The impact of multi-access technologies on consumer electronic auctions: A comparison of markets in China and the Netherlands

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Summary

An investigation of the pervasive impact of multi-access technologies, i.e. the internet, wireless data, wired and wireless voice, and interactive TV, on consumer electronic auctions was carried out in the Dutch market by some researchers. This article extends the analytic generalizability of their research findings through a replication study in the emerging markets of China. By comparing the empirical research findings, we reveal that there is no significant difference in the impacts of multi-access technologies on consumer electronic auctions within dissimilar contexts; as long as both the business and the technologies are prevalent. This affirms the argument that the use of more sophisticated multi-access technologies has positive effects on the maturity level of exchange processes and stakeholders interactions in consumer electronic auctions, thereby leading to an increase in the expected success of the auctions.

Introduction

Consumer electronic auctions, such as eBay, are something novel but not unfamiliar to many people. Internet technologies have contributed to the rapid development of electronic auctions. Pinker et al. (2003) characterized the ways in which internet technologies have changed the conduct of auctions, including reduced transaction costs, accessibility, managing complexity, information gathering, and time element. The diffusion of electronic auctions can however be further accelerated by using other technologies beyond the internet. Additional information and communication technologies may provide customers with more engaging services and exchange environments. eBay has already enabled direct instant communication between buyers and sellers by adopting a voice application, Skype. Skype is a software, based on peer-to-peer technology, that lets people make free calls to anyone else on Skype. In eBay, sellers can have Skype buttons on their listings, which tells buyers that these sellers are able to be reached by Skype. The remarkable benefit of using Skype in eBay is an increase in the instant communication between buyers and sellers. And thus, the buyers’ and sellers’ satisfaction with both the exchange and eBay will grow. Eventually, eBay may retain and attract more customers, enlarge their market share, and make more profits.

eBay’s example reflects the argument of De Ruiter and van Heck (2004) that the rapid emergence of new access technologies (e.g. wireless and voice technologies) can remedy the disadvantages (e.g. immobility) of ‘conventional’ internet technology, promising all stakeholders (i.e. buyers, sellers, and auctioneers) in consumer electronic auctions to benefit from the application of those access technologies. They conducted a multi-case study of five consumer electronic auctions in the Netherlands in 2003 to determine the impact of multi-access technologies on consumer electronic auctions. Their research findings demonstrated that the application of multi-access technologies in consumer electronic auctions could have positive effects on the exchange processes, interactive communication and the success of auctions.

However, this research focused on the Western-European market. It is unclear whether the findings in the Netherlands are also applicable in other markets. The dissimilar contexts may cause remarkably divergent opinions towards the application of multi-access technologies in consumer electronic auctions. Therefore, replication studies are required to test the generalizibility of their findings. In our replication study, we selected China to test the current doctrine due to the notable divergence between China and the Netherlands in many facets. Considering the impact of technologies on electronic markets, we identify three main factors (i.e. technology adoption, development of E-commerce, and national culture) that may yield different results. These factors are summarized in Table 1.

According to the data in Table 1, it can be seen that although internet diffusion was rapid in both countries from 2000 to 2007, the number of internet users in the Netherlands is already the majority of the population (88.4%) while in China internet users are still minorities (12.3%). The internet adoption situation in these two countries is evidently different. This confronts the auctioneers in these two countries with completely different business environments. Given China’s massive population and a push to get broadband access in more households (Belcher, 2006), the country will eventually have the most internet users in the world. In turn, auctioneers in China embrace a huge potential customer pool. And hence, they may emphasize the attraction of new customers when considering the potential impact of multi-access technologies. By contrast, the customer pool in the Netherlands is relatively stable and does not have as significant a potential as in China. And thus, auctioneers in the Netherlands may place more emphasis on customer retention when assessing the effect of multi-access technologies. Due to dissimilar motivations, the research findings from these two contexts may also differ.

Belcher (2006) claims that currently China’s E-commerce is still in its infancy due to the lack of a safe and efficient online payment system for credit card transactions as well as poor logistics and distribution networks. The inefficient payment system may compel Chinese auctioneers to take more responsibilities to insure the safety and satisfaction of the exchanges between buyers and sellers. Thus auctioneers in China may hold special attitudes towards the adoption of multi-access technologies in terms of payment. The logistical problem is tied to geographical circumstances. The geographic size of China (9,600,000 km2) is much larger than the Netherlands (41,526 km2), and some districts, such as small towns in the north-west in China, are very difficult to access due to special terrain or poor infrastructure. Hence, auctioneers in China may be more concerned about how to improve logistics than the auctioneers in the Netherlands.

Finally, national cultures (Hofstede, 1983) that manifest themselves from superficial to deep, in symbols, heroes, rituals, and values, are not easily changed and embedded in every sphere of a society, including business management. Hofstede (1993) employed five bipolar dimensions as illustrated in Table 1, i.e. power distance, individualism, masculinity, uncertainty avoidance, and long-term orientation, to describe cultural differences between nations. He argued that the position of a country on these dimensions indicates the way a society operates, including its management processes and the kind of theories applicable to its management. Consequently, it can be implied that auctioneers in two cultures probably have different emphases in their business strategies. For example, based on the long-term orientation in China but relatively shorter term orientation in the Netherlands, it can be presumed that Chinese auctioneers are likely to give more emphases on the enhancement of the long-term relationship among buyers, sellers, and themselves for better businesses.

As a result of the differences between the two contexts of China and the Netherlands, the auctioneers in these two countries may hold dissimilar perceptions about the application of access technologies in consumer electronic auctions. Thus we are inspired to study the research question: ‘To what extent does the influence of multi-access technologies on consumer electronic auctions differ between two countries with divergent contexts?’ The research question will be investigated by doing a replication study of the previous one done by De Ruiter and van Heck (2004) but in Chinese consumer electronic auctions, and then, comparing the results of the two studies. Three sub research questions (SQ) are further specified in order to adequately investigate the answer to the main research question. Afterwards, we will compare the results of both investigations so as to generalize more conclusive findings.

  • SQ1: How (dis)similarly do multi-access technologies influence the exchange processes of electronic auctions in China and the Netherlands?

  • SQ2: How (dis)similarly do multi-access technologies influence the stakeholders of electronic auctions in China and the Netherlands?

  • SQ3: What are the impacts of multi-access technologies on the (expected) success of electronic auctions perceived by Chinese and Dutch auctioneers?

Section snippets

Literature review

In the previous research, De Ruiter and van Heck (2004) focused on the impact of multi-access technology sophistication on the expected success of consumer electronic auctions through two intervening variables, maturity level of exchange processes and communication between stakeholders. They proposed that the maturity level of exchange processes and the communication between stakeholders will be increased and enhanced along with an increase in the sophistication level of multi-access

Conceptual framework and research methodology

Consistent with the literature survey and the research of De Ruiter and van Heck (2004), the conceptual model (Fig. 2) is established and four hypotheses are posited.

De Ruiter and van Heck (2004) contended that the exchange processes could be further improved via data-oriented applications more than via voice-oriented applications. In particular, they found that voice applications are not perceived to ameliorate basic trade processes at all. This leads to the first hypothesis (H1, see Table 3).

Research methods and techniques

We followed the same research technique, semi-structured interview, to collect the primary data from the auctioneers. We interviewed one individual member or a group of management team members in each selected electronic auction. Each interview lasted for about one hour and contained three parts. In the first part, we collected data regarding the impacts of multi-access technologies on the maturity level of exchange processes by using the same scorecard as in the previous research. This

Selection of electronic auctions

The criteria of selecting electronic auctions refer to the criteria of De Ruiter and van Heck (2004). One criterion is that the electronic auctions should have a website, as the internet forms the foundation of all the possible access technology combination. Another criterion is that they must be consumer electronic auctions, either B2C or C2C. Referring to the argument of De Ruiter and van Heck (2004), multi-access technologies could have a vast impact on consumer markets. And the other

DangDang Bao

DangDang Bao started in February, 2006, and is currently focusing on C2C auctions. Like other electronic auctions in this research, it does not restrict the products being sold, and consumers can find almost every sort of product there. Compared to the other electronic auctions, DangDang Bao is very young. It identified itself at the initial stage. At present, DangDang Bao offers members free services, its financial needs are fully provided by its holding company, DangDang, which is one of the

eBay EachNet

eBay EachNet began in March 2002 after eBay invested 30 million USD in EachNet in China. eBay EachNet focuses on doing C2C online auctions, but B2C auctions are also gaining in popularity, as many companies treat electronic auctions as an additional, more contemporary way to sell their products and meet customers. Revenues of eBay EachNet are mainly generated from listing fees as is the case with other eBay auctions worldwide. It is currently the second largest electronic auction in China.

PaiPai

PaiPai was established on September 12, 2005. Its holding company is the first and the largest developer of instant communication software, Tencent, in China. PaiPai is developing dramatically and has gained over 20,000,000 registered users. PaiPai is currently ranked the third largest consumer electronic auction in China. The distinct service provided by PaiPai is its so-called Communicate to Commerce, framework – a pun on the already common term C2C. By taking advantage of Tencent instant

Taobao

TaoBao was founded on May 10, 2003 by Alibaba, and aims to become the largest consumer electronic auction in the world. Currently, TaoBao is mainly focusing on C2C electronic auctions whilst B2C electronic auctions seem to be increasing. Since its foundation, it has successfully attracted 66,000,000 registered members and become the largest electronic auction in China with its completely free services. At present, TaoBao does not generate any revenue due to its free services. This is the

6688

The 6688 electronic auction platform is owned by Beijing 6688 electronic commerce Ltd. The strategy of this company is to find and remove all the obstacles in Chinese electronic markets, enabling every exchange process through ‘e’, and accelerating the pace of the development of e-commerce in China. However, according to 6688, they do not want to be simply identified as an electronic auction, because it is not their core business, they would rather identify themselves as an ‘enabler’ of

Analysis of empirical data in China

As this paper underscores the comparison between the research findings in China and the Netherlands and the way of analyses in both of the researches are the same, we do not intend to go into details of the research results in China but provide an overview of the hypotheses validation.

Table 5 summarizes the four hypotheses that are tested in China, regarding the influence of using multi-access technologies on consumer electronic auctions, the validation results, and the alternative hypothesis,

Comparison of electronic auctions between China and the Netherlands

Given the analysis of the empirical data collected in China, we now compare the research findings in both China and the Netherlands. We commence the comparison with the impact of using multi-access technologies on the exchange processes and interaction between stakeholders, and then, continue the comparison with the impact on the success of electronic auctions. In turn, we will be able to answer the three sub research questions.

Impact of multi-access technologies on exchange processes

The underlying difference between the two studies lies in the differing emphasis of access technologies. While De Ruiter and van Heck (2004) thought that ‘data-oriented’ should be an additional condition of multi-access technologies to fulfil the requirement of improving exchange processes, we have noted that ‘communication oriented’ should be the more desired additional condition. The comparison of these arguments could help to answer the first sub research question ‘How (dis)similarly do

Conclusions and recommendations

Following the detailed analysis and comparison of research findings in China and the Netherlands, in this section, we answer the central research question, validate the propositions, present the research relevance, give recommendations to consumer electronic auctions, and suggest some future research topics.

This research has examined the generalizability of the theory regarding the impact of multi-access technologies on consumer electronic auctions built by De Ruiter and van Heck (2004). Based

Research relevance

This research captures a notable interest in the auction research stream – the influence of technologies on markets, particularly electronic markets. Malone et al. (1987) have already demonstrated the distinctive influences of ICT technologies on the creation of electronic markets. They also suggested that taking advantage of the technology to further develop markets and improve the relationship between stakeholders in this business network requires further thought. In turn, this study

Recommendations for electronic auctions

As stated at the beginning of this article one of the objectives of this research is to provide electronic auctions with some suggestions, the following recommendations have been formulated based on the results of the research.

First, through the comparison of the two studies, it has been found that electronic auctions possessing some speciality may gain higher customer loyalty. This means that if the products sold on the electronic auctions are specialized, they could meet the needs of a

Future research

This research and the previous one of De Ruiter and van Heck (2004) have revealed the impact of the sophistication level of multi-access technologies on consumer electronic auctions in China and the Netherlands by following a qualitative method. Nevertheless, a quantitative method can be adopted to test the hypotheses proposed in the studies. By studying a large number of consumer electronic auctions in various markets, it could be possible to make statements about whether or not the proposed

Acknowledgements

We would like to thank Stephan de Ruiter for his knowledge and experience sharing of the previous research in the Netherlands in 2003, all the managers and employees of the electronic auctions in China for their time and cooperation towards our empirical research, all the other people who contributed to our study, and the reviewers of this article for their time and valuable comments.

SHENGYUN YANG is a Ph. D. candidate at Rotterdam School of Management, Erasmus University. Her researches focus on information markets and consumer online auctions.

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Cited by (2)

SHENGYUN YANG is a Ph. D. candidate at Rotterdam School of Management, Erasmus University. Her researches focus on information markets and consumer online auctions.

ERIC VAN HECK is Professor of Information Management and Markets at Erasmus University’s Rotterdam School of Management. He is director of doctoral education at Erasmus Institute of Management (ERIM). His research concentrates on electronic markets and business networks. His recent books are Making Markets – co-authored with Ajit Kambil – that was published by Harvard Business School Press and Smart Business Networks – co-edited with Peter Vervest, Kenneth Preiss, and Louis-François Pau – that was published by Springer.

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