Understanding consumer online shopping behaviour from the perspective of transaction costs

 et al.
2003, Bart
 et al.
2005, Forsythe
 et al.
2006, Lai 2008). It is argued that expertise gained through simple usage of the Internet for 
non-purchase purposes such as information gathering and non-commercial communication 
will lead consumers to discover that uncertainties associated with the Internet (e.g., privacy 
and security) are often exaggerated (Miyazaki and Fernandez 2001). For example, concerns 
over cookies - pieces of information that a website stores on a consumer’s computer that are 
used to identify repeat visitors and personalize the online shopping experience - could 

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dissipate as consumers learn that cookies typically cannot access data other than that already 
provided to the website by the consumer. Therefore, this study argues that consumers with 
higher levels of Internet expertise would have more knowledge and control of online risks 
and uncertainties, thus their perceived TCs towards evaluating the risks and uncertainties 
would be lower. Evaluating uncertainties requires information or knowledge about the 
Internet environment and online vendors, in this sense consumers’ Internet expertise plays an 
important role in estimating the online uncertainties (Kunreuther 2002, Yen
 et al.
2013). This 
claim is also supported by the view that online uncertainties diminish with increased Internet 
expertise (Forsythe
 et al.
2006). All of the above leads to the following hypothesis: 
H1b: A customer’s perceived Internet expertise is negatively related to his/her perceived TCs 
associated with online shopping. 
 
Online buying frequency 
Transaction frequency refers to the extent to which transactions recur (Yen
 et al.
2013). 
Williamson (1981a) suggests transaction frequency is one of the critical dimensions for 
describing transactions. Higher transaction frequencies provide companies with a motive to 
employ hierarchical governance structures, as these structures make it easier to recover large 
transactions of a recurring kind (Williamson 1985, Teo
 et al.
2004). Many researchers have 
failed to confirm empirically that transaction frequency is related to a choice of governance 
structure (Rindfleisch and Heide 1997, Anderson 2008). While some studies investigating the 
factors that affect online shopping behaviour chose to omit this construct from their research 
models (Liang and Huang 1998, Teo
 et al.
2004), when transactions are supposed to occur at 
a high frequency, both transaction parties are likely to desire a specific or convenient 
platform to deal with the repeated transactions. Thus, this study continues to explore the 
relationship between transaction frequency and online shopping behaviour. 

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Online buying frequency is here defined as the extent to which an online shopper perceives 
that he or she frequently conducts online buying from a certain online store. The study 
considers online buying frequency as an important antecedent of consumer TCs since it 
represents the dimension of frequency in the original TCT. According to TCT (Williamson 
1981a, Williamson 1985, Williamson and Ghani 2012), a high level of transaction frequency 
reduces perceived TCs associated with the shopping channel.
The results of the empirical studies built on TCT in the context of online shopping show that 
consumers with high buying frequency sense less TCs than those with low buying frequency 
(Teo and Yu 2005, Kim and Li 2009b, Yen
 et al.
2013). This may be because consumers get 
used to the process once they have experience buying online. They are more likely to 
understand the risks and uncertainties of online shopping. The learning process may reduce 
their perceived TCs associated with online shopping (Wu
 et al.
2014). Teo (2006) states that 
consumers may not be familiar with online purchase in their first time of online shopping. For 
instance, they would not know how to open an online bank account or how to pay for the 
products by using the online payment system, etc., which increases the perceived learning 
cost of online purchase. When consumers are more familiar with the process after several 
times of successful online transactions, they will have a better understanding of the entire 
process of online shopping, hence their perceived TCs, such as search cost, evaluation cost, 
etc. would decrease. Furthermore, if consumers are satisfied with the products purchased at 
an online store, they will be very likely to continue to buy from the online store (Cronin and 
Taylor 1992, Anderson and Sullivan 1993, Zeithaml