An Empirical analysis of online shopping adoption in China

169 Pages·2011·1.83 MB·English

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thesis.
An Empirical Analysis of Online Shopping Adoption in China

A thesis
submitted in partial fulfilment
of the requirements for the Degree of
Master of Commerce and Management

at
Lincoln University

by
Jun Li Zhang (Helen)

Lincoln University, Canterbury, New Zealand
2011
Abstract of a thesis submitted in partial fulfilment of the requirements for the Degree
of M. C. M.

An Empirical Analysis of Online Shopping Adoption in China

By Jun Li Zhang (Helen)

The Internet is a global communication medium that is increasingly being used as an
innovative tool for marketing goods and services. The Internet has added a new dimension
to the traditional nature of retail shopping. The internet offers many advantages over
traditional shopping channels and the medium is a competitive threat to traditional retail
outlets. Globally, consumers are rapidly adopting Internet shopping and shopping online is
becoming popular in China. If online marketers and retailers know and understand the
factors affecting consumers’ buying behaviour, they can further develop their marketing
strategies to attract and retain customers.

There is a conceptual gap in the marketing literature as there has been very limited
published research on the factors influencing consumers’ choices between online shopping
and traditional shopping in China. This study seeks to fill this conceptual gap in the
context of online shopping by identifying the key factors influencing Chinese consumers’
online shopping behaviour.

II
A self-administered questionnaire was used to gather information from 435 respondents
from Beijing, China. The findings of this study identify seven important decision factors:
Perceived Risk, Consumer Resources, Service Quality, Subjective Norms, Product Variety,
Convenience, and Website Factors. All of these factors impact on Chinese consumers’
decisions to adopt online shopping.

This research offers some insights into the links between e-shopping and consumers’
decisions to shop or not shop online. This information can help online marketers and
retailers to develop appropriate market strategies, make technological advancements, and
make the correct marketing decisions in order to retain current customers and attract new
customers. Moreover, managerial implications and recommendations are also presented.

Keywords: Online shopping, Electronic market, China, Logit analysis

III
Acknowledgement

Here I want to express my gratitude to all the people who supported me during the whole
process of writing my thesis.

First and foremost, I would like to express my deep appreciation to my supervisor, Mr.
Michael D. Clemes for his advice, guidance, patience, support, and encouragement
throughout this research. His good advice helped me solve many problems far more
quickly than I could have on my own. I would also like to express my sincere gratitude to
my associate supervisor, Dr. Christopher Gan, who provided valuable advice and
constructive feedback. Especially, he helped me clarify the approaches to do the data
analysis.

I would also like to give many thanks to my parents, Yao Ping and Xiao Yan, for their
unconditional love, understanding, and moral and financial support throughout my
overseas study. I am deeply grateful for all they have done and continue to do for me. My
special thanks go to Yi Zeng, who has stood beside me and looked after me during these
years. His support and thought made this work possible.

Additionally, I would like to acknowledge the assistance and give thanks to all the
individuals who have assisted me in analyzing data. These people include Nancy Zheng,
Lingling Dou, Wei Jing, and Xin Shu. Furthermore, thanks are also given to postgraduate
fellows and staff in the Commerce Division at Lincoln University for their help and
support.
IV
Table of Content

Abstract ................................................................................................................................ II
Acknowledgement .............................................................................................................. IV
Table of Content .................................................................................................................. V
List of Tables ....................................................................................................................... X
List of Figure..................................................................................................................... XII
List of Appendices ........................................................................................................... XIII
Chapter 1 Introduction .......................................................................................................... 1
1.1 Introduction ............................................................................................................ 1
1.2 The E-Commerce Industry in China ........................................................................... 3
1.3 Problem Statement ...................................................................................................... 4
1.4 Research Objectives .................................................................................................... 6
1.5 Research Contribution ................................................................................................ 6
1.6 Thesis Overview ......................................................................................................... 7
Chapter 2 Literature Review ................................................................................................. 8
2.1 Introduction ................................................................................................................. 8
2.2 Online Consumer Behavior ......................................................................................... 8
2.3 The Consumer Decision-Making Process ................................................................... 9
2.3.1 Problem Recognition ......................................................................................... 10
2.3.2 Information Search............................................................................................. 11
2.3.3 Evaluation of Alternative ................................................................................... 11
2.3.4 Purchase Decision .............................................................................................. 12
2.3.5 Post-purchase Behavior ..................................................................................... 13
2.4 Previous Studies ........................................................................................................ 13
2.5 Factors Influencing Consumers' Online Shopping Adoption Behavior ................. 16
2.5.1 Website Factors .................................................................................................. 16
2.5.2 Perceived Risks .................................................................................................. 18
2.5.2.1 The Concept of Perceived Risk................................................................... 18
2.5.2.2 Types of Perceived Risk ............................................................................. 19
V
2.5.2.3 Perceived Risks of Online Shopping .......................................................... 20
2.5.3 Service quality ................................................................................................... 22
2.5.3.1 The Definition of Service Quality............................................................... 22
2.5.3.2 Service Quality Dimensions ....................................................................... 24
2.5.3.3 Service Quality in Online Retailing ............................................................ 24
2.5.3.4 Empirical studies on Service Quality Dimensions in Online Retailing ...... 25
2.5.4 Convenience ....................................................................................................... 27
2.5.5 Price ................................................................................................................... 28
2.5.6 Product Variety .................................................................................................. 30
2.5.7 Subjective Norms ............................................................................................... 31
2.5.8 Consumer Resources .......................................................................................... 32
2.6 Demographic Characteristics .................................................................................... 32
Chapter 3 Research Hypotheses and Model ....................................................................... 34
3.1 Introduction ............................................................................................................... 34
3.2 Conceptual Gaps in the Literature ............................................................................ 34
3.3 Research Objectives .................................................................................................. 34
3.4 Hypotheses Development ......................................................................................... 35
3.5 Hypotheses and Construct Relating to Objective One and Two............................... 35
3.5.1 Website Factors .................................................................................................. 35
3.5.2 Perceived risk ..................................................................................................... 36
3.5.3 Service Quality................................................................................................... 37
3.5.4 Convenience ....................................................................................................... 39
3.5.5 Price ................................................................................................................... 40
3.5.6 Product Variety .................................................................................................. 41
3.5.7 Subjective Norms ............................................................................................... 41
3.5.8 Consumer Resources .......................................................................................... 42
3.5.9 Product Guarantee .............................................................................................. 43
3.6 Hypotheses Related to Research Objective Three .................................................... 43
3.7 The theoretical Research Model ............................................................................... 45
3.8 The Research Model Based on Factor Analysis ....................................................... 47
Chapter 4 Research Methodology ....................................................................................... 49
VI
4.1 Introduction ............................................................................................................... 49
4.2 Sampling Method .................................................................................................. 49
4.3 Sample Size ............................................................................................................... 50
4.4 Questionnaire Development...................................................................................... 51
4.4.1 Focus Groups ..................................................................................................... 51
4.4.2 Questionnaire Format......................................................................................... 52
4.4.3 Pre-testing Procedures ....................................................................................... 53
4.5 Data Analysis Technique .......................................................................................... 54
4.5.1 Factor Analysis .................................................................................................. 54
4.5.1.1 Modes of Factor Analysis ........................................................................... 55
4.5.1.2 Types of Factor Analysis ............................................................................ 56
4.5.1.3 Statistical Assumptions for Factor Analysis ............................................... 57
4.5.1.4 Test for Determining Appropriateness of Factor Analysis ......................... 58
4.5.1.5 Factor Extraction in Principle Components Analysis ................................. 59
4.5.1.6 Factor Rotation............................................................................................ 60
4.5.2.7 Interpretation of Factors .............................................................................. 63
4.5.2 Summated Scale ................................................................................................. 64
4.5.2.1 Content Validity .......................................................................................... 64
4.5.2.2 Dimensionality ............................................................................................ 65
4.5.2.3 Reliability .................................................................................................... 65
4.5.3 Logistic Regression Analysis ............................................................................. 66
4.5.4 Sensitivity analysis............................................................................................. 72
4.5.5 Additional statistic analysis .......................................................................... 73
4.5.5.1 Analysis of Variance (ANOVA) ........................................................... 74
4.5.5.2 T-test ...................................................................................................... 75
Chapter 5 Results and Discussion ....................................................................................... 77
5.1 Introduction ............................................................................................................... 77
5.2 Sample and Response Rate ....................................................................................... 77
5.3 Descriptive Statistics ................................................................................................. 77
5.4 Assessment for Factor Analysis ................................................................................ 79
5.4.1 Statistical Assumptions for Factor Analysis ...................................................... 79
VII
5.4.1.1 Examination of the Correlation Matrix ....................................................... 79
5.4.1.2 Inspection of the Anti-Image Correlation Matrix ....................................... 80
5.4.1.3 Bartlett’s Test of Sphericity ........................................................................ 80
5.4.1.4 The Kaiser-Meyer-Olkin Measure of Sampling Adequacy ........................ 80
5.4.2 Factor Analysis Results...................................................................................... 80
5.4.2.1 The Latent Roots Criterion ......................................................................... 81
5.4.2.2 The Scree Test............................................................................................. 81
5.4.2.3 Rotation Results .......................................................................................... 81
5.4.2.4 Factor Interpretation.................................................................................... 82
5.4.3 Assessment of Summated Scales ....................................................................... 83
5.4.3.1 Content Validity .......................................................................................... 83
5.4.3.2 Dimensionality ............................................................................................ 83
5.4.3.3 Reliability .................................................................................................... 83
5.4.4 Statistical Assumptions for Logistic Regression Models .................................. 84
5.4.4.1 Outliers ........................................................................................................ 84
5.4.4.2 Muticollinearity........................................................................................... 84
5.4.4.3 Data Level ................................................................................................... 84
5.5 Results Relating to Research Objective One (Hypotheses 1 to 9) ............................ 84
5.6 Results relating to Research Objective Two ............................................................. 87
5.7 Research relating to Research Objective Three (Hypotheses 10 to 16) .................... 90
5.7.1 Age Relating to Online Shopping Adoption ...................................................... 92
5.7.2 Marital Status Relating to Online Shopping Adoption ...................................... 92
5.7.3 Education Relating to Online Shopping Adoption ............................................ 92
5.7.4 Occupation Relating to Online Shopping Adoption .......................................... 93
Chapter 6 Conclusion and Implications .............................................................................. 94
6.1 Introduction ............................................................................................................... 94
6.2 Conclusions Pertaining to Research Objective One ................................................. 94
6.3 Conclusions Relating to Research Objective Two .................................................... 96
6.4 Conclusions Relating to Research Objective Three .................................................. 97
6.5 Theoretical Implications ........................................................................................... 98
6.6 Managerial Implications ........................................................................................... 99
VIII
6.7 Limitations and Avenues for Future Research........................................................ 107
REFERENCE .................................................................................................................... 109

IX