Featured Research

from universities, journals, and other organizations

E-commerce's future is in creating 'swift guanxi,' or personal and social rapport

Date:
June 14, 2013
Source:
Temple University
Summary:
Despite the reputation of online marketplaces being distant and impersonal, through social technologies such as instant messaging, they can create the sense of personal and social relationships between buyers and sellers, termed "swift guanxi" in China, to facilitate loyalty, interactivity and repeat transactions, according to new research.

Despite the reputation of online marketplaces being distant and impersonal, through social technologies such as instant messaging, they can create the sense of personal and social relationships between buyers and sellers, termed "swift guanxi" in China, to facilitate loyalty, interactivity and repeat transactions, according to new research by Temple University Fox School of Business Professor Paul A. Pavlou.

Three researchers -- in addition to Pavlou, Tilburg University's Carol Xiaojuan Ou and Robert M. Davison of the City University of Hong Kong -- studied data from TaoBao, China's leading online marketplace, to examine the efficacy of using computer-mediated-communication (CMC) technology to build guanxi and turn impersonal one-time shoppers into loyal and committed long-term customers through personal rapport.

Guanxi is a Chinese concept "broadly defined as a close and pervasive interpersonal relationship" and "based on high-quality social interactions and the reciprocal exchange of mutual benefits," Ou, Pavlou and Davison wrote.

In the past, online shoppers have been presumed to prefer impersonal transactions, but their study argues that both retailers and customers inherently desire the kind of relationship that can be called guanxi, even if the degree and extent of communication varies by culture. For example, in China, communication before a transaction of a few dollars could take more than 45 minutes.

"Nobody would argue that personal relationships are unimportant, but it is unfathomable that people in the U.S. would engage in such extensive communications and personal interactions for a small transaction," said Pavlou, the Fox School's Milton F. Stauffer Professor of Information Technology and Strategy.

The instant messaging technology used on TaoBao allows buyers and sellers to interact immediately and to use emoticons and avatars in the negotiation and verification of the transaction details. In addition, all of the customers' messages related to a specific product are shown in a message box. Finally, the feedback system provides users with textual and numerical evaluations of buyers and sellers that further establish rapport.

"The role of CMC tools in establishing swift guanxi via interactivity, presence, and trust, suggests that buyer-seller interaction can easily and quickly transform strangers into acquaintances," the researchers wrote. "In terms of repeat transactions, the effective use of CMC tools creates a significant opportunity for online sellers who wish to reinforce swift guanxi with buyers via building buyers' trust."

With the use of CMC tools (such as instant messaging, message boxes and feedback), TaoBao has achieved a loyalty rate, or "stickiness," of 71.3 percent of its customer base -- the kind of loyalty that is typically associated with only brick-and-mortar retailers.

Guanxi, largely enabled by CMC tools, can help explain the success of Taobao in China despite eBay's attempts to capture China's online market with eBay China (EachNet). Currently Taobao has 96 percent market share in China compared to 0.1 percent for EachNet.

Pavlou explained the significance of the study's findings by citing an April 2000 article in The Economist that said: "If you don't have the patience to learn about guanxi, old boy, you might as well pack your bags and go home."

"This study validates this warning by showing the ability of social technologies to transform online marketplaces from impersonal transactions among strangers to personal relationships among virtual friends," Pavlou said. "The future of electronic commerce lies in personal relationships virtually enabled by social technologies."


Story Source:

The above story is based on materials provided by Temple University. The original article was written by Rosella Eleanor LaFevre. Note: Materials may be edited for content and length.


Journal Reference:

  1. Carol Xiaojuan Ou, Paul A. Pavlou, and Robert M. Davison. Swift Guanxi in Online Marketplaces: The Role of Computer-Mediated Communication Technologies. MIS Quarterly., 2013 [link]

Cite This Page:

Temple University. "E-commerce's future is in creating 'swift guanxi,' or personal and social rapport." ScienceDaily. ScienceDaily, 14 June 2013. <www.sciencedaily.com/releases/2013/06/130614165137.htm>.
Temple University. (2013, June 14). E-commerce's future is in creating 'swift guanxi,' or personal and social rapport. ScienceDaily. Retrieved September 30, 2014 from www.sciencedaily.com/releases/2013/06/130614165137.htm
Temple University. "E-commerce's future is in creating 'swift guanxi,' or personal and social rapport." ScienceDaily. www.sciencedaily.com/releases/2013/06/130614165137.htm (accessed September 30, 2014).

Share This



More Mind & Brain News

Tuesday, September 30, 2014

Featured Research

from universities, journals, and other organizations


Featured Videos

from AP, Reuters, AFP, and other news services

Do Video Games Trump Brain Training For Cognitive Boosts?

Do Video Games Trump Brain Training For Cognitive Boosts?

Newsy (Sep. 29, 2014) More and more studies are showing positive benefits to playing video games, but the jury is still out on brain training programs. Video provided by Newsy
Powered by NewsLook.com
Your Spouse's Personality May Influence Your Earnings

Your Spouse's Personality May Influence Your Earnings

Newsy (Sep. 26, 2014) Research from Washington University suggest people with conscientious spouses have greater career success. Video provided by Newsy
Powered by NewsLook.com
Can A Blood Test Predict Psychosis Risk?

Can A Blood Test Predict Psychosis Risk?

Newsy (Sep. 26, 2014) Researchers say certain markers in the blood can predict risk of psychosis later in the life. The test can aid in early treatment for the condition. Video provided by Newsy
Powered by NewsLook.com
Harpist Soothes Gorillas, Orangutans With Music

Harpist Soothes Gorillas, Orangutans With Music

AP (Sep. 25, 2014) Teri Tacheny, a harpist, has a loyal following of fans who appreciate her soothing music. Every month, gorillas, orangutans and monkeys amble down to hear her play at the Como Park Zoo in Minnesota. (Sept. 25) Video provided by AP
Powered by NewsLook.com

Search ScienceDaily

Number of stories in archives: 140,361

Find with keyword(s):
Enter a keyword or phrase to search ScienceDaily for related topics and research stories.

Save/Print:
Share:

Breaking News:

Strange & Offbeat Stories


Health & Medicine

Mind & Brain

Living & Well

In Other News

... from NewsDaily.com

Science News

Health News

Environment News

Technology News



Save/Print:
Share:

Free Subscriptions


Get the latest science news with ScienceDaily's free email newsletters, updated daily and weekly. Or view hourly updated newsfeeds in your RSS reader:

Get Social & Mobile


Keep up to date with the latest news from ScienceDaily via social networks and mobile apps:

Have Feedback?


Tell us what you think of ScienceDaily -- we welcome both positive and negative comments. Have any problems using the site? Questions?
Mobile: iPhone Android Web
Follow: Facebook Twitter Google+
Subscribe: RSS Feeds Email Newsletters
Latest Headlines Health & Medicine Mind & Brain Space & Time Matter & Energy Computers & Math Plants & Animals Earth & Climate Fossils & Ruins