The Impact Of Online Channel On Listed Retailers’ Performances In China

With the quick development of e-business, incorporating the Internet to operationbusiness activities in firms has been one of representations in economic globalization.The ability of E-marketing is a key role of competition capability for a firm. More andmore traditional firms are considering the development strategy in Internet environmentcarefully and redesigning marketing tactics which help to adapt the global market. Inorder to exploring the development ways which fit their online marketing, firms arepuzzled with the elusive link between online channel application and firm performance.Especially for retailing which is characterized as low profit margins and intensecompetition, as one of the biggest businesses in our country, how to apply onlinechannel effectively to control costs and improve performance? These relevant questionsurgently need us to explore and research theoretically. Based on the transaction costtheory, resource-based view and the value chain analysis theory, this paper analyze theimpact of the online marketing channel to the performance of China’s retailersempirically, and then analyze the influence of the channel marketing strategy, timing ofadoption and regional background to performance.Based on a sample of58listed retail companies and their accounting and financialdata during1999–2010, we adopt an event-study approach to examine the onlinechannel’s impact on firm performance. The empirical results show that, afterimplementing the online sales strategy, listed retail firms experience significantabnormal improvements in financial performance. Although short-term results varyacross different control group specifications, the longer-term effects are highlysignificant in almost all cases. We also found that, a high local presence is a significantadvantage for retailers in sales growth, which means that the integration of traditionalchannels and online channel can promote the improvement of performance. In addition,the results show that the timing of online channel adoption does not have a significantimpact on performance improvement, but area where the company located dose.