Understanding consumer online shopping behaviour from the perspective of transaction costs

H2d: A customer’s perception of the reputation of an online store is negatively related to 
his/her perceived TCs associated with purchasing from the online store.
3.6.1.3 Online Channel-Related Characteristics 
Online channel-related characteristics refer to a consumer’s general perception of online 
shopping and the online environment. Three main antecedents of consumer TCs associated 
with the online channel-related characteristics are perceived convenience, privacy and 
security concerns and environmental uncertainty.
Perceived convenience 
In this study convenience is defined as the advantages (i.e., saving time and effort) that 
consumers enjoy through online shopping. Convenience mainly refers to two dimensions of 
shopping activities: where to shop and when to shop. Online shopping is convenient 
compared to traditional stores since it is free from temporal and spatial constraints. Kaufman-
Scarborough and Lindquist (2002) believe that online shoppers consider online shopping to 
be convenient by providing place-convenience since they can shop without leaving their 
location and take advantage of time convenience.
Since consumers rarely visit multiple physical retail stores prior to purchase (Childers
 et al.
2001), online shopping lowers the costs of acquiring pre-purchase information while at the 
same time increase search benefits by providing a broader array of product alternatives at a 
small incremental costs (Yen
 et al.
2013). Thus, convenience is likely to reduce consumers’ 
search cost when they purchase online. Prior studies (Jensen 2012, Workman and Cho 2012) 

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have revealed that convenience-oriented consumers are more likely to purchase online due to 
the opportunity to search and compare a large number of alternatives at a relatively low 
search cost (Alba
 et al.
1997). Many studies have suggested the saliency of perceived 
convenience in predicting online shopping adoption (Chen
 et al.
2009, Clemes
 et al.
2013).
In addition, the convenience in online shopping increases transaction efficiency through the 
ability to shop at home, by eliminating such frustration as fighting traffic and looking for a 
parking space, and avoiding long checkout lines, while also offering single-stop shopping that 
eliminates travel to and from a variety of stores (Childers
 et al.
2001).
According to the 
CINIC (2012), consumers in China consider time saving as one of the main benefits of online 
shopping because it eliminates the necessity of having to travel to one or more traditional 
stores. As Srinivasan et al. (2002) indicate, the very nature of electronic transactions means 
that consumers expect fast, efficient processes that favour the development of the purchase. 
Chocarro et al. (2013) argue that, in the absence of the speed and efficiency, many consumers 
will choose to leave the website without completing the purchase process, and Cao and Gruca 
(2004) state that transaction inconvenience represents an opportunity cost to consumers. 
These findings suggest that consumers who are motivated by the great convenience of online 
environment are more likely to consider online retail stores for purchase of products and 
services as convenience can facilitate ease of search and product comparisons and further 
reduce their perceived TCs, especially the search cost. Thus, the following hypothesis is 
provided: 
H3a: The perceived convenience of online shopping is negatively related to a customer’s 
perception of TCs associated with online shopping. 
 
Privacy and security concerns 

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Privacy and security concerns reflect the uncertainty of online shopping (Yeh
 et al.
2012b). 
Urban et al. (1999) stated if customers do not trust that their personal data will be kept private 
and that payment is secured and executed only with appropriate authorization, they will not 
use the Internet. This statement suggests that online privacy and security concerns are 
inextricably linked and when combined, may actually prevent online purchasing from taking 
place.
The important parts of privacy concerns include sharing (selling, renting) personal 
information to other companies without the consumers’ approval, tracking of shopping habits, 
receiving junk mail and unsolicited messages, placement of cookies on a consumer’s 
computer, and being contacted by the company without providing consent (Tavani 1999, Tsai