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Getting Chinese ‘buy in’ online

Media Release
3 February 2014
- for immediate release

Getting Chinese ‘buy in’ online

Its inhabitants are estimated to spend around 1 billion hours on the internet each day, making it the world’s largest internet market. Yet, when it comes to China, relatively little is known about consumer perceptions or preferences with regard to online shopping.

Lincoln University’s Senior Lecturer in Marketing, Mike Clemes, along with his colleagues Helen Zhang and Professor Chris Gan, have gone some way to try to bridge that knowledge gap, having just published an empirical analysis of online shopping in China in the Journal of Retailing and Consumer Services.

Using a questionnaire informed from current research literature (albeit sparse) and focus groups, Mike’s aim was to develop a comprehensive theoretical framework to identify and analyse the ‘decision factors’ shaping a customer’s willingness to shop online, and included ascertaining the relative importance of these factors. He also aimed to examine the role demographics play in the uptake of online shopping among Chinese consumers.

“Understanding the decision process and behaviours associated with online shopping is tremendously important in the ever growing virtual marketplace. What’s particularly interesting about China, however, is not only how little is known about e-shopping behaviours, but how few Chinese consumers relative to the country’s population actually use the internet for their purchases,” says Mike.

“With the right kind of research, the e-shopping experience can be dramatically improved, thereby going some way to retaining current customers and sourcing new ones. The findings of the research are every bit as important to New Zealand businesses looking to attract Chinese consumers as it is to Chinese businesses themselves,” he said.

Perhaps unsurprisingly, the findings showed that Chinese consumers viewed factors such as perceived risk (which had the strongest influence) and service quality as key factors influencing their decision to shop online; prompting the thought that businesses selling online to Chinese consumers may need to invest in risk-reducing strategies such as high-end encryption technology to mitigate any consumer concerns.

Of particular interest, however, is the seemingly high influence a consumer’s resources play when it comes to online shopping. For instance, well-educated employees appeared more inclined to shop online, with the suggestion being that this may be due to greater literacy, computer competency, and ready access to internet technology.

One possible way around this suggested in the article could be for business-to-consumer marketers to consider providing computer training courses, or increasing the provision of public computers; especially in the case of those businesses which have a physical retail presence who could use the opportunity to educate customers visiting their store.

Falling out of the research were interesting observations relating to social factors and demographics. For instance, the online shopping behaviour of friends and family appears to be a major influencer of e-shopping uptake. This is especially the case when it comes to female e-shoppers. In fact, the research found that, in China, female consumers are overall more likely to shop online than their male counterparts; a trend that is becoming increasingly pronounced. E-retailers, therefore, may want to consider providing online forums and chat rooms for female consumers to share their experiences.

Somewhat related, the research also suggests that, in the interest of creating brand loyalty,  an e-retailer may want to consider personalising the online shopping environment to make it more aligned to individual preferences.

One notable finding of the research was that high-income Chinese consumers have a much lower inclination to shop online. This may be a tied to a preference for more up-market products, with the consumers preferring to physically examine the product and take advantage of any support services offered in an in store environment. As such, Mike suggests that e-retailers wanting to attract high-income customers may want to put extra emphasis on after-sale service.

Although the research has gone some way to highlight the key decision-making factors for online shopping among Chinese consumers, Mike does stress that more research is probably required.

“Future research should probably focus on such aspects as the frequency of online shopping, the types of products being purchased, and the spend quantities,” he said.

ENDS

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