Abstract: As the rapid development of social commerce, the online social platform-based CKYS has emerged, which uses the WeChat social network for information dissemination and product sales. The purpose of this paper is to study the strategy choices of whether retailers should join CKYS. By establishing a demand function and then a profit function model, the profitability of WeChat social networks of retailers is measured using both consumer net utility and social influence. The two independent variables in the demand function are the probability of that consumer net utility is non-negative and social influence. In the consumer net utility, the impact of reference price and unfit on utility are considered. Social influence measured by interaction rate and embeddedness is computed as a logistic model to express the probability that a retailer can make potential customers in the WeChat buy products under the conditions of certain interaction rate and embeddedness. Through the mathematical simulation of the profit function, some joining strategies can be proposed to help retailers to make joining decisions. The results of the study show that: When other variables take different values, there are two kinds of relations between average interaction rate and profit: 1) When the time cost of retailers is less than the profit threshold, the profit decreases first, then increases, and finally decreases as the average interaction rate increases. At this time, retailers can join the platform and should improve the average interaction rate. When the average interaction rate reaches the maximum value point of profit function, retailers should not increase the average interaction rate. 2) When the time cost of retailers is greater than or equal to the profit threshold, the profit decreases as the average interaction rate increases. At this time, the retailers should not join the platform. At the same time, the retailers can also make the decision whether to join CKYS according to the length of the time required to recover the initial registration cost. The results of the study can not only provide some strategies for retailers who intend to join CKYS, but also provide reference for follow-up research about social commerce.

Key words: CKYS; demand function; social networks; social influence; consumer utility