Factors affecting online group buying intention and satisfaction: A social exchange theory perspective Wen-Lung Shiau a , Margaret Meiling Luo b,⇑ a Ming Chuan University, 5 De Ming Road, Gui Shan District, Taoyuan 333, Taiwan, ROC b Strayer University, 760 West Sproul Road #200, Springfield, PA 19064, United States article info Article history: Available online 15 August 2012 Keywords: Online group buying Social exchange theory (SET) Reciprocity Reputation Trust abstract This study investigates factors that affect consumer continuous use intention toward online group buying and the degree that reciprocity and reputation of social exchange, trust, and vendor creativity affect con- sumer satisfaction and intention toward online purchasing. Data from 215 valid samples was obtained using an online survey. The research model is assessed using partial least squares (PLS) analysis. The results show that the intention to engage in online group buying is predicted collectively by consumer satisfaction, trust, and seller creativity. Consumer satisfaction with online group buying is predicted pri- marily by trust, followed by consumer reciprocity. The proposed research model explains 67.7% of vari- ance for satisfaction and 39.7% of variance for intention to engage in online group buying. The results suggest that reciprocity, trust, satisfaction, and seller creativity provide considerable explanatory power for intention to engage in online group buying behavior. Ó 2012 Elsevier Ltd. All rights reserved. 1. Introduction The recent rapid growth of information technology (IT), the Internet, and the e-commerce boom have created significant opportunities that are characterized by a lack of spatial boundaries. The Internet has an increasingly significant influence on people’s everyday lives, in aspects such as communication, entertainment, social activities, and shopping. Numerous businesses have also changed their business model and shifted from physical sellers to the virtual market because of the opportunities offered by an on- line business model. A recent survey of over 27,000 Internet users in 55 markets from the Asia Pacific, Europe, the Middle East, North America, and South America showed that the Internet market of- fers significant opportunities in emerging markets (Nielsen, 2010). This shows that the traditional forms of consumption have transformed. Online group buying has become popular with the emergence of US-based sites such as Groupon, launched in 2008. The term group shopping refers to social or collective buying where items can be purchased at significantly reduced prices when enough buy- ers participate in the purchase. The transaction proceeds only when the required number of buyers is reached. Significant savings can be made (CTVglobemedia, 2011) by purchasing more products together to reduce the price. This popular trend in online shopping experienced significant growth during 2010 and 2011. In the United States and Europe, online group buying is highly popular and successful, and is based on a simple but powerful concept: consumers enjoy receiving significant discounts on premium prod- ucts, although merchants are only willing to provide these dis- counts if they can sell high quantities (Pressitt, 2010). A CNN report in 2010 indicated that this concept has motivated a new cat- egory of ‘‘group buying’’ websites, at least one of which may be val- ued at more than US$1 billion. In Canada, local merchants offer their services at a discount of between 30% and 90%. Online group buying websites are also experiencing rapid growth in Asia (CNN, 2010). In China, more than 1215 group buying sites have been launched and the total transaction value of the Groupon-type mar- ket is projected to reach RMB$980 million (US$147.6 million). This market is expected to grow by an annual average of 57% over the next 3 years (NetworkWorld, 2010). Online group buying in Tai- wan has also become increasingly popular. Shoppers are using on- line group buying primarily because of incentives to save money. Taiwan’s largest bulletin broad system site, PTT (http://ppt.cc), and Ihergo website (http://www.ihergo.com/) are the most popu- lar group buying websites. The revenue of one renowned group buying website increased from NT$13 million in 2008 August to NT$27 million at the end of 2008, and an average of more than 700 new groups are established everyday (Taipei Times, 2010). Incentives to save money are frequently used to demonstrate the consumer behavior of group buying. Over time, however, the factors that influence consumers to engage in group buying behav- ior have developed more multi-faceted dimensions because of the 0747-5632/$ - see front matter Ó 2012 Elsevier Ltd. All rights reserved. http://dx.doi.org/10.1016/j.chb.2012.07.030 ⇑ Corresponding author. Tel.: +1 215 391 2169. E-mail addresses: mac@mail.mcu.edu.tw (W.-L. Shiau), margaret.luo@strayer. edu (M.M. Luo). Computers in Human Behavior 28 (2012) 2431–2444 Contents lists available at SciVerse ScienceDirect Computers in Human Behavior journal homepage: www.elsevier.com/locate/comphumbeh