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Journal of Retailing and Consumer Services 21 (2014) 364–375

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Journal of Retailing and Consumer Services


journal homepage: www.elsevier.com/locate/jretconser

An empirical analysis of online shopping adoption in Beijing, China


Michael D. Clemes n, Christopher Gan, Junli Zhang
Faculty of Commerce, Lincoln University, PO Box 84, Lincoln, Christchurch 7647, New Zealand

art ic l e i nf o a b s t r a c t

Available online 12 September 2013 The Internet is a global communication medium that is increasingly being used worldwide as an
Keywords: innovative tool for marketing goods and services. At the end of 2010, Internet users in China reached 420
B2C online shopping million. However, online shopping in China is not widely practiced and organisations investing in B2C
Electronic market online shopping need to understand the factors that affect Chinese consumers′ online buying behaviour.
Logit regression analysis This research develops a theoretical research model as a framework to identify the key decision factors
China influencing Chinese consumers′ to shop, or not to shop online. A self-administered questionnaire was
used to gather information from 435 respondents in Beijing, China. The empirical analysis identifies and
ranks seven important decision factors: perceived risk, consumer resources, service quality, subjective
norms, product variety, convenience, and website factors. All of these decision factors impact on Chinese
consumers′ adoption of online shopping. Moreover, managerial implications and recommendations are
also presented.
& 2013 Elsevier Ltd. All rights reserved.

1. Introduction The specific objectives of this research are:

China is the world′s largest Internet market (Internet World  To develop a comprehensive theoretical research model as a
Stats, 2010). The estimated time Chinese spend on the Internet framework to analyze the decision factors of online shopping
each day is 1 billion hours, more than double the daily time spent adoption in China.
by United States consumers (BCG, 2010). However, there is a large  To identify the factors that influence Chinese consumers′
gap between developed and developing countries on understand- decisions to adopt online shopping.
ing on how consumers perceive online shopping and there is  To determine the order of importance of the factors that impact
growing interest in understanding what factors impact on con- on Chinese consumers′ choices of online shopping versus non-
sumers′ decisions to shop or not shop online (Brashear et al., 2009; online shopping.
Shih, 2004). Further, published empirical research on the decision  To examine the impact of different demographic characteristics
factors that influence Chinese consumers to shop online is sparse. on online shopping adoption.
In addition, the relative importance of the decision factors has not
been empirically determined. In particular, this is the case for The Internet, in its current form, provides channels for com-
China′s growing B2C (business to consumer) Internet shopping munication, information gathering and entertainment. However,
environment. the Internet is also an important vehicle for commercial transac-
The major contribution of this study is to provide an improved tions (Swaminathan et al., 1999). Internet commerce involves the
understanding of the decision factors that influence B2C online sales and purchases of products and services over the Internet
shopping adoption in China′s rapidly expanding e-commerce (Keeney, 1999). This new type of shopping mode has been termed
industry. The information on the decision factors and their relative online shopping, e-shopping, Internet shopping, electronic shop-
importance obtained from the comprehensive empirical analysis ping and web based shopping. The Internet and the World Wide
will benefit future researchers who study consumer behaviour in Web make it easier, simpler, cheaper and more accessible for
the e-commerce industry. In particular, researchers who are business and consumers to interact and conduct commercial
interested in China′s growing B2C Internet market will benefit transactions electronically. The Internet is altering the nature of
from the results of this research. customer shopping behaviour and has many advantages over
traditional shopping delivery channels. The Internet is also viewed
as a major threat to traditional retail store outlets (Hsiao, 2009).
The Internet has been basically used in two ways from a
n
Corresponding author. Tel.: +64 3 3252811x8292; fax: +64 3 252 3847. marketing perspective (Haubl and Trifts, 2000). Companies use
E-mail address: mike.clemes@lincoln.ac.nz (M.D. Clemes). the Internet to communicate with customers. Consumers use the

0969-6989/$ - see front matter & 2013 Elsevier Ltd. All rights reserved.
http://dx.doi.org/10.1016/j.jretconser.2013.08.003
M.D. Clemes et al. / Journal of Retailing and Consumer Services 21 (2014) 364–375 365

Internet for a variety of purposes, including seeking product attitudinal and experiential characteristics. They note that in Hong
information before making a purchase decision online. The grow- Kong, educational level and income are significant discriminate
ing interest in understanding what factors affect consumers′ variables that distinguish Internet shoppers from non-Internet shop-
decisions to make purchases online has been stimulated by the pers. Shergill and Chen (2005) investigate the behaviour of New
growth in online sales (Liao and Cheung, 2001; Ranganathan and Zealand′s online consumers′ and their results show that website
Ganapathy, 2002; Shih, 2004; van der Heijden and Verhagen, design, website reliability/fulfillment, website customer service, and
2004). website security/privacy are the four main factors that impact on
Consumers shop online for various reasons. For example, consumers′ perceptions of online shopping. Using primary data from
Swinyard and Smith (2003) examine the lifestyle characteristics a sample of 135 respondents in India, Prasad and Aryasri (2009)
of online consumers and explain that consumers often choose to identify that factors such as convenience, web store environment,
shop online because they like having products delivered at home online shopping enjoyment and customer service influence the
and want their purchases to be private. Furthermore, additional willingness of consumers to shop on the Internet.
studies find that factors such as convenience, peer influence, the
lower price of products sold online, Internet experience, and ease
in purchasing may also influence consumers′ decision to shop 2. The factors influencing consumers′ adoption of online
using the Internet (Chang et al., 2005; Limayem et al., 2000). shopping and hypothesised relationships

1.1. The E-commerce industry in China The factors that are identified in the literature and are proposed
to influence the adoption of online shopping and sixteen testable
E-commerce in China was launched in 1998 by Jack Ma and his hypotheses (H1–H16) are discussed in this section. The theoretical
partners with a business to business (B2B) online platform called research model developed to test the relationships between the
Ailbaba.com (Backaler, 2010). EBay was the first Western multi- decision and demographic factors and online shopping adoption is
national to enter the Chinese e-commerce market in 2003, presented in Fig. 1.
followed by Amazon. Furthermore, 2003 was a milestone for
Chinese e-commerce with the introduction of Alipay, Alibaba′s
version of PayPal that adds security to online payments (Backaler, 2.1. Website factors
2010). Internet World Stats, 2010 notes that by the end of June,
2010, Internet users in China reached 420 million, a 9.36% increase Websites are fundamentally store houses of information that
from the end of 2009 and the number of users is predicted to can aid customers when they search for information. B2C websites
increase during the next decade. are sites that enable consumers to make purchases through the
Wang (2011) reported that despite the growth in Internet users, World Wide Web (Ranganathan and Ganapathy, 2002). The design
there were only 160 million online shoppers in China at the end of characteristics of a web page may also impact on consumers′
2010. Currently, consumer-to-consumer marketing (C2C) is the online buying decisions (Shergill and Chen, 2005).
largest segment in the Chinese e-commerce industry. However, Ranganathan and Ganapathy (2002) identify four key charac-
business-to-consumer marketing (B2C) is growing dramatically. teristics of B2C websites: information content, design, security,
Products such as software and DVDs were the top sellers during and privacy. Similarly, Elliott and Speck (2005) find that there are
the early days of Chinese e-commerce (Backaler, 2010). Recently, five website factors (ease of use, product information, entertain-
clothing, cosmetics, books and airline tickets are becoming top ment, trust, and currency) affecting consumers′ attitudes toward
sellers (Lee, 2009). Chinese traditional retailers are paying increas- retail websites. The content and design of a website are important
ingly more attention to online transactions. Many traditional considerations when online retailers design high quality websites
retailers are developing e-commerce platforms that are driving (Wolfinbarger and Gilly, 2003). Content refers to the information,
B2C online retailing market growth and attracting more consumer features or services offered in a website, whereas design is the way
interest in purchasing products online (Su, 2009). China′s in which the contents are presented to consumers (Huizingh,
e-commerce activities reached 523.1 billion RMB in 2010 (Wang, 2000). Liu and Arnett (2000) note that in the context of electronic
2011). commerce, a successful website should attract customers and
make them feel the site is trustworthy, dependable, and reliable.
1.2. Decision factors in E-commerce Shergill and Chen (2005) find that a poor website design is the
major reason for consumers not to make purchases online.
Understanding the decision process of online shopping and the
behaviors of online consumers is crucial for practitioners to H1. There is a positive relationship between well designed web-
compete in the virtual marketplace (Constantinides, 2004). Lohse site factors and online shopping adoption.
et al. (2000) explain that an improved understanding online
consumer behavior is also important as it may help companies 2.2. Perceived risk
clarify their online retail strategies for web site design, online
advertising, segmenting markets and product variety. Identifying Previous research suggests that perceived risk is a key compo-
the decision factors that influence the behaviours of online nent in the consumers′ Internet shopping decision-making pro-
consumers is vital as the information can help improve the design cess (Liebermann and Stashevsky, 2002). From the customers′
of e-shopping websites, support the development of online trans- perspective, perceived risks in e-commerce are greater than the
actions, and encourage more consumers to shop online (Cao and purchases made at brick-and-mortar stores (Suki, 2007). From
Mokhtarian, 2005; Chang et al., 2005). a managerial point of view, understanding consumer risks and
Previous studies on consumers′ online shopping behavior have how consumers react to and mitigate risks can help managers to
identified a number of decision factors that consumers consider improve their business prospects and strategies (Comegys et al.,
important in their adoption of online shopping. For example, Sin and 2006). Miyazaki and Fernandez (2001) note that consumers who
Tse (2002) investigate the online shopping behavior of Hong Kong perceived less risks or concern toward online shopping are likely
consumers. The authors also find that Internet shoppers and non- to make more purchases than consumers who perceived more
shoppers can be distinguished by demographic, psychographic, risks. Perceived risk also can be viewed as the anticipated negative
366 M.D. Clemes et al. / Journal of Retailing and Consumer Services 21 (2014) 364–375

Website Factors (+)

Perceived Risk (-)

Service Quality (-)

Convenience (+)

Price (+) Online Shopping


Adoption

Product Variety (+)

Consumer Resources Binary variable


(+)
1= Do online shopping
Subjective
Norms (+/-) 0= Do not do online shopping

Product Guarantee (+)

Demographic
Characteristics (+/-)

Independent variables
Fig. 1. The theoretical research model.

consequences a consumer associates with the purchase of a judgments of the quality of e-service provided by online compa-
product or service (Dunn et al., 1986). nies. Yang and Jun (2002) maintain that online retailers need to
In an electronic shopping context, risk can be characterized evaluate the importance of e-SQ dimensions, to better developing
into different elements. Jarvenpaa and Todd (1996) identify five online marketing strategies.
subdimensions of perceived risk: economic, social, performance, Yang and Jun (2002) examine the e-service quality dimensions
personal, and privacy. Doolin et al. (2005) examine New Zealand from the perceptions of online and non-online shoppers in the
consumers′ perception of the perceived risks of Internet shopping South-western United States. The authors′ results show that the
based on their Internet shopping experience. The authors use reliability dimension is the most critical dimension for online
three dimensions to measure perceived risk: product risk, privacy shoppers and the security dimension is the most important
risk, and security risk. dimension for non-online shoppers. E-service quality can max-
In the context of specific risks, Bhatnagar et al. (2000) find that imize the online competitive advantages of e-commerce (Santos,
risks related to not getting what is expected and credit card 2003). Lee and Lin (2005) find that good service quality, in the
problems may negatively affect online shopping intention. Chang context of Internet retailing, positively influences the purchase
et al. (2005) reviewed several empirical studies regarding the intentions of consumers. Moreover, Vijayasarathy and Jones (2000)
antecedents of online shopping, and concluded that risk percep- find that poor service quality appears to have a negative influence
tion had a significant negative influence on the attitude towards on consumers′ decisions to make purchases online. Therefore, the
online shopping. Conversely, consumers are more likely to shop at following hypothesis is proposed:
online stores with sound security and privacy features (Doolin
et al., 2005; Miyazaki and Fernandez, 2001; Suki, 2007). Thus, the H3. There is a negative relationship between poor service quality
following hypothesis is proposed: and online shopping adoption.

H2. There is a negative relationship between perceived risk and 2.4. Convenience
online shopping adoption.
Convenience has been associated with the adoption of non-
2.3. Service quality store shopping environments (e.g., Darian, 1987; Eastlick and Lotz,
1999) such as online shopping. Shopping convenience is acknowl-
Service quality in e-commerce (e-service quality) relates to edged to be the major motivating factor in the decisions of
customers′ perceptions of the result of the service and perceptions consumers to buy products at home. Darian (1987) identified
of service recovery (Collier and Bienstock, 2006). Santos (2003) five types of convenience for in-home shopping: reduction in
explains e-service quality as consumers′ overall evaluations and shopping time, timing flexibility, saving the physical effort of
M.D. Clemes et al. / Journal of Retailing and Consumer Services 21 (2014) 364–375 367

visiting a traditional store, saving of aggravation, and providing the disapprove of a behavior and one′s motivation to comply with
opportunity to engage in impulse buying, or directly responding to the approval or disapproval of the reference group. Vijayasarathy
an advertisement. (2004) defines normative beliefs in the context of consumer
Consumers who value convenience are inclined to make intention to shop online as “the extent to which a consumer
purchases via the Internet more often and to spend more money believes that people who are important to him/her would recom-
on online shopping (Swaminathan et al., 1999). Prasad and Aryasri mend that the consumer engages in online shopping” (pp. 752).
(2009) propose that consumers′ perceptions of convenience posi- Tan et al. (2007) examine how three dimensions of national
tively impact on their willingness to make purchase from the culture may moderate the impact of attitude, subjective norms,
Internet and patronage Internet retail stores. As consumers obtain and self-efficacy on consumers′ online shopping behavior between
utilitarian value from efficient and timely transactions, both time China and New Zealand. In their study, subjective norms are
and effort savings positively influence customers′ online purchase divided into two types, namely peer influence (friends and family)
intention (Childers et al., 2001). Therefore, the following hypoth- and external influence (mass medium, popular press and news
esis is proposed: reports). In the context of online shopping, many consumers will
decide not to shop online if their friends or family do not
H4. There is a positive relationship between convenience and
encourage them to make purchases through the Internet
online shopping adoption.
(Foucault and Scheufele, 2002). Thus, the following hypothesis is
proposed:
2.5. Price
H7. Subjective Norms affect consumers′ decisions to adopt online
Consumers′ choices of shopping channels may be affected by shopping.
the perceived price of the channel (Chiang and Dholakia, 2003).
Reibstein (2002) indicates that online consumers generally are 2.8. Consumer resources
looking for price information from different retailers for the same
product in order to make the most favourable economic decision. Engel et al. (1995) consider consumer resources as one of five
Vijayasarathy and Jones (2000) find that savings in transaction individual factors that are derived by consumers′ individual
costs that lead to better deals on price can positively influence differences. Individual factors are characteristics of the individual,
consumers′ attitudes on the intention to shop online. and different individual characteristics may have an impact on the
Ahuja et al. (2003) consider that a better price is one of reasons behaviors of consumers (Hawkins et al., 1995). Online shopping
that motivates U.S. consumers to make purchases online. requires people to have computer skills and resources, such as
Brynjolfsson and Smith (2000) find that the prices of products computer ownership or computer and Internet accessibility (Shim
sold online in the U.S. are usually 9 to 16% lower than products et al., 2001). Further, the increasing number of computer-trained
sold in traditional retail shops. In addition, in the context of online consumers has contributed to the extraordinary growth of Internet
shopping, a low price may also attract price-sensitive customers shopping (Eun Young and Youn-Kyung, 2004).
(Reibstein, 2002). Thus, the following hypothesis is formulated: Li et al. (1999) find that consumers′ Internet knowledge has a
positive impact on consumers′ online shopping intention and
H5. There is a positive relationship between low prices charged by
adoption. Moreover, Liao and Cheung (2001) identify that con-
online retailers and online shopping adoption.
sumers with experience in the use of personal computers tend to
prefer online shopping. Therefore, the relationship between con-
2.6. Product variety sumer resources and online shopping adoption is hypothesized as
followed.
A wide selection of products leads to improved comparisons,
and eventually, better purchase decisions (Keeney, 1999). H8. There is a positive relationship between consumer resources
Szymanski and Hise (2000) find that product variety is one of and online shopping adoption.
the important reasons why customers choose to shop online.
Consumers′ perceptions of variety are influenced not only by the 2.9. Product guarantee
number of distinct products, but also by the repetition frequency,
organization of the display, and attribute differences (Hoch et al., Koyuncu and Bhattacharya (2004) explain that a lack of a
1999; Van Herpen and Pieters, 2002). guarantee covering the quality of goods is one of the major factors
Consumers usually prefer more variety when a choice is given that prevent consumers from buying certain goods (e.g. high
(Kahn and Lehmann, 1991). A variety of product offerings and priced goods and goods that need visual inspection) through the
unique product offerings are identified as an important positive Internet. Yingjiao and Paulins (2005) study college students′
functional effect directly related to Internet shopping (Cho, 2004). attitudes and behavioural intentions towards shopping online for
Sin and Tse (2002) find that, when compared with non-online apparel products. Their results show that an easy return policy
shoppers, Internet shoppers have a more positive evaluation of the provided by online retailers is an important factor influencing
product variety available through online shopping. Thus, the college students′ willingness to buy apparel products using the
following hypothesis is proposed: Internet. Koyuncu and Bhattacharya (2004) maintain that con-
sumers will reduce their purchases from the Internet if they
H6. There is a positive relationship between product variety and
cannot receive their orders from online retailers within the
online shopping adoption.
guaranteed time. Thus, the following hypothesis is proposed:

2.7. Subjective norms H9. There is a positive relationship between product guarantee
and online shopping adoption.
A subjective norm is defined as “a person′s perception of the
social pressures put on him to perform or not perform the 2.10. Demographic characteristics
behavior in question” (pp. 6) (Ajzen and Fishbein, 1980). Choi
and Geistfeld (2004) argue that a subjective norm consists of Demographic characteristics are commonly studied when re-
a normative belief that a reference group will approve or searchers are trying to determine why consumers make purchases
368 M.D. Clemes et al. / Journal of Retailing and Consumer Services 21 (2014) 364–375

online (Foucault and Scheufele, 2002). The evidence from previous three, as this section was used to survey consumers who did not
studies shows that there is a significant relationship between the use the Internet as a shopping medium. In addition, some ques-
demographic characteristics of Internet users and online purchase tions were randomly placed in Sections two and three in order to
frequency (Chang and Samuel, 2004). reduce any systematic bias in the responses (Sekaran, 2003). The
Previous research suggests that online consumers tend to be last section of the questionnaire contained questions relating to
younger, possess greater wealth, be better educated with high respondents′ social demographic characteristics.
incomes and spend more time on the Internet (Brashear et al., Multiple measures, including nominal scales, Likert scales, and
2009; Swinyard and Smith, 2003). Atchariyachanvanich and Okada interval scales were employed in the questionnaire. In Section Two
(2006) study Chinese and Japanese online consumers. The authors and Three, the statements were measured using a Seven-point Likert
find that Chinese online consumers are young, single, male and are scale ranging from strongly agree (1) to strongly disagree (7). A seven-
company or government employees, or self-employed. However, point Likert scale was used as the scale is the optimum size compared
Fu (2009) claims that in China, there are more female Internet to five and ten point scales (Schall, 2003). Furthermore, Nunnally
users becoming online shoppers than male Internet users, and the (1978) suggests that a seven-point scale can increase the variation and
trend is increasing steadily. Thus, following hypotheses are reliability of the responses.
proposed: The questionnaire was reviewed by two marketing experts and
two online retailers. A pre-test of the questionnaire was also
H10. Female consumers are more likely to adopt online shopping conducted on a random sample of 40 Chinese consumers who
than male consumers. were aged 18 years or over outside of a shopping mall in Beijing.
H11. Younger age is positively related to online shopping Feedback from the 40 consumers was obtained to clarify the
adoption. questions and statements and to assess the reliability and validity
of the questionnaire (Cooper and Schindler, 2006). Some minor
H12. Single consumers are more likely to adopt online shopping. wording modifications to the questionnaire were made as a result
of this process.
H13. There is a positive relationship between higher education
levels and online shopping adoption.
3.2. Data
H14. Occupation has a positive impact on the adoption of online
shopping. The data was collected in Beijing, China in 2010 from September
1st to September 22nd using a convenience sampling approach on a
H15. There is a positive relationship between high incomes and
face-to-face basis. The sample was drawn from the population of
online shopping adoption.
Beijing, the capital of China. A total of 447 questionnaires were
H16. There are different perceptions of the adoption of online returned from 460 questionnaires distributed to respondents in
shopping factors within demographic groups. shopping mall rest areas over the three week period. Twelve of the
questionnaires were incomplete or were unsuitable for use in this
study. This resulted in a total of 435 usable responses, or a 94.57%
3. Data and methodology
useable response rate. The questionnaires were tested for late return
bias using extrapolation. The results indicated no evidence of late
3.1. Questionnaire development
response bias.
From the 435 useable questionnaires, 53.6% (2 3 3) of respon-
Due to the lack of published research in China regarding online
dents were online shoppers, while 46.4% (2 0 2) of respondents
shopping adoption, it was necessary to collect primary data to test
were non-online shoppers. The sample respondents were com-
the hypotheses and satisfy the research objectives of the study.
prised of 46.9% males and 53.1% females. The dominant age groups
The design of the questionnaire was based on a thorough review of
were between 26–35 years (30.1%) and 36–45 years (22.5%), and
the literature and feedback from focus groups. The review of the
married people were the highest percentage in the sample (69.7%).
literature and the focus group discussions held in Beijing, China
Respondents who had a bachelor degree, or a diploma & certifica-
helped to identify the factors that may affect customers′ decisions
tion made-up the major education group, accounting for 37.0% and
to shop online.
27.1% of the respondents, respectively. The dominant occupation
The information obtained from the focus group discussions was
groups included company employee (22.5%) and professional
also used to assist in developing the most appropriate, timely, and
(16.6%). In terms of income level, the majority of respondents′
relevant survey questions. In accordance with homogeneity as
monthly income was between CNY 3001–6000 (26.7%) and CNY
recommended by Zikmund and Babin (2010) in focus group
2001–3000 (24.6%) (see Appendix 1).
research, one focus group interview consisting of six consumers
with online shopping experience; and a focus group interview
consisting of six consumers who did not have online shopping 3.3. Data analysis technique
experience were conducted. The participants were asked to dis-
cuss the nine factors identified in the literature review that may After the data were collected and tabulated, a series of
influence them to shop online. During the discussion, group statistical assumptions were tested to ensure the appropriateness
members were also encouraged to identify any additional decision of the data for factor analysis. The results show that the most of
factors and provide comments on any decision factors that were the correlation matrices were greater than 0.03, and the anti-
suggested by other participants. image correlation matrix illustrates that the majority of these
The survey questionnaire used in this study consists of four values are close to zero. Barlett′s test of sphericity was high
sections (for the complete questionnaire see Zhang, 2011). Section (6141.680) and the level of significance was low (0.000). Moreover,
one was designed to group the customers: online shoppers or non- the Kaiser–Meyer–Olkin value was 0.846. According to Kaiser and
online shoppers. Sections two and three contain questions that Rice (1974), the value is “meritorious”, which implies that the
were based on the factors derived from the literature review and variables belong together and are appropriate for factor analysis.
the two focus group interviews in order to evaluate respondents′ As a result, the data set was deemed appropriate for factor
online shopping choices. Opposite wording was used in Section analysis.
M.D. Clemes et al. / Journal of Retailing and Consumer Services 21 (2014) 364–375 369

A factor loading of 70.05 was used as a guideline to identify Age group 3; 1 if respondent age is above 56 years
significant factor loadings as 7 0.05 produced a clearer structure old; 0 otherwise
and increased the robustness of the factor rotation (Hair et al., MAR (+/  )¼Dummy variables for marital status
2010). In this study, the results of the latent root criterion Marital status 1; 1 if respondent is single/never
demonstrated that the 36 variables submitted for factor analysis married or de facto; 0 otherwise
were extracted to form nine dimensions. These nine dimensions Marital status 2; 1 if respondent is married;
explained 61.41% of the variation in the data. The nine dimensions 0 otherwise
are: (1) risk, (2) consumer resources, (3) website factors, (4) price, Marital status 3; 1 if respondent is divorced/
(5) service quality, (6) convenience, (7) subjective norms, (8) pro- separated; 0 otherwise
duct guarantee, (9) product variety. EDU (+/  )¼Dummy variables for educational qualifications
Educational qualification 1; 1 if respondent
3.4. Multivariate analysis completed low-level education (up to high school level);
0 otherwise
Followed by factor analysis, a logit model was used in this study Educational qualification 2; 1 if respondent
to analysis Chinese consumers′ online shopping behaviour due to completed middle-level education (diploma/certification);
the binary nature of the dependent variable. Logistic regression 0 otherwise
analysis is the most popular technique available for modelling Educational qualification 3; 1 if respondent
dichotomous dependent variables (Garson, 2010). The literature on completed high-level education (bachelor degree or master
using logistic regression analysis for online shopping behavior is degree or PHD and above); 0 otherwise
sparse. However, there is an increasing trend in using logistic OCC (+/  )¼Dummy variable for occupational status
regression analysis in economic and behavioural research because Occupational status 1; 1 if respondent is a
of the existence of many discrete variables. For example, Cabrera professional; 0 otherwise
(1994) advises that the logistic regression is not only applicable to Occupational status 2; 1 if respondent is a manager
college enrollment, but also to behaviors such as college persis- or company employee or sales/service; 0 otherwise
tence, transfer decisions, and degree attainment. Moreover, Occupational status 3; 1 if respondent is a civil
Clemes et al. (2007) and Clemes et al. (2010) use a logit analysis servant; 0 otherwise
to analyze the factors that contribute to bank switching behaviour Occupational status 4; 1 if respondent is self-
in New Zealand and China, respectively. employee; 0 otherwise
The dependent variable in this study, the adoption of online Occupational status 5; 1 if respondent is a laborer or
shopping, is dichotomous. Therefore, the logit model is: farmer; 0 otherwise
Occupational status 6; 1 if respondent is a student;
egðxÞ
Pðonline shoppingÞ ¼ πðxÞ ¼ 0 otherwise
1 þ egðxÞ
Occupational status 7; 1 if respondent is
and thus unemployed, home maker, retired or others; 0 otherwise
1 INC (+/ ) ¼Dummy variables for annual income levels
Pðnon  online shoppingÞ ¼ 1πðxÞ ¼
1 þ egðxÞ Income level 1; 1 if respondent annual income level
is 500RMB–1500RMB; 0 otherwise
where g(x) represents the independent variables: website factors,
Income level 2; 1 if respondent annual income level
perceived risks, service quality, convenience, price, product vari-
is 1501RMB–3000RMB; 0 otherwise
ety, subjective norms, consumer resources, product guarantee, and
Income level 3; 1 if respondent annual income level
demographic characteristics.
is above 3001RMB or others; 0 otherwise
Consumers′ adoption of online shopping is hypothesized to be
affected by the following factors and can be implicitly written
under the general form:

ESHOPPING ¼ f ðWS; PR; SQ ; CV; PI; PV; SN; CR; PG; DC; εÞ
3.5. Results and findings
The discrete dependent variable, ESHOPPING, measures
whether an individual used internet as a shopping media. The
The items used to measure each factor were tested for relia-
dependent variable is based on the question asked in the mall
bility by using a Cronbach′s alpha value of 0.6 as the cut-off point
intercept survey: “Have you shopped online before?” ESHOPPING
for exploratory research as suggested by Churchill (1979). In this
takes a value of 1 if the respondent is an online shopper; and is
study, all of the factors have a Cronbach′s alpha value greater than
0 otherwise. In the equation, WS is website factors, PR is perceived
0.60. The result of the reliability tests for the construct measures
risk, SQ is service quality, CV is convenience, PI is price, PV is
are shown in Table 1.
product variety, SN is subjective norms, CR is consumer resources,
Logistic regression analysis was used to identify the factors that
PG is product guarantee, DC is demographic characteristics, and ε
influence Chinese consumers′ decisions to adopt online shopping
is an error term.
(see Table 2). In general, the model fitted the data very well (Chi-
square¼ 458.73776, P value ¼ 0.0001, Degrees of Freedom¼ 19).
Demographic characteristics The model explains 76.35% (Pseudo R-squared) of the variance in
The dummy variables for demographic characteristics are as the choice of online shopping. The results for the significant
follows: decision factors are shown in Table 2.
GEN (+/  )¼Gender; 1 if respondent is a male; 0 otherwise The coefficient value for perceived risk, consumer resources,
AGE (+/  )¼Dummy variables for age group service quality, subjective norms and product variety are signifi-
Age group 1; 1 if respondent age is between 18 to cant at the 0.01 level of significance. Website factors and conve-
35 years old; 0 otherwise nience are significant at the 0.05 level of significance. The results
Age group 2; 1 if respondent age is between 36 to in Table 2 show that website factors, convenience, product variety,
55 years old; 0 otherwise and consumer resources have positive influences on Chinese
370 M.D. Clemes et al. / Journal of Retailing and Consumer Services 21 (2014) 364–375

Table 1
The reliability test for the measures of online shopping adoption choice in China.

Constructs Items Cronbach′s alpha

Risk 7. I am confident that the information I provide to an Internet retailer is not used for other purposes 0.858
6. There is a low risk for purchasing online
8. I feel secure about providing my bank card details to a payment platform
9. I am confident that my personal information is protected by an Internet retailer
10. Online shopping is just as secure as traditional retail shopping
Consumer resource 31. I have regular access to the Internet 0.835
30. I have regular access to a computer
32. I am very skilled at using the Internet
33. I have knowledge about how to make purchases through the Internet
Website factors 2. The website designs of the Internet retailers are aesthetically attractive 0.741
5. It is quick and easy for me to complete a transaction through the website
4. The links within the website allow me to move back and forth easily between pages of the website
1. Internet retailers′ websites are easy to navigate
3. The Internet retailers′ websites provide in-depth information to answer my questions
Price 25. Online shopping allows me to save money as I do not need to pay transportation costs 0.716
24. Online shopping allows me to bay the same, or similar products, at cheaper prices than traditional retailing stores
26. Online shopping offers better value for my money compared to traditional retail shopping
23. I think the Internet offers lower prices compared to retail stores
Service quality 17. Internet retailers encourage me to make suggestions 0.735
16. Internet retailers understand my needs
18. Internet retailers offer good after sales service
15. It is easy to receive a personalized customer service from an Internet retailer
Convenient 20. It takes only a little time and effort to make a purchase through the Internet 0.777
21. Internet shopping saves me time, so I can do other activities
19. It is more convenient to shop through the Internet when compared to traditional retail shopping
Subjective norms 35. The media influenced my decision to make purchases through the Internet 0.781
36. Marketing communication influenced my decision to make purchases through the Internet
34. Family/friends encourage me to make purchases through the Internet
Product guarantee 12. The quantity and quality of the products I receive from Internet retailers are exactly the same as I order 0.601
11. Internet retailers honour their product guarantees
13. The products I ordered are delivered to me within the time promised by the Internet retailers
Product variety 27. Internet shopping offers a wide variety of products 0.725
28. I always purchase the types of products I want from the Internet
29. I can buy the products that are not available in retail shops through the Internet

Table 2
Logistic regression results (influencing factors and demographic characteristics on online shopping adoption).

Number of observations: 435


Log likelihood function:  71.04461
Restricted log likelihood:  300.41346
Chi-squared statistics: 458.73776
Degrees of freedom: 19
Prob [ChiSqd4value]: 0.00001
McFadden R2: 0.7635106
Coefficients Std error Sig. Marginal effects

nnn
Risk  2.42825 0.36037 0.0000  0.4785
Consumer resources 1.56574 0.31729 0.0000nnn 0.30825
Website factors 0.65348 0.28711 0.0228nn 0.12865
Price 0.15835 0.36197 0.6618 0.03117
Service quality  1.04375 0.29379 0.0004nnn  0.20549
Convenience 0.65403 0.28024 0.0196nn 0.12876
Subjective norms  0.91370 0.23023 0.0001nnn  0.17988
Product guarantee  0.35885 0.34286 0.2953  0.07065
Product variety 0.77984 0.27822 0.0051nnn 0.15353
Gender  1.09820 0.50326 0.0291nn  0.21734
Young age 2.07694 0.86270 0.0161nn 0.37924
Middle age 1.98792 0.80937 0.0140nn 0.35330
Single or De Facto 1.78346 0.66026 0.0069nnn 0.28364
Middle education 0.96911 0.60702 0.1104 0.17024
High education 2.76713 0.77962 0.0004nnn 0.48177
Professional 1.47172 0.72461 0.0423nn 0.22254
Manager and company Employee and sales/service 1.38599 0.57796 0.0165nn 0.24131
Self-employee 2.25274 0.83432 0.0069nnn 0.27198
Low income 0.76880 0.63850 0.2286 0.13656
High income 0.08593 0.55820 0.8777 0.01681

nn
Statistically significant at the 0.05 level of significance.
nnn
Denote statistically significant at the 0.01 level of significance.
M.D. Clemes et al. / Journal of Retailing and Consumer Services 21 (2014) 364–375 371

Table 3 between consumers′ income and online shopping adoption. Thus,


Marginal effects of the decision factors. hypothesis H15 is rejected, which is consistent with the findings of
Ahuja et al. (2003), showing that consumers′ incomes do not have
Factors Marginal effect Ranking
an impact on online shopping behavior.
Perceive risk  0.4785 1
Consumer resources 0.30825 2
Service quality  0.20549 3 3.6. Implications
Subjective norms  0.17988 4
Product variety 0.15353 5
Convenience 0.12876 6 This research offers some valuable insights into the linkage
Website factors 0.12865 7 between B2C e-shopping and the decisions of consumers to shop
or not shop online. This information can help B2C online market-
ers and retailers to develop appropriate market strategies, make
technological advancements, and make the correct marketing
consumers′ decisions to adopt online shopping, providing support decisions in order to retain their current customers and attract
for hypotheses H1, H4, H6, and H8. The results also show that new customers. Specifically, if B2C online marketers and retailers
perceived risk, service quality and subjective norms significantly can improve their understanding of the buying behaviour of their
influence Chinese consumers′ choice of online shopping adoption customers, they can present goods and services more effectively
negatively. Thus, hypotheses H2, H3 and H7 are supported. and continue to improve their offerings in order to strengthen
However, Table 2 shows that there is no significant relationship their competitive advantage (Liu et al., 2008).
between price and product guarantee and Chinese consumers′ This study indicates that perceived risk has the strongest
choice of online shopping adoption. Hence, hypotheses H5 and H9 influence on the decisions of consumers to adopt online shopping.
are rejected. Previous researchers note that perceived risk is a critical consid-
Furthermore, marginal effect analysis was used to rank the eration for consumers in deciding whether to shop via the Internet
seven decision factors that impact on consumers′ choices of online (Doolin et al., 2005; Lim, 2003; Monsuwe et al., 2004). Thus,
shopping versus non-online shopping, from the most important to online marketers and retailers need to invest in risk-reducing
least important. The marginal effects shown in Table 3 are strategies in order to minimize consumers′ perceived risk of
calculated as the partial derivatives of the non-linear probability shopping online. This study reveals that Chinese consumers′ risk
function evaluation at each variable′s sample mean (Liao, 1994; perceptions regarding B2C online shopping mainly relate to the
Pindyck and Rubinfeld, 1991). The marginal effect also determines following factors: privacy and security of personal information,
the marginal change in the dependent variable, given a unit security of online transactions, and product risk. Therefore, various
change in a selected independent variable, holding other variables risk-reducing strategies should to be developed by online market-
constant (Liao, 1994). ers and retailers to mitigate these risk factors.
According to the results of marginal effect analysis in Table 3, In term of privacy and security risks, online retailers need to post
perceive risk has the maximum impact on consumers′ adoption of the formal privacy policies of their online security system on their
online shopping. For example, a unit increase in the perceived risk website and adopt superior encryption technology so that consumers
factor results in an estimated 47.86% fall in the probability of can be easily informed about online retailers′ security measures. For
consumers choosing online shopping. Similarly, a unit increase in example, a safe payment method should be provided by B2C online
consumer resources results in a 30.83% probability of a consumer retailers in order to protect customers′ privacy and guarantee their
adopting online shopping. Service quality was ranked as the third financial security (Liu et al., 2008). With regard to product risk,
most important decision factor. The fourth and fifth most impor- product warranty policies, money back guarantees, and the right to
tant decision factors were subjective norms and product variety, exchange the product without additional shipping charges can also
respectively. The marginal effect result also showed that conve- be offered by B2C online retailers in order to mitigate the risk of
nience and website factors were ranked as the sixth and seventh making a poor purchase decision. Furthermore, to diminish con-
most important decision factors. sumers′ doubts regarding the inability to physically inspect a product
Logistic regression analysis was used to test hypotheses H10 to in an online shopping transaction, detailed and complete product
H15 to examine the impact of the demographic characteristics on information should be provided by online retailers on their
consumers′ online shopping behavior. The logistic regression web pages.
results in Table 2 reveal that female, younger age, single, higher The results of this study reveal that consumer resources,
education, and occupation groups all have a different probability including the accessibility to personal computers and the Internet,
associated with the adoption of online shopping. Therefore, knowledge of computers and Internet use, and the knowledge of
hypotheses H10, H11, H12, H13, and H14 were supported. The how to make a purchase online also have a strong influence on
ANOVA results (see Zhang, 2011, for the results of the ANOVA consumers′ decisions to shop online. Moreover, the results of this
tests) demonstrated that consumers had different perceptions on study illustrate that company employees who are well educated
the adoption of the online shopping decisions factors based on are more likely to shop online. This may be attributed to well
their demographic characteristics: age, marital status, education educate consumers having computer and Internet skills. For those
levels, and occupation. Thus, hypothesis H16 was supported. These consumers who do not have computer and Internet literacy, or
results are in accordance with the findings of Atchariyachanvanich lack access to computers, the B2C online marketers could provide
and Okada (2006), Brashear et al. (2009), Chang and Samuel free computer training courses in order to improve peoples′
(2004), and Li et al. (1999). Although there is limited empirical computer and Internet skills. In addition, public computer access
research regarding females and online shopping adoption, Fu to the Internet can also be provided by the online marketers.
(2009) indicates that in China, there are more female Internet For those retailers who own both physical retail stores and
users dominate online shoppers than male Internet users, and that Internet retail stores, the retailers need to place computers in their
the trend is increasing steadily, supporting the findings of physical retail stores to demonstrate to their customers the
this study. process of purchasing products online. In addition, retailers can
However, the results from the logistic regression analysis and provide free brochures to their customers explaining how to shop
ANOVA showed there were no statistically significant relationship via the Internet.
372 M.D. Clemes et al. / Journal of Retailing and Consumer Services 21 (2014) 364–375

Based on the empirical findings of this study, the service quality understand. If consumers encounter unclear or difficult terms
provided by B2C online retailers plays a significant role in and conditions or vague product information, they could be
influencing consumers′ decisions to shop online. This result is unwilling to make further purchases online. In addition, the design
consistent with a number of researchers regarding service quality of the purchasing process should be simplified in order to retain
as a priority and one of the primary concerns in e-commerce (Cai and attract more consumers, especially for those consumers who
and Jun, 2003; Santos, 2003; Yang and Jun, 2002). In an online have limited online shopping experience.
shopping context, the neglect of consumers′ concerns and inqui- Furthermore, one of the research findings also indicates that
ries and delayed delivery times lead to customer dissatisfaction consumers′ with different demographic characteristic have differ-
(Liu et al., 2008). Hence, online retailers need to offer a prompt ent views of online shopping adoption. Therefore, e-retailers
delivery and provide quick responses to customers′ concerns, should not treat all consumers alike. When planning for marketing
complaints and inquiries. For example, along with using commu- activities, online marketers must take gender, age, marital status,
nication channels such as e-mail, online retailers can also offer live education level, and occupation into consideration for market
customer services and online chats with customer service repre- segmentation and identification of the appropriate target market.
sentatives providing a more personalised service. For example, this study shows that the Chinese female consumers
Another aspect of service quality that B2C online retailers are more likely to shop online. Zhou et al. (2007) indicates that
should not overlook is the personalized online shopping environ- female consumers are more influenced by their friends and family.
ment. Zhou et al. (2007) claim that consumer loyalty and their Thus, specific marketing strategies should be designed by online
online experience can be improved using a personalized, online marketers and retailers in order to target female consumers.
shopping environment. Hence, online marketers and retailers Therefore, improving interpersonal communication by providing
need to develop online marketing strategies to personalize shop- online forums and chat rooms for female consumers to share their
ping environments in order to meet different consumers′ needs experiences with their friends could encourage more females to
and preferences. For example, an online shopping environment shop online.
that provides an online community and interactivity (e.g. chat The results of this study indicate that Chinese consumers with
rooms and customer reviews) may help B2C online retailers to high incomes do not tend to shop online. This may be because
retain and attract customers. these consumers prefer to purchase branded products (e.g. Nike,
The results of this study also indicate that subjective norms Gucci, and Apple) from up-market retail stores where they believe
effect consumers′ decisions to adopt online shopping, supporting they can physically examine the products and receive good
the findings of Choi and Geistfeld (2004), Foucault and Scheufele supporting services. In addition, branded products and services
(2002), and Vijayasarathy (2004). This finding indicates that an are usually perceived by consumers as possessing better quality
individual′s decision to shop online can be influenced by his/her (Shergill and Chen, 2005). Thus, it is important for online market-
friends and family. Thus, online retailers should ensure that ers and retailers who want to attract consumers with high
consumers have a positive shopping experience each time they incomes to market more well-known products or brands online
visit an online store so that the consumers can pass positive word- and offer good after sale services. For example, online marketers
of-mouth to other people. In addition, a membership system could and retailers can provide advanced 3-D technologies (such as
be used by online retailers. For example, when a frequent interactive online dress rooms) in order to minimize consumers′
customer introduces a new customer to become a member of an concerns regarding their inability to physically examine products
Internet store, the online retailer can offer 50% off their next online (Shergill and Chen, 2005).
purchase. Along with the importance of the influence of friends The results of this study also illustrate that older consumers are
and family, this study also finds that the media can be a social less likely to shop online. Previous studies indicate that older
factor that influences consumers′ decisions to shop online. There- consumers may be discouraged from using the Internet as a
fore, online retailers′ stores can be promoted on the radio, shopping medium due to low Internet experience and risk con-
television and billboards as well as in newspapers and trade cerns (Doolin et al., 2005). Therefore, online markets and retailers
journals. For example, Chinese online markers can select a Chinese need to address these issues and demonstrate how to shop online
friendly celebrity to be the spokesperson of their website in order and the advantages of shopping online to older consumers. For
to attract potential customers. example, online retailers can distribute circulars identifying the
Convenience and product variety are also shown to be perti- advantage of online shopping to older consumers.
nent in the acceptance of the Internet as a shopping medium. The
findings suggest that in the context of online shopping, consumers 3.7. Limitations and avenues for future research
no longer need to be concerned about parking, transportation,
crowds, and weather conditions. Consumers can also be assured Although this study has provided relevant and interesting
that they can purchase products that may not be found in their insights to the understanding of consumers′ online shopping
local retail stores (Chiang and Dholakia, 2003). As a result, adoption in China, there are limitations associated with the
innovative B2C online retailers should increase the number of research.
product types and brands available online, as well as emphasize Future research might focus on online shopping categories such
the convenience of shopping online as opposed to in-store shop- as frequency of shopping (e.g., non-shoppers, occasional shoppers,
ping. Lee (2009) also claims that several varieties provided and frequent shoppers), or types of product categories purchased
by online retailers may help to satisfy customers′ various needs (e.g., goods versus services or luxuries versus necessities). The
and prevent them from turning towards alternative traditional information obtained may offer additional and useful information
shopping. to marketers and online retailers.
B2C Online marketers and retailers need to be innovative with Second, in addition to the seven decision factors that impact on
their websites. For example, offering valuable and accurate pro- consumers′ decisions to shop online indentified in this study,
duct descriptions, the possibility of zooming in on the image of the there may be other factors that may affect consumers′ adoption of
product, and the use of web-cameras could help consumers to online shopping. Future research should investigate other factors
form perceptions of the external qualities of the product (Cases, that may influence consumers′ adoption of online shopping,
2002). To help popularize a web page, the information provided on such as past home-shopping experiences, incentives, and product
online retailers′ web pages needs to be succinct and easy to characteristics.
M.D. Clemes et al. / Journal of Retailing and Consumer Services 21 (2014) 364–375 373

Table A1

Variables N Total respondents Online shoppers Non-online shoppers

Frequency % Frequency % Frequency %


(No. of respondents (No. of respondents (No. of respondents
per option) per option) per option)

Gender Valid
Male 204 46.9 91 39.1 113 55.9
Female 231 53.1 142 60.9 89 44.1
Total 435 100.0 233 100.0 202 100.0
Age Valid
18–25 65 14.9 51 21.9 14 6.9
26–35 131 30.1 104 44.6 27 13.4
36–45 98 22.5 52 22.3 46 22.8
46–55 82 18.9 18 7.7 64 31.7
56–65 35 8.0 4 1.7 31 15.3
66 þ 24 5.5 4 1.7 20 9.9
Total 435 100.0 233 100.0 202 100.0
Marital status Valid
Single/never married 81 18.6 66 28.3 15 7.4
De Facto 38 8.7 28 12.0 10 5.0
Married 303 69.7 138 59.2 165 81.7
Divorced/Separated 13 3.0 1 .4 12 5.9
Total 435 100.0 233 100.0 202 100.0
Education Valid
Primary education 6 1.4 0 0 6 3.0
Middle school 32 7.4 3 1.3 29 14.4
High school 88 20.2 23 9.9 65 32.2
Diploma/certification 118 27.1 56 24.0 62 30.7
Bachelors degree 161 37.0 124 53.2 37 18.3
Master degree 24 5.5 21 9.0 3 1.5
PHD or above 6 1.4 6 2.6 0 0
Total 435 100.0 233 100.0 202 100.0
Occupation Valid
Professional 72 16.6 53 22.7 19 9.4
Manager 24 5.5 14 6.0 10 5.0
Civil servant 30 6.9 21 9.0 9 4.5
Company employee 98 22.5 72 30.9 26 12.9
Self-employee 46 10.6 14 6.0 32 15.8
Labourer 42 9.7 8 3.4 34 16.8
Farmer 4 .9 0 0 4 2.2
Student 25 5.7 20 8.6 5 2.5
Sales/service 27 6.2 13 5.6 14 6.9
Unemployed 6 1.4 2 .9 4 2.0
Home maker 11 2.5 4 1.7 7 3.5
Retired 39 9.0 6 2.6 33 16.3
Other 11 2.5 6 2.6 5 2.5
Total 435 100.0 233 100.0 202 100.0
Income Valid
CNY500- 32 7.4 20 8.6 12 5.9
CNY500–1000 26 6.0 11 4.7 15 7.4
CNY1001–1500 45 10.3 23 9.9 22 10.9
CNY1501–2000 78 17.9 34 14.6 44 21.8
CNY2001–3000 107 24.6 58 24.9 49 24.3
CNY3001–6000 116 26.7 74 31.8 42 20.8
CNY6001–10,000 26 6.0 11 4.7 15 7.4
CNY10,000þ 5 1.1 2 .9 3 1.5
Total 435 100.0 233 100.0 183 100.0

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