Factors Affecting the Adoption of E-Commerce: A Study of the Textile Industry in Wujin, China

By Chong, Alain Yee Loong; Ooi, Keng Boon et al. | International Journal of Business and Management Science, January 1, 2009 | Go to article overview

Factors Affecting the Adoption of E-Commerce: A Study of the Textile Industry in Wujin, China


Chong, Alain Yee Loong, Ooi, Keng Boon, Tak, Yew King, ShuYang, Zhu, International Journal of Business and Management Science


Abstract:

The purpose of this paper is to examine the factors that influence the adoption of e-commerce with emphasis on textile companies in WuJin, China. The factors are organizational readiness, innovation characteristics, government influence and culture. Binary logistic regression was applied to test the research model. The result shows that organizational readiness, innovation characteristics and culture influence the adoption of e-commerce among textile companies in WuJin. As China's culture is different from many western countries, it is found that relationships between organizations, or GuanXi as it is commonly known in China, needs to be established before organizations collaborating with each other are willing to adopt e-commerce. The findings of this study are useful for the Malaysian companies who are interested to adopt e-commerce with their business partners in China.

Keywords: E-commerce, Wujin, textile industry, culture, Organizational readiness

INTRODUCTION

China is one of the fastest growing economies in the world. With the emergence of internet technologies, firms in China a re now a ble to explore new market opportunities without being constraint by geographical locations. However, by engaging in businesses with companies in other countries, companies in China are also exposed with increased competitions. In order to stay competitive, many Chinese companies are starting to employ e-commerce in their bus inesses in order to be efficient in their business operations.

The Chinise government knows that with globalization as well as China's entry into the World Trade Organization (WTO), Chinese firms will be facing competitions. To ensure long term com petitiveness of Chinese firms, the government must ensure that Chinese firms do not compete merely on having lower costs. T he Chinese government therefore has taken a lot of measures to foster e-commerce development in the recent years by improving IT infrastructure in China to ensure that Chinese firms are more productive. One of the e-commerce models that the Chinese g overnment ha s em ployed is the "Sunan" model in Wujin. The Chinese government has placed emphasis on the economic development of Wujin as it is one of the fastest growing provinces located in the Southeast of China. Wujin is ranked by the Chinese government as atop 10 counties in terms of economic ranking (Wujin Economy and Trade Bureau, 2005).

The Sunan model was applied by the Chinese in the early eighties and it "attributes the de velopment of Sunan to the local state-directed township and village en terprises (TVEs)" and is viewed as urbanization from be low (Wei, 2002). The Sunan model is a model that the Chinese government constantly encourages, support and helps the development of enterprises, and has existed for more than 20 y ears. The Chinese government has modified the Sunan model and name as " new Sunan model". The " new Sunan model" is an a pplication method that combined e-commerce and Sunan model together in order to assist companies to take advantages of e-commerce that is perceived for the world market. At present, the " new Sunan model" is mentioned a nd i s be coming popular in Wujin.

The Textile industry is the main industry in Wujin. This industry plays a key role to Wujin's economy. The industry is currently facing a lot of challenges and business opportunities as they move toward the global marketplace (Ouyang and Li, 2005). There are several barriers of textile industry; one of the earlier barriers they faced was that they could not get enough information quickly and adequately. Today, w ith g lobalization a nd emphasis on fair competition, the textile industries in China are facing the challenges of China's entry to the WTO and the canceling of quota for export.

As e-commerce develops, it h as profound impacts on textile industry which provides a lot of chances to them like expanding their market, and getting different information (Ouyang and Li, 2005 ). …

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