Supply-side hurdles in internet B2C e-commerce: An empirical investigation

Abstract

Given Hong Kong's special circumstances of small physical size, advanced infrastructure, and low shopping cost, a survey is designed under which supply-side problems in Internet business-to-consumer (B2C) e-commerce are indirectly revealed by responses on the demand side. Difficulties arising from the reluctance to answer questionnaires on the part of e-firms wary about trade and innovation secrets and their small number at the outset are thereby overcome. Survey data on demand-side obstacle factors in the form of perceived low e-shopping comparability, e-shopping inconvenience, e-transaction insecurity, and poor Internet privacy, together with orientation toward social interaction and low awareness on the part of consumers, translate into information on notionally matching supply-side hurdles. Regression analysis and hypothesis testing indicate statistical significance for the above hurdle factors in terms of impact on individual unwillingness to shop online. These results add to the inductive basis for future research into a general demand-supply theory of Internet B2C e-commerce and offer an empirically-grounded position against which the effects of later supply-side changes can be evaluated. Useful information also follows for engineer-managers seeking to compare marginal improvements in supply-side problems, particularly in the form of estimated substitution ratios.