Exploring the Impact of Peer Influence on Online Shopping

Abstract

Commercialization of social media is no longer optional for businesses, especially online businesses. An effective online presence is crucial for creating awareness of new products or services and triggering activity. The objective of this chapter is to investigate peers' influence on Chinese millennial consumers' purchase behavior. To be specific, this study examines the relationship between peers' purchase histories and consumers' purchase decisions among Chinese millennials. Specifically, this study explores whether and to what extent peers' purchase histories affect consumers' purchase perception, such as perceived usefulness, perceived risk, and purchase intention. Analysis of online surveys shows how peer influence affects Chinese millennial's purchase intention and decision in online shopping. Furthermore, perceived usefulness positively also affects purchase intention, while perceived risk has a negative influence. This chapter provides suggestions for online retailers to attach importance to peer influence when advertising their products.