The Impact of Microbusiness from the Chinese Consumer Perspective: Problems and Prospects
B2C: B2C describes or involves the sale of goods or services directly to customers for their own use, rather than to businesses (Cambridge Online Dictionary, 2017).
C2B: Consumer to business is a business model where an end user or consumer makes a product or service that an organization uses to complete a business process or gain competitive advantage. C2C will allow brands to get feedback from customers, resulting in products more in line with customers.
C2C: Consumer to consumer relates to the buying or selling of products or services and information between individual consumers, especially over the internet (Cambridge Online Dictionary, 2017).
KOL: Key opinion leader
Microbusiness: A C2C WeChat business trading model which utilises online social network platforms (Zhang & Liu, 2016, p.250).
WeChat friend’s circle: users can share and get access to accepted WeChat friends’ information, creating an intimate and private communicating circle within the users’ choice of close friends.
1.1 Research Background
When the term market economy was invented, who would have thought the likes of eBay and Taobao would come along giving us digital markets, in almost everything and anything. When you think back to traditional markets in town squares, they’ve always been designed to connect as many buyers and sellers as possible in one place at a set time, but online markets use online technologies to lift the constraints of time and location to connect unimaginable numbers of buyers and sellers, in even the most niche of products.
The increased use of the smart phone have further managed to connect the Chinese populace (The Economist, 2016) and there is evidence to suggest that increased mobile internet usage can help generate a higher disposable income for individuals in China (Jiao, 2015; Yang, 2016; Zhong 2016). Chinese individuals are using their smart phones to generate higher disposable incomes via selling products on social media. This activity has become known in Chinese as “微商” (Wēishāng). The first Chinese character, “微” (Wēi) refers to social media blogging in China, and the second character, “商” (shāng) refers to business. Therefore the meaning of For the purposes of this study, “微商” (Wēishāng) is business, through social media. The name Wēishāng shall be translated into ‘Microbusiness’. Thus, “Microbusiness” refers to buying and selling on social media.
Academic studies concerning Microbusiness, on one hand frequently write on Microbusiness’ potential to revolutionise China’s e-commerce market, whereas the other half often write on the trust issues that exist between consumers riddling Microbusiness’ development. This study sets out to explore consumer opinions from a real group of Chinese Microbusiness users based in Durham, U.K.
1.2 Research gap
The academic literature on Microbusiness is sparse in the Chinese language and non-existent in the English language. In Chinese academia, there is a body which covers the study of B2C Microbusiness and also C2C from a buyer perspective, however in contrast, the focus of this study will be the issues and problems within C2C Microbusiness, from a consumer perspective. The study of C2C Microbusiness provides an opportunity for an extended analysis of trust within Microbusiness.
- Research questions
In order to answer the study’s title, “The Impact of Microbusiness from the Chinese Consumer Perspective: Problems and Prospects”, the three specific research questions were formulated:
- Why are Chinese consumers choosing Microbusiness?
- What are the main issues that threaten Microbusiness’ development?
- What are Microbusiness’ prospects?
4. Thesis Structure
The study deals with the theme of Chinese e-commerce and in particular, the discussion of C2C e-commerce in terms of social media. Chapter one outlines the research background and outlines this study’s contributions and limitations.
Chapter two argues outlines the background to the topic. The rise of Microbusiness is explained through the rise of social media and how it as in turn affected China’s e-commerce markets. Next, chapter two outlines the threats that Microbusiness faces. Then chapter two goes onto argue that Microbusiness, unlike traditional e-commerce channels, located on platforms such as eBay or the Chinese equivalent Taobao, operates through social media and outlines the benefits the social network brings. Located in the social network, Microbusiness benefits from the huge community of interlinked users in China’s most popular app, WeChat.
Chapter three outlines the mixed methodology that is used to test the verifiability of the literature’s claims around Microbusiness and also provides details of the pilot study and how this helped adjust the final methodology. Chapter four shows the results and discusses the impact of Microbusiness, its problems and prospects. It argues the central problems include a flood of fake products, and an unregulated WeChat platform and over-advertising.
The final chapter five concludes that Microbusiness is plagued with trust problems, and can only significantly impact the Chinese e-commerce market if it acquires regulation from the Chinese government.
The study aims to contribute to those interested in the largest e-commerce market in the world, China (Mckinsey, 2017). This study provides a clear warning of Microbusiness’ limitations, and outlines some of the opportunities that Microbusiness presents to big businesses. Additionally, the study provides a set of recommendations for the further development of Microbusiness.
This study chooses to analyse overseas Chinese students studying at The University of Durham, UK to test the research questions. This study’s sample is limited within its small size and would benefit from the inclusion of a wider age range, and an inclusion of Chinese nationals living outside of Durham, U.K. Additionally, with only one year to write an undergraduate dissertation, the allocated reading time frame was relatively small and a deeper comparison of B2C and C2C Microbusiness is recommended with a longer working time frame.
Chapter 2: Literature Review
Chapter 2: The Rise of Microbusiness
2.1 The rise of social media
In addition to having the world’s biggest Internet user base—513 million people, more than double the 245 million users in the United States1—China also has the world’s most active environment for social media. In addition, China’s online users spend more than 40 percent of their time online on social media, a figure that continues to rise rapidly (Mckinsey, 2012). Social media has been adopted with such vigour in China due to the cultural practice of guanxi resident there as well a high context and highly collectivist country (Banfe, 2014). The literature seems to confirm the findings that Chinese culture ranks lower on individualism but scores very highly on collectivism (ITIM, 2008; Hofstede, 1984; Lockett, 1988; Leung and Bond, 1984; Nevis 1983). Though some argue modernisation and globalisation are encouraging a new Chinese spirit of individualism (Ralston, 1995, Birnbaum-More, 1995, Yu, Chan, & Ireland, 2007). Conversely, some authors argue that a better characterization of Chinese culture would be neither individualist nor collectivist, but relational (Gannon, 2001). Li (2000) refers to the Chinese variant of collectivism as family-oriented collectivism. Within the Chinese culture, relationships are taken very seriously. Therefore, we will assume that Chinese culture ranks low on individualism and places a high value on collective goals. Certainly, this goes a long way to explaining the hyper social environment in China. And there is support for the contention that this reflects itself in the existence of relational webs which privileges in group familial relations in China. This web of relations in China is known as a guanxi.
Social media provides a unique vehicle for communication for guanxi to occur, which deserves consideration, especially considering its huge popularity there (Banfe, 2014). A cursory examination of initial evidence suggests that social media provides the possibility of high context communication and efficient information gathering, facilitating relationship building and maintenance within the relational dyads as well as group characteristics of guanxi. Social media is perfectly suited to the communication needs of these particularistic and personal hyper-social networks in China.
China’s hyper social networks are now connected by WeChat (Tang et al 2017). Today, WeChat remains the dominant app in China and has consolidated itself as the “one app to rule them all” (The Economist Online, 2016). WeChat is now “at every point of your daily contact with the world, from morning until night” (Financial Times Online, 2016). Some studies center on the possible predictors and the negative effects of mobile addiction. One piece of research has found that the use of Social Network Site (SNS) mobile applications is an important indicator of mobile addictive condition (Salehan & Negahban, 2013). In addition, it has been found that compulsive usage of one’s smartphone and “techno-stress” are proportionate positively to psychological traits such as “locus of control” (Lee et al, 2014). In China, the use of social media in China is both changing social streams of consciousness and ways of perceiving the world thus creating huge shifts in Chinese society (Banfe, 2014). In the commercial sector, due to the WeChat app that forms the “locus of control”, we can see a “socialisation” of China’s trade services (Liao & Chen, 2016). In particular, this study asks if the rise of social media has the potential to revolutionise the C2C e-commerce industry.
2.2 Socialisation of e-commerce
Historically, in China, Taobao and eBay were the two major players dominating the online consumer-to-consumer (C2C) market (Chen, Zhang, Yuan & Huang, 2007). Some authors argue that Taobao overcame competition from eBay due to specific features such as free listings, a variety of merchandise, and the introduction of a B2C market (Steiner, 2009). However, Taobao’s website states its success is down to the fact that they helped sellers develop relationships with customers (Taobao, 2017). This focus on relationships is particularly interesting and, Xu (2007) corroborates this stating that Taobao outperformed eBay because they were able to successfully implement successful relationship building mechanisms on their website. Furthermore, Mohamud (2014) states that Taobao, through the use of instant message boxes and feedback systems, were able to mimic traditional face-to-face interactions and thus engender the formation of guanxi in the online context. This study seeks to explore if successful relationships can be established in the online marketplace.
According to Pablos (2006), the origin of Guanxi relates to the Confucian heritage of Asian countries and Chinese communities in non-Asian countries. Leeet al. (2006, page…) state that “with a history of more than 2500 years, Confucianism has exerted a fundamental influence on the Chinese and East Asian modes of thinking and way of behaving.” Thus, by definition, ‘Guanxi’ embodies this influence, and so it is not surprising that “Guanxi is deeply embedded in the mind-set of Chinese and is in every aspect of their personal and organisational interactions” (Park & Luo, 2001, page…). When conducting business in China, guanxi is thought to be one of the most influential factors when doing business in China (Fan, 2002; Dunfee & Warren, 2001). From these arguments, this study asks if social media can replicate successful guanxi between buyers and sellers.
The most significant attempt to explain the practical application of guanxi in the online context was carried out by Pavlou, Ou, Carol and Davison (2004). Pavlou et al (2014) named the concept “swift guanxi”, which describes how guanxi, which is traditionally developed over time, is developed at a fast rate online due to the immediacy offered by online CMC tools. Mohamud (2014) argues that Taobao implemented “swift guanxi” into the e-commerce market place and this decision was decisive in overthrowing eBay’s early dominance in the China (Mohamud, 2014). Jack Ma, Taobao’s owner famously quoted: “eBay may be a shark in the ocean, but I am a crocodile in the Yangtze river. If we fight in the ocean, we lose, but if we fight in the river we win” (Jack Ma speech 1994). These arguments delineate that “swift guanxi” built online over a quick period can replicate traditional guanxi, usually built over a long time and lead us to ask whether Microbusiness is successful in building successful relationships in the marketplace.
If “swift guanxi” can be built through Taobao’s relatively simple social chat functions, we can infer that China’s online social networks, infinitely more complex in connecting Chinese people, can do the same. Since Confucius’ time, Chinese culture has been a high context, collectivised, and hyper-socialised and today, perhaps, social media is a modern expression of these timeless traits. Thus, this study asks can social media, through its ability to implement more complex modes of “guanxi”, dominate the Chinese e-commerce market. Or in other words, does WeChat, as the “locus of control’ in Chinese society today, have the potential to revolutionise the C2C e-commerce industry in China?
From a B2C perspective, it seems that China’s e-commerce market is already experiencing a shift over towards social media-based platforms. Take JD.com, China’s second largest e-commerce company who experienced a 15.5% gain of China’s total e-commerce market share from 2014-2015 (appendices 1). CEO Haoyu Shen (2016 page…) noted, “Back then, commerce was not big yet on WeChat but we thought that there was an opportunity for us to build upon the vast user base of WeChat and on top of that maybe we can have a lot of social components that can help us drive more commerce volume.” It seems that China’s B2C e-commerce market is experiencing a “socialisation” of its trade services (Chen, 2014). Will the C2C industry follow suit? This study asks if China’s C2C e-commerce market can experience, like its B2C elder brother, a “socialisation” of its trade service
The Chinese are a collectivist, high context culture, drawn to communities and establishing close relationships through guanxi and so WeChat provides the perfect place for communication. However, within WeChat, trust and security issues threaten the further development of social media over traditional e-commerce platforms (Yu, 2015; Yongyi, 2015; Ting, 2016; Li Donglou, 2015; Jiao, 2015; Yang, 2016). The theory that WeChat is able to build guanxi and strong relationships in a business context is confounded by the lack of regulation prevalent between consumers.
2.3 The main factors threatening consumer and seller trust
It is important to separate Microbusiness’ main trust issues into firstly external and then internal problems. External problems include the media, the Chinese government and international legal issues. The three internal problems threatening Microbusiness are: the large number of fake products, an unregulated WeChat platform, and sellers that over-advertise. Internally, Microbusiness’ low entry barriers are a double-edged sword that are on one hand are an attractive business opportunity and on the other, are attracting a low calibre of business peoples. In turn this is creating trust issues; a lack of external regulation from a third-party provider is compounding these issues.
Firstly, with regards to Microbusiness’ external problems, heavily publicised campaigns from the Chinese State owned media have the potential to impact Chinese citizen’s trust of Microbusiness. Reports include incidents such as the 2015 case, where thousands of Chinese were hospitalised after purchasing defective cosmetic facial masks (Jiao, 2015). Later in 2015, state regulators were unable to find the manufacturers of “Thai Child Artefacts”, who were exposed in the media for exceeding the lead and mercury limits in one of their products by 10,000 times (Li Donglou, 2015). According to the “Yunnan Daily” newspaper, twenty students lost over 20,000,000 RMB in a phishing scam to Microbusiness (Dong, 2016). Li Donglou (2015) explores this issue further, considering whether Microbusiness can pick itself back up from such a long catalogue of disasters in his article.
Secondly, the Chinese government has the potential to stifle the development of Microbusiness through over-regulation such as increasing taxes on imported products (Yuan, 2016; Wen 2015; Li Ruonan 2016; Liu, 2015; Luo, 2015; Xiao et al. 2016). Microbusiness people that go untaxed are creating a wave of potential illegal activity, also known as “parallel importing”. A parallel import is a non-counterfeit product imported from another country without the permission of the intellectual property owner (WTO, 2017). Parallel imports are often referred to as grey products and are implicated in issues of international trade, and intellectual property (International Trademark Association, 2017). It is arguable that Microbusinessmen are tapping into the Chinese market’s high demand for genuine products and are potentially doing business in very ambiguous legal areas. The theme of legal ambiguity is later put forward in the interview to interviewees to help form a conclusive opinion on Microbusiness’ perceived legality. Microbusiness’ implications with parallel imports are highly interesting and indicate the grey area that Microbusiness occupies in many Chinese minds.
Microbusiness’ internal problemsare widely covered across the base of literature (Huan, 2016; Yin, 2017; Yuan, 2016; Wen, 2015; Li Ruonan, 2016; Liu, 2015; Xiao et al. 2016). These studies pinpoint three central problems plaguing the general public’s opinion of Microbusiness: the large number of fake products, an unregulated WeChat platform, and sellers that over-advertise.
Microbusiness user’s trust levels will continue to be negatively affected if advertisement continues to clutter the social dynamic of WeChat (Li Ruonan, 2016; Wang, 2015; Zhang, 2015; Wu, 2015; Wang, 2015). Consumers can perceive companies and brands as “interlopers”, “party crashers” (Fournier & Avery, 2011), or “unwanted guests in the interactive space” (Schultz & Peltier, 2013 p.86). Thus, unwanted advertising can have a negative effect on the business and social life of the seller. Therefore, it can be inferred that trust issues occur not only amongst those being advertised to, but within the advertisers also.
WeChat founder, Zhang Xiaolong (WeChat online podcast, 2016) summarised WeChat’s greatest problem as clutter: “The greatest challenge for WeChat is not how much more we can do, but how many things we can screen and block… it takes a lot of work so that WeChat remains uncluttered.” Advertisements can have a negative effect on the attractiveness of a social media channel (Dwivedi et al., 2016). This essay takes up the theme of clutter, or over-advertising and through the use of interviews, questions whether they agree that Microbusiness is cluttering their social media feeds (5.2.2).
Other authors outline the additional problems in Microbusiness as illegal pyramid schemes, a low degree of professionalism, and a homogeneous list of products (Li Ruonan, 2016; Wang, 2015; Zhang Yu, 2015). The narrow range of products has limited the development of Microbusiness and has created fierce competition between sellers. 70% of products sold in microbusiness are cosmetic face masks, where profit is minimal (Wang, 2015). Considering Microbusiness’ faults, there are some authors that even suggest that Microbusiness as a typical C2C business is flawed (Zhang & Liu 2016). C2C business models are flawed in aspects including: front end payments, a lack of a regulating third party platform that will inevitably lead to buyer’s distrust; and a lack of a supervision mechanisms resulting in consumers and sellers often have no chance of recourse after a dispute. Often in flawed C2C businesses, buyers and sellers are left unable to safeguard their legitimate rights and interests. If C2C business models are flawed, then Microbusiness cannot revolutionise e-commerce for the Chinese consumer. In this light, can Microbusiness ever significantly impact the C2C e-commerce market in China if it is inherently flawed?
Perhaps with more regulation, said issues could be solved? The lack of regulation within C2C Microbusiness is the principal cause that lead to user’s trust issues (Zhang, 2015; Yang, 2016; Gao Chong & Li Min, 2016; Yin, 2017; Yuan, 2016; Wen, 2015; Li Ruonan, 2016; Liu, 2015; Li Donglou, 2015; Wang, 2015). The literature is uncertain whether WeChat or the government should provide regulation to the platform (Luo, 2015; Zhang, 2015; Yang, 2016; Gao & Li, 2016; Yin, 2017; Yuan, 2016; Wen, 2015; Li Ruonan, 2016; Liu, 2015; Li Donglou, 2015). Therefore, this study asks real Microbusiness buyers and sellers whom they believe Microbusiness should be regulated by.
Trust issues within the WeChat platform threaten to destroy Microbusiness’ power to establish fruitful business relationships. Externally, the Chinese government assaults the Microbusiness phenomenon with bad publicity. Internally, Microbusiness’ development is threatened with the issues of fake products, over-advertising, illegal pyramid schemes, a low degree of professionalism, and homogeneous list of products. For many Chinese consumers, the C2C Microbusiness phenomenon represents an untrustworthy form of business, flooded with poor quality products and an irritating form of advertising. Laced with such mistrust, what real benefits does the Microbusiness phenomenon leave in its wake?
2.4 The benefits to consumers and sellers of C2C Microbusiness over the internet
Chinese consumers are increasingly choosing C2C Microbusiness over traditional e-commerce markets because sellers are able to sell their products untaxed via C2C Microbusiness (Zhang, 2015; Wu, 2015; Dong, 2016; Li Donglou, 2015; Jiao, 2015; Yang, 2016). Secondly, in addition to filling the gap in the market for cheaper goods, Gao & Li (2016) and Li Ruonan (2016) argue that C2C Microbusiness traders fill the gap in the market for cheaper foreign goods. Foreign goods, in the eyes of the Chinese consumer, are often perceived to be a safer alternative to domestic Chinese goods. In China, there is lack of systematic rules, protection, institutional rules, regulations and infrastructures protecting online consumers (Martinsons, 2008). The ongoing baby milk scandal since 2008 is an example of this, “In many cases, milk powder that is almost past its expiration date is repackaged and sold online as imported baby formula” (China Daily, 2016 page). Nowadays, Chinese consumers are not only concerned about the price but also pay attention to the product quality (Fan, 2005). In this manner, Microbusiness functions to fill the gap for cheaper foreign goods, which are perceived to be safer than products from the domestic market. The literature does clearly state what products are at sale in the Microbusiness market. Hence, this study seeks to find out what products are commonly associated with the Microbusiness market, and why from a consumer perspective, Chinese consumers are choosing to use C2C Microbusiness over traditional e-commerce marketplaces.
Furthermore, online sellers perceive C2C Microbusiness pertaining to have unique advantages that traditional e-commerce markets, such as Taobao cannot match. Benefits include: the free WeChat marketing platform with no regional limits, lower barriers to entry; and a stable customer basedaround well-established friendship groups on WeChat (Zhang, 2015; Wu, 2015; Dong, 2016; Li Donglou, 2015; Jiao, 2015; Yang, 2016). It appears that not only the immediacy of higher profits and cheaper items are attracting the Chinese market, but implicitly, WeChat’s platform, is a source of further attraction over traditional e-commerce marketplaces. Unfortunately, the literature is not clearly detailed why particular sellers are choosing to do Microbusiness, however this study is an examination of why Chinese consumers, not Chinese sellers, are choosing to use C2C Microbusiness over traditional e-commerce marketplaces. Therefore, it is recommended that a further study of Microbusiness from the seller perspective is undertaken.
If Taobao’s advanced IM and CMC tools are able to implement “swift guanxi”, then we can infer that WeChat’s technologically superior, fully complete, social network will continue to attract the businessmen and women alike. For example, C2C Microbusiness users can further create relationships using voice and video intercoms, a more lucid and intuitive than text responses which can help traders communicate better with their consumers (Xu, 2015). The Economist (Chan, 2016) provides an excellent metaphor to illustrate WeChat’s technological superiority: Whereas other mobile social network creators are killing a buffalo and only using its skin for leather, as opposed to WeChat, who utilise the buffalo’s skin, meat, milk, and more. Similarly, other mobile social network experiences remain at a superficial, surface-only level unlike WeChat, which harnesses all the parts of the phone, such as the GPS location sensors, voice intercom and video camera. This leads this study to explore the potential power of WeChat in C2C Microbusiness.
Perhaps the common factor attracting sellers and buyers to C2C Microbusiness is WeChat’s high level of social integration in the Chinese community (Yuan, 2016; Wen 2015; Li Ruonan 2016; Liu, 2015; Luo, 2015; Xiao et al. 2016). Microbusiness operates on the WeChat platform, which shows a growth rate of 40% per annum and in terms of active users versus overall populations, WeChat’s saturation rate in Tier 1 cities is 91%, and 69% in Tier 2 cities, (WeChat podcast, author, date). It is predicted that the saturation rate in Tier 3-6 cities will follow suit. Although these figures are subject to bias as they were released by WeChat, they do concede that this saturation figure number may in fact be lower because some users may have multiple accounts. Regardless, WeChat is now the most popular social networking app in China today. This study seeks to find out if Microbusiness is, as Chu Wei (2015) says, is becoming inseparable from the Chinese community.
C2C Microbusiness hosts many advantages owing to the social network function. For example, product information is spread at a faster rate within Microbusiness due to the amount of time people spend on WeChat in China (Luo Miqiao, 2015). Over half of WeChat’s users spent over an hour a day on the platform, and nearly a fifth of them were on it for more than 4 hours a day (emarketer.com, 2017). Today, WeChat is there at “every point of your daily contact with the world, from morning until light” (Economist 2016, page). With the integration of WeChat into everyday life in China, sellers and buyers alike are choosing to do Microbusiness over C2C rivals such as Taobao due to its deeper social integration amongst customers.
One group showcasing the advantages of WeChat’s social network model are a group of farmers in Guizhou, who are utilising WeChat’s free marketing platform on the social network to broadcast their crop growth via text and picture updates to their customers in real time (Li Ruonan, 2015). The social network model aids the farmers in two distinct ways: Firstly, by cutting out the need for expensive marketing strategies, farmers are saving costs and secondly, farmers are able to keep up to date with market trends and prices via social media in the comfort of their own home. By virtue of the social network model, Microbusiness is not only bringing benefits to Guizhou farmers, but also to their customers who are in turn able to buy affordable and fresh agricultural products. Some authors have criticised the social network model as it does not allow for easy product identification on a small mobile device (Wen, 2015). Yet since early 2015, WeChat has been available to download on a desktop and this update addresses the problem of a small mobile screen (Tencent, 2017). The online marketplace can breaks time and space constraints for businessmen worldwide. However, the Guizhou farmers are an example of how WeChat in particular is helping to establish strong guanxi between seller and consumers. Microbusiness by virtue of operating on social media, is benefiting from the social network effect and this study seeks to explore the implications of this for Chinese consumers and sellers.
B2C Microbusiness has grown ten times faster than Alibaba, China’s most popular B2C channel. Does this huge growth figure suggest that China’s e-commerce market is shifting towards a social media based model? B2C Microbusiness has achieved within a year what Alibaba has done in a decade. In just under one year, Microbusiness has developed more than 1,000 official stores and this does not include the vast multitude selling on their friends’ circle (Chen, 2016). Liao & Chen (2016) argue that Microbusiness’ strength essentially lies in its socialisation of trade services. However, the shifts in the B2C market do not necessarily mean the same for China’s C2C. For example, Austrad (2016) claims that consumers place higher levels of trust in authenticity of purchases made on major B2C platforms such as ‘Tmall’, ‘JD.com’ and ‘Yihaodian’ (Australian Government Trade Commission, 2015). It is therefore difficult to predict the outcome of the C2C industry based on the success of China’s B2C market. However, Austrad (2016) does not provide a reference for the claims that B2C is trusted over C2C and so this study’s interview will seek to explore the verifiability of the claim that B2C Microbusiness is trusted over C2C.
Furthermore, Chen’s (2016) claim that B2C has grown ten times as fast as Alibaba is contentious because in the Chinese online market context, it is extremely difficult to distinguish between a business or a consumer. On WeChat, anyone can set up a “shop”, such as the shop Chen refers to. Organizational buying behaviour involves a functional involvement, in which buyers have rational and task motives, whereas the consumer market behaviour, which is more family orientated and social and psychological motives dominate purchase decision of consumers (Panda, 2009). But does the opening of a shop, which sells ten products a year constitute a business? Contentions between defining B2C and C2C sellers is but one of the many ambiguities surrounding the novel Microbusiness phenomenon and have led to the author’s caution treading the literature’s trail. Panda (2009) distinguishes between the main differences between consumer (C2C) and organisational (B2C) markets. To remind the reader, this is a study of Microbusiness’ impact from the consumer perspective.
Fig.1 The differences between organizational (B2C) and consumer (C2C) markets (Panda, 2009)
First and foremost, it appears that consumers are choosing to do Microbusiness over traditional e-commerce markets because Microbusiness offers the availability of cheaper, and often untaxed foreign goods. Secondarily, this essay regards WeChat’s dominance as a key aspect to Microbusiness’ success. Theoretically, WeChat is able to mimic establishing guanxi through its technological innovations, such as advanced video, GPS, picture messaging and other services in the online context. As Ou and Davison (2009) point out, advanced social tools online have the ability to foster an atmosphere conducive to replicating traditional guanxi. Therefore, can we conclude that Microbusiness, by virtue of operating on WeChat, has significantly impacted the Chinese e-commerce market by offering cheap goods through the social network function? This essay in the next section outlines the interview methodology formulated in order to collect data from real Microbusiness users’ experience to test these claims.
2.4 Microbusiness’ prospects
At the Australian Trade of Commerce’s 2015 symposium (Austrad, 2015), Microbusiness was recommended as an innovative distribution channel for foreign businesses wishing to sell within China. They recommend finding representative KOLs within Chinese communities such as nurses and teachers to advertise pharmaceutical and baby products. It appears that China’s social media craze is attracting overseas attention.
Is the shift of e-commerce from traditional platforms to social media inevitable? From a macro perspective, the challenge for most commercial organizations has already shifted from whether to use social media or not, to how to use it more effectively. If the consumer becomes the commercial organisation by setting up a shop online, then it appears so. According to a McKinsey Global Institute’s report (2012), 70 percent of organizations were regularly using social media for business purposes, a figure that may have increased significantly since then. Edosomwan et al. (2011) claims that social media helps companies communicate collaboratively, and helps companies serve current and potential customers in terms of receiving feedback, developing products, or providing customer service and support. Or C2C Microbusiness, with a could offer prospects for the development of C2B business, whereby customers can provide businesses with punctual, useful feedback to create personalised items and services (Li Ruonan, 2013). But Kumar (2013) argues that the widespread generation and consumption of social media content has created an extremely competitive online environment where different types of content vie with each other for the scarce attention of the user community. The future of Microbusiness is unclear and this study seeks to ask suggestions for its development from real Microbusiness users.
One study of Microbusiness that stood out was Li et al. (2015) who provided a set of recommendations for the trust issues existing within Microbusiness:
Fig 2. Lietal. (2015) recommendations to improve the trust issues within Microbusiness
Li et al’s (2015) study provided the inspiration for this study’s interview methodology. Li et al’s (2015) interview data was collected from a focused group of experienced marketers in Changsha and it reveals a broad range of practical suggestions for the growth of Microbusiness. Li et al’s (2015) study is limited insomuch that the data was collected in only one city, Changsha. The value of the data could perhaps be enhanced by evaluating more cities. This study aims to build on his research by re-testing the validity of Li et al’s (2015) recommendations with a different sample set based in Durham, U.K.
Fig. 3 Swot Analysis of C2C Microbusiness 1 (referenced within essay)
Chapter 3: Methodology and Research Design
The central premise of the methodology was to gather evidence in order to open up the Microbusiness debate to a Western audience. Although Li et al’s (2015) qualitative interview methodology provides an interesting framework to analyse consumer opinions on Microbusiness, an additional quantitative methodology was employed to help infer general consumer opinion.
Methodological debates often arise over the relative merits of either using quantitative over qualitative research methods (Johnson & Onwuebuzie, 2004). Through using quantitative and qualitative research and data, the study gains in breadth and depth of understanding and corroboration (Hussey & Hussey, 1997). Equally, the weaknesses of each methodology are offset inherent to using each approach by itself. On one hand, one of the most advantageous features of conducting a mixed methodical approach is the possibility of triangulation, i.e., the use of several means (methods, data sources and researchers) to examine the same phenomenon (Entwistle & Ramsden, 1983). Indeed, triangulation allows for the accurate identification of different qualities of the Microbusiness phenomenon by approaching it from perhaps unorthodox vantage points (Wisker, 2009). Considering Microbusiness is a new phenomenon and the relating research is sparse, successful triangulation will allow for the collection of supplementary data that will increase understanding of the understudied Microbusiness phenomena.
In choosing a suitable triangulation approach, a concurrent nested design would be employed (Grimsley, 2008). During the collection and analysis of Microbusiness data, conducted separately yet concurrently, one set of data (qualitative) will nest the other less important set of data (quantitative) (Grimsley, 2008). This is because the interviewees’ conversations will constitute the major findings and nest the minor quantitative data. By featuring a minor and a major aspect, the methodology benefits from a shorter collection, avoiding prolonged numerical analysis, but also benefits from the triangulation of data. It is noted that the need for integration of mixed methodologies can result in unbalanced evidence (Grimsley, 2008). However, through simple numerical data analysis, it is hoped that the convergence of data will be lucid and transparent.
This study also adopts a case study in answering the research question. WeChat is taken as a representative case study to analyse Microbusiness because Microbusiness can operate on any social media platform, such as Weibo (Li Ruonan, 2016). Robson (2002) asserts that the case study strategy would be useful if the aim of the study is to gain in a rich understanding of the research perspective and the process being endorsed.
- Research design, purpose and paradigm
The qualitative data gathering was built on an interpretive inductive design whereas the quantitative data gathering was built on a deductive methodology in a positivistic paradigm (Saunders et al. 2007). The interpretivist view provides the most suitable methodological approach of collecting a ‘snapshot’ of a Microbusiness in its natural settings. Similarly, the positivist view allows for the collection of statistically analysable data (Myers, 1997).
Seeking depth rather than breadth, the sample size was corresponding with the qualitative research paradigm in which relatively small sample sizes are used to generate information-rich data (Patton, 1990). 20 Microbusiness sellers were randomly selected from a purposive sample of 50 participating students following a purposive sampling strategy (Lincoln & Guba, 1985). The sampling strategy required prior experience either selling / buying in Microbusiness. As a student of Chinese Studies, the researcher at the university of Durham had a large amount of access to Chinese overseas students and so was in a favourable position to access data. Respondents came from a list of 50 Chinese international students from the University of Durham. There were no objections or limitations raised by interviewees with regards to the questions or the purpose of the study. However, there are obvious barriers and limitations that may arise from trying to collect data from students due to the nature of the interview: for example, there is a risk that the information provided may be superficial or biased (Middlewood & Abbott, 2012). Interview requests were sent to all students via Facebook or E-mail messaging (response rate = 12.5%).
Ethics refer to the appropriateness of one’s behaviour in relation to the rights of those who become the subject of a research project (Blumberg et al. 2005), and thus in this light, participants’ reserve the right for all recordings to remain private. An ethical consent form can be found appendices 2. All interviewees agreed to audiotape the interviews (between 10-20 minutes), which resulted in 200 pages of transcripts.
- Data collection
- Primary data collection: Qualitative component
To remind the reader, the mixed methodology was employed to answer the following research questions:
- Why are Chinese consumers choosing Microbusiness?
- What are the main issue that threaten Microbusiness’ development?
- What are Microbusiness prospects?
Primary data collection was inspired after one year spent living in Beijing. Catching note of the growing phenomenon of consumers selling publically to each other on WeChat inspired further field research, however the experience did not provide any hard data. Instead as Bailey (1966) suggests, a profound research period can provide impetus study, even if it does not provide data.
Where the literature review forms the basis of the research question, it can also be used to analyse the findings (Yin, 2002). Based on this, the findings from each interviewee were analysed according to the topics discussed in the literature review. This suggests a deductive approach to analysing data and is essential for theoretical driven studies. This deductive analysis is the patterns matching procedure (Saunders et al. 2007), which involves proposing a set of questions based on the literature’s theoretical propositions. In the instance where a pattern is found in the interview similar to the literature on Microbusiness, there is evidence to suggest there is indeed an explanation for the findings (Saunders et al, 2007).
The qualitative interview period employed common research design techniques such as using 9 types of questions (Kvale, 1966): introduce; probe; follow up; specify; direct; indirect; structure; silence; interpret. The interview was split into four main themes based around the research questions. The first theme sets out to ask interviewees why they use(d) Microbusiness. Guiding questions are needed and it is important that these are unbiased. Even asking the question ‘why?’ can lead to defensiveness in an interview (Becker, 1998 in Yin, 2014). Instead, researchers should ask ‘how?’ to create a nonthreatening and friendly environment for the interview to take place. Therefore, the question why users use Microbusines is split into: what, who, how when and where.
The second section discusses where they perceive Microbusiness’ issues to lie and the third section asks interviewees for their suggestions in order to develop Microbusiness. Considering this is an exploratory study, the purpose of interview is for the interviewee to be talking more than the interviewer which will not be achieved if lengthy questions are asked (Thomas, 2013).
Finally, it should be noted that a further limitation of interviews can be a direct result of creating a friendly conversational environment in which the interview takes place. In this environment, the interviewer’s perspective can influence the interview and the interviewee’s responses can thus influence the research questions. Yin (2014) describes this as reflectivity which can lead to an “undesirable colouring of the interview material” (Yin, 2014, p.112). However, interviews were conducted along a semi-structured interview plan, which provided an element of continuity between interviewees (Interview plan can be found appendices 1).
3.2.3 Primary data collection: Quantitativecomponent
In order to test Microbusiness user opinions according to a recognised scale, the Likert scale was employed. The Likert Scale is a five-point scale which is used to allow the individual to express how much they agree or disagree with a statement from a scale of 1-5 (1= strongly disagree; 2 = disagree; 3 = undecided; 2 = agree; 1 – strongly agree) (Karl, 2005). The Likert Scale is one of the most universal methods for interview collection and therefore is easily understood (Kuzon et al. 1996). Hence, the responses found later in the discussion section are easily quantifiable and subjective to computation of very simple mathematical analysis (Jamieson, 2004). Since it does not require the participant to provide a concrete yes or no answer, it does not force the participant to take a stance on Microbusiness. Instead, the Likert scale allows interviewees to respond in a degree of agreement; this makes question answering easier on the respondent (Likert 1932). However, the Likert Scale is one-dimensional and only gives 5 options of choice, and the space between each choice cannot possibly be equidistant. Therefore, interviewees’ opinions found in the next section, chapter four, may perhaps be excessively simplified. Additionally, using the Likert scale, people avoid choosing the “extremes” options on the scale, because of the negative implications involved with “extremists”, even if an extreme choice would be the most accurate (Jamieson, 2004).
3.2.4 Secondary Data Collection
The secondary data includes academic articles, expat journals, magazines, vlogs, podcasts, and YouTube videos. Expat magazines were helpful in guiding an understanding of the Microbusiness phenomenon, however their individual opinions were limited and could not fairly represent the Chinese consumer market’s opinion.
The following academic journals provided the base of the study and were largely based on recent official statistics from 2014-2017: Yuan, 2016; Wen, 2015; Li Ruonan, 2016; Liu, 2015; Luo, 2015; Xiao et al. 2016. Additionally, vlogs, podcasts and YouTube videos provided noteworthy statistics from the Chinese National Bureau of Statistics and also Tencent. Thus, the video and audio sources proved valuable in learning about the Chinese e-commerce market. Although official statistics are often “characterized by unreliability, data gaps, over aggregation, inaccuracies, mutual inconsistencies, and lack of timely reporting” (Gill, 1993), they provided the necessary platform to conduct a study on novel area that is Microbusiness. The fact that all articles relating to Microbusiness from 2014 are constantly updated, indicates a positive evolving research area. However, large amounts of academic articles found on Chinese academic portals were of a poor standard and lacked rigorous methodologies, for example containing inaccurately referenced essays. As a non-native Chinese speaker, the translation process is relatively long and therefore to discover that an article is incorrectly referenced after completing translation, was a source of frustration. It is recommended in future studies where non-Chinese speakers are translating Chinese journals to first check referencing in order to not waste time!
3.3 Pilot Study
The pilot study is a small experiment designed to test logistics and gather information prior to the larger study, to improve the larger studies’ quality and efficiency (Ruxton & Colgrave, 2006). The pilot study can reveal certain deficiencies in the proposed experiment design and save unnecessary expenditure on time in the large-scale study (Dodd & Lancaster, 2004). The pilot study’s methodology can be found in the following methods section. The pilot study’s design did not differ hugely to the final interview; however, it was fundamental in incubating the discussion of a major theme in the discussion section: trust. In particular, the pilot study inspired the question, “Do you consider your previous Microbusiness sellers as trustworthy?”
The pilot study consisted of semi-structured interviews with five local Chinese students, three female and two male, on a volunteer basis who were studying full time at The University of Durham, U.K. Although a pilot study does not guarantee success in the main study, it greatly increases the likelihood (Simon, 2011). The pilot study modified the definitive interview methodology design in three areas: Firstly, it re-shuffled the order of the interview questions, which resulted in more fluid communication between interviewer and interviewee; secondly, the pilot study revealed ambiguity over the definition of Microbusiness amongst the sample of interviewees. Thus, at the start of each interview, the following Microbusiness definition was provided: “Microbusiness shall refer to customer to customer transactions (C2C) on social media, unless stated as B2C, where it shall refer to businesses conducting transactions with their customers”. Thirdly, the pilot interviews brought up trust numerous times throughout the interview and thus served as a reminder of their prominence within Chinese-related business literature. Therefore, the theme of trust was accordingly incorporated into the final interview design
Chapter 4 Results and Discussion
The three research questions are as follows:
- Why are Chinese consumers choosing Microbusiness?
- What are the main issues that threaten Microbusiness’ development?
- What are Microbusiness’ prospects?
4.1 Why are Chinese consumers choosing Microbusiness?
To explore why Chinese consumers are choosing Microbusiness, the interview asked consumers what they were buying, who they were buying from, when they were buying and where they were buying from.
What are consumers buying?
Gao & Li (2016) and Li Ruonan (2016) argued that consumers are choosing Microbusiness because of the relatively cheaper foreign goods. Foreign goods, in the eyes of Chinese consumers, are often safer alternatives than domestic Chinese goods (Fan, 2005). Microbusiness holds a specific area of the market for products, such as baby milk powder, cosmetic face-masks, and make-up, unlike Taobao which nearly everything and anything (Gao & Li, 2016; Li Ruonan, 2016). This study set out to test the literature’s claims. Hence, the interviewees were asked, “Please list the products you buy on Microbusiness?” The results are shown below in fig. 4:
Results reveal that “Foreign cosmetics” (80%) were the most bought on Microbusiness. These were followed by “Foreign food products” (70%) and “Foreign wearables” (70%) respectively. Importantly, the results confirm along with Gao & Li (2016) and Li Ruonan (2016) that Microbusiness market includes foreign goods.
Interviewee 16 seemed to confirm the sample’s findings, “Me, my family and friends use Microbusiness when we want to buy untaxed, cheap foreign products, like British cosmetic facemasks or baby products, from stores like Holland and Barratt… We want foreign products because they are a higher quality than domestic Chinese goods” (Appendices 2).
However, it is not only foreign products bought on Microbusiness. The question, “What do you buy on Microbusiness” limiting to the validity of the potential answers by only including the interviewees’ personal experiences. Bush (2002:65) defines ‘validity’ as “whether the research has accurately described the phenomenon which it is intended to describe”. The sample consisted of overseas students studying at the university of Durham, whose annual fee ranges between £14,700 and £18,900 (Durham University, 2017). Therefore, it can be inferred that the sample do not cover a wide economic representation of Chinese consumers. On one hand, the sample, may be biased towards selecting foreign products because the Chinese market do perceive foreign products to be safer (Fan, 2005). On the other hand, the sample may be biased towards foreign products because they are potentially wealthier than other consumers. Bush (2002) continues by linking the external validity of a study with its generalisability and therefore it is doubtful that the sample can be applied to other situations or locations.
Therefore, in order to expand the study and reveal the widest range of responses possible, the question was put to interviewees: “What products do you commonly associate with Microbusiness?” The addition of “product association” was beneficial to the study because it allowed for further “generalisability” in the study. The results were compiled, calculated and can be seen on the opposite page (fig. 5).
The new question was able to reveal two new results. “Foreign baby products” (80%), and Chinese products (70%). The second question was considered particularly revealing in helping expand the generalisability in order to answer the first research question, “Why are Chinese consumers choosing Microbusiness?”
The follow up answers revealed that China’s baby healthcare scandals had led to a high number of the Chinese diaspora selling baby milk back to China (an example of such adverts can be found in appendices 1).
Interviewee 3 added, “My sister back in Hangzhou mainly uses Microbusiness to buy baby products from her friends abroad. My sister worries about the Chinese products, you know? By using WeChat, my sister can ask for a friend’s recommendation to buy a better quality foreign product.” Interviewee 3 revealed that Chinese consumers are using WeChat to gain an understanding of the market’s atmosphere. Online markets are therefore using technologies to lift the constraints of time and location to connect buyers and sellers in China and abroad, in even the most niche of products.
It also appears that Chinese consumers are reliant on WeChat to ask their friends for recommendations when purchasing products.
4.1.3 When and where are consumers buying?
The literature failed to identify how often consumers are using Microbusiness or even where. Therefore, in order to establish the frequency and location of the sample’s purchasing habits, the question was put to interviewees, “How often, per month, do you use Microbusiness in the U.K. and China?”
Time per month
The results (fig.6 ) reveal that within the sample, Microbusiness purchases are more commonly occurring from within China. The results show that the mean buyer was buying 2.5 times more in China than in the U.K.
Who are they buying from?
The literature made clear that there are serious trust issues between sellers and buyers within Mircrobusiness (Huan, 2016; Yin, 2017; Yuan, 2016; Wen, 2015; Li Ruonan, 2016; Liu, 2015; Xiao et al. 2016). Therefore, the question was asked, “Do you consider your list of previous Microbusiness sellers as trustworthy?”
The interview revealed that sample were undecided (fig.6). In the sample’s minds, Microbusiness is not positively trusted. Therefore, it can also be assumed that within Microbusiness, it is difficult to establish trusting relationships, or “guanxi.” Hence, it seems then unlikely, that C2C Microbusiness can, similar to its B2C elder brother operating on JD.com, experience a “socialisation” of its trade services,
The ambiguous level of trust prompted a further exploration into Microbusiness’ perceived legality. Interviewees were asked whether they perceived Microbusiness as a legal business practice. The majority were unsure (50%), whereas illegal (25%) and legal (25%) were equally matched. Once again, the sample results highlight a level of uncertainty pertaining to Microbusiness. Thus, it seems conclusive that Microbusiness occupies an ambiguous, uncertain and not positively trusted business mode in the minds of Chinese consumers.
C2C or B2C
This study reviewed Austrad’s (2015) claims that Chinese consumers trust B2C platforms over C2C platforms. In order to establish the verifiability of this claim, interviewees were offered the choice of buying a hypothetical product from either an official account (B2C), or from an individual seller (C2C). The popular majority (95%) chose B2C over C2C. Therefore, Austrad’s claims can be concluded that from the sample, B2C Microbusiness is a more trusted platform than C2C Microbusiness. In conclusion, since B2C is experiencing a socialisation of trade services (Liao & Chen 2016), it is unfair to assume the same will happen to C2C Microbusiness.
- What are the main issues that threaten Microbusiness’ development?
Some authors argue that C2C business models are flawed by a lack of a regulating third-party platform (Zhang & Liu 2016). Conversely, some of the literature pinpoints three central problems that are affecting C2C Microbusiness: a large number of fake products, an unregulated WeChat platform, and sellers that over-advertise (Huan, 2016; Yin, 2017; Yuan, 2016; Wen, 2015; Li Ruonan, 2016; Liu, 2015; Xiao et al. 2016). The media has also negatively contributed to the legal ambiguity of Microbusiness within the minds of Chinese consumers’, which only serves to compound these trust issues. Therefore, the question was put to interviewees and the results are shown opposite (fig. 7):
The results show that poor product quality (80%) was the main perceived issue from the consumer perspective. A lack of regulation and over-advertising were also considered major threats (75% and 70% respectively). These results confirm the literatures findings that the three main aspects threatening Microbusiness’ development are the large number of fake products, an unregulated WeChat platform, and sellers that over-advertise.
Interviewee 2 summed up the group’s sentiments well, “When I think of Microbusiness, I think of irritating advertisements of fake products cluttering up my friend’s circle. I have blocked around half of my Microbusiness contacts.” (Appendix) The results confirm the literature’s findings that Microbusiness is “cluttering” the social function of WeChat. It appears that sellers, instead of establishing positive, trusting guanxi, are irritating the Chinese consumer market with advertising clutter to the point where they are being blocked online.
Interviewee 6 revealed that Microbusiness can sometimes be dangerous, “I used to buy on WeChat using Microbusiness, but until my mum bought a dangerous cosmetic face mask that sent her to the hospital, I want nothing to do with Microbusiness. I have blocked all of my WeChat friends that are Microbusinessmen.” (Appendix).
After finding this out from the sample, the use of the semi-structured interview allowed for the exploration of where other securities issues may arise. In order to explore further security issues, interviewees were requested to identify their single largest security concern. Obtained results demonstrate that Microbusiness’ “lack of regulation” (50%) was the principal cause that led to user security anxieties. The sample also identified “poor after sales service” as another key security worry (30%) (including refund issues, postal service problems and mistranslations of foreign products); “fake/faulty products” and “deceitfulness”, although recognised as major security issues, were respectively 5 times less prevalent than “lack of regulation”, and 3 times less prevalent than “poor after sales service”.
The literature review asked if C2C Microbusiness had the potential to build on Taobao’s social IM functions by operating on a more advanced social network, however, it appears that social and commercial dynamics do not integrate well and can even be dangerous. Thus perhaps, we can conclude then that Taobao will remain top of the C2C e-commerce market for the foreseeable future.
What external factors are affecting Microbusiness’ growth?
Firstly, with regards to Microbusiness’ external problems, heavily publicised campaigns from the Chinese State owned media have the potential to impact Chinese citizen’s trust of Microbusiness.Therefore, the question was put to interviewees, “What external factors are affecting Microbusiness’ growth?”, Interviewee 3 revealed,“The government are an extremely worrying aspect for Microbusiness’ future opportunities and the young entrepreneurs who operate on the channel.”
Interviewee 11 explained why this may be the case, “Last year the Chinese government introduced a 12.5% import tax on all imports bought via Jindong (B2C form of Microbusiness). Indeed, imports incur very high taxes because the government wants to nurture its own industries, despite this being against the spirit and the letter of their agreed WTO agreements. The National Party Congress has just taken place in Beijing and they are stressing more control of imports of foreign goods. The government deposits the products in a custom area where they cannot be released until a 12.5% tax levy is paid. Although this may not dissuade people, it demonstrates that the government has shown a desire for control.” (Appendix) Interviewees 3 and 11 revealed that Microbusiness sellers are facing threats from the Chinese government and this may affect the future development of Microbusiness.”
In conclusion to the main issues affecting Microbusiness’ development, the interviews revealed three major areas: a lack of regulation, poor quality products and over-advertising. It appears that that the issues threatening Microbusiness appear greater than its potential to significantly impact the Chinese market at this stage.
4.3 Where does Microbusiness’ revolutionising potential lie?
The interview enquired into plausible suggestions for the development of Microbusiness in order to find out where else Microbusiness’ could significantly impact the Chinese e-commerce market. This study employed a similar recommendation system that occurred at the end of Li et al’s (2015) study on Microbusiness. Interviewees were asked to rate Li et al.’s recommendations using the standardised Likert 1-5 scale. The results are shown below (fig.9).
From these recommendations, it appears that the main issue affecting Microbusiness’ prospects is a lack of regulation, which could be solved through a third-party operator. Although on one hand, perhaps C2C businesses are flawed, (Zhang & Liu 2016), using a regulating third party, such as the government or Tencent, Microbusiness could then develop. For example, C2C Microbusiness channels could be used as an innovative distribution channel for foreign businesses wishing to enter the Chinese market, as suggested by the Australian Trade of Commerce’s 2015 symposium (Austrad, 2015). Or C2C Microbusiness, with a third-party regulator could offer prospects for the development of C2B business, whereby customers can provide businesses with punctual, useful feedback to create personalised items and services (Li Ruonan, 2013). However, without a third-party regulator such as the government, Microbusiness cannot significantly benefit the Chinese e-commerce market, apart from providing a small, generally ambiguous ad-hoc service that operates in a grey area of the law.
Chapter 5: Conclusion
Although C2C Microbusiness, by virtue of operating on WeChat, is inseparable from the community (Chen, 2016), it appears to be a phenomenon that is not positively associated within the Chinese community. Microbusiness, is a branch of the hyper-socialised Chinese online world. It represents a hazy and ambiguous area in the minds of Chinese consumers and does not threaten to significantly impact the Chinese consumer market anytime soon. It will continue to go unregulated, plagued by mistrust as long as it continues to go unregulated.
This study address a gap in the English language literature concerning Microbusiness. By exploring trust issues outlined by Yuan, 2016; Wen, 2015; Li Ruonan, 2016; Liu, 2015; Luo, 2015; Xiao et al. 2016, and the background of the Chinese e-commerce market in a variety of Western journals, (The Economist, Mckinsey reports, Austrad), this research has hoped to overcome the initial barrier of understanding the current state of the Chinese Microbusiness phenomena.
Conclusion to research questions
- Why are Chinese consumers choosing Microbusiness?
Chinese consumers are choosing to use Microbusiness over safer B2C alternatives primarily because of the demand for cheaper alternatives to expensive foreign goods. The majority of the interview sample would choose B2C over C2C Microbusiness and there is no evidence to suggest that Chinese consumers are increasingly choosing C2C Microbusiness over traditional e-commerce marketplaces. The results show that guanxi are hard to produce in the social media e-commerce world. It is doubtful that Microbusiness currently has the chance to significantly impact the Chinese e-commerce market when consumers would rather choose safer, B2C alternatives, and especially considering the wide level of uncertainty and ambiguity surrounding Microbusiness.
- What are the main issue that threaten Microbusiness’ development?
The results confirmed the literatures’ findings that there are three internal major issues affecting Microbusiness’ development. These include: a lack of regulation, poor quality products and over-advertising. According to the sample and literature therefore, it appears that the extant issues within Microbusiness threaten its chance to significantly benefit or offer new innovations to the Chinese e-commerce market.
- What are Microbusiness’ prospects?
From the interviewee of ten consumers and ten sellers, Microbusiness’ potential to revolutionise the e-commerce market for Chinese consumers is very slim. Li et al’s (2015) set of recommendations were tested:
|I would like to see punishments including fines and prison sentences meted out to those who abuse Microbusiness||AGREED|
|Microbusiness should be taxed||AGREED|
|Tencent should provide more regulation with regards to Microbusiness||NOT CONFIRMED|
|Microbusiness should have a seller rat rating system, similar to that of Taobao||AGREED|
|The Chinese government should provide more regulation with regards to Microbusiness||STRONGLY AGREED|
- Implications and recommendations: Regulation
The conclusive recommendation of this study is, if Microbusiness wishes to develop, it must receive further regulation and backing from the Chinese government. Without external backing, the internal issues within Microbusiness’ will continue to rattle consumer’s trust. Regulation is also recommended for the safety of Chinese consumers because fake and dangerous products are a large issue within China. Even within a small sample of twenty interviewees, one of the interviewee’s mothers was sent to hospital owing to a defective mask. Perhaps this number was more within the group?
Limitations and future research
There were a number of limitations that occurred while conducting this research. The main limitation encountered during this research, similar to Li et al (2015), was that interviews were conducted only in one small city, Durham. They cannot accurately represent a wide range of opinions on Microbusiness. Additionally, the results from s small group of Chinese foreign students studying in the U.K cannot be generalized to represent the average Chinese e-consumer. There is a chance that the views of other students studying in other countries may be completely different. It is recommended that interviews be carried out in China and among its diaspora in the hope of distilling a set of recommendations that can help to develop Microbusiness into a valuable business entity. Future research could also explore the impact potential of the Microbusiness phenomenon from a B2C perspective.
Chapter 8: Appendices
Appendices 1: The most commonly associated products with Microbusiness: Foreign baby products. These are Typical C2C Microbusiness adverts collected from real users and highlight that the 2008 baby milk scandal is still affecting consumer trust in domestic Chinese baby products tod
 For a further discussion of parallel imports, please see Laidler et al. (2016)
 Please see above video for a discussion of illegal pyramid schemes
 Please see Li Ruonan, 2016 for a further discussion of Microbusiness’ low degree of professionalism
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