1. Privacy concern and Customer Loyalty Tendency of B2C online Shopping in China Dongpu Fu Business School, Renmin University of China Sanpu.fu@gmail.com © All rights reserved

2. Agenda Research Question Reference Theory Research Model and Hypotheses Research Methodology Conclusion and Implications

3. Research Question Background Question In 2011, China's online shopping users reach 194 million persons, online shopping usage increased to 37.8% (CNNIC, 2012), online shopping has increasingly penetrated into our lives. Personal information is important for e-commerce retailers to improve service levels and sales. But there is few literature to study whether and how privacy concern effect on consumer’s online shopping loyalty tendency.

4. Reference Theory Based on Social exchange theory Reciprocal Trust switching costs for online customers mainly consists of economic costs and psychological costs Communication privacy management theory Social Penetration theory Switching Costs Privacy Boundary Trust Privacy diffusion Risk aversion

5. Literature Review ConceptDefinitionReference Customer Loyalty Loyalty is a consumer's willingness and “a deeply held commitment to rebuy or repatronize a preferred product/service consistently in the future, thereby causing repetitive same-brand or same brand-set purchasing, despite situational influences and marketing efforts having the potential to cause switching behavior” Oliver 1999; Zhang and Prybutok 2005 PrivacyIt has a few different definitions based on different dimensions, such as Value-Based definitions, Cognate- Based definitions, and respectively seen as rights, as commodities, as state and control ; Individuals have rights of their own privacy reserved individually, restrict others to access to personal information, and also as a valuable commodity exchange rights e.g., Campbell and Carlson 2002; Garfinkel 2000; Smith et al. 2011

6. Literature Review 理论解释参考文献 *Communica tion Privacy Management (CPM) theory Prior to communication, individuals engage in the development of personal privacy boundaries to protect the integrity of their discussion content. The establishment of privacy boundaries is essential due to the vulnerability individuals face in their disclosures, especially when the disclosure involves their deepest emotions and beliefs. *Continued communication held in confidence results in more trust credit points awarded because privacy risks are effectively minimized, whereas a deduction is taken should breaches in privacy occur. Petronio 2002; Malhotra et al. 2004

7. Literature Review- 参考理论 理论解释参考文献 Switching Costs switching costs for online customers mainly consists of economic costs and psychological costs 。 1)switching costs positively influence customer loyalty. 2)Switching costs play the role of exit barrier in the relationship between buyers and sellers Yen, 2010; Dick & Basu 1994; Weiss and Anderson 1992; Smith 1998; Jones et al. 2000 Risk Perception Risk perception was first proposed by Bauer of Harvard University in 1960, he believes that it cannot be predicted whether is right the results of any consumer buying behavior, and some of the results may make consumers unhappy, so consumer purchasing decisions imply some uncertainty in the results, and this uncertainty is the initial concept of the risk Shi-yun 2010

8. Research Model and Hypotheses Privacy concern can effect online shopping loyalty positively; Privacy Concern Online shopping Loyalty Tendency

9. Research Methodology Methodology: survey methodology, pre-test and design the questionnaire referring prior literatures ， then issue it to the respondents with experience of online shopping including staffs in firms and MBA students in Collages in Beijing Data Processing: SPSS v17 was used to make principal component analysis and reliability analysis, and LISREL v8.7 was used to make confirmatory factor analysis and the hypothetical model validation

10. Research Methodology -Questionnaire Construct/Item Indicator Privacy Concern (abr. PC)----(Malhotra et al. 2004) PC1 ： You believe that your personal information may be misused or diffused by retailer when login to online shop and register personal information? PC2 ： If you have successful shopping experiences and register real wealth of personal information in a certain shopping website, you will not conditionally provide more real personal information to other online shop website. PC3 ： If you have successful shopping experiences at a certain shopping website and register real wealth of personal information, you worry about misuse or diffusion of your own personal information in the network? Customer Loyalty (abr. CL)----(Park and Kim 2003) If you have successful shopping experiences at a certain shopping website and register real wealth of personal information, do you agree to the following statements? CL1 ： If the corresponding commodity price and quality of service provided by other websites are basically the same, I would choose this website Shopping. CL2 ： I would often go to this website to browse and buy goods. CL3 ： I will recommend this website to others.

11. Research Methodology Total 102 ， 67 responses are integrity ItemOptionNumber s Percent age (%) ItemOptionNumber s Percent age (%) Gender male32 47.8 Occupat ion student13 19.4 female3552.2staff54 80.6 Age Under 25 1116.4 Experien ce of internet 1 to 3 years 34.5 26 to 3547 70.1 4 to 6 years 710.4 36 to 457 10.4 7years more 5785.1 Above 42 3.0 Experien ce of online shoppin g seldom 1014.9 Educatio n Backgro und Doctor 1116.4 ordinary 2029.9 Master 1725.4 Many times 2537.3 under- graduat e 3958.2 often 1217.9

12. Research Methodology Composite reliability is more than 0.6 Construct Validity includes Convergent Validity (abr. CV) and Discriminant Validity (abr. DV). CV and DB is greater than 0.5 Model fitting: the fitting degree indicators: Chi-Square = 8.72 (P = 0.069), GFI = 0.94, AGFI = 0.77, NFI= 0.82 ( 0.9), CFI = 0. 86 (> 0.8), SRMR = 0.10 (<0.5), RMSEA = 0.062 (0.05 ~ 0.08). From these data, the P-value is greater than 0.05 but less than 0.1, the statistical result is relatively significant

13. Conclusion, Limitations and Implications Online retailers should pay more attention to those who have high privacy concerns under the premise of improving the quality of service, and improve the level of privacy protection and website security in order to attract and retain more consumers 1.Part items of the questionnaire are unreasonable 2.The number of samples is less than normal 3.Difficult to control other influences factors on loyalty 4.Some value of indicators is not ideal. Privacy concerns of consumers have positive impacts on their online shopping loyalty tendency Conclusion Limitations Implications

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