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Motivations for selecting cross-border e-commerce as a foreign market entry mode

Motivations for selecting cross-border e-commerce as a foreign market entry mode

Qi, Xiaoguang, Chan, Jin Hooi ORCID: 0000-0002-6275-9763, Hu, Junyan and Li, Yifan (2020) Motivations for selecting cross-border e-commerce as a foreign market entry mode. Industrial Marketing Management. ISSN 0019-8501 (In Press) (doi:https://doi.org/10.1016/j.indmarman.2020.01.009)

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Abstract

This article is an in-depth case study examining a foreign firm deploying Cross-border E-commerce as an entry mode to the Chinese market, integrating services provided by a major technology provider and a leading marketplace platform. Selecting which foreign market entry mode is an important internationalization strategic decision of firms and could have a considerable impact on the firm's performance. The CBEC mode emerges as a plausible choice: e-commerce has grown rapidly in many markets, particularly in China. Additionally, foreign firms face high transaction costs due to unfamiliar consumer behavior and institutional barriers. It is especially difficult for SMEs.

This study deploys transaction cost theory as the underpinning framework to explain the motivations for selecting a CBEC entry mode. The findings suggest that CBEC could reduce uncertainties and opportunistic behaviors, while increasing trust. Foreign firms could lower their asset investment in physical shops, staff requirements and training, logistics and warehousing: these supports are provided by marketplace platforms. This new entry mode also takes advantage of the involvement and the dependency of intermediaries. In addition to providing market knowledge, technology providers help to build trust and reduce risks and thereby transaction costs, despite the high transaction frequency of e-commerce.

Item Type: Article
Uncontrolled Keywords: entry mode, cross-border e-commerce, China, technology intermediaries
Subjects: H Social Sciences > H Social Sciences (General)
Faculty / Department / Research Group: Faculty of Business
Faculty of Business > Department of Systems Management & Strategy
Faculty of Business > Networks and Urban Systems Centre (NUSC)
Faculty of Business > Networks and Urban Systems Centre (NUSC) > Supply Chain Management Research Group
Last Modified: 30 Apr 2020 00:00
Selected for GREAT 2016: None
Selected for GREAT 2017: None
Selected for GREAT 2018: None
Selected for GREAT 2019: None
Selected for REF2021: REF 3
URI: http://gala.gre.ac.uk/id/eprint/26792

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