Herd Behavior In Chinese C2C Market

With the growing use of the Internet in China, more and more people are shopping online. According to the latest report China Internet Network Information Center release, China has 427 million Internet users,1/3 of which are using Internet as a tool to shopping. The number of users who shops more than 5 times per month has reached tens of millions more, and the types of products has reached thousands of millions. Online shopping behavior gets more and more attention by the society. Behind the prosperity of online shopping in the booming market, consumers and seller are faced with some problems. For example, because online consumers cannot chat with sellers face to face, what's more, online consumers are not able to touch the goods, consumers need to rely on the information provided by third parties. More and more consumers are making purchasing decision by considering other consumers'choice. Herding behavior is playing an important role in Chinese C2C market.This study set online user's shopping behavior as the research object, by reviewing Chinese and western literatures on this topic, we build a theoretical model to testify the herding behavior in Chinese C2C market. We caught 16,464 panel data about Nokia cellphone in 28 days from March 2011.We take a v analysis based on the data we got. All the results are supporting our hypotheses. Here are some conclusion we found. 1. Online consumers'herding behavior towards products are significantly exists, which means daily sales are significantly affected by recent sales of products. However Online consumers'herding behavior towards sellers are not significantly exists, which means daily sales are not significantly affected by accumulated sales of sellers.2. Daily sales has an "inverted U" relationship with accumulated sales of sellers. Online consumer will reduce their shopping intention when accumulated sale of sellers are extremely high.3. Product life has a positive effect on online consumers'herding behavior. Compared to products that are newly introduced, herding behavior is more obvious when products are introduce to the public for a longer time.4. The number of assurance seals has a positive effect on online consumers'herding behavior. Compared to products with less assurance seals, herding behavior is more obvious with more assurance seals.5. Qualification attribute has a negative effect on online consumers'herding behavior. Compared to qualified real cellphone, herding behavior is more obvious for smuggled cellphone6. Price, assurance seals, description and weekend effect all have significant effect on online consumers'herding behavior...