Why Are Online Promotions in China So Complicated?

National online shopping days like China’s Double 11 (also know as Single’s Day) ignite the enthusiasm of millions of online shoppers, but many are left perplexed by the rules that can come with coupon applications. Dengfeng Yan, Visiting Associate Professor of Marketing at NYU Shanghai, explains why many marketers devise promotions in a very complicated way and how such computational complexity influences the buying behaviors of online shoppers.

Dengfeng’s research focuses on understanding how consumers respond to numerical information (such as prices and attribute specifications) and how consumer judgment and preferences vary as a function of psychological distance.

According to previous research that analyzes online shopping habits, marketers complicate their promotion designs in response to the many factors that influence how a consumer decides to make a purchase. When potential buyers completely focus their attention on the process of figuring out the best buying strategy, they unconsciously skip over considering other factors like quality and after-sale service, and aren’t even thinking about whether they really need the product or not.

Another possible scenario is that after spending a considerable amount of time on seeking the optimal strategy, many people find it more difficult to give up because of the sunk cost.

While Prof. Yan believes that complicated promotions affect consumer purchase decisions in a variety of ways, the result is usually the same: consumers often end up buying many unnecessary products. “No matter how smart consumers are, marketers are often the ultimate winner.”

Dengfeng Yan is a member of the Center for Business Education and Research (CBER) at NYU Shanghai, which aims to promote innovative research on China-related business and to inspire academic collaboration among industry leaders, business faculty and students.



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