The Role of Trust in Successful Ecommerce Websites in China: Field Observations and Experimental Studies

The ecommerce market in China is both the largest online market in the world and the market with the greatest number of low quality or counterfeit product offerings. We examine three very successful online companies in China and their very different paths to success and then use our experience to develop testable hypotheses, as proposed by Eisenhardt and Graebner. We present our hypotheses and then discuss the experiments that were conducted in China, the United States, Germany, and Singapore in order to test these hypotheses. We expected to see that the role of reputation is critical in China, and that it is more critical in China than in ecommerce markets elsewhere. Consistent with our hypotheses, we find first that vendor reputation is indeed the most important factor influencing consumers' willingness to shop at and willingness to pay for goods from a specific vendor in China and elsewhere. We find only limited support for our hypotheses concerning the role of risk mitigation mechanisms in general, but we do find support for the hypothesis that the Chinese online markets differ from online markets elsewhere.