An empirical study on consumer acceptance of products in electronic markets: A transaction cost model

Electronic commerce is gaining much attention from researchers and practitioners. Although increasing numbers of products are being marketed on the web, little effort has been spent on studying what product is more suitable for marketing electronically and why. In this research, a model based on the transaction cost theory is developed to tackle the problem. It is assumed that customers will go with a channel that has lower transactional costs. In other words, whether a customer would buy a product electronically is determined by the transaction cost of the channel. The transaction cost of a product on the web is determined by the uncertainty and asset specificity. An empirical study involving eighty-six Internet users was conducted to test the model. Five products with different characteristics (book, shoes, toothpaste, microwave oven, and flowers) were used in the study. The results indicate that (1) different products do have different customer acceptance on the electronic market, (2) the customer acceptance is determined by the transaction cost, which is in turn determined by the uncertainty and asset specificity, and (3) experienced shoppers are concerned more about the uncertainty in electronic shopping, whereas inexperienced shoppers are concerned with both.