Advertising On Social Network Sites A Structural Equation Modelling Approach – Social media marketing has become one of the most significant growth paths for many businesses in today’s world. However, many companies are still unclear about using social media marketing to their advantage, especially in an e-commerce environment. Against this background, this study is proposed to examine the effects of social media marketing activities (SMMAs) (interactive, informative, word-of-mouth, personalization and trending) on relationship quality, such as commitment, trust and satisfaction in order to predict consumers’ online repurchase intentions in China’s e-commerce environment. This study proposed a theoretical model using stimulus-organism-response (S-O-R) theory. Using a structured questionnaire and purposive sampling, this study examined the responses of 403 consumers using partial least squares structural equation models. The findings revealed that SMMAs significantly enhance relationship quality factors, such as commitment, trust, and satisfaction, which in turn positively increase consumers’ online repurchase intentions in China’s e-commerce industry. This is an innovative study that contributes to the S-O-R theory and provides several managerial guidelines that assist managers in improving their business performance in the e-commerce industry. This study also highlighted some limitations.
The Internet, social media, mobile applications, and many other virtual communication technologies have permeated billions of people’s daily lives (Yu et al., 2022). Recent statistics revealed that more than 4.60 billion people were active Internet users worldwide, accounting for about 59.5% of the world’s population. Thus, there were 4.32 billion mobile internet users, and 4.2 billion were active users of social media platforms (Statista, 2022). Therefore, social media has become an integral part of the lives of many people around the world. On the other hand, Western social media platforms are restricted in China, such as Twitter, Facebook and YouTube are not officially authorized. This ban is characteristic of China’s social media ecology. In recent years, China’s social media users have grown significantly on various social media platforms, including WeChat, Sina Weibo (Chinese Twitter), Little Red Book (XioHongShu, also known as Chinese Instagram), Douyin (Chinese TikTok), QQ (Chinese MSN) , and Youku (Chinese YouTube) stand out among the other Chinese social media platforms. As of April 2022, WeChat had 1.26 billion monthly active users, Sina Weibo had 573 million monthly active users, Little Red Book (XioHongShu) had 200 million monthly active users, Douyin had 800 million monthly active users, QQ had 573 million (2020) monthly active users, and Youku had 500 million (2020) monthly active users (Gentlemen Marketing Agency, 2022). In general, social media gives customers a new way to learn about products and communicate with others around the world who have had similar experiences with products and services (Yang, 2019). Thus, social media has revolutionized business and marketing dynamics, with organizations leveraging social media to educate, attract, and retain existing customers (Yang et al., 2022).
Advertising On Social Network Sites A Structural Equation Modelling Approach
Social media is “a set of Internet-based applications that build on the ideological and technological foundations of Web 2.0, and enable the creation and exchange of user-generated content” (Kaplan and Online, 2010, p. 61). Companies can reap significant benefits in the current era by integrating social media marketing strategies into their business units (Dwivedi et al., 2020, 2021). Companies use social media to interact with consumers, improve brand awareness, influence consumer behavior, build relationships, and consumer feedback helps them improve their existing products and services, as well as sales volumes (Lal et al., 2020). On the other hand, social media empowers customers more and more and allows them to take control of the marketing communication process; They become message generators, collaborators and observers (Hamilton et al., 2016). Thus, it has become important for marketers to strategically utilize social media to gain competitive advantage and higher performance (Lamberton and Stephen, 2016). In the context of strategic marketing, social media interaction consists of a procedure that allows not only companies to exchange resources but also customers to do so. For example, Hollebeek et al. (2019) argue that customers can allocate operant resources (equipment) and operant resources (knowledge) to firms during interactions. With the increasing importance of social media in consumer acquisition and market intelligence, marketers may strategically design different social media resources based on their existing organizational capabilities and resources (Li et al., 2021).
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Electronic commerce is a growing field that covers the direct and indirect buying, selling and trading of goods and services through computer networks around the world (Gunasekaran et al., 2002). According to Garrett and Skevington (1999), electronic commerce encompasses all elements of business, such as orders, commercial market development, supply chain and money transfer, by using new communication technologies. A new era in China’s economy began with the growth of the e-commerce market, which accounted for more than 38% of the country’s GDP (gross domestic product) by 2020. In 2021, China accounted for more than 50% of global GDP. Retail sales in trade exceed Europe and the United States combined (Yihan, 2022). According to eMarketer (2020), retail e-commerce sales in China are expected to reach $3.085 trillion by 2022, increase to $3.331 trillion by 2023, and $3.565 trillion by 2024. China has the most technologically prominent population in the world. In 2019, China had 883 million Internet users, more than three times the population of Internet users in the United States. Similarly, a survey by Statista (2021) predicts that China will have more than 1,069 million social media users by the end of 2022 and more than 1,279 million users by the end of 2026. Thus, it revealed that China has great potential for e-commerce platforms to sell products and services. According to the International Trade Administration (2021), China’s e-commerce business is dominated by Alibaba’s Taobao and Tmall (with 50.8% market share), JD.com (with 15.9% market share), and Pinduoduo (with 13.2% share market) become the third largest platform in China. In recent years, social media platforms such as WeChat, TikTok and Weibo have gained immense popularity in China, gaining a huge number of local and international users. These social media platforms have great potential to attract a larger consumer base, and many companies aim to leverage these platforms for their marketing activities. For example, Douyin (Chinese TikTok) generated $27.2 billion in advertising revenue in 2020 (Zhang et al., 2022). Social media platforms often use new strategies to facilitate e-commerce. For example, WeChat allows marketers to target its 1.2 billion users with innovative marketing strategies or “mini-programs” that allow retailers to display online stores and push messages to promote special offers or launch new product lines. By 2020, WeChat reported doubling revenue ($250 billion) from transactions through its “mini programs” (International Trade Administration, 2021).
The trend of electronic shopping has been increasing in recent years (Cachero-Martínez and Vázquez-Casielles, 2021), and social media continues to be relevant and trendy due to its interaction and provides enormous possibilities for developing relationships. Therefore, it is essential to examine the activity of social media marketing (SMMAs) in electronic commerce (Ismail, 2017; Yadav and Rahman, 2018). The increasing penetration of social media into society is an effective means of disseminating information and creating social relationships, and brings about a new era of e-commerce called social commerce (Zhang et al., 2014). SMMAs are a critical aspect of social commerce practices (Liang and Turban, 2011), which include a variety of activities such as user reviews, ratings, recommendations, online forums and e-commerce (Hajli, 2015). Previous research has mainly focused on SMMAs in the branding context in terms of brand loyalty, brand image, brand awareness and repurchase intentions in different consumer environments (Ismail, 2017; Cheung et al., 2020, 2021; Ebrahim, 2020; Yang et al., 2022) While few studies have focused on SMMAs in the context of e-commerce in terms of purchase intentions, brand equity and customer loyalty from the Indian perspective (Yadv and Rahman, 2017, 2018). On the other hand, many researchers have emphasized the great potential of SMMAs and urged further research in different consumer environments (Appel et al., 2020; Dwivedi et al., 2021; Li et al., 2021; Zahay, 2021). Against this background, this study aims to investigate the impact of SMMAs on consumers’ online repurchase intentions through relationship quality (commitment, trust, and satisfaction) in China’s e-commerce industry. A number of researchers recognized the significance of relationship quality factors and advocated further research, especially in electronic commerce (Yadav and Rahman, 2018). Therefore, it is important to answer the following questions in order to achieve the goals:
What is the effect of SMMAs on relationship quality factors (commitment, trust and satisfaction) and online repurchase intentions?
This innovative research contributes to stimulus-organism-response (S-O-R) theory in the context of China’s e-commerce business. Furthermore, this study provides several managerial guidelines for developing and executing several business strategies in China’s online environment. In order to organize this research, first, we introduce the topic by highlighting its importance, research gap, research objectives and research questions. Second, we develop a theoretical research model by following the S-O-R framework, formulate related hypotheses, and design the methodology. Finally, we analyze and discuss the findings, noting theoretical and managerial implications, concluding remarks, limitations, and scope for future research.
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The core assumption of this study is that SMMAs (stimulus-S) have a positive effect on consumer relationship quality (commitment, trust, and satisfaction) (organism-O) to predict consumers’ online repurchase intentions (response-R). Figure 1 illustrates the theoretical
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