Factors inuencing consumers online

shopping in China
Wen Gong, Rodney L. Stump and Lynda M. Maddox
Abstract
Purpose The purpose of this paper is to develop an understanding of the factors inuencing Chinese
consumers to shop online by exploring the effects of user demographic characteristics and media
characteristics on shopping intention.
Design/methodology/approach A nationwide online survey of 503 Chinese consumers was carried
out to test the proposed conceptual model of online shopping intention using hierarchical regression.
The results support most of the proposed hypotheses.
Findings Chinese consumers age, income, education and marital status, and their perceived
usefulness are signicant predictors of online shopping intention.
Research limitations/implications Future research should use actual online purchases as the
dependent variable and explore the effects of product characteristics, merchants and intermediate
characteristics, as well as environmental inuences in online shopping behavior.
Practical implications Consideration of individual differences in explaining Chinese consumers
online buying intention could provide a better understanding of users adoption of the internet as a
shopping and transaction channel, as well as enhance an e-tailers market targeting and segmentation
effectiveness. E-marketers should incorporate features that can enhance online shopping efciency.
Originality/value Given the tremendous growth of B2C e-commerce in China, there is a critical need
for understanding what drives Chinese consumers to shop online. As one of the few large-scale
empirical studies on Chinese consumers online shopping behavior, these results will enable
e-marketers to better design their e-marketing strategies that cater to Chinese consumers changing
needs and lifestyles and improve their online shopping experiences and satisfaction.
Keywords Consumer behaviour, Internet, Shopping, Chinese consumers, Online shopping intentions,
B2C e-commerce
Paper type Research paper
Introduction
China now has 420 million internet users (CNNIC, 2010), representing the highest per
country usage in the world. With growing disposable income, the hundreds of millions of
netizens[1] are spending more and more on information and communication products and
services compared to their daily necessities, thus creating huge prospects for the
development of e-commerce and a digital economy in China. While many countries
worldwide were severely hit by the global recession, Chinas online retail market appeared to
be unaffected and has actually been growing steadily. Recent data reveal that China had
87.88 million users shopping on the Internet compared to 74 million the previous year
(CNNIC, 2009). This rapid growth represents opportunities as well as challenges for both
domestic and international marketers operating in the e-commerce space. Thus it is crucial
for e-marketers to understand what drives Chinese consumers to shop on the Internet in
order to design e-marketing strategies that caters to their changing needs and lifestyles and
improve their online shopping experiences and satisfaction.
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VOL. 7 NO. 3 2013, pp. 214-230, Q Emerald Group Publishing Limited, ISSN 1558-7894 DOI 10.1108/JABS-02-2013-0006
Wen Gong is based in the
Department of Marketing,
Howard University School
of Business, Washington,
DC, USA. Rodney L. Stump
is based in the Department
of Marketing, Towson
University, Towson,
Maryland, USA.
Lynda M. Maddox is based
at The George Washington
University, Washington, DC,
USA
Received 13 February 2013
Accepted 17 March 2013
Despite the surge in internet usage in China, analysts and researchers have questioned
whether Chinese consumers will become avid online shoppers. They point to Chinas cultural
preference for face-to-face business interactions as well as regulatory issues as factors that
may inhibit the development of online shopping (Raven et al., 2007; Rein, 2008).
While there is a growing body of research exploring consumers online shopping behavior in
Western context, far less is known in other parts of the world (Stafford et al., 2004). Thus,
whether these studies and associated theories are generalizable to other cultural contexts
such as China remains largely unknown. To date, relatively few empirical studies have been
carried out in the Chinese context. Given the tremendous growth this market is experiencing,
an in-depth understanding of the underlying motivations, attitudes and behaviors of Chinese
online shoppers is needed if marketers and advertisers are to inuence consumers online
buying decisions. This paper intends to ll some of this knowledge gap by empirically
investigating the determinants of Chinese consumers online shopping intentions.
In the following section, we reviewboth the Chinese online retail market and factors identied
in the existing literature that inuence consumers online buying intentions. Next, we present
our conceptual model and a series of hypotheses derived from it. Following that, we
describe our methodology, present the results of our survey, discuss the implications of
these ndings and tender recommendations for future research.
Literature review
Overview of Chinas online retail market
One manifestation of Chinas continuous rapid economic growth during the past two
decades is its consumers swelling consumption power (Zhao et al., 2008). As a result of the
growing affordability and availability of Internet access, more and more Chinese consumers
are using the internet for information, entertainment and communication purposes. At the
same time, Chinese consumers increasing understanding of online applications, a more
transparent and convenient online shopping environment and expanding investments by
companies have turned more and more Chinese netizens into online shoppers. Evidence of
this is reected in Chinas online retail market value reaching USD 18.8 billion in 2008 with a
vigorous growth rate of 128.5 percent in 2008 (Lee, 2009). Rising against the global
economic crisis, Chinas online shopping penetration rate has reached 24.8 percent and the
online B2C (business-to-consumer) annual growth rate is expected to exceed 100 percent
over the next two years (CNNIC, 2009; Lee, 2009).
One decade after the establishment of the rst B2C web site 8848.com in 1999, Chinas B2C
e-commerce has entered a stage of rapid development (Weng and Lee, 2009; Shanghai
Business Review, 2010). In contrast to most Western markets, C2C (consumer to consumer)
e-commerce (akin to eBays model) currently dominates Chinas online shopping market with
93.2 percent of total online sales in 2008 (CNNIC, 2009). Exemplifying this is Taobao, the
largest e-tailer in China whose web site allows buyers to shop in C2Cbazaars as well as B2C
branded stores. However, the online B2C market is expected to rapidly grow and become
the main driver behind the market expansion in the future as the B2C platform matures and
more local and foreign rms use this model to enter the market (Lee, 2009; Shanghai
Business Review, 2010).
Chinese netizens have greatly increased their online spending over the years. The average
spending online reached RMB1,600 (USD 234.3) in 2008 (IResearch, 2009; Lee, 2009) (see
Figure 1 for trends from 2003 to 2008). Like their Western counterparts, the online shopping
lists of Chinese consumers have also expanded a great deal from the initial simple selection
of books, music and video products to include a more extensive array of product categories
including apparel, housewares, digital products and many others.
Critics posit that e-commerce will not work in China, arguing that Chinese consumers are
traditionally conservative savers who refuse to buy on credit, distrust online vendors due to
privacy and quality concerns, and need to feel and touch a product before purchasing it
(Rein, 2008). Such perceptions may be in a state of ux as things have changed dramatically
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in China during the past three decades. The implementation of the one-child family policy
and the rapid transition to a market economy have remolded the Chinese society culturally,
as well as economically. Younger generations of Chinese hold a set of cultural values
strikingly different from those of their parents and older generations (Gong et al., 2004).
Young Chinese are more individualistic, novelty-seeking, admire foreign-made products,
and have a heightened sense of brand and status consciousness (Gong and Li, 2008).
Indeed, they have become the trend setters in almost every product and service category
fromstreet fashion to mobile phones and online purchases. Therefore, it is not surprising that
several market research reports have found that young and educated consumer segments
with higher income level are mainly the early adopters of online shopping in China (Lee,
2009; Rein, 2008).
Characterized by high technology and low entry barriers, Chinas online shopping market is
very dynamic and highly competitive, yet it holds great promise (Lee, 2009). In recent years,
the government has attached great importance to e-commerce as a means of spurring
Chinas economy and has released a series of policies to regularize and guide Internet and
e-commerce development, mainly through the 11th Five-Year Plan and the 2006-2020
National Informatization Development Strategy (CNNIC, 2009).
Despite these positive factors, China is not a country where it is easy for foreign rms to
operate online effectively and compete. Online sales and logistics are separated
everywhere in China and cash on delivery is still the main payment method for online
shopping (Shanghai Business Review, 2010). Geographical diversity, cultural barriers, lack
of cultural understanding, the fast-changing business environment and government
regulations, and especially the poor distribution networks and the lack of a safe and efcient
online payment mechanism all make this market less accessible to foreign rms (Lee, 2009).
CNNICs surveys have consistently shown that Chinese internet users are less involved in
e-commerce activities such as online shopping and payment, compared to their use of the
internet as a tool for entertainment, communication and information. The relatively low
adoption of e-commerce activities by Chinese consumers lags that of their Western
counterparts, especially Americans (Zhao et al., 2008).
This recap of the Chinese market not only highlights the importance of and an imminent need
for more research on Chinese online shoppers but also implies that Internet marketing
strategies developed in Western countries may not be applicable in the Chinese context.
Figure 1 Online shoppers average online spending per year
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Factors inuencing consumers online shopping
The increasing popularity and proliferation of online shopping has stimulated widespread
research aimed at understanding what inuence consumers online shopping behavior.
Earlier research sought to develop proles of internet buyers and identify predictors of
consumers intention and adoption of online shopping. More recently, research has begun to
focus on consumer site commitment, online shopping satisfaction and e-loyalty (online
repurchasing) (e.g. Ha, 2006; Li et al., 2006; Massad et al., 2006; Park and Kim, 2006).
Synthesizing studies in this area from 1994 through 2002, Cheung et al. (2005) provided a
critical and comprehensive review of the theories and empirical results of consumer online
behavior. The theory of planned behavior (TPB), theory of reasoned action (TRA), and
technology acceptance model (TAM) were identied as the dominant conceptual bases in
the surveyed literature. Five major categories of determinants of consumer online behavior
were identied:
1. Consumer characteristics such as consumer demographics, attitude, motivation,
perceived risk and trust.
2. Product characteristics such as price and product type.
3. Merchants and intermediate characteristics such as brand, service, privacy and security
control.
4. Environmental inuences such as exposure, market uncertainty, and competition.
5. Medium characteristics such as ease of use and information quality.
Chang et al. (2005) and Zhou et al. (2007) have also conducted meta-analyses on the
antecedents of consumers adoption of online shopping.
Conceptual model and hypotheses
Our study chooses to concurrently focus on two dimensions identied as being signicant
determinants of consumer online behavior, namely consumer and medium characteristics.
Specically, our model focuses on online shopping intentions as the dependent variable,
based on Fishbein and Ajzens (1975; Ajzen and Fishbein, 1980) theory of reasoned action
(TRA) which posits that beliefs inuence attitudes, which lead to intentions, and nally to
behaviors. We dene online shopping intentions as users likelihood to engage in online
shopping or buying activities, following the precedent of Chen et al. (2002). The
independent variables in our model include demographics and perceived risk, as aspects of
consumer characteristics, and perceptions of ease of use and usefulness, as aspects of the
medium characteristics (see Figure 2).
Figure 2 Model of factors inuencing Chinese consumers online shopping intentions
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Consumer demographics. Consumer demographics are the most frequently studied area in
online shopping research. While there is abundant evidence that consumers demographic
traits such as gender, age, income, education, and marital status are associated with their
online shopping behavior (Liebermann and Stashevsky, 2009; Zhou et al., 2007), the extant
empirical literature reports many inconsistent ndings. We include these factors as the
baseline for our analysis and to provide additional evidence to help resolve these
inconsistencies.
Consider rst gender. Men were reported to hold the same (Alreck and Settle, 2002) or even
more favorable (van Slyke et al., 2002) perceptions towards online shopping than their
female counterparts, despite the fact that women usually have much more positive attitudes
toward shopping in general and towards both store and catalogue shopping in particular.
Explanations for such a gender pattern in the online setting have been offered from different
perspectives, for example, women were reported to perceive higher risk in online
purchasing than do men even when controlling for differences in Internet usage (Garbarino
and Strahilevitz, 2004); men and women exhibited different shopping orientations while
women were more recreational-oriented and motivated by social interactions, men were
more convenience-oriented and care less about face-to-face contacts (Swaminathan et al.,
1999); men and women are interested in different types of product when shopping on the
Internet (Jayawardhena et al., 2007; Zhou et al., 2007); e-shoppers are more likely to be male
than female because e-shopping involves a computer technology with specic masculine
associations (Dholakis and Chiang, 2003). In addition, men and women also show
signicant differences in online information search (Yoo-Kyoung and Bailey, 2008), women
demonstrate a stronger need than men for tactile cues in product evaluation (Citrin et al.,
2003), and women were found to be less satised than men with their online shopping
experience (Doolin et al., 2005; Kimand Kim, 2004; Rogers and Harris, 2003). Another study
also reported more men than women participated in online auctions (Fallows, 2005),
indicating that consumers online buying behavior varies not only by gender but also by
shopping formats (Shehryar, 2008). Summarizing these rationales, we posit:
H1a. Chinese male consumers are likely to hold higher online shopping intentions than
their female counterparts.
The existing research shows conicting results about the effect of age in predicting online
shopping. Several studies have found a positive relationship (Bhatnagar et al., 2000; Donthu
and Garcia, 1999; Doolin et al., 2005; Liebermann and Stashevsky, 2009) while others
reported a negative one (Joines et al., 2003; Swinyard and Smith, 2003) or no relationship (Li
et al., 1999; Rohm and Swaminathan, 2004). Zhou et al. (2007) assert that this inconsistency
across research ndings may be a function of the lack of a standard age categorization
scheme being used across studies. Looking to the broader adoption of innovation literature,
particularly studies that have pertained to information and communications technologies
(ICT) and services mediated by ICT, such as computers (Stoneman, 1983), the Internet
(Kiiski and Pohjola, 2002), automatic teller machines (Murdock and Franz, 1983), and
Internet banking and shopping (Eastin, 2002), there is a substantial body of evidence that
suggests that consumer innovators and early adopters tend to be younger, have higher
levels of income, and are more educated (Dickerson and Gentry, 1983; Gatignon and
Robertson, 1991; Rogers, 1995). In light of this, we propose:
H1b. There is an inverse relationship between Chinese consumers age and their
intention to shop online.
Common wisdomhas it that better educated consumers are more likely to be exposed to the
internet technology and thus have more condence in using the internet as a medium for
shopping (Hui and Wan, 2007). However, mixed effects were identied regarding a
consumers educational level on his/her online shopping intention. Some have reported a
positive relationship (Li et al., 1999; Liao and Cheung, 2001; Swinyard and Smith, 2003;
Susskind, 2004) while others did not (Bellman et al., 1999; Donthu and Garcia, 1999;
Mahmood et al., 2004, Liebermann and Stashevsky, 2009). As noted above, higher
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education levels often have been related to the adoption of other information and
communications technologies (ICT) and services mediated by ICT, which leads us to tender:
H1c. The higher the educational level of Chinese consumers, the more likely they will
intend to shop online.
As for income, it is well documented that online shoppers tend to earn more money than
traditional store shoppers (e.g. Mahmood et al., 2004; Susskind, 2004; Doolin et al., 2005).
Similarly, higher incomes generally show a high correlation with the adoption of other
information and communications technologies (ICT) and services mediated by ICT. Hence,
we propose:
H1d. The higher the income level of Chinese consumers, the more likely they will shop
online.
The effect of marital status on online shopping intentions is also not clear. Bhatnagar et al.
(2000) and Liebermann and Stashevsky (2009) have reported an insignicant effect. On the
other hand, Kim and Kim (2004) have found the number of children to be a signicant
predictor of consumer online shopping intentions of clothing. Thus, marital status, per se,
may not be predictive but when coupled with the presence or absence of children in the
household, this combination may be germane. Accordingly, we predict:
H1e. Married Chinese with children are more likely to hold higher intentions to shop
online than married persons with no children or singles (regardless if children are
in the household).
Perceived risk. Perceived risk plays a critical role in consumer decision-making and
behaviors (Mitchell, 1999). This is particularly true with Internet purchases, which involve
activities that are not only technology-intensive but also of an impersonal nature (Bart et al.,
2005; Hsu and Wang, 2008; Yang et al., 2006; Zhou et al., 2007). Prior research has
indicated that the probability of consumers choosing an online marketing channel increases
signicantly if their condence in that channel is high and the perceived risk is low
(Bhatnagar et al., 2000; Black et al., 2002). Within the extant literature, perceived risk has
been conceptualized at several levels of specicity. Some studies have operationalized this
construct in a multidimensional fashion that focuses on different aspects such as privacy
performance, payment, and social risk (e.g. Karson, 2008; Miyazaki and Fernandez, 2001;
Cases, 2002). Park et al. (2004) have taken an intermediate approach and categorized these
risks according to related to product/service (such as functional loss, nancial loss, time loss
and opportunity loss) and those related to online transaction (such as privacy, security, and
nonrepudiation). Conversely, Pavlou (2003) argues that perceived risk in the context of
online shopping is a unidimensional construct. Despite the considerable variance on how to
conceptualize this construct, the empirical literature is more straightforward. In general, the
negative relationship between perceived risk and consumers attitudes toward online
shopping and in turn, their intention to shop online has received widespread empirical
support (e.g. Bhatnagar et al., 2000; Dinev and Hart, 2005; Featherman and Pavlou, 2003;
Jarvenpaa et al., 1999; Joines et al., 2003; Kolsaker et al., 2004; Liang and Jin-Shiang, 1998;
Liao and Cheung, 2001; Liu and Wei, 2003; Molina-Castillo and Lopez-Nicolas, 2007; Park
et al., 2004; Pavlou, 2003; Ruyter et al., 2001). Thus we propose:
H2. Perceived risk negatively inuences Chinese consumers intention to shop online.
Perceived ease of use and perceived usefulness. Based on the comprehensive review by
Cheung et al. (2005), the technology acceptance model (TAM) (Davis, 1989) is one of the
dominant theories underlying the examination of consumer online behavior. TAM was
originally developed to explain and predict computer-usage behavior based on two specic
behavioral beliefs: perceived ease of use (PEU) and perceived usefulness (PU). Perceived
usefulness is the degree to which a person believes that using a particular system would
enhance his or her job performance, and perceived ease of use is the degree to which a
person believes that using a particular system would be free of effort (Davis, 1989. p. 320).
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It has since been applied to diverse types of information systems as well as users behavior
on the internet, such as internet users online shopping behavior (e.g. Gefen et al., 2003;
Klopping and McKinney, 2004; Park et al., 2004). The benets identied in the e-commerce
literature relative to PEU include the perceived ease of information search, ease of ordering
(any time, any location) and overall ease of use, while PU encompasses improved search
and buying, increased shopping productivity, money and time saved by shopping online,
and greater product choices available online (Khalifa and Liu, 2007; Park et al., 2004).
In general, PU has been shown to have a signicant inuence on attitude formation and
subsequent behaviors and has received considerable empirical support (e.g. Davis, 1989;
Zhou et al., 2007), whereas the evidence for perceived ease of use has been inconsistent
(Klopping and McKinney, 2004). Based on these conceptualizations and empirical
precedents, we posit:
H3a. Perceived ease of use will positively inuence Chinese consumers likelihood of
shopping online.
H3b. Perceived usefulness will positively inuence Chinese consumers likelihood of
shopping online.
Methodology
Sample size and prole
Data for this study were collected as part of a larger effort to compare the attitudes and
behaviors related to Internet use and online shopping of Chinese consumers with a
benchmark study of US consumers conducted by Pew Internet & American Life Project
(Horrigan, 2008). Some changes (such as income categorization and product categories)
were made to t the Chinese context based on CNNIC Online Shopping Survey (2006). The
questionnaire was translated and back-translated to ensure semantic consistency between
Chinese and English versions (Singh, 1995) prior to pre-testing.
DigitalBiz.com, a Washington DC-based company specializing in online marketing
research, was commissioned for data collection. The survey was conducted on a private
web site administered by the company. The sampling frame included e-mail addresses
collected from major Internet sites in China. Invitations to participate in the research were
sent to 8,000 random addresses. A total of 503 respondents completed the survey,
representing a response rate of 6.5 percent. No incentives or follow-up e-mail reminders
were used to increase participation. Thus, the sample was a product of self-selection and all
the respondents should be considered as Internet users. Data collection lasted about one
week. Respondents were screened to be at least 16 years old. Table I presents the sample
demographics and webgraphics and a comparison of the composition between those who
have made a purchase online with those who have not yet done so. While male respondents
seem to be overrepresented and those under 18 are underrepresented relative to the
population of Chinas as a whole, the sample education and income distributions are in line
with what have been reported about Chinese online customers (CNNIC, 2008a).
Operationalization of variables
Our dependent measure, online shopping intention was operationalized as a formative index
(Diamantopoulos and Winklhofer, 2001) comprising 15 items that were measured using
ve-point Likert scales bounded by very likely and very unlikely. It encompassed a
broad range of product categories and was not specic to using a particular online retailing
venue.
Predictor variables
1. Demographics:
B Gender (H1a) was measured with a single dichotomous item and included as a single
dummy variable in the substantive analysis. Male served as the benchmark.
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Table I Sample demographics and webgraphics
All (%)
n 503
Online
purchasers (%)
n1 417
Online
non-purchasers (%)
n2 86
Gender
Men 73.6 73.4 74.4
Women 26.4 26.6 25.6
Age
16-17 1.0 .5 3.5
18-24 29.8 29.7 30.2
25-34 50.5 52.3 41.9
35-44 15.5 15.8 14.0
45-54 2.2 0.7 9.3
55-64 1.0 1.0 1.2
65-74
75
Marital status
a
Single without children 54.3 54.2 53.3
Single with children 1.4 0.7 4.7
Married without children 9.7 10.4 7.0
Married with children 34.2 34.7 34.9
Education
Below secondary
Secondary 1.2 0.5 4.7
High School 8.0 6.0 17.4
Junior College 24.7 23.5 30.2
Undergraduate 57.3 59.5 46.5
Graduate and above 8.9 10.6 1.2
Monthly income
under RMB 500 5.4 4.1 11.6
RMB 501 to 1000 5.4 4.6 9.3
RMB 1001 to 2000 19.9 17.5 31.4
RMB 2001 to 3000 18.5 19.2 15.1
RMB 3001 to 4000 17.3 18.5 11.6
RMB 4001 to 5000 10.3 11.0 7.0
RMB 5001 and above 16.7 18.9 5.8
Do not know or refused 2.4 1.9 4.7
No income 4.2 4.3 3.5
Internet usage
Never
Less than once a month 0.4 0.5
1 to 3 times per month 0.6 0.7
1 to 3 times per week 3.0 2.2 7.0
4 to 6 times per week 17.1 16.3 20.9
Once a day or more 78.9 80.3 72.1
Place of internet access
At workplace 23.7 24.2 20.9
At home 63.2 64.0 59.3
At school 8.5 7.9 11.6
Internet cafe 2.4 2.2 3.5
Others 2.2 1.7 4.7
Surng equipment
Desktop computer 73.0 72.2 76.7
Laptop computer 26.2 27.1 22.1
Mobile phone 0.8 0.7 1.2
Note:
a
Missing value for two cases
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B Age (H1b) was measured with a single ordinal item where each of the ten response
categories represented a range of ages. The midpoint of the selected range was
included in the substantive analysis.
B Education (H1c) was measured with a single ordinal itemwith six response categories.
For the substantive analysis three of the lowest categories were combined to represent
high school or lower. The resulting 4 categories were represented by three dummy
variables in the substantive analysis and high school or lower served as the
benchmark.
B Income (H1d) was measured with a single ordinal item where seven of the nine
response categories represented an income range, one represented no income, and
the nal category dont know or refused was treated as a missing value. The
midpoint of the indicated range was included in the substantive analysis.
B Marital status (H1e) was operationalized to encompass both marital status and the
presence or absence of children in the household. The four categories were
represented by three dummy variables in the substantive analysis and single without
children served as the benchmark.
2. Perceived risk (H2) was operationalized as a formative index (Diamantopoulos and
Winklhofer, 2001) comprising six items, with the respondent instructed to check all that
apply.
3. Perceived ease of use (H3a) was operationalized as a three-item reective scale and
validated using the procedures recommended by Churchill (1979). The reliability of this
scale is (Cronbach 0:68).
4. Perceived usefulness (H3b) was operationalized as a nine-item reective scale and
validated following the same procedure. The reliability of this scale is (Cronbach 0:88).
Substantive analysis. The hypotheses were tested in a hierarchical fashion using ordinary
least squares (OLS) regression. In the initial run, the main effects of the demographic
variables were assessed. The main effects of the three substantive factors, i.e. perceived
risk, PEU and PU were then added, and the model was re-estimated. The signicant overall
F tests in both runs are indicative that interpretation of the individual regression models and
parameter estimates for the independent variables is warranted. Results are displayed in
Table II.
Table II Regression results (standardized coefcients and t-values shown)
DV: online shopping intention Baseline (demographics) Full (demographics and substantive)
Constant 18.505 * 6.629*
Gender (dummy variable) 0.046 1.057 ns 0.059 1.339***
Age 20.163 23.022* 20.144 22.876*
Education1 (dummy variable) 0.107 1.455*** 0.085 1.247 ns
Education2 (dummy variable) 0.163 2.041** 0.147 1.992**
Education3 (dummy variable) 0.058 0.961 ns 0.041 0.722 ns
Income 0.262 5.371* 0.191 4.143*
Marital and children in home Status1 (dummy
variable) 0.067 1.497*** 0.057 1.376***
Marital and children in home Status2 (dummy
variable) 0.083 1.802** 0.058 1.361***
Marital and children in home Status3 (dummy
variable) 0.129 2.284** 0.089 1.691**
Perceived risk 20.021 20.530 ns
Ease of use 0.017 0.419 ns
Usefulness 0.376 9.149 *
F-value
(df1,df2)
F(9,481)6.675* F(12,478) 12.887*
R
2
(Adjusted R
2
) 0.111 (0.094) 0.244 (0.225)
DR
2
/DF-value DR
2
0.133/DF
(3,478)
6.212*
Notes: Signicance levels (one-tailed test) * p , 0:01; ** p , 0:05; *** p , 0:10; ns not signicant
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As we can see from Table II, the addition of the main effect terms relating to the three
substantive variables results in a signicant improvement in the explanatory power of the
models. R
2
showed a signicant improvement from .11 to .24. Table III summarizes the
hypotheses and testing results.
Discussion and managerial implications
Summarizing our results concerning demographics, our hypothesis related to gender (H1a)
was not supported given the marginally signicant parameter estimate, which suggests that
Chinese male and female consumers hold similar online shopping intentions. We did nd a
signicant inverse relationship with regards to age, thereby supporting H1b. H1c was
partially supported in that the dummy variable corresponding to undergraduate degree was
signicant. As expected, we did nd a signicant relationship with regards to income, which
supported H1d. H1e was supported in that the dummy variable corresponding to married
with children was signicant and greater than the other marital status/children in household
categories.
Perceived risk was found to have no signicant inuence on online shopping intentions, thus
H2 was not supported. We found mixed results regarding the two media characteristics.
Perceived ease of use generated a non-signicant parameter estimate, which was contrary
to H3a, whereas perceived usefulness was found to have a signicant positive effect, which
supported H3b.
As summarized above, the results of our study are mostly in accordance with expectations
and contribute to our understanding of the drivers of consumer e-commerce in China. Our
results would be of the most practical interest to e-marketers, both domestic and
international. Our research provides empirical evidence about how consumer
characteristics (i.e. gender, age, income, education, marital status) and medium
characteristics (i.e. perceived risk, ease of use and usefulness) can inuence Chinese
consumers online shopping behavior. We believe that we can all agree on the signicance
and potential of the B2C e-commerce in China. As such, our ndings will be of value to both
domestic and international e-marketers who are trying to inuence consumers online
shopping decisions. Our results will help develop an understanding of what drives Chinese
consumers to shop online, which will, in turn, help e-marketers design e-marketing
strategies that cater to the changing needs and lifestyles of Chinese consumers and
enhance their online shopping experiences and satisfaction.
Table III Summary of hypotheses and testing results
Hypotheses Results
H1a. Chinese male consumers are likely to hold higher online
shopping intentions than their female counterparts
Not supported
H1b. There is an inverse relationship between Chinese consumers
age and their intention to shop online
Supported
H1c. The higher the educational level of Chinese consumers, the more
likely they will intend to shop online
Partially supported
H1d. The higher the income level of Chinese consumers, the more
likely they will shop online
Supported
H1e. Married Chinese with children are more likely to hold higher
intentions to shop online than married persons with no children or
singles (regardless if children are in the household)
Supported
H2. Perceived risk negatively inuences Chinese consumers intention
to shop online
Not supported
H3a. Perceived ease of use will positively inuence Chinese
consumers likelihood of shopping online
Not supported
H3b. Perceived usefulness will positively inuence Chinese
consumers likelihood of shopping online
Supported
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Marketers must knowwho their buyers are and what drives themin order to develop the most
actionable marketing plans and strategies. Previous research has delineated the effects of
consumer demographics in the buying process. Our results indicate that Chinese
consumers age, education, income and marital status are signicant predictors of their
Internet purchase intention, echoing the ndings from most of the existing literature in the
area. Several market research reports have found that young and educated consumer
segments with higher income level are mainly the early adopters of online shopping in China
(Lee, 2009; Rein, 2008). The nding that gender is not a signicant predictor of Chinese
consumers online shopping intention appears to be at odds with what have been
documented in the extant literature (e.g. Citrin et al., 2003; Garbarino and Strahilevitz, 2004;
Rogers and Harris, 2003; Swaminathan et al., 1999; Yoo-Kyoung and Bailey, 2008). There
may be a simple reason for this the rapid growth of Internet use and online shopping in
China may have evened out the gender aspect of the typical shopper, something certainly
worth further investigation. Meanwhile, because of the over-representation of the male
respondents in our sample, to better investigate the effects of gender, we conducted a post
hoc analysis, where we split the sample by gender (n1 361 for the male subgroup and
n2 128 for the female subgroup) and reran the models using the same variable set except
the gender dummy variable. Interesting results emerged where some regression
coefcients are signicantly different across the two subgroups. According to the post
hoc analysis results, we found negative effect of age is more pronounced in women than in
men (t 1:81, p , 0:1); effect of highest education level is positive for men, whereas the
opposite is true for women (t 1:80, p , 0:1); and effect of risk level is negative for men,
whereas the opposite is true for women (t 21:95, p , 0:05).
No doubt, consideration of individual differences in explaining consumers online buying
intention could provide a better understanding of users adoption of the Internet as a
shopping and transaction channel as well as enhance an e-tailers market targeting and
segmentation effectiveness.
An interesting nding of the study is the insignicance of perceived risk as predictor of
Chinese consumers online shopping intentions. Although the majority of the Chinese
respondents expressed their top concerns as product not being able to live up to
expectations, disputes being difcult to resolve, unreliable customer service and making
online payment, such concerns do not seem to affect their online shopping intention. This
leads us to infer that security and privacy concerns are becomingless important in predicting
Chinese consumers online shopping intention, especially with rapid advancement of
information technologies and increasingly improved regulation/legislation on e-commerce in
China. However, this by no means indicates that e-marketers would not benet fromadopting
and implementing buyer-friendly online security and privacy protection measures.
Contrary to our expectation, perceived ease of use was not found to be a predictor of
Chinese consumers online shopping intention. Knowledge of the reality of Chinas internet
and e-tailing industry may help explain this nding. Although broadband Internet access
have gained a wide popularity in China (91 percent, 94 percent and 98 percent for 2008,
2009 and 2010 respectively) (CNNIC, 2008b, 2009, 2010), download speed remains far
behind that of developed countries (CNNIC, 2010) and the data transfer rate further slows
down during peak hours because broadband width is shared (Lee, 2009). The poor
nationwide distribution networks and the lack of a safe and efcient online payment
mechanism are signicant hurdles that hinder Internet purchases in China. In addition,
despite the growing popularity, credit card usage and transaction volume are still very low in
China, compared to those of developed economies (Hunkar, 2009). These local conditions
may greatly reduce the convenience and, in turn, ease of use of online shopping among
Chinese consumers. However, along with the increased affordability, increasingly more
Chinese are searching on the Internet. Product information made available on the Internet
via comparison sites, chat rooms, blogs or social media networks may be perceived as a
great advantage. There is an old Chinese saying never make a purchase until you have
compared three shops. Such comparison convenience may be more appreciated by
Chinese consumers. Further, source credibility greatly affects Chinese consumers search
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activity and word-of-mouth (WOM) is greatly valued due to their group orientation.
Information shared by other consumers can be very inuential because it is not controlled by
the marketers and is thus seen as more credible. Therefore, although Chinese consumers
may not perceive online shopping to be easy, they still exhibit favorable attitudes toward
online shopping because of other advantages associated with it such as time-saving, lower
price, and wide selection (Gong and Maddox, 2010). This consequently facilitates their
online shopping intentions.
Perceived usefulness showed a signicant impact on Chinese consumers online shopping
intentions. This is in line with what has been documented in the literature and reects the
general utilitarian nature of online consumers (Jarvenpaa and Todd, 1997). The nding
suggests that e-marketers should incorporate features that can greatly enhance online
shopping efciency, for example, a search mechanism that can not only provide extensive
relevant information but also facilitate product comparison and help users make their best
decisions inamost efcient way. Of equal importanceis therealization that shoppingintention
is not equivalent to actual purchase. While more web site visitors have become more
comfortable andexperiencedshoppingonline, a recent study revealedthat about 50 percent
of Chinese online consumers abandon their shopping cart before purchase (China Business
Daily, 2008), suggesting a problem for e-marketers who prefer buyers but not browsers. As
such, it is important for the e-tailers to identify and address the drivers of cart abandonment
and nd innovative ways to bring consumers back and encourage future transactions. Cart
abandonment highlights the challenge for e-tailors to understandonline consumers potential
frustration and unpreparedness to make a purchase as well as the opportunity for them to
recover lost sales by clearing the path to purchase, keeping a tab on competitors prices,
clarifyingshippingcosts anddelivery times upfront, avoidingout-of-stock scenario as well as
pinning down the simplest checkout procedure (Mulpuru et al., 2010).
Limitations and suggestions for future research
Several limitations of this study shouldbe mentioned. First, despitethefact that weconducted
a nationwide survey, males and older consumers are over-represented in our sample,
compared to general online customers prole depicted by CNNIC (2008a). Also, the
response rate can be improved by providing incentives and/or sending follow-up e-mails. As
such, the Chinese sample may not be representative of the Chinese online shopping
population as a whole. Second, we used consumers online shopping intention as the
dependent variable in the study instead of their actual online purchase amount or frequency.
The self-report nature of purchase intention may be a potential bias. Third, only two major
categories of determinants of consumer online behavior, namely consumer characteristics
and medium characteristics were included in our conceptual model. Taking these into
consideration, the results are to be interpreted in light of the limitations outlined here.
Future research should use Chinese consumers actual online purchases as the dependent
variable and more revealing results regarding consumer e-commerce in China may come to
light. Future research should also explore the effects of product characteristics, merchants
and intermediate characteristics and environmental inuences in online shopping behavior
and enhance the predictive power of the proposed model. In terms of research
methodology, other techniques such as web analytics can be considered and utilized in
future research to better understand consumers web usage. Researchers should also start
to investigate additional topics that may be of great interest to e-marketers in China. For
example, how will customer service and return policy affect Chinese consumers online
shopping intentions and subsequent purchase behavior? Knowledge in this regard will help
e-marketers understand the role of these factors in the formation of expectations and their
impact on customer satisfaction and retention. Social networking web sites are perceived by
Chinese online users as good places for opinion and information sharing and allow them to
make better shopping decisions (CNNIC, 2010). Insights about the potential of
social-shopping sites in converting Internet users into online buyers in China should
help e-marketers design more effective viral marketing and e-WOM marketing strategies on
these web sites in generating desired outcomes.
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Note
1. Throughout this paper we use the terms netizens and internet users interchangeably.
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Corresponding author
Wen Gong can be contacted at: gong.gw@gmail.com
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