Understanding consumer online shopping behaviour from the perspective of transaction costs

1.3 PURPOSE OF THE STUDY 
 
Given the importance of consumer TC reduction, especially in managing TCs as a strategic 
input into the performance superiority creation, it is surprising that little empirical study has 
been done to address the compositions, antecedents and consequences of consumer TCs in 
online shopping setting. This research aims to bridge the existing gaps in the literature. The 
ultimate purpose is to explain the important phenomenon of consumer TCs associated with 
online shopping; that is, to investigate their antecedents and examine online purchase 
behaviour and customer loyalty from the perspective of TCs. To this end this study adopts 
Transaction Cost Theory (TCT) (Williamson 1981a) as a research lens. This research aims to 
advance consumer behaviour and marketing literature by developing an integrative 
theoretical framework of the antecedents and outcomes of TCs during the online purchase 
and post-purchase phase. The proposed framework will be empirically tested using a large-
scale sample randomly selected from real-world online shoppers in China. The study attempts 
to achieve the following two specific objectives: 
1.
To identify antecedent factors that affect consumer TCs in online shopping.

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2.
To investigate the impacts of TCs as perceived by consumers on their decisions in 
choosing an online vendor. 
1.4 SIGNIFICANCE OF THE STUDY 
This study is expected to contribute to the existing literature. Firstly, given the call for a 
paradigm shift from market focus to consumer focus, this study extends the current 
knowledge by attempting to apply TCT to explain individual consumer behaviour in online 
shopping environment. It develops the comprehensive component conceptualization of 
consumer TCs, and suggests a system of measurement of these components with regard to the 
time and effort that individual online consumers spend on different stages of e-commerce 
transaction process. This study would advance the measurement of TCs by explicating the 
concept of consumer TCs and positioning them within the online context. Despite the 
considerable literature on TCs for organisations, there exists a lack of a thorough theoretical 
understanding of consumer TCs. The research on consumer TCs would contribute to the 
existing knowledge by elaborating the TCs during the different phase of online transaction 
process.
Secondly, the study would also contribute to research on TCT by examining various 
antecedents that can determine consumers’ perception of TCs in online shopping. The 
identification of such predicative factors that impact on the TCs would help clarify the 
mechanism, through which TCs for consumers are determined. This would help online 
vendors to choose appropriate strategies to alleviate TCs perceived by consumers. The 
significance of focusing on the antecedents of consumer TCs is important and meaningful on 
both theoretical and managerial grounds. 

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Thirdly, it offers new insight into marketing theory by highlighting TCs as an important 
factor that impact on the actual online purchase behaviour and loyalty of the customers. To 
the best of our knowledge, this research is the first to link consumer TCs to online purchase 
behaviour and customer loyalty toward an online vendor, thus providing the e-marketers with 
a useful guideline for fine-tuning their e-businesses’ strategies.
Finally, previous research has traditionally involved western samples. By collecting data 
among Chinese online shoppers, this research addresses a significant gap in the literature by 
extending the existing research to a rapidly growing emerging market of China. As China has 
a culturally different business environment from traditional western market, this study is 
expected to identify potentially alternative factors that impact on the purchasing decisions of 
the Chinese consumers, enriching the existing research on online shopping. In addition, this 
study is also expected to provide practical recommendations for online vendors, be they 
Chinese or western businesses, to formulate appropriate marketing strategies in online 
environment.