An Evaluation of the Factors Affecting the Online Shopping Intentions of Consumers in China

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Abstract

Online shopping has grown rapidly in China over the last decade, yet there are only a few studies in Chinese context. This research focuses on B2C (Business to Customer) and C2C (Customer to Customer) to identify the factors that affect online shopping intention of consumers in both positive and negative aspects. However, there are some differences exist that influence online shopping intention among different countries. As a result, this essay evaluates the determinants of online shopping intention of Chinese consumers by comparing consumers in other countries, which will give an insight for online sellers to develop more competitive strategies in China.

Contents

Abstract
Introduction1
Literature Review3
1. Global consumers6
1.1 Main factors: price, convenience and risks6
1.2 Additional factors7
2. Chinese consumers8
2.1 Main factors: quality, delivery and payment security8
2.2 Additional factors: social influence9
Conclusion11
Bibliography14

Introduction
There are a growing number of people choosing online shopping and this growing trend has emerged all over the world over the last few decades. Online shopping is defined as “The act of purchasing products or services over the Internet” (Business dictionary, 2012). Similarly, iResearch (2011) defines it as “The process of transferring commodities or services from the merchant/seller to individual users (consumers) via the Internet. Such a process is called online shopping if any of its capital flow, logistics, or information flow involves the Internet.” Benefiting from the rapid economic growth and the development of the Internet, online shopping has become increasingly prevalent in China. The amount of transactions in online shopping, accounts for 1.1% in 2008 rising to 3.3% in 2010 of China’s total retail sales of consumer goods (CNNIC, 2011). Moreover, the latest report illustrates that up to December 2012, the number of net citizens in China reached 513 million, of which online shoppers are 194 million and the figure has kept a steady development trend with an increase of 20.8% compared to the end of 2011 (CNNIC, 2012). It can be seen that online shopping in China has experienced a robust growth and demonstrates a great potential when compared to mature online shopping markets, such as the USA, UK and Japan.

However, the development of China’s online shopping has encountered some obstacles, such as the limitations found within delivery and payment systems (Liu, He, Gao, & Xie, 2008, p.925 & p.932). Moreover, most research into online shopping has focused on western countries, but very little research has been done in the Chinese context (Kau, Tang, & Ghose, 2003, p.140; Liu, et al., 2008, p.921; So, Wong, & Sculli, 2005, p.1225). Therefore, in order to reach its potential and to maintain the steady growth tendency of online shopping market in China, it is important to attempt to comprehend the issues influencing the online purchase intentions of Chinese consumers. Thus, the purpose of this paper is to identify and evaluate factors that signify the differences between online purchase intentions of Chinese and global online shoppers.

This paper is structured as follows. The next section reviews the related literature about the issues relating to online shopping. Section 1 will identify which factors are prominent or auxiliary and may affect online shopping intention of global consumers while section 2 will compare Chinese consumers with global consumers and evaluate the significance of the differences.

Literature Review
The e-commerce industry has developed rapidly worldwide over the last few decades including the online shopping market in China which has experienced steady growth. Much research has tried to identify what the factors are and how they affect the online shopping purchase intention; however, a large proportion of these studies have been concerned about the West...
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