China and Internet Shopping - B2C Commerce in China: Improving E-Trust Levels
The main characteristic of today's international economy is globalization, it can be defined as a process by which economies, societies and cultures have become integrated through a global network of communication, transportation, and trade. In addition to globalization, the international economy is characterized by an informational technological revolution and economic integration. The newest evolving positive trends is electronic commerce (e-commerce) , it generally referred to as business-to-business(B2B) and business-to-consumer(B2C) online shopping. B2B can be open to all interested parties or limited to specific, pre-qualified participants market, B2C online shopping is related to buying products or services at a so-called bricks-and mortar retailer or in a online shopping mall (Bazdan, 2011). Online shopping is a form of e-commerce in which the buyer directly accesses the seller's inventory or services via Internet. Without the large mount of inventory and selling cost, e-commerce providing retailers a low cost international trade platform.
Statement of Problems:
When most of people talk about Chinese products, the first thing that comes to the mind is they are low cost and of mediocre quality, that is the perception and stereotype. But in reality, in China there are more and more emerging brands and designers that offer innovative, authentic and original design, but they do not have the means to expand their brands and products beyond the Chinese market because the cost of running oversea business and the technological resources are out of their affordability, even some of them are already operating their online business inside the China. The small online retailers are just starting to see how they can use international sourcing to their advantage. () They carried out with minimum investment and run with the plan to produce more income with the least amount of money invested in a business, the management of assets and liabilities is not difficult (Small Business Bible, 2006). Therefore the small online business are more flexible and easy to adjust their business direction.
Meanwhile the major disadvantage of those online small business is the lack of authenticity. Most people prefer to do business with established industries rather than to put their trust in small businesses which have several risk factors. To make the name for a small business in the big industry is the major obstacle that most small businesses face. much marketing effort and references are required to firmly establish and authenticate a small business (Small Business Bible, 2006). Even China has largest Internet users, which is about 420 million (Internet world stats, 2010), B2C e-commerce in China is not as prosperous as people expect in the current stage. The lacking of consumers' trust is believed to be one of the major handicaps for further development and growth of B2C e-commerce in China.
E-commerce Consumer Behavior:
According to the previous research, the e-trust is considered as one of the most important prerequisites for e-commerce success. Online transactions and exchange relationships are not only characterized by uncertainty, but also by anonymity, and the culture gaps between courtiers may intensify this property. Different online shoppers with different e-trust levels based on their past online purchasing experience and income. This study proves that retailers in China a new export channel with higher e-trust levels are more likely to have higher purchasing power. It is suggested that the most effective marketing strategy for an e-commerce firm targeting the shoppers in the world to attract and promote their first online purchasing experience with Chinese sellers. Further, the middle class has proven to be major online purchasers. E-firms who could gain their trust eventually will be more profitable. The lack of control and potential opportunism, making risk and trust crucial elements of electronic commerce. Online transactions often do not involve simultaneous exchange of goods and money because the spatial and temporal separation between exchange partners is common (C. Pang, D. C. Yen, 2007). When a customer chooses to trust an online store, he or she may then proceed to provide personal information, buy the product, and utilize the service offered by a vendor located in different parts of the country or even in other countries, while having limited history of prior online transactions.
It is difficult to imagine that consumers would desire these activities without having put their basic trust in a specific vendor. Nevertheless, the customer is the strategy because the customer determines and drives the strategy of the whole enterprise (M. Zeleny).
Because online shoppers’ e-trust is essential to e-commerce success, it is worthwhile to examine the factors that will affect consumers’ e-trust levels and how e-trust levels will affect the purchasing power of online shoppers. Taking this aspect, the previous research focuses on two online shoppers’ key attributes, online purchasing experience and income, and examine their relationships with the online shoppers’ e-trust. First of all, if the consumers could be attracted or promoted to do their first online purchasing rather than just surfing the Internet, they would tend to have a high e-trust level (Chuan Pang, David C. Yen and J.Michael Tarn, 2007). In other word, it is suggested that the most effective marketing strategy for an e-commerce firm targeting shoppers in China is to promote, attract and convince shoppers to make their first online purchase. However, it is important to understand that customers may not want extensive choice and selection and variety and endless options, and they just want what they want (M. Zeleny, 2005). In this sense, the first online purchasing experience becomes even more critical. Further, with a higher e-trust level, these customers will be more willing to purchase and spend more money online. Second of all, there is a trust threshold between those who have online purchasing experience and those who do not have similar experiences, therefore those who have more online purchasing experiences do not have a higher e-trust level than those who have less experience in online purchasing. Last but not least, it is important to encouraging more purchases to improve e-trust level, encouraging more purchases is certainly helpful for keeping consumers in this trust threshold.
Therefore to creat a global e-commerce supply chain witch convergence the dispersedly retailers and cover searching, payment and shipment services under the one IT company's brand is the best business form to expanding the Chinese local brands' commercial opportunities. The company should focus on the marketing promotion, The e-firm companies should promote a large amount of popular and designers brands
MADDEN, N. (2011). THE WALMART OF CHINA? E-COMMERCE EXPLODES ON ALIBABA'S TAOBAO MALL. Advertising Age, 82(3), 10. Retrieved from EBSCOhost.
The main online consumers in China have higher income tend to have higher e-trust level. Those high income(more than $1,000/month) in China usually belong to the younger and professional group with higher education level. If the e-firms that can gain their trust will eventually by more profitable in cyberspace.