected has emerged, it has
quickly become a new consumption model that leads other e-commerce platforms, such as
Taobao Xinxuan and JD.made, which have had a huge impact on the traditional e-commerce
operation model. The mass foundry mode of production is gradually replaced by small
batches of customized production. Small and refined products are more in line with the
consumption concept of the modern new middle class, and there is a larger consumer market.
The ODM e-commerce model focuses on differentiated marketing strategies. Under the
background of new consumption upgrades, our country’s manufacturing industry accelerates
the pace of supply-side reform, the expansion of enterprises stimulates domestic demand, and
reduces consumers’ growing needs for a better life, as well as unbalanced and insufficient
development. The contradiction between the two has major strategic influence and
significance. Existing research on ODM models mostly studies the operation management
and development strategies of ODM models from the upstream perspective, that is, the supply
chain perspective, and rarely studies the ODM e-commerce models from the downstream
perspective, that is, the consumer perspective. In order to have a deeper understanding of the
influence mechanism of ODM e-commerce model on consumer decision-making, this article
uses NetEase selected of e-commerce platform as the research object to explore the influence
mechanism of ODM e-commerce model on consumer decision-making under the influence
of new consumption concepts. Provide a modest force for the optimization and development
of the ODM e-commerce model.
4 NetEase selected overview
As NetEase's original life-quality e-commerce platform, NetEase selected is the first e-
commerce company to adopt the ODM model, focusing on home life and other products.
Advocate the business philosophy of "good life, not so expensive", connect directly with
famous manufacturers, eliminate brand premiums and intermediate links, and select high-
quality, high-quality products for consumers. NetEase selected positions its audience as the
new middle class. Most consumers are between 20 and 35 years old. This part of consumers
is characterized by limited income but pursuing high-quality life. The first choice for
consumption is rational consumption that focus on product content and tend to products with
high quality and low price that improve the quality of life8. In order to meet the needs of
consumers, NetEase selected has always adhered to the standard of excellence in product
selection, saving consumers time and cost of purchasing products.
The entire process from production to sales of the products on the NetEase selected
platform is a standard ODM operation process. Therefore, this article uses the NetEase
selected as the research object. In this platform, each product can be collected from the
shelves, views, and collections. Inventory, sales volume, repurchase rate and other
3
SHS Web of Conferences 96, 04009 (2021) https://doi.org/10.1051/shsconf/20219604009
IAFSM 2020
information, through the development of data sets, data analysis can be used to analyze the
impact of ODM e-commerce model products on consumer shopping decisions.
5 The influence of ODM mode on consumer decision-making
5.1 Data Collection
Use a Java-based web search engine to collect data from the official website of NetEase
selected, and use commodities as the unit of data collection. From the official website, you
can see that NetEase selected includes eight categories, such as home life, clothing, shoes
and bags, food and beverages, personal care, cleaning, maternal and child parenting, sports
travel, digital home appliances, and strict selection of global. Different categories of goods
have different effects on consumers' shopping decisions. So this article uses the commodity
categories of NetEase selected as control variables to analyze. As of December 23, 2019, the
NetEase selected homepage has 4,293 products. In order to improve the accuracy of data
analysis, different attributes of products will be captured, such as product sales, product
evaluation and other data. According to whether the product has the "NetEase self-operated
brand" logo, the ordinary products and ODM model products of the NetEase selected
platform are distinguished. Since the platform cannot capture the sales volume, according to
the characteristics that the evaluation volume is basically consistent with the sales volume9.
The evaluation volume is used as the data of the sales volume. The number of additional
reviews based on the product is used as the analysis data of consumer participation. In
addition, it also includes the category of the product. After collecting the data, the data is
normalized to lay the foundation for subsequent empirical analysis. In order to avoid
deviations from the analysis of the model due to the type of commodities, the commodity
category is analyzed as a control variable.
5.2 Define research variables
In order to analyze the impact of the ODM model on consumer decision-making, this paper
analyzes the collected data based on the SPSS software platform. The product category is
used as the control variable, the ODM model product is used as the independent variable, and
the product sales volume is the dependent variable. Consumer participation is used as a
moderating variable. The specific measurement methods of the variables are shown in Table
1.
4
SHS Web of Conferences 96, 04009 (2021) https://doi.org/10.1051/shsconf/20219604009
IAFSM 2020
information, through the development of data sets, data analysis can be used to analyze the
impact of ODM e-commerce model products on consumer shopping decisions.
5 The influence of ODM mode on consumer decision-making
5.1 Data Collection
Use a Java-based web search engine to collect data from the official website of NetEase
selected, and use commodities as the unit of data collection. From the official website, you
can see that NetEase selected includes eight categories, such as home life, clothing, shoes
and bags, food and beverages, personal care, cleaning, maternal and child parenting, sports
travel, digital home appliances, and strict selection of global. Different categories of goods
have different effects on consumers' shopping decisions. So this article uses the commodity
categories of NetEase selected as control variables to analyze. As of December 23, 2019, the
NetEase selected homepage has 4,293 products. In order to improve the accuracy of data
analysis, different attributes of products will be captured, such as product sales, product
evaluation and other data. According to whether the product has the "NetEase self-operated
brand" logo, the ordinary products and ODM model products of the NetEase selected
platform are distinguished. Since the platform cannot capture the sales volume, according to
the characteristics that the evaluation volume is basically consistent with the sales volume9.
The evaluation volume is used as the data of the sales volume. The number of additional
reviews based on the product is used as the analysis data of consumer participation. In
addition, it also includes the category of the product. After collecting the data, the data is
normalized to lay the foundation for subsequent empirical analysis. In order to avoid
deviations from the analysis of the model due to the type of commodities, the commodity
category is analyzed as a control variable.
5.2 Define research variables
In order to analyze the impact of the ODM model on consumer decision-making, this paper
analyzes the collected data based on the SPSS software platform. The product category is
used as the control variable, the ODM model product is used as the independent variable, and
the product sales volume is the dependent variable. Consumer participation is used as a
moderating variable. The specific measurement methods of the variables are shown in Table
1.
Table 1. Variable measurement.
Variable
Description
Measurement
Independent
Variable
ODM
Whether the product is self
owned brand of NetEase.
0: Non self owned
brand of NetEase
1: Self owned brand
of NetEase
Dependent
Variable
Sales volume of
goods
The quantity of productin
sold.
evaluation quantity
Moderator
Variable
Consumer
continued
participation
Whether the consumer has
any additional comments
after purchasing the
product.
0: No additional
comments
1: Having
additional
comments
Control
variable
FMCG (Fast
Moving Consumer
Goods)
Whether the product is
FMCG type
0: Not FMCG
1: FMCG
ODM: This variable is Whether the product is self-owned brand of NetEase. Use
"NetEase self-operated brand" as the distinguishing mark of this variable, and code the
logo with "NetEase self-operated brand" in the crawled product data as "1", and code "0"
without this logo.
Sales volume of goods: This variable is the quantitative data representation of the
model. There is no merchandise sales volume displayed on this platform. According to
the default evaluation and content evaluation in the evaluation volume, it can be basically
assumed that the evaluation volume is consistent with the merchandise sales volume data.
Consumer continued participation: This variable is the expression of consumer
participation in the product after receiving the product. Use the additional comment of
the product as the variable. If there is an additional comment, the product is coded as "1",
and if there is no additional comment, the code is "0".
Control variable: The product category is used as control variables. Due to the
relatively low threshold of ODM for apparel, footwear and bags, many businesses will
form an ODM model to increase profits. In order to reduce the impact, it will be used as
the control variables.
5.3 Descriptive statistical analysis
From the perspective of the overall commodity attributes of NetEase selected, ODM model
products account for the vast majority (78.9%), and there are still some non-ODM model
products (21.1%). Among them, home life, food and beverages, clothing, shoes and hats, and
selected Global’s products on the NetEase selected platform accounted for 16.1%, 13.4%,
19.1% and 26.1% of the total number of products respectively. Since NetEase selected adjusts
its operation and sales plans according to consumers' needs and feedback, the quantity ratio
of product categories and ODM products in each product category also confirm the
positioning of NetEase selected for consumers. New middle-class consumers who have a
certain spending power and tend to have a higher quality of life. They are generally between
25 and 35 years old, and they pay more attention to quality life and healthy life.
In the survey of consumer participation, it was found that among the products on the
NetEase selected, products with review accounted for 74.9% of the total number of products,
of which ODM products accounted for 82.7% of the total number of products with review.
Commodities accounted for 25.1% of the total number of commodities. On the whole, the
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SHS Web of Conferences 96, 04009 (2021) https://doi.org/10.1051/shsconf/20219604009
IAFSM 2020
high level of consumer participation on the NetEase selected indicates that users are more
sticky and the shopping platform is more active. From the product categories, except for the
strict selection of the global product category, the number of products reviewed for the other
seven categories accounted for more than 80% of the total number of products in each
category. ODM products also accounted for the vast majority, indicating that NetEase
consumers on the selected platform are willing to share their willingness to use with other
consumers, which also helps the platform increase the weight of consumers' decision-making
when choosing products, which has a certain impact on consumers' shopping choices.
5.4 Correlation analysis
Use SPSS software to analyze the correlation between ODM model products and consumer
decision-making, use product categories as control variables, ODM products as independent
variables, product sales as dependent variables, and consumer participation as a moderating
variable to construct a model. The method of stepwise hierarchical regression is adopted.
Model 1 is the correlation analysis between control variables and consumer decision-making;
Model 2 adds independent variables to analyze the correlation between ODM model goods
and consumer decision-making; Model 3 adds moderating variables to analyze consumer
participation in ODM model The impact of the relationship between goods and consumer
decisions. The results of stepwise hierarchical regression analysis are shown in Table 2.
Table 2. Hierarchical regression results.
Variable
Model 1
Model 2
Model 3
Dependent variable: Sales volume of goods
Control variable
FMCG
0.250***
0.253***
0.229***
Independent variable
ODM
0.159***
0.145***
Moderator effect
Consumer continued participation * ODM
products
0.181***
Constant
1.406E-15
1.298E-15
-0.032
R-square
0.075
0.100
0.130
Observations
3474
Note: *p < .10; **p < .05; ***p < .01. All tests are tailed.
The correlation analysis results show that in Model 1, the product category and consumer
decision-making show a positive correlation (β=0.250***); in Model 2, the independent
variables are added to the model, and the correlation analysis results show that ODM There
is a significant positive correlation between model products and consumer decision-making
(β=0.159***). As the control variable of product category, its correlation with consumer
decision-making has no significant change; in Model 3, the consumer participation As a
moderating variable, the analysis results show that consumer participation has a positive
regulatory effect on the relationship between ODM model products and consumer decision-
making (β=0.181***). The closer the relationship between ODM model products and
consumer decision-making.
6
SHS Web of Conferences 96, 04009 (2021) https://doi.org/10.1051/shsconf/20219604009
IAFSM 2020
high level of consumer participation on the NetEase selected indicates that users are more
sticky and the shopping platform is more active. From the product categories, except for the
strict selection of the global product category, the number of products reviewed for the other
seven categories accounted for more than 80% of the total number of products in each
category. ODM products also accounted for the vast majority, indicating that NetEase
consumers on the selected platform are willing to share their willingness to use with other
consumers, which also helps the platform increase the weight of consumers' decision-making
when choosing products, which has a certain impact on consumers' shopping choices.
5.4 Correlation analysis
Use SPSS software to analyze the correlation between ODM model products and consumer
decision-making, use product categories as control variables, ODM products as independent
variables, product sales as dependent variables, and consumer participation as a moderating
variable to construct a model. The method of stepwise hierarchical regression is adopted.
Model 1 is the correlation analysis between control variables and consumer decision-making;
Model 2 adds independent variables to analyze the correlation between ODM model goods
and consumer decision-making; Model 3 adds moderating variables to analyze consumer
participation in ODM model The impact of the relationship between goods and consumer
decisions. The results of stepwise hierarchical regression analysis are shown in Table 2.
Table 2. Hierarchical regression results.
Variable
Model 1
Model 2
Model 3
Dependent variable: Sales volume of goods
Control variable
FMCG
0.250***
0.253***
0.229***
Independent variable
ODM
0.159***
0.145***
Moderator effect
Consumer continued participation * ODM
products
0.181***
Constant
1.406E-15
1.298E-15
-0.032
R-square
0.075
0.100
0.130
Observations
3474
Note: *p < .10; **p < .05; ***p < .01. All tests are tailed.
The correlation analysis results show that in Model 1, the product category and consumer
decision-making show a positive correlation (β=0.250***); in Model 2, the independent
variables are added to the model, and the correlation analysis results show that ODM There
is a significant positive correlation between model products and consumer decision-making
(β=0.159***). As the control variable of product category, its correlation with consumer
decision-making has no significant change; in Model 3, the consumer participation As a
moderating variable, the analysis results show that consumer participation has a positive
regulatory effect on the relationship between ODM model products and consumer decision-
making (β=0.181***). The closer the relationship between ODM model products and
consumer decision-making.
6 Conclusion
This paper takes the NetEase selected platform represented by the ODM e-commerce model
as the research object, and explores the relationship between ODM model products and
consumer decision-making. The research found that there is a significant positive correlation
between ODM model products and consumer decision-making. There is also a significant
positive correlation between consumer decisions, and consumer participation has a positive
regulatory effect on the relationship between ODM model products and consumer decisions.
The research conclusions provide theoretical support for the ODM e-commerce model to
increase user stickiness, increase consumer decision-making weight, and expand marketing
models.
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