The Special Challenges of Ecommerce in China: A Preliminary Investigation of Sufficient Conditions for Generating Adequate Consumer Trust for Initial Launch

Abstract

The ecommerce market in China is both the largest online market in the world and the one with the greatest number of low quality or counterfeit product offerings. Using case studies to develop testable hypotheses, as proposed by Eisenhardt and Graebner, we examine three very successful online companies in China and their very different paths to success. Our findings suggest that offering promises, assurances, and guarantees to consumers is not sufficient, because it is relatively easy for low quality sellers to offer counterfeit promises along with counterfeit products. We do find that promises backed up reputational capital can be sufficient to generate necessary online trust, and that actions must be taken to maintain quality in order to maintain trust. We understand the limitations of the work: since the same dataset cannot be used both to generate hypotheses and to test them we view this work as theory generation and not theory testing.

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