Determinants of Customer Loyalty in China C2C E-Commerce: From a Social Network Perspective

China’s C2C electronic market has been growing very rapidly. The largest Chinese online auction company, Eachnet, was purchased by eBay but faced tough competition from another Chinese company, Taobao. Taobao’s market share is now twice as large as eBay’s. Why has eBay quickly lost its market share to newly-launched Taobao? This paper developed and tested a theoretical model that explains the effects of social relation and customer value on online customer loyalty and shopping behavior. This model was tested using empirical data (N=224) and PLS-Graph software. Results show that customers’ trust networks and customer value significantly influenced their loyalty to vendors, while customers’ affect networks and loyalty significantly influenced their shopping behaviors. The results suggest that the current C2C electronic market in China is a social environment where customers’ loyalty to a vendor can be built more easily by the vendor’s social relation management services than by transaction services. These findings advance theory by understanding online consumer loyalty from a social network perspective. The present study contributes by explaining the determinants of consumer’s shopping behavior and loyalty in China C2C Electronic Commerce.