Research Article, J Bus Hotel Manage Vol: 7 Issue: 5

Factors that influence the online shopping behavior of foreigners in China

Graham Yamak Emmanuel, Wen Jiawen, Li Jiao, Mo Jiawen, Liu Yi

Master student, Yangzhou University, Information Engineering Department

*Corresponding author: Yamak Emmanuel G, Master student, Yangzhou University, Information Engineering Department E-mail: jiaweiwenhjb@hotmail.com

Citation: Yamak Emmanuel, et al. (2021) Factors that influence the online shopping behavior of foreigners in China. J Bus Hotel Manage.

Abstract

Keywords: E-commerce, foreigners, TAM (Technology Acceptance Model), shopping, Social Commerce.

Introduction

Online shopping is a viable preference for consumers as the internet has become an essential tool for communication and business worldwide. (The Internet World Stats) (2018) reported that there are more than four billion internet users in 2017, and it is a 577 percent growth as compared to the total population of internet users in the year 2000. The Asian region conquers 49.2 percent of the total number of internet users. In 2017, an estimated 1.66 billion people worldwide purchased goods online; the total number of internet users had triggered $2.3tn of the sales from the internet, and projections show a growth of up to $4.48tn by 2021(Statista), (2018). Online shopping is the easiest solution for a busy life in today’s world. In the past decade, there had been a massive change in the way customers shopping. Online shopping saves crucial time for modern people because they get so busy that they cannot or unwilling to spend much time shopping. Online shopping has always been a vibrant research area as it encapsulates behavioral theory by describing the shopping motivation trends of people in general bringing forth the need to find out why people shop online. The proliferation of foreigners into China describes a spectrum of different cultural assimilation and there was the need to evaluate how foreigners who migrate to China engage in

making purchases online as compared to their formal methods of shopping considering internet experience and usage. After foreigners come to China, they quickly integrate and accept the new online shopping environment (some of the countries where the foreigners are surveyed have no online shopping and the Internet penetration rate is relatively low). In the process of learning cultural courses and gradually improving the level of Chinese, they soon integrate and accept this shopping method. Therefore, this paper takes foreign life as the research object to explore the characteristics of foreigners’ shopping behavior and its influencing factors in the online shopping environment.

The need to decipher which factors affect foreigners who migrate to China for various needs draws our attention adding to the literature the different characteristics affecting online shopping behavior. This article takes foreigners in China as the research object to study the influencing factors of online shopping for foreigners in China. On the one hand, it can enrich the basic online shopping theoretical system; on the other hand, it can provide a theoretical reference for Chinese enterprises to expand e-commerce abroad. Concerning the enrichment of the basic online shopping theoretical system; by adding to the general pool of knowledge about online shopping but also setting a pace in the fabric of online shopping amongst foreigners who live in China as one of the first research-based on these groups of people. Chinese enterprises can also have a complete-handbook of references with regard to online shopping behavior amongst foreigners which can enable the marketing, branding, and advancement of their company’s database on social commerce enhancing profitability and expansion.

This article takes foreigners in China as the research object, on the one hand, it can provide a variety of basis for the marketing strategy of China’s domestic online shopping platform, help companies determine the target market and form a business model, on the other hand, it can be a cross-border e-commerce platform The improvement of the environment provides certain ideas to further clarify the development direction of related companies.

The next section of this journal describes a background into online shoppings conception, continual prevalence across different time frames aiding in the establishment of the different hypotheses being brought forward. There is also the discussion of the research methodology and proceeded by the analysis and discussion and the general conclusions.

LITERATURE REVIEW

As one of the fastest-growing economies in the world, China has the highest eCommerce sales worldwide. Online shopping is deemed to be one aspect of the daily lives of Chinese citizens describing their livelihood, several apps and websites have been designed to serve

*Corresponding author: Yamak Emmanuel G, Master student, Yangzhou University, Information Engineering Department E-mail: jiaweiwenhjb@hotmail.com

All articles published in Journal of Business & Hotel Management are the property of SciTechnol, and is protected by copyright laws. Copyright © 2021, SciTechnol, All Rights Reserved.

their never-ending needs. (According to the statistical report on the development of China’s Internet), by June 2019, the number of Internet users in China had reached 854 million, and the Internet penetration rate had reached 61.2%. This convenient basic condition provides technical support for the online shopping activities developed from 2009, which makes the shopping festival diversified and large-scale matured. The significant growth of electronic commerce, also known as e-commerce, is an alternative for customers to make purchases quickly and practically, without leaving the house. However, all this growth has to be supported by good presale, sale, and post-sale strategies.

(According to Gomez-Herrera et al.) (2014), internet shopping generally does not matter anymore where buyers and sellers are located because the information is only a mouse click away and no longer related to physical distances. They state that language barriers and institutional barriers such as online payment facilities and cost- efficiency of parcel delivery systems might play a significant role in cross-border trade. In this research, there is a need to establish a link between language barriers and online shopping behavior for foreigners. As foreigners assimilate into new cultures, there is the need to acquaint themselves with the new language and that can either inhibit or promote the online shopping behavior of a foreign consumer.

The three most commonly used scales found in the literature for measuring the quality of sites are the e-SERVQUAL, WEBQUAL, and eTailQ (Hapenciuc & Condratov), (2007). The eSERVQUAL measures customers’ perceived quality of websites. The WEBQUAL scale focuses on the interface of the site and closely monitors the behavior that reusing and revisiting sites entails. Meanwhile, the eTailQ scale seeks to predict customers’ judgments regarding quality and satisfaction with the site (Hapenciuc & Condratov), (2007). Service is seen as an important aspect of online shopping and online shopping behavior and there was the need to determine its influence in the research by finding out its influence.

(Davis) (1989) proposed TAM to elucidate the behavior of individuals in adopting new IS. According to the original model, a user’s attitude toward using a new system is mainly influenced by the perceived usefulness (PU) and the perceived ease of use (PEOU) of the system. Where PU explains the degree to which a person believes that using a system will be useful and PEOU clarifies the degree to which a person believes that the adoption of the new system will require effort.. TAM has evolved and many researchers have extended it. (Johar and Awalludin) (2011) concluded that PU, PEOU, and PE have a positive influence on consumers’ intentions to shop online and encourage the online shopper to browse more, which increases the likelihood of purchase. TAM has been exclusively discussed as one pertinent aspect of online shopping and online shopping behavior and there was the need to determine its influence in this research by finding out its potency to perceived usefulness, perceived ease of use, perceived convenience, perceived time saving, and perceived money-saving. The main purpose of choosing this characteristic is to establish how these elements affect online shopping of foreigners in china distinguishing online experience and exposure.

(Boardman, McCormick’s) research contributes to knowledge by investigating why different age groups use different shopping channels and explore their preferences and motivations to interact with these channels. This provides an insight into whether age influences consumer channel choice, an area that is vital in the twenty-first century,

due to the significant growth of online over the past two decades. With older consumers increasingly shopping online it becomes pertinent to explore preferences and unique behaviors, an aspect that is lacking in extant research. (Boardman, McCormick’s) qualitative inquiry further enhances current debates by providing an insight into perceived channel benefits and whether motivations into channel selection are affected by the consumer’s age. As described by various studies, age is a determining factor deciding the type of products purchased by different age groups. The establishment of which age groups buy what will go a long way in aiding Chinese companies to improve their foreign target market modules with regard to age, as well as general, improve the literature about how different age groups shop online.

Based on the IS literature, participation in electronic commerce can be definedas “the consumers’ engagementinonline exchange relationships with Web vendors” (Pavlou and Fygenson), (2006), p. 115. In the case of social commerce, the participation of consumers includes both direct and indirect commercial transactions. Direct transactions refer to the consumer’s buying behavior during the purchase phase of his/ her decision-making process. On the other hand, indirect transactions include electronic word-of-mouth (e-WOM) referral activities within the defined purpose, information search, selection process, and after- sales of the customer decision-making process, being characterized by requests and business information sharing on social media (Zhang et al.,) (2014).

In this research, there is an evaluation of social commerce and how it affects online shopping behavior of the sample size considering how the comments of consumers influence their purchasing potency, bad ratings, bad comments from other consumers, information of the product online being identical, being precise and the product being up-to-date, as well as considering product reviews.

This research mainly uses the quantitative analysis method based on the decision bases on the use of an empirical research methodology. There was a distinctive decision to design an electronic questionnaire, distribute the questionnaire, collect the questionnaire’s results, and organize the data. The quantitative analysis method is used in the construction of the analysis model and the inspection of modeling analysis. From the perspective of planning behavior theory, this research constructs a decision-making framework to explain foreigners’ online shopping behavior and uses binary logistic regression model and factor analysis to explore the internal mechanism of online shopping willingness and online shopping behavior. Factor analysis is performed to explain the relationship between a set of observed variables in terms of a smaller number of unobserved variables. Using SPSS 25.0, factor analysis was performed on 21 variables.

RESEARCH METHODOLOGY

Previous research confirmed that demographics play an important role in determining whether people use the internet or intend to shop online; they concluded that the online population is relatively younger, more educated, and wealthier (Li and Zhang), (2002). After exploring the research about online shopping and online shopping behavior, there was a need for a drive toward the attainment of the factors that enhance or inhibit the online shopping behavior of foreigners in China.

To test the factors that influence the shopping behavior of foreigners in China, there was a performance of empirical research. A structured questionnaire was developed using an electronic platform. To prevent multiple responses, the electronic questionnaire was shared using QR

codes and also through web links. The process of dissemination was through Wechat QR codes and web link addresses that were forwarded and redistributed. Some of the questions were closed-ended and other questions were designed as a five-point Likert-Scale. The survey was created in September 2019, whilst responses took almost six months to be received and analyzed. In total, 302 respondents answered the questionnaire from a population made up of 187 males and 115 females. The respondents answered several questions aiding in the investigation of which factors affecting the shopping behavior of foreigners in China.

SPSS and other software were used as analysis tools to process the collected research data with descriptive statistics and binary regression analysis. The respondents’ age ranged from 18 to over 50 years old. The majority, 74.8 percent of the respondents are below the age of 30 years. 73.5 percent of the respondents had a general experience with regard to an online experience. 81.9 percent of the respondents are scholarship students, 12.3 percent of the respondents are salaried workers whilst the remainder are self-supported university students.64.6 percent of the respondents are bachelor’s students, 6 percent of the respondents are doctorate students, 2.2 master’s students and 6.3 of the respondents are diploma or certificate students whilst the remainder is associate degree students. 50.3 percent of the respondents’ salary is under ¥1000 online who holds the position as the majority of the respondents.52.6 percent of the total respondent population which marks the largest percentage of fluent Chinese language speakers.60.9 percent of the total respondent population spend under ¥1000 online; holding the majority position of the respondent population. Analysis of the data was obtained and sorted out based on the characteristics and preferences of foreigners online shopping in China. The original variables were used for PCA with an orthogonal rotation, which converged in six iterations. The cumulative percentage of factor loadings (total variance explained) is 62.570%. In comparison, concerning the general rule of empirical analysis, a cumulative percentage of this magnitude is seen as sufficiently suitable for this research. The extracted constructs from the factor analysis were regressed against the salary to determine how the type of salary affects the factors that influence the shopping behavior of foreigners in China. (Tab.4). The response variable (salary) is first selected and then assigned as the dependent variable in SPSS. The explanatory variables are chosen from the SPSS variable list (factor loadings) and assigned as the covariant in SPSS with a 95 percent confidence interval selection and probability less than 0.5. The equation below is used to calculate binary logistic regression describing the regression method used.

P: probability of Y occurring e: natural logarithm base

b0: interception at y-axis b1: line gradient

bn: regression coefficient of Xn X1: predictor variable

X1 predicts the probability of Y.

Opinions regarding the minimum sample size have varied. Some researchers stated that with no missing data, a reasonable sample size is about 150 respondents. However, others argue that the minimum sample size recommended is 200. On the other side, identifying the minimum sample size should be based on the complexity of the

model, i.e. a sample size of 100 is the minimum for a model with five constructs and 150 for a model with seven constructs. Another way to identify the minimum sample size is based on the ratio of the sample size to the number of items in a model; the ratio should be at least 5:1 (Hair et al.,), (2014); (Kline), (2011). The final decision was to use a sample size between 200-300 as a suitable sample for the research.

ANALYSIS RESULT

This table below (Tab.1) describes basic statistics of 302 respondents who answered several questions aiding the investigation of which factors affecting the shopping behavior of foreigners in China. The table also describes their various minimum and maximum values as well as their mean and standard deviation values

Table 1: Basic Statistics of Respondents

KMO and Bartlett’s test balls are applied to the 21 items of the dataset and were highly significant, indicating that the variables are correlated. The higher KMO value of the Kaiser-Meyer-Olkin measure of sampling adequacy is 0.783 indicates that there are more common factors between the variables; therefore, they are more amenable to be analyzed. Barlett’s spherical test value is 2258.670, significant at 0.000 with a difference (df) of 210 Factor analysis is performed to explain the relationship between a set of observed variables in terms of a smaller number of unobserved variables. Using SPSS 25.0, factor analysis was performed on 21 variables. The original variables were used for PCA with an orthogonal rotation, which converged in six iterations. The cumulative percentage of factor loadings (total variance explained) is 62.570%.To espouse and extract factors, the eigenvalues considered were ones greater than 1. Six constructs were extracted and explained.

The first construct explains seven factors. This construct establishes and confirms how online shopping behavior is positively affected by social commerce. The second construct explains four factors.

This construct establishes how TAM affects online shopping and which dependent factors (GOOD QUALITY, RECOMMENDATION, TAM, and PRICE OF THE PRODUCT) are associated with TAM. Salary, occupation and spending habits are interdependent and form the third construct. It also describes that they are not mutually exclusive. Gender and Chinese level are the constructs for the fourth component and this construct espouses how an increase in Chinese language fluency positively affects gender and their vice versa and also stating the interdependence. The fifth construct establishes the interdependence of age and education and how that affects the shopping behavior of the respondents and establishes a positive impact between age and educational level. A high online experience positively affects the desire of consumers, i.e. the respondents that shop online in this survey. It is proven that a great online experience expressively affects an online desire with regards to how consumers are satisfied or dissatisfied with online shopping

The extracted constructs from the factor analysis were regressed against the salary to determine how different salaries affect these constructs. (Tab.4)The results showed that all constructs apart from construct 2 plays an important role in the explanatory variables. The model summary determines the R2 which is stated below in the table. The ANOVA table result (155.332, 32.87) =279.761 at sig = 0.00.These constructs prove that the model is statistically significant, showing how the dependent variable (salary) is affected.

DISCUSSION

This study has proven that good quality, recommendation, and the price of the product are a powerful determinant of TAM. With regard to good quality, it positively affects TAM in the area of perceived convenience; one can shop anytime and enjoy the ease of delivery service, as well as checking the quality, price, and style before making a purchase. With regard to recommendation it positively affects TAM in the area of perceived ease of use; the easier it is to use an application, the more likely one would intend to use it, influencing one’s purchasing potency. With regard to the price of the product it positively affects TAM in the area of perceived money-saving; one’s sensitivity to pricing and how that influences one’s decision to make a purchase. This result confirms the hypothesis of how TAM influences the shopping behavior of foreigners in China. . TAM has been widely established and researched upon, and the affirmation as a determinant to online shopping behavior in general and in regards to this research, it re-establishes itself as perceived usefulness, perceived ease of use, perceived convenience, perceived time saving, and perceived money- saving have a positive impact on the shopping behavior of foreigners, in general, describing it as a metric to consider in the spectrum of online shopping and online shopping behavior. When companies in China consider targeting a foreigner market, the consideration for TAM should be paramount for the achievement of the aim of selling to people from a different race and demography.

Results confirm social commerce and show how it is impacted by the language barrier, poor after-sales service, delivery options, no return policy, shipping fee, and shipping costs. The social commerce components are a relevant factor, is defined by (Hajli) (2013) as the presence of comments, ratings, and reviews about products – that are referred to by many authors as word-of-mouth. (According to Doney and Cannon) (1997), the reputation of a company is defined as the

measure in which consumers believe that the company is honest and concerned about its customers. In social commerce, users tend to consider the reputation of a company as an important factor while evaluating their trust in the company and products and services purchasing. The results of this study affirm how foreigners take into consideration the attributes described by (Kim and Park), (2013) and portray a positive influence on online shopping behavior. Social commerce depicts some factors that can affect the general purchasing behavior of consumers and in this regard to foreigners in general, eWOM and language barriers covey a very defining factor inhibiting the intent and or disapproval for an online purchase defining the tenets of a foreigner being taken as a part of the general online shopping population. In totality, Chinese e-commerce firms can enhance their scope to foreigners by providing a safe space for reviews in other languages and bridge the language gap by integrating other languages into the online shopping platforms.

Salary, occupation and spending habits are dependent modules. The results of the study stipulate that 50.3% of the respondent population earns under ¥1000. 60.9% of the total respondent population also spend under ¥1000.81.8% of the total respondent population are scholarship students and this is a clear reflection of the salary and spending percentages and how they are inter-related. This clear correlation between salary, occupation, and spending habits determines the various spending targets markets which companies can target when they want to reach a pattern age demography which aids in the strategically positioning of e-commerce companies in China. E-commerce companies in China can also use this information to segregate their positions when considering to attract other online platforms and other potential foreign markets.

In terms of gender and Chinese level, 52.6% of the total respondent population has reached a basic level of Chinese language study, have a good comprehension of the Chinese language. This means that 30.95 of the male population can comprehend Chinese and 19.05% of the female population can comprehend Chinese. This result describes the interdependence of a particular gender concerning their fluency and how that translates into purchases describing online shopping behavior. These figures translate into so many spectrums of significance. One of the significance is that it aids Chinese e-commerce platforms to know to decipher gender prospects and language fluency which can translate into revenue production as it would be easier to advertise online products to these groups of people. Additionally, this adds to the pool of knowledge to behavior theory by aiding to structure a framework to determine how different gender and Chinese levels persons shop online and how these two factors working hand in hand. Gender alone plays an important role as a factor that has underpinned how people shop online and its linkage with the level of Chinese fluency has provided a different spectrum for Chinese e-commerce literature as it establishes a new theory that gender and the level of Chinese fluency have a positive impact on the shopping behavior of foreigners who migrate to China for different reasons.

Concerning online experience; 73.5% have a general knowledge about online shopping, whilst 8.9% have rich experience about online shopping and this combined shows that 92.4% of the total respondent population have a good knowledge about online shopping and this would affect their desire about online shopping and satisfaction in general.

In retrospect, a higher level of online experience would enhance a higher desire for online shopping affecting the desires of online

consumers. It is important to note that, the online experience is a significant factor that affects the online shopping behavioral desire of consumers. The proliferation of the internet has been the greatest element that has enhanced the prospect of online shopping. This has therefore translated into the development of online shopping in China on different e-commerce platforms, with the integration and assimilation of foreigners over the past decade, e-commerce has been intrigued by the rapid purchasing behavior of foreigners in china and that drifted the research to find out what characteristics affect foreigners who shop whilst they live in China. The determination of online experience being one of the reasons enhancing the purchasing behavior of foreigners in China is paramount as it adds to the pool of e-commerce knowledge that foreigners who in China are also affected by online experience as well as translating into the confines of online exposure and internet usage and how some foreigners who have little to no internet penetration change their environment and have now become introduced to internet usage which has translated into online shopping using their mobile phones and computers.

CONCLUSION

Based on the results of this study, this paper puts forward the following suggestions for the construction of its online shopping platform:

1. Pay attention to the thoughtfulness of pre-sale service and after- sale service of online shopping, and draw lessons from some online service methods provided by China’s e-commerce
2. Refine the introduction of online stores and use video and multi- angle photos to introduce the goods in detail so that consumers have a comprehensive understanding of the
3. Attach importance to the quality of goods. E-commerce platforms and national regulatory authorities should jointly supervise the quality of goods provided by businesses to ensure those consumers’ rights and interests are not

At the same time, businesses themselves should also strengthen self- discipline and be responsible businesses. Also, the research results can provide quality and service-oriented marketing strategy suggestions for cross-border e-commerce platforms in China.

The findings of this study have to be seen in light of a limitation. The sample comprised mostly of students than foreign workers. Analysis of the data shows that 6% of the total respondent�??s population is salaried workers. The lack of these numbers affects the reason for the research because it would make it easier to identify shopping behavior, especially for salaried workers since they are the ones that would be regular shoppers. After all, they earn a living. Further studies on the shopping behavior of foreigners in China should consider more inclusiveness concerning salaried workers to create dynamism and diversity in the data results

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