Understanding Chinese Users’ Preference for Domestic over Foreign Internet Services

Abstract

ABSTRACT The recent phenomenal growth in the number of Internet users has made China the largest Internet population in the world. While the market size of the country is still comparatively small, its growth remains promising due to the very low penetration rate. However, most foreign Internet companies that have entered the Chinese market are struggling to compete with their domestic counterparts. Additionally, the gap between Chinese users’ preference for domestic over foreign Internet services is widening rapidly. What factors contribute to their preference for domestic Internet services? This study attempts to understand Chinese users’ perceptions of Internet services through a sociotechnical analysis. A large-scale survey was conducted in two major Chinese cities. The authors find that superior technical quality and word-of-mouth influence positively affect the preference for domestic service, while the perceived globalness of foreign Internet firms is negatively related to the preference for domestic services. The level of consumer ethnocentrism has no effect on preference. By employing the Importance-Performance Analysis approach, the authors offer further implications for theory and practice. The research findings can serve as a foundation for investigating similar Internet marketing phenomena in other emerging economies.