Understanding consumer online shopping behaviour from the perspective of transaction costs

6.3 IMPLICATIONS 

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6.3.1 Theoretical Implications 
This study entails several theoretical implications for understating consumer TCs in an online 
setting. The literature reflects conflicting findings with regard to TCs which this study 
attempts to resolve via the empirical results. A major issue pertains to the applicability of 
TCs to consumer behaviour in online environments as the Internet represents a fundamentally 
different environment for retailing compared with traditional retailing. This research adds 
knowledge to three bodies of existing literature (TCT, consumer behaviour, and E-commerce) 
by developing an integrative theoretical framework of consumer TCs of online shopping that 
is grounded in strong theories and is successfully tested using a large-scale sample randomly 
selected from Chinese online shoppers. By examining the antecedents of consumer TCs, the 
direct consequences of TCs directed toward consumers’ online purchase and post-purchase 
behaviour, the key mediators and the key moderators of the effects of consumer TCs on their 
behavioural outcomes, as well as the product categories comparison, this study directly 
addresses many questions that have remained largely unexplored by previous TCs and 
consumer behaviour research. As a result, the study provides a deeper understanding of TC 
mechanisms in online consumer behaviour. 
Specifically, eight aspects of this study are noteworthy in terms of its theoretical 
contributions. Firstly, this study takes a new perspective on the study of TC mechanisms in 
consumer behaviour. It offers deeper theoretical and empirical insights into consumer 
behaviour by explicating the role of TCs at the individual consumer level. Prior research 
addressed the relations among TCs, organizational structures and behaviour, however, there 
have been few empirical studies examining the relationships between TCs and individual 
consumer behaviour. By showing that individual consumers have to bear some TCs (e.g., 
search cost, evaluation cost and monitoring cost) associated with each shopping activity, the 

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study provides opportunities to extend the original TCT from firm level to individual level. It 
goes beyond previous TCs research (Granovetter 2005, Barney and Hesterly 2006, Hennart 
2006) and further reflects that consumers’ behaviour toward a transaction is driven by their 
perception of TCs. By demonstrating the applicability of the TCT at the individual consumer 
level, this study establishes external validity and contributes to the theory development of 
both TCT and consumer behaviour. 
Secondly, although much research has used TCT to explain the rise of global electronic 
markets and the cost-savings afforded by network-based communication, few have conducted 
empirical studies using TCT to explain consumer behaviour in B2C electronic commerce 
context. The current study applies the TCT to the online market and tests their contractual 
relationships empirically. Additionally, it develops a nine-component conceptualization 
(consisting of access cost, search cost, evaluation cost, ordering cost, payment cost, delivery 
cost, monitoring cost, post-sale cost and adaptation cost) of consumer TCs associated with 
each step of the online transaction process and further groups them into three broad 
categories, namely pre-TCs, contemporaneous TCs and post-TCs. It also sheds light on how 
consumer TCs which are coupled with the unique characteristics that e-commerce carries 
differ from those in a traditional marketplace. In this sense, one of the contributions of the 
study is the development and empirical testing of a consumer choice model which is based on 
the three-component conceptualization of consumer TCs to examine consumer behaviour in 
online environments. It fills the gap in the existing body of TCT and online consumer 
behaviour knowledge, and advances the literature by untangling the relationships between 
consumer TCs and online consumers in a B2C e-commerce setting.

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Thirdly, given the unique characteristics of online transaction, this study extends the original 
TCT by examining various antecedents that can determine consumers’ perception of TCs of 
online shopping, especially extending Liang and Huang’s (1998) work. To identify a 
comprehensive set of antecedents of consumer TCs associated with shopping at an online 
store, this study examines a consumer’s entire online transaction experience including not 
only a consumer’s online experience of purchasing products from a particular online vendor – 
the focus of previous online B2C TC research (Liang and Huang 1998, Teo and Yu 2005, 
Yen
 et al.
2013) – but also his/ her offline experience and resources related to online 
shopping as well as his/her attitudes towards the general online shopping channel. The 
theoretical development and empirical results suggest that a consumer’s perception towards 
the seven key aspects of his/her online transaction experience, including Internet access 
availability, perceived Internet expertise, online buying frequency, product quality concern, 
e-service quality, reputation of online store and perceived convenience, constitute the key 
antecedents of consumer TCs. The finding enriches online marketing and consumer 
behaviour research by empirically identifying antecedents of TCs from a more 
comprehensive perspective, which include consumer-related characteristics, online store- and 
product-related characteristics, and online channel-related characteristics. It also adds to the 
TCT literature by incorporating additional beliefs relevant to the online shopping context and 
investigating the effects of antecedents to beliefs on online TCs.
Furthermore, among the antecedents of importance, consumers weigh e-service quality most 
heavily when evaluating TCs of online shopping. Online buying frequency and perceived 
Internet expertise play the second and the third role, respectively. Consumers weigh Internet 
access availability the least when judging whether the TCs are high or low. Taking an 
expanded list of antecedent factors into account contributes to the theoretical and empirical 

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advancement of the role of the key players’ (consumer, online vendor/store and online 
channel) characteristics on consumers’ TC evaluation and their subsequent behaviour (Teo 
and Yu 2005). The findings also provide deeper insights into online vendors’ TC-reduction 
activities and further help them gain a more thorough understanding on how to alleviate 
consumer perceived TCs associated with purchasing at their stores by looking into the seven 
antecedent factors identified in this study.
Fourthly, although previous research argues that various factors from different aspects of a 
transaction can affect consumer’s online behaviour, little effort has been devoted to the 
investigation of the consumer’s online purchase behaviour from a TCT perspective. A few 
studies have examined the effects of TCs on purchase intention or willingness to transact 
(Liang and Huang 1998, Teo
 et al.
2004, Teo and Yu 2005), nevertheless, the initial intention 
or willingness does not necessarily lead to the occurrence of purchase behaviour (Chandon