Understanding consumer online shopping behaviour from the perspective of transaction costs

LIST OF FIGURES 
 
Figure 3.1 An Integrative Model of Consumer TCs of online Shopping 
114 
Figure 3.2 The Antecedents of Consumer TCs of online Shopping 
116 
Figure 3.3 The Consequences of Consumer TCs of online Shopping 
117 
Figure 3.4 The Partially Mediating Role of Customer Satisfaction 
118 
Figure 3.5 The Moderating Role of Consumer Risk-Bearing Propensity
119 
Figure 3.6 The Moderating Role of Perceived Enjoyment of online Shopping 
119 
Figure 5.1 Two-Step Preliminary Analyses
211 
Figure 5.2 The Structural Model (Used for Testing of H1a-5) 
258 
Figure 5.3 Structural Model with Control Variables Showing Results of
Analysis 
262 
Figure 5.4 Model Results – Search Products 
278 
Figure 5.5 Model Results – Experience Products 
282 
 
 
 
 
 
 
 
 
 
 
 
 

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CHAPTER1: INTRODUCTION 
1.1
 
BACKGROUND 
E-commerce is business transactions undertaken through the Internet for goods or services,
including online shopping, online banking, online payment, online stocks, and online travel 
reservation (Reddy and Iyer 2002). It has grown rapidly since the mid-1990s (Reddy and Iyer 
2002) and is an important means of conducting business (Tian and Stewart 2007). According 
to an estimation by Online Retail Forecast in 2012, online shoppers in the United States will 
spend $327 billion in 2016, an growth of 45 per cent over 2012 and 62 per cent growth over 
2011 (Mulpuru 2011). There are many reasons given for the growth of e-commerce over 
recent times, including for example, its size as a source of information, increasingly 
becoming much more user friendly and more accessible and less expensive (Bonn
 et al.
1999). Today, e-commerce has penetrated into the national economy, social services, all areas 
of people's lives, from the basic necessities of daily life to all industry.
Online shopping has increased rapidly over the past several decades not only in the world but 
also in China in particular (Clemes
 et al.
2013). In the past few years, the Internet has 
emerged as a vibrant marketplace for consumers and sellers of various goods and services in 
China (Gao and Bai 2014). According to a report published by China Electronic Commerce 
Research Centre (CECRC) (2014), the total online retail market (B2C and C2C) in China 
reached $225 billion by June of 2014 and is expecting to reach $368.2 billion at the end of 
2014, almost doubling over 2013. Business-to-Customer (B2C) online retail sales were 
$12.67 billion in 2010, $29.46 billion in 2011, $63.65 billion in 2012, and $122.57 billion in 

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2013 (iResearch 2013). The data indicate that China’s online shopping is growing and will 
continue to grow. Therefore, the research conducted in this area would have the potential to 
contribute to a better understanding of this rapidly increasing market and to online shopping 
in general.
Despite increased Internet usage and rapid growth of online shopping (China Internet 
Network Information Centre 2012), transactions via online channel still constitute a very 
small percentage of total China retail sales (Jin 2012). The CECRC (2014) reported that 
online retail sales represent only 6.8 per cent of total retail sales of commodities in 2013, 
which implies that even though online shopping continues to break new records every year, 
the popularity of offline shopping far overshadows that of online shopping (Kim
 et al.
2012a). 
The reasons underlying the relatively small percentage of online retail sales when compared 
with the offline retail sales created by the traditional shopping are not clearly understood 
(Kim
 et al.
2012a), thereby still requiring investigation by practitioners in the marketing field. 
Furthermore, within all the e-commerce network applications, the increase rate of online 
shopping for physical goods usage ranks at the bottom in China (CECRC 2012). For example, 
in 2013, the annual growth rate of online payment ranks first, followed by travel reservation, 
and then followed by online stocks and online banking. The last one is online shopping. The 
low annual increase rate of online shopping may be caused by an insufficient grasp by online 
vendors of the complexity and dynamics of e-business, obstacles to web access and online 
banking, inadequate supply and delivery systems, and privacy and security concerns of online 
consumers, which have been already explored (Soopramanien and Robertson 2007, Hong and 
Thong 2013). Nevertheless, there might be other potential reasons from the different 

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perspectives that can offer a better explanation, which have not yet been fully investigated in 
China (Wu
 et al.
2014).
From the standpoint of online vendors, selling goods and services via the Internet that is 
capable of accommodating various kinds of products and services is argued to have enormous 
potential. However, the fact reported by online vendors is that people browse the Internet 
more for information than for buying online (Hoffman