The Impact of e-Commerce Development Level on Location Choice of Foreign Retail Companies in China

Abstract

This study aims to investigate the impact of e-commerce development level on location choice of foreign retail companies in China. Based on the China e-commerce development index and statistical yearbook of China, conditional logistic regression analysis is used to estimate how the e-commerce development level influences location choice of the top 6 foreign retail companies'(RT-Mart, Wal-Mart, Carrefour, Metro, Auchan and Lotus) in China. The results show that the location choice is positively influenced by the e-commerce development level measured by size index, penetration index and supporting index of the development level of e-business respectively. In addition, factors such as the market potential, competition, entry barriers and infrastructure also have significant impact on location choice. This study enhances the knowledge about the effect of e-commerce development level on the behavior of multinational companies, especially on that of retailers in the era of e-commerce.