CHINESE CONSUMER PURCHASE INTENTION AND ATTITUDE FOR ONLINE SHOPPING OVERSEAS
1.1. Background of the Study
Within the past few decades, the Chinese economy had shown the sign of extremely rapid growth pace. This has also been coped with the ever-changing marketplace, where the Chinese consumers are now more exposed to the foreign markets, especially from the increasing prominence of the country’s e-commerce channels. Accordingly, with its reputation as the country with the world’s fastest economic growth rate, China had embodied the characteristics of a gigantic marketplace that attracts various business overseas to participate in the Chinese market, and e-commerce had been regarded as an important gate for these foreign participants to participate in the Chinese market; especially with the rise and prominence of e-commerce business channels as of today.
At the same time, with the increasing opportunities that are available for foreign businesses to enter and participate in the Chinese market, Wu (2012) believed that the exposures of the foreign business influx, all with their own pricing, products as well as promotional model could possibly change the Chinese consumers’ value and attitudes towards consumption, especially in light with the rising disposable income of the Chinese households, as well as the greater arrays of alternatives available for the Chinese market.
Wu (2012) illustrated this issue, outlining that there are changes of spending pattern by the Chinese consumers, in which they are now more willing to purchase discretionary, foreign products, or those that are manufactured overseas. Chen and Wang (2015) further explained that this is also attributable to the lingering beliefs that the Chinese local products relatively possess lower quality than their foreign counterparts. Wong and Ahuvia (1998) noted that the Chinese consumers in the post WTO fashion industry periods also shows greater inclinations to prefer small luxury items and emphasizing the importance of status symbols from foreign brands with substantial brand recognitions.
However, while there are recognitions on the changing consumer value patterns to foreign products in regards to the differences of symbolic value of prices, better quality of products and increasing promotions of foreign-made products in the Chinese media; and that there are mutual consensuses that the consumers’ purchasing intention and behaviours of Chinese products are somewhat fuelled from the rising prominence of e-commerce channels (Chen and Wang, 2015), there remains relatively little explorations as of how the increasing transactional simplicity through e-commerce might affect the Chinese consumers’ purchasing intentions and their attitude towards foreign products.
1.2. Problem Statement
The previous research by Hooper (2000) suggested that foreign products are generally categorised as luxury products in China due their differences in three marketing mix aspects as compared against the Chinese local products. First of all, their relatively higher prices, while generating the impression of high-quality goods for the consumers, also creates an impression of luxury, as the prices limits the product coverage only to the high-income Chinese consumer segments. Kwok et al. (2006) also confirmed that the luxurious imagery of foreign products can be rooted from their relatively higher quality than local products. However, most importantly perhaps, is the arguments from Lin and Sternquist (1994), who suggest that the limited availability of the foreign, imported goods also helps in instilling the feeling of ‘exclusivity’ for the Chinese and Taiwanese consumers.
However, the increasing promulgations of e-commerce channel had somewhat diminishing Lin and Sternquist (1994)’s conceptions. As of today, there are wide arrays of foreign, imported goods that can be purchased through online means. This is also related to the changes in the Chinese online market realm, in which the bigger consumer pool as well as the lower business barriers had prompted many foreign companies to choose to enter the Chinese market through e-commerce channels.
Qin (2010) also noted that there are rising rates of Chinese consumers who purchase imported products from overseas markets, and this had in turn, had changed the overall shopping habits of the Chinese consumers; especially with the rising incomes and the introductions of wider arrays of products anc concepts in the Chinese market.
While elder Chinese generations still maintains traditional spending habits, the changing pattern is exhibited to be more prominent for the younger Chinese customers; who are now considered to be more ‘westernised’ and having greater emphases of quality. Qin (2010) commented that as these new generations would gradually take over the positions of elder customer segments in China, there are high possibilities that the Chinese consumers would gradually alter their purchasing preferences; from limiting their purchasing only to basic necessities to look for more comfortable, high-quality goods to support their lifestyle, both characteristic that are presumed to pertains for foreign products.
Still, even with these changing consumer orientations, there remain possibilities that the changes of the consumer behaviours would also exhibit unique pattern, as of whether the easier accessibilities to more alternatives in e-commerce realm might diminish the luxurious perceptions of the foreign products. As such, this study is intended to observe and analyse the Chinese consumers’ purchasing intentions, as well as their attitude towards foreign products that are procured through online shopping.
1.3. Research Aims and Research Questions
As it has been hinted above, the main aim of this study would be to assess and analyse how the Chinese consumers’ purchasing intentions and their relative attitude to foreign products might be affected if these products are procured from online shopping means. To achieve this research aim, the researcher emphasise the objective in assessing the perceptions of both luxury and quality of foreign products that are procured from physical luxurious stores against their counterparts that are acquired through online basis, before determining whether these perception dynamics would affect the willingness of purchase by the Chinese consumers.
In particular, this research shall be focused to answer the following set of research questions:
- Are there any differences on the Chinese consumers’ perceptions to luxury and quality of foreign products; especially from those that are procured from physical luxurious stores against those that are obtained from online stores?
- Could the differences on the consumers’ perceptions above affect the willingness of the Chinese consumers to purchase foreign products from online basis?
1.4. Scope and Limitations of the Study
This study shall only be focused in assessing the dynamics only in the region of Mainland China, excluding those that currently reside outside the Mainland proximities. Accordingly, the study is conducted in the post-recession economic climate in 2016 and therefore, does not consider the impacts of general economic fluctuations in China towards the consumers’ purchasing intentions.
This research also does not consider the impact on the brands of the e-retailing channel towards the purchasing intentions. Instead this research generalise all channels (both domestics and foreign channels) as equal.
II. Literature Review
2.1. Consumer Behaviours on Foreign Products
Thompson et al. (2013) noted that the actual definitions of foreign products had been increasingly ambiguous, with the globalisation of productions’, which blurs the country of origin (COO) designations. At the same time, Solomon (2015) noted that this blurred designation had increased the importance of COO label designations in the decision making process, in a manner as described by Papadopoulos et al. (1990), that it symbolise the significant value of the products; especially in the realm of product quality and social acceptability in the usage of the product. This pattern is consistent with the previous findings from Herche (1992) that the consumer behaviours towards imported products are generally being influenced by the consumers’ imagery about the country where the product originates.
Herche (1992) also noted the consumers tended to apply different evaluation model to foreign products than the domestic products; and that both positive and negative evaluation result on the consumptions of foreign products will directly affects their purchasing intentions. For instance, Wang et al. (2004) commented that foreign products might be more preferable if the consumers find that the domestic producers are unable to produce the products, or in case that the local products are perceived as of having inferior quality. Wang et al. (2004) also suggest that domestic products would be more favoured in case that the consumers are unable to obtain adequate amount of information about the foreign products, or in case that foreign products are perceived as of having inferior quality than local products.
The introduction of foreign product alternatives is also believed to generate changes in market dynamics. For instance, Herche (1992) commented that easier consumer access to foreign products might erode the consumers’ loyalty to local brands, as consumers would be exposed to different sets of quality, prices, availability as well as brand popularity differences between the local against imported products. Wang et al. (2004) supported this notion: commenting that both price and product quality dimensions as the most salient aspects in consumers’ mind that affect their purchasing intentions towards foreign products. This is also consistent with the previous findings that were outlined from Papadopoulos et al. (1990), who noted that the consumers’ evaluation towards products from various origins is highly affected from the tradeoffs between the price and value of the products from different origins.