International Journal of E-Business Research, 10(2), 23-44, April-June 2014 23
Prior Negative Experience, Online Privacy Concerns and Intent to Disclose Personal Information in Chinese Social Media Hongwei “Chris” Yang, Advertising, Department of Communication, Appalachian State University, Boone, NC, USA
ABSTRACT A paper survey of 489 Chinese college students was conducted in spring, 2012 to test a conceptual model of online information disclosure in social media. It shows that young Chinese SNS users’ prior negative experience of online disclosure significantly increased their online privacy concerns and their perceived risk. Their online privacy concerns undermined their trust of online companies, marketers and laws to protect privacy and elevated their perceived risk. Their trust strongly predicted their intent to disclose the lifestyle and sensitive information. Their online privacy concerns only inhibited them from disclosing sensitive information in social media. However, their prior negative experience did not directly predict their intent of self-disclosure on SNS. Implications for academia and industry are discussed. Keywords:
Chinese Consumers, Online Disclosure, Online Privacy Concerns, Prior Negative Experience, Risk, Trust, Social Media Use
INTRODUCTION Consumers’ willingness to disclose truthful personal information online underwrites the continuing success of Chinese social networking sites (SNS) such as Qzone and Renren.com. As we know, SNS make huge profits by utilizing the users’ profiles, status updates, social connections and their friends’ recent activities for
advertising and marketing purposes (Quinn, 2010). SNS allow advertisers to tailor their ads more effectively and target to social media users more precisely, especially those who expressed interests or liked their brands or products on SNS. As a result, Tencent became the world’s third largest Internet company, after Google and Amazon, with the revenues of $1.8 billion in 2009, including over $144 million in ad
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24 International Journal of E-Business Research, 10(2), 23-44, April-June 2014
revenue and net profit of $760 million, capitalizing on 637 million registered users of its social networking site Qzone (Madden, 2011). By the end of 2011, Chinese users of social networking websites reached 244 million, or 47.6% of Chinese Internet users (CNNIC, 2012). DCCI (2011) predicts that Chinese marketers will increase their advertising spending on social media from 1,730 million yuan ($279 million) in 2011 to 4,160 million yuan ($671 million) in 2013. However, the inappropriate use and weak security of consumers’ online data on SNS will raise their online privacy concerns, undermine their trust, increase their risk perceptions, curb consumers’ enthusiasms of sharing valuable personal information online, diminish the effectiveness of targeted ads on SNS, and attract regulators’ attention. Few Chinese commercial websites have realized the importance of gaining Internet users’ trust by conspicuously announcing and strictly implementing their online privacy policies. Only 2 per cent of the Top 1500 Chinese websites, 8 per cent of the Top 100 commercial websites and 4 per cent of the Top 100 B2C websites seem to comply with the FTC (1998) four fair information practice principles of (1) Notice/awareness, (2) Choice/ consent, (3) Access/participation, and (4) Integrity/security (Kong, 2007). One of the biggest Chinese online security firms warn Internet users that the SNS have become the major culprit of abusing online privacy and the SNS users will have to deal with many privacy security risks when using social networking services (Rising, 2009). Among other things, SNS themselves are vulnerable to various attacks from hackers and cyber predators who covet subscribers’ personal data because security, access controls, and privacy are weak by design on most SNS (Rising, 2009; Shin, 2010). Consequently, young Chinese Internet users have exhibited a very high level of online privacy concerns (Yao & Zhang, 2008). Research also shows that Chinese social media users have expressed low acceptance of all kinds of display ads on SNS with only 30% of them approving and 10% ever clicking on them (CNNIC, 2009). To protect
Chinese citizens’ online privacy, the People’s Congress has been working on a national law after it passed the Tort Liability Law specifically listing Chinese citizens’ right to privacy in 2010. Many Chinese scholars believe that the Tort Liability Law can be evoked to protect Chinese Internet users’ online privacy (e.g., Ma, 2011; Xu & Luo, 2010). Observers also raised the concerns that Chinese new privacy law might be more stringent than Western privacy laws (e.g., Antisdel & Ghalayini, 2011). Sooner or later, Chinese government will enforce new privacy laws and regulations in social media. Adolescents and young adults are the heaviest users of SNS in China but little is known about how their prior negative experience of online disclosure influences their willingness to disclose personal information on SNS. Chinese SNS boast more than 124,000,000 subscribers, 52.6% of whom are young people ages 20-29, 50.33% of whom are students, and 59.1% of whom had some college education (CNNIC, 2009). Previous Chinese studies mainly focus on discussing business models/strategies of social networking websites (e.g., R. Sun, 2010; Wang, 2011), investigating the motives behind Chinese consumers’ SNS use (e.g., Liang, Li, Wang, & Di, 2011; Xu & Zhao, 2011) and examining the effectiveness of marketing communications on SNS (e.g., J. Sun, 2010; Wang & Wu, 2010). Almost no empirical research has examined the impact of prior negative experience of online disclosure on Chinese consumers’ willingness to disclose personal information on SNS, mediated by online privacy concerns, risks, trust, and SNS use. Due to limited research, social media companies, interactive marketers and regulators are not sure whether they need to take appropriate measures to protect Chinese consumers’ online privacy, reduce their online privacy concerns, minimize their privacy risks, and gain their trust so as to guarantee the continued effectiveness of social media marketing and safeguard the order of conducting e-commerce in social media. They lack knowledge regarding whether gaining SNS users’ trust and mitigating their risks will lead to more disclosure of truthful
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International Journal of E-Business Research, 10(2), 23-44, April-June 2014 25
and valuation personal information on SNS. It will also be helpful for them to learn how to encourage SNS users to reveal more personal identifying, lifestyle and even sensitive information. To answer these questions, this study attempts to construct and test a conceptual model of disclosing personal information in social media, based on the extensive review of literature and social contract theory.
THEORETICAL FRAMEWORK Social Contract Theory Social contract theory can help us explain the relationship of young SNS users’ prior negative experience, online privacy concerns, perceived risk, trust, social media use, and intent to disclose personal information online. Social contract theory was applied by many direct marketing scholars to examine consumers’ privacy concerns in both offline and online contexts in developed countries (e.g., Culnan & Bies, 2003; Malhotra, Kim, & Agarwal, 2004; Phelps, Nowak, & Ferrell, 2000; Okazaki, Li, & Hirose, 2009). Moreover, Dunfee and Warren (2001) used social contract theory to examine ethical implications of Guanxi or connection for doing business in China. Chinese scholars also suggest that the social contracts approach to business could help Chinese firms gain consumers’ trust and build brand equity (e.g., Hou, 2010; Lin, 2004). Consumers’ exchange of personal information with marketers can be considered as an implied social contract (e.g., Culnan, 1995; Dunfee, Smith, & Ross, 1999; Milne, 1997; Milne & Gordon, 1993). From this perspective, a social contract is formed whenever a consumer provides a marketer with personal information on the Internet in exchange for any incentive (including free convenient services of social networking websites). The consumer expects that their personal information will be managed responsibly. The implied contract will be regarded as “fair” if the marketer complies with FTC’s five fair information practice principles, and the consumer has reasonable control over
their personal information collected by the marketer (Culnan, 1995). The contract will be breached by the marketer if consumer’s personal information is collected without his knowledge or consent, if the consumer’s personal information is provided to a third party without permission, if the consumer’s personal information is used for any other purpose not agreed upon by the consumer, if the accuracy of the consumer’ personal data is not safeguarded, if the consumer is not offered an opportunity to opt out, or if the consumer is not informed of the firm’s privacy policy (Phelps et al., 2000). So, when none of the above improper behavior occurs, consumers’ privacy is protected but will be invaded when any aforementioned incident occurs (Milne & Gordon, 1993). Similarly, Malhotra and associates (2004) argue that a marketer’s online collection of consumer personal information is considered “fair” if only the consumer is given control over the information and the consumer is informed of how the information will be used for what purpose. This study assumes that most Chinese consumers would like to have more control and their privacy concerns will be raised after losing the control over how information about them is collected and used (Phelps et al., 2000). Any prior negative experience of online disclosure will be considered the breach of an implied social contract for young Chinese consumers. Accordingly, their online privacy concerns will be increased, their risk of online disclosure heightened, and their trust undermined. Consequently, they will be more reluctant to disclose three types of personal information in social media.
Online Information Privacy Concerns For this study, online information privacy can be regarded as the legitimate claim of Chinese individuals, groups, or institutions to determine for themselves when, how, and to what extent information about them is communicated to others on the Internet (Westin, 1967). Previous Western studies of direct marketing identified
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26 International Journal of E-Business Research, 10(2), 23-44, April-June 2014
at least six major aspects of consumers’ privacy concerns: collection (e.g., Smith et al., 1996; Stewart & Segars, 2002), unauthorized secondary use (e.g., Smith et al., 1996; Stewart & Segars, 2002), improper access, errors (Smith et al., 1996; Stewart & Segars, 2002), control, and awareness of privacy practices (Malhotra, Kim, & Agarwal, 2004). The present study conceptualizes Internet users’ online information privacy concerns as the degree to which an Internet user is concerned about online companies’ collection of personal information, the unauthorized secondary use, improper access, and error of one’s online data. As Smith and associates (1996) suggest, Collection becomes consumers’ concern when they perceive that “extensive amounts of personally identifiable data are being collected and stored in databases.” Consumers are also concerned about Unauthorized secondary use, that it, “information is collected for one purpose but is used for another, secondary purpose.” Improper access bothers consumers when “data about individuals are readily available to people not properly authorized to view or work with this data.” Consumers also worry about Error because “protections against deliberate and accidental errors in personal data are inadequate” (p. 172). Smith and associates (1996) developed a scale to measure these dimensions and validated it across the populations of students, consumers, and professionals. The validity and reliability of this instrument have been tested by subsequent empirical studies (e.g., Milberg, Smith, & Burke, 2000; Rose, 2006; Stewart & Segars, 2002). Further research also supported unauthorized secondary use, improper access and error as legitimate consumers’ online privacy concerns (e.g., Janda & Fair, 2004; Metzger & Doctor, 2003; Sheehan & Hoy, 2000; Shin, 2010). Recently, Yang’s (2011) study shows that Smith et al.’s (1996) CFIP scale outperformed Malhotra et al.’s (2004) IUIPC scale when measuring young American Internet users’ information privacy concerns. Moreover, several empirical studies have adopted Smith and colleagues’ (1996) scale to measure Chinese Internet users’ online
information privacy concerns satisfactorily (e.g., Hsu, 2004; Lowry, Cao, & Everard, 2011; Yao & Zhang, 2008). Hence, Chinese Internet users’ online information privacy concerns will be treated as a four-dimensional construct and a second-order factor as did previous scholars (e.g., Stewart & Segars, 2002; Malhotra, Kim, & Agarwal, 2004; Okazaki, Li, & Hirose, 2009).
The Consequences of Prior Negative Experience Previous studies have shown that prior negative experience in personal information disclosure might significantly increase consumers’ information privacy concerns in both online and offline contexts (e.g., Bansal et al., 2010; Okazaki et al., 2009). After a prior negative experience of online disclosure, consumers perceive that an implied social or psychological contract has been breached by online companies or Internet marketers. Consequently, dissatisfied consumers feel riskier providing personal information online and they will be less likely to trust that online companies or Internet marketers will handle their disclosed online data in good faith. Research also shows that prior negative experience of online privacy invasion can not only heighten consumers’ risk perception of online disclosure directly (e.g., Bansal et al., 2010) but also undermine their trust in online companies or Internet marketers or laws to protect online privacy (Yang, 2012). Consumers’ online privacy concerns are often treated as barriers to consumer’s participation in Internet marketing and e-commerce (e.g., Cho & Cheon, 2004; Sheehan & Hoy, 1999). Studies show that Internet users will take coping measures to address their heightened privacy concerns after they find that an implied social contract is breached by SNS (e.g., Son & Kim, 2008). Among other things, when Internet users perceive that their personal information is mishandled, they will refrain from patronizing these SNS. Chen, Xu and Mao (2010) showed that Chinese Internet users are less likely to disclose truthful and sensitive personal information on SNS if their privacy risk is high. Yang
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International Journal of E-Business Research, 10(2), 23-44, April-June 2014 27
(2011) found that American college students’ prior negative experience of online disclosure not only significantly increased their online privacy concerns but also reduced their time spent on SNS. So, it is possible that, when young Chinese consumers find that online companies have mishandled their online personal information, they will refrain from disclosing truthful personal information on SNS and patronizing these social networking websites. Therefore, the following hypotheses are proposed: H1: Young Chinese Internet users’ prior negative experience of online disclosure will significantly (a) increase their online information privacy concerns, (b) increase their perceived risk of online disclosure, and (c) undermine their trust of online companies, marketers and laws to protect privacy. H2: Young Chinese Internet users’ prior negative experience of online disclosure negatively predicts their intent to disclose (a) lifestyle information, (b) personal identifying information, and (c) sensitive information on SNS. H3: Young Chinese Internet users’ prior negative experience of online disclosure will reduce their time spent on social networking websites.
Online Privacy Concerns, Perceived Trust and Risk Perceived trust of online disclosure is conceptualized as the degree to which Internet users believe that online companies and marketers will use their personal data properly and the laws will protect their online privacy (Merisavo et al., 2007). In addition, Internet users reasonably expect that online companies and marketers will abide by privacy laws to safeguard their disclosed personal data. From a social contract perspective, when parties involve in a contractual relationship, one party must assume that the other will act responsibly to fulfill its promises (Okazaki et al., 2009). In this sense, consumers
often give online companies a confidence vote before providing their personal information. However, their heightened online privacy concerns can undermine their trust. Studies show that Internet users’ privacy concerns negatively influence their trust in websites (e.g., Metzger, 2004) but addressing consumers’ online privacy concerns helps build their trust of online companies (e.g., Rifon, LaRose, & Choi, 2005). Other studies also reveal that consumers’ information privacy concerns seriously undermine their trust in online companies’ commitment to protect their personal information (e.g., Malhotra et al., 2004) and their trust in mobile advertisers’ proper handling of their personal information (Okazaki et al., 2009). Similarly, Chinese empirical studies found that proper protection of online privacy could build Chinese consumers’ trust of commercial websites (e.g., Zhang, 2008; Wang, 2008). The opposite should be true too. Hence, it is posited that: H4: Young Chinese Internet users’ online privacy concerns will negatively affect their trust in online companies, marketers and laws to protect their online privacy. Perceived risk refers to the expectation that a high potential for loss is associated with disclosing personal information to online companies and marketers (Malhotra et al., 2004). Because of the impersonal and distant nature of e-commerce and online marketing, Internet users feel at the risk that online companies will behave in an opportunistic manner by mishandling their personal information. In addition, considering various security threats to online companies’ databases, Internet users are also uncertain whether their personal information will be leaked, breached, or stolen by hackers (Pavlou, 2003). Western studies show that consumers’ perceived risk will be exacerbated by their elevated information privacy concerns (e.g., Malhotra et al., 2004; Okazaki et al., 2009). Correspondingly, Chinese scholars identified online privacy concerns as an important dimen-
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28 International Journal of E-Business Research, 10(2), 23-44, April-June 2014
sion of Internet users’ perceived risks of engaging in e-commerce activities (e.g., Jing, Zhou, & Wang, 2007; Yang, Qian, & Pang, 2011). It is reasonable to assume that: H5: Young Chinese Internet users’ online privacy concerns will increase their perceived risk in providing personal information on the web. Previous studies document that trust plays a central role in determining consumers’ risktaking behaviors such as online purchasing and disclosing personal information to Internet marketers (e.g., Pan, Zhang, & Gao, 2010; Sirdeshmukh, Singh, & Sabol, 2002; Yu & Song, 2005). Research also suggests that consumers’ trust can mitigate their perceived risk of disclosing personal information to direct marketers and conducting online transactions and thus reduce consumers’ uncertainty of participating in ecommerce and interactive marketing activities (McKnight et al., 2002; Malhotra et al., 2004; Pavlou, 2003; Okazaki et al., 2009). Chinese studies corroborate that online consumers’ perceived risk and trust are negatively related (e.g., Chen, Xu, & Mao, 2010; Yang, Qian, & Pan, 2011; Zhao & Ji, 2010). More relevantly, Chen et al. (2010) found perceived trust of SNS significantly mitigated consumers’ perceived privacy risk. If young Chinese Internet users trust that online companies, marketers and laws can protect their online privacy, they would feel safer to disclose personal information on SNS. So, it is formulated that: H6: Young Chinese Internet users’ trust in online companies, marketers and laws to protect their online privacy will significantly decrease their perceive risk of disclosing personal information online.
Predicting Online Self-Disclosure Although the sensitivity of personal information varies by persons and by contexts, and there is no consensus on how to differentiate personal
data, studies on online self-disclosure of consumers show that the sensitivity of consumer information can increase their online privacy concerns (Andrade, Kaltcheva, & Weitz, 2002; Lwin, Wirtz, & Williams, 2007; Sheehan, 1999) and reduce their willingness to disclose personal information online (Cranor, Reagle, & Ackerman, 1999; Gupta, Iyer, & Weisskirch, 2010; Phelps et al., 2000). Generally, consumers are most willing to provide their demographic data, less willing to provide their lifestyle and purchasing information, and least willing to provide personal identifiable information and sensitive information about their finances and medical records (Cranor et al., 1999; Gupta et al., 2010; Phelps et al., 2000). Therefore, this study intends to examine three types of personal information that consumers are less likely to disclose online: lifestyle information including one’s product/brand preferences, interests, hobbies, and purchasing habits; personal identifying information including one’s name, email address, and telephone number; and sensitive personal information such as medical records, financial situations, and national ID number. It is very likely that the sensitivity of disclosed information moderates the influence of online privacy concerns, trust and risk on their intent to divulge personal information on SNS. To address heightened online privacy concerns, consumers from different cultures will adopt passive or proactive measures to protect their online privacy. U.S. studies have found a consistently positive relationship between the level of privacy concerns and protection behaviors (Lwin et al., 2007; Sheehan & Hoy, 1999; Son & Kim, 2008; Wirtz et al., 2007; Yang, 2012). The same relationship was identified in Australia, India, South Korea, and Singapore (Cho, Rivera-Sánchez, & Lim, 2009). These online privacy protection measures include refusing to provide personal information, asking to remove personal information, and falsifying personal information (Son & Kim, 2008). More studies have identified a negative correlation between online privacy concerns and their willingness to disclose personal information
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International Journal of E-Business Research, 10(2), 23-44, April-June 2014 29
to websites (e.g., Joinson, Reips, Buchanan, & Shofield, 2010; Pan & Lieber, 2010; Stutzman, Capra, & Thompson, 2011). Thus, we assume that: H7: Young Chinese Internet users’ online privacy concerns negatively predict their intent disclose (a) lifestyle information, (b) personal identifying information, and (c) sensitive information on SNS. Studies indicate that trust can be built to reduce consumers’ perceived risk of engaging in ecommerce and Internet marketing (e.g., Comegys, Hannula, & Väisänen, 2009; Pavlou, 2003). Research also shows that consumers’ trust positively reinforces their willingness of self-disclosure (Joinson et al., 2010; Malhotra et al., 2004; Metzger, 2004; Rifon et al., 2005). Similarly, Chinese studies demonstrate that consumers’ online trust positively influences their intent to adopt online shopping (Han & Liu, 2009; Pan et al., 2010; Yu & Song, 2005; Zhang, 2008). Chinese research also reveals that consumers’ trust positively influences their intent to disclose personal information on SNS, perceived usefulness of SNS, and participation on SNS (e.g., Guo, Shim, & Otondo, 2010; Wu, Huang, Yen, & Popova, 2012). If Chinese online companies and Internet markers act responsibly and comply with selfregulatory rules, they will honor the implied social contract with consumers and gain consumer trust. In turn, Chinese consumers will be more likely to trade their personal information for many convenient benefits of SNS and to spend more time on SNS. So, this study expects that: H8: Young Chinese Internet users’ trust in online companies, marketers and laws to protect online privacy positively predicts their intent to disclose (a) lifestyle information, (b) personal identifying information, and (c) sensitive information on SNS.
Chinese Internet users with heightened risk of online disclosure will be more likely to withhold three types of personal information on SNS and reduce their usage accordingly. Because of open and easy access to SNS, their users take many risks including personal communication being publicly disseminated, personal information and images being divulged and hacked, and unauthorized use of personal information by third parties (Rising, 2009; Rosenblum, 2007). Previous studies indicate that perceived risk inhibits Internet users from engaging in online transactions and marketing activities (Comegys et al., 2009; Pavlou, 2003). Similarly, when consumers are not sure that online companies will honor their implied social contract to guarantee the safety and proper use of their online personal information, their perceived risk will increase and they will refrain from disclosing personal information on SNS. Western researchers found that perceived risk negatively predicted Internet users’ willingness to disclose personal information to online companies and marketers (LaRose & Rifon, 2007; Malhotra et al., 2004; Myerscough et al., 2006; Norberg et al., 2007; Olivero & Lunt, 2004). Chinese scholars also found that perceived risk restrained online consumers from participating in e-commerce activities (e.g., Tan, Wu, & Liu, 2008; Zhao & Ji, 2010) and from divulging personal information online (e.g., Chen et al., 2010). One of the most important motives of using SNS is to exchange personal information with friends (Ellison, Steinfield, & Lampe, 2007; Subrahmanyam, Reich, Waechter, & Espinoza, 2008). When Internet users find it very risky to disclose personal information online, they will be less likely to reveal lifestyle, personal identifying, and sensitive information on SNS. Therefore, this study proposes that: H9: Young Chinese Internet users’ perceived risk of disclosing personal information online negatively predicts their intent to disclose (a) lifestyle information, (b) personal identifying information, and (c) sensitive information on SNS.
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30 International Journal of E-Business Research, 10(2), 23-44, April-June 2014
Social Media Use and Online Self-Disclosure There is a quite consistent finding in the evergrowing literature of social media research that SNS are used to maintain offline relationships with friends, relatives, colleagues and other acquaintances (Boyd & Ellison, 2007; Chu & Choi, 2010; Subrahmanyam et al., 2008). Heavy Internet and SNS users commonly have more offline social ties (Marshall et al., 2009). Naturally, heavy SNS users feel free to share all kinds of personal information with friends and relatives in social media. In addition, frequent SNS users tend to have more trust in SNS if they believe that online companies and marketers have honored the implied contract. Accordingly, they will feel more uninhibited to disclose their personal information on SNS. Actually, studies show that SNS users hold favorable attitudes toward SNS and have higher trust in SNS than non-users (Fogel & Nehmad, 2009; Paek, Bae, Hove, & Yu, 2011). Research also shows that frequent Chinese SNS visitors tend to participate actively in online discussion of hot topics, chatting with friends, posting comments, and sharing photos, videos and other resources (CNNIC, 2009). Hence, it is expected that: H10: Young Chinese Internet users’ social media use will positively predict their intent to disclose (a) lifestyle information, (b) personal identifying information, and (c) sensitive information on SNS.
METHOD In spring 2012, cooperating professors administered paper surveys at 5 public universities in Beijing, China. The college student sample is suitable for this study considering that 52.6% of SNS users are young adults aged 20-29, 72.9% of whom are Internet users in China (CNNIC, 2009; CNNIC, 2012). Students were the primary samples (44.7%) in 219 social media studies in advertising, communication, marketing, and
public relations from 1997-2010 published in top journals in these fields (Khang, Ki, & Ye, 2012). The survey questionnaire was translated into Chinese by the first author and back translated by a professor into English to check content validity. The English survey consists of 38 questions including an open ended question about their daily time spent on SNS, a 4-item scale of Internet users’ prior negative experience (Cho et al., 2004), Smith et al.’s (1996) 15item scale of concerns for information privacy (CFIP), Merisavo et al.’s (2007) 3-item scale of Internet users’ trust, Malhotra et al.’s (2004) 5-item scale of perceived risk, three measures for behavioral intent to disclose three types of personal information (Andrade et al., 2002), and demographic questions. Most measures are 5-point Likert scales except social media use and demographic questions (See Appendix). With SPSS-19 and AMOS-19, the survey data set was subject to statistical analyses including confirmatory factory analysis, principal axis factoring analysis, structural equation modeling, and multiple regression.
RESULTS 489 college students voluntarily participated in our survey. The descriptive statistics of respondents are reported in Table 1. The majority of participants are females. Most of them are very young (99% of them aged 17-28). Their family annual income seems to be normally distributed and slightly skewed to the lower income brackets. Similarly, their personal monthly income is evenly distributed. On average, Chinese college students spend 138.7 minutes on SNS daily. Table 2 shows the means, standard deviations and independent samples t test results by gender of key constructs. There are some significant differences of independent and dependent variables across gender. Female participants are more concerned about online information privacy and perceive higher risk of disclosing online than their male counterparts. Male respondents are more trusting in online
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International Journal of E-Business Research, 10(2), 23-44, April-June 2014 31
Table 1. Descriptive statistics of Chinese respondents (N = 489) Gender
Male
Female
24.1%
75.9%
Age
Chinese Family Income (SES)
Mean
SD
20.26
1.76
Chinese Personal Income
< 24,000 yuan
15.1%
< 300 yuan
24.9%
24,001 – 36,000 yuan
15.1%
301 – 600 yuan
13.3%
36,001 – 48,000 yuan
19.6%
601 – 900 yuan
16.8%
48,001 – 60,000 yuan
13.3%
901 – 1200 yuan
23.1%
60,001 - 72,000 yuan
10.8%
1201 - 1500 yuan
13.3%
> 72,000 yuan
26.0%
> 1500 yuan
8.6%
(Minutes)
Mean
SD
Median
Mode
Range
Social Media Use
138.7
132.03
120
60
0-720
companies, Internet marketers and laws to protect their online privacy and so more likely to divulge their sensitive personal information on SNS. Table 3 presents Cronbach coefficients (α) of 8 adapted scales and the results of exploratory factor analyses (principle axis factoring with varimax rotation). A liberal minimum require-
ment for scale reliability is 0.60 (Peter, 1979), while some scholars recommended a stricter minimum requirement of 0.70 (e.g., Nunnally & Bernstein, 1994). Therefore, six scales’ performance can be considered quite satisfactory and two scales’ reliability is acceptable. In addition, all scales yielded the extracted variance
Table 2. Means, standard deviations, and t test results of key constructs Construct
Mean
SD
Male
SD
Female
SD
t
df
p
Prior experience (4 items)
12.01
2.92
11.74
3.30
12.10
2.79
-1.09
174
.28
Privacy concerns (15)
59.36
9.28
55.95
10.94
60.45
8.42
-4.10
163
.00**
Perceived trust (3)
8.78
2.46
9.29
2.68
8.62
2.37
2.42
179
.02*
Perceived risk (5)
18.61
3.17
17.72
3.77
18.89
2.90
-3.08
163
.00**
Disclosure intent1 (1)
3.70
1.08
3.58
1.05
3.73
1.09
-1.30
203
.19
Disclosure intent2 (1)
3.57
1.12
3.64
1.19
3.54
1.10
.81
185
.42
Disclosure intent3 (1)
2.39
1.24
2.80
1.20
2.26
1.22
4.19
200
.00**
Note: SD = Standard Deviation. IUIPC = Internet Users’ Information Privacy Concerns. CFIP = Concern for Information Privacy. Total N = 489. Female N = 371. Male N = 118. Independent samples t test by gender (equal variances not assumed). * p < .05, ** p < .01.
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32 International Journal of E-Business Research, 10(2), 23-44, April-June 2014
Table 3. Mean scores, scale reliability and EFA results Construct
Mean
Cronbach α
Variance explained
Prior negative experience
3.00
.659
51.0%
Collection (CFIP subscale)
3.89
.814
64.6%
Secondary use (CFIP subscale)
4.26
.910
78.8%
Improper access (CFIP subscale)
4.21
.885
81.3%
Error (CFIP subscale)
3.54
.885
74.5%
Concern for Information Privacy (CFIP)
3.96
.915
72.0%
Perceived trust
2.93
.673
63.0%
Perceived risk
3.72
.743
56.2%
Note. CFIP = Concern for Information Privacy. Variance Explained = Extraction sums of squared loadings of principal axis factoring. N = 489.
above the 0.50 recommended level (Fornell & Larcker, 1981). A confirmatory factor analysis demonstrates that the CFIP measurement model fits the survey data very well: χ2 = 220.44, df = 83, p < .01; Normed χ2 = 2.66; RMSEA = 0.058; TLI = 0.965; CFI = 0.972. It has excelled on four conventional standards: the normed chi-square (the model chi-square divided by the degree of freedom) in the 2:1 or 3:1 range (Carmines & McIver, 1981), the Root Mean Square Error of Approximation (RMSEA) ≤ .06, Tucker-Lewis Index (TLI) ≥ .95, and Comparative Fit Index (CFI) ≥ .90 (Hu & Bentler, 1999; Schumacker & Lomax, 2004). Therefore, the CFIP model is considered a satisfactory measure of young Chinese Internet users’ online privacy concerns, and included in further analyses. The maximum likelihood method of structural equation modeling was adopted to fit the proposed research model to the survey data. Figure 1, 2 and 3 present three tested structural models with standardized path estimates and critical ratios while Table 4 displays the model testing results. Three research models have achieved satisfactory fit for young Chinese Internet users’ behavioral intent to disclose three types of personal information on SNS. Three normed
chi-square values fall between 2:1 and 3:1 (Carmines & McIver, 1981), three RMSEA values are smaller than the recommended cutoff value of .06, and three comparative fit indexes are above .90 (Hu & Bentler, 1999; Schumacker & Lomax, 2004). Three TLI’s are over .90 but a little below .95 probably because TLI penalizes the complexity of a tested model. In addition, Marsh, Hau and Wen (2004) argue that the cutoff value of .95 for the TLI is probably too stringent for hypothesis testing. Thus, the fitness of three models is considered good. The path estimates shown in Figure 1, 2 and 3 supported Hypothesis 1a and 1b. Young Chinese Internet users’ prior negative experience strongly increased their online information privacy concerns and their risk perceptions. However, it did not undermine their trust. So, H1c was rejected. Both H2 and H3 were not supported. Their prior negative experience did not directly predict their intent to disclose three types of personal information and their SNS use. Three significant, negative path estimates supported Hypothesis 4. Young Chinese Internet users’ online privacy concerns seriously hurt their trust and greatly heightened their perceived risk. Thus, Hypothesis 5 was strongly supported. Interestingly, young Chinese Internet users’ trust could not mitigate their perceived risk, as
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International Journal of E-Business Research, 10(2), 23-44, April-June 2014 33
evidenced by three insignificant path estimates from trust to risk. Therefore, Hypothesis 6 was rejected. Hypothesis 7 proposes that young Chinese Internet users’ online privacy concerns would negatively predict their intent to disclose three types of personal information on SNS. Results show that their online privacy concerns did not inhibit them from divulging lifestyle and personal identifying information but restrained them from revealing sensitive information on SNS. Hence, H7c was supported while H7a and H7b were disconfirmed. H8a and H8c were both confirmed while H8b was marginally supported. Young Chinese Internet users’ trust positively influenced their intent to disclose lifestyle and sensitive information on SNS while moderately predicting their intent to disclose personal identifying information. Surprisingly, young Chinese Internet users’ perceived risk had no significantly negative influence on their intent to reveal lifestyle, personal identifying, and sensitive information on SNS. Thus, H9a, H9b and H9c were all rejected. H10b was confirmed, H10a was marginally supported but H10c was disconfirmed. Young Chinese Internet users’ SNS use positively predicted their intent to disclose personal identifying information, and moderately influenced their intent to reveal lifestyle information but did not affect their intent to disclose sensitive information. To determine possible influences of demographic variables, three multiple regressions were run against the intent to disclose three types of personal information on SNS. The results are presented in Table 5. Corroborating the findings of previous independent samples t tests, gender negatively predicts young Chinese consumers’ intent to disclose sensitive information on SNS. Their family annual income emerged as a significant predictor of their intent to reveal lifestyle information on SNS.
DISCUSSION AND IMPLICATIONS This study shows that social contract theory is applicable to marketing and information management in Chinese social media after it has satisfactorily tested three research models of the influence of the prior negative experience on young Chinese Internet users’ intent to disclose personal information on SNS, mediated by online privacy concerns, trust, risk and SNS use. Three causal models reveal that the consequences of young Chinese SNS users’ prior negative experiences of online disclosure are not immediate and direct. However, they can cause serious repercussions on young Chinese consumers’ online privacy concerns and perceived risk of online disclosure, which in turn predict their intent to disclose on SNS. These relationships provide valuable consumer insights and have significant theoretical and practical implications for social media researchers, online companies, interactive marketers, and policy makers. The study shows that Smith et al.’s (1996) CFIP scale can be adopted to measure young Chinese SNS users’ online information privacy concerns. It suggests that the CFIP scale possesses considerable cross-cultural validity, given that it was validated by several Western studies before (e.g., Milberg et al., 2000; Rose, 2006; Stewart & Segars, 2002). Results indicate that young Chinese Internet users are very worried about collection of personal information, unauthorized secondary use, improper access to the collected online data or security, and inaccuracy of online personal database. Both the industry and academia should be clearly aware that current young Chinese Internet users are very much concerned about their online privacy. When addressing young Chinese SNS users’ online information privacy concerns, interactive marketers and social media companies should provide the appropriate notice or warning about their practices of collecting personal information online. In addition, SNS operators should assure SNS users that they have fortified their website security to prevent
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34 International Journal of E-Business Research, 10(2), 23-44, April-June 2014
Figure 1. Structural equation model 1 with standardized path estimates. Note. Significance of the path estimates are shown in parentheses (critical ratio). *p < .05, **p < .01, ns = not significant. Model fit: χ2 = 916.32, df = 358, p < .01; RMSEA = 0.057; TLI = 0.916; CFI = 0.926
unauthorized secondary use of their users’online personal data and improper access to their collected online data. They should also allow SNS users to check the accuracy of online personal data and to update their personal profiles in a timely and effortless manner. This study discovers that young Chinese Internet users’ prior negative experience of online disclosure will drastically increase their online information privacy concerns and risk perceptions. These findings are consistent with previous studies (e.g., Bansal et al., 2010; Okazaki et al., 2009; Sheehan & Hoy, 1999; Son & Kim, 2008; Yang, 2011). Apparently, the breach of implied social contract will have some immediate effects on young Chinese consumers. Social networking websites owners, operators and online marketers should act responsibly when they try to monetize subscribers’ profiles by targeting ads to them or supplying their data to third parties. Once these subscribers perceive
the mishandling of their online data, their online privacy concerns will be exacerbated. Consequently, they might adopt some kind of online privacy protection behaviors such as falsifying personal information on SNS (Son & Kim, 2008). However, their prior negative experience could not refrain them from disclosing three types of personal information on SNS. It can be partly explained by the fact that a majority of them (58.8%) had not yet fallen victim to the invasion of online privacy (group mean = 3 on the scale of 1-5). Another reason is that a majority of Chinese Internet users usually register on SNS with pseudonyms (DCCI, 2011), which might protect them against online privacy invasion. The results demonstrate that young Chinese Internet users’ online privacy concerns can intensify their perceived privacy risk and undermine their trust. To make it worse, their
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International Journal of E-Business Research, 10(2), 23-44, April-June 2014 35
Figure 2. Structural equation model 2 with standardized path estimates. Note. Significance of the path estimates are shown in parentheses (critical ratio). *p < .05, **p < .01, ns = not significant. Model fit: χ2 = 925.97, df = 358, p < .01; RMSEA = 0.057; TLI = 0.914; CFI = 0.925
perceived risk cannot be mitigated by their trust. The findings validate the influence of consumers’ online privacy concerns on trust and risk evidenced by previous studies (e.g., McKnight et al., 2002; Malhotra et al., 2004; Pavlou, 2003; Okazaki et al., 2009) but the relationship of trust and risk in the present study is inconsistent with the current literature. Online companies and marketers in China should improve their communication strategies to increase Internet users’ awareness of their online information privacy policies and to minimize their online privacy concerns. Both advertising and public relations techniques should be utilized to build a trustworthy reputation in terms of online information privacy to minimize negative media coverage on SNS privacy issues. Responsive and proactive customer relationship management (CRM) is strongly advised to encourage the continued use of current SNS users and attract more new
subscribers. A competent CRM team should closely monitor negative comments of dissatisfied SNS users and make necessary adjustments immediately. This study found that young Chinese Internet users’ trust enhanced their intent to disclose personal identifying, lifestyle and sensitive information. However, their heightened risk did not weaken their intent to reveal the three types of information on SNS. These findings are consistent with the trust literature (e.g., Guo et al., 2010; Joinson et al., 2010; Malhotra et al., 2004; Metzger, 2004; Rifon et al., 2005) but at odds with the risk studies (e.g., LaRose & Rifon, 2007; Malhotra et al., 2004; Myerscough et al., 2006; Norberg et al., 2007; Olivero & Lunt, 2004; Zhao & Ji, 2010). The mixed results can be explained partly by young Chinese consumers’ low initial trust and high risk perceptions.
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36 International Journal of E-Business Research, 10(2), 23-44, April-June 2014
Figure 3. Structural equation model 3 with standardized path estimates. Note. Significance of the path estimates are shown in parentheses (critical ratio). *p < .05, **p < .01, ns = not significant. Model fit: χ2 = 926.89, df = 358, p < .01; RMSEA = 0.057; TLI = 0.915; CFI = 0.925
Therefore, online companies and Internet marketers should take proper measures to gain young Chinese SNS users’ trust. Even with their high risk perceptions and privacy concerns, many are willing to disclose their lifestyle and personal identifying information on SNS. Given adequate privacy assurance, more Chinese SNS users will open up and patronize SNS frequently so that targeted marketing communications in social media will be more relevant and effective. Social commerce will flourish only when Internet users trust SNS enough to engage in online shopping by providing their financial information. For starters, online companies and marketers can disclose their online privacy policy conspicuously on their websites, before or after Internet users provide their personal information (Miyazaki, 2008). Online companies and marketers can also gain consumers’ trust and reduce their perceived risk by seeking a privacy seal from third party institutions such as Beijing EC Trust Center and PayPal (Han & Hu, 2009;
Xiao & Han, 2011). Finally, online companies should consider employing public relations and cause-related marketing activities to build a good reputation that positively influences online consumers’ trust (Wang, 2008; Zhang, 2010). On the other hand, government and consumer advocacy groups should continue to remind young Chinese SNS users of the dangers of disclosing sensitive personal information such as national ID and bank account numbers online as it seems that young Chinese SNS users are not quite risk-averse in doing so on SNS. For concerned parents, educators, consumer advocacy groups, and government, it offers some comfort that young Chinese consumers’ SNS use did not predict their intent to disclose sensitive information, whereas it is a blessing for online companies and Internet marketers that their SNS use predicted their willingness to reveal lifestyle and personal identifying information. Nevertheless, both industry and government need to work together in China
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International Journal of E-Business Research, 10(2), 23-44, April-June 2014 37
Table 4. Fit indices for three research models in Figure 1 Model
χ2(df)
Nmd χ2
RMSEA
TLI(NNFI)
CFI
Research Model1
916.32(358)*
2.56
0.057
0.916
0.926
Research Model2
925.97(358)*
2.59
0.057
0.914
0.925
Research Model3
926.89(358)*
2.59
0.057
0.915
0.925
Note. RMSEA: root mean square error of approximation, GFI: goodness of fit index, TLI: the Tucker-Lewis index or NNFI: non-normed fit index, CFI: comparative fit index. * p < .01
to curb online privacy misuses and abuses on SNS as frequent users tend to have more prior negative experiences. In light of increasing government scrutiny and future stringent privacy laws in China, online companies and Internet marketers can now argue that as young Chinese SNS users are less likely to divulge their sensitive information on SNS, it is not necessary to impose a stricter government regulation and self-regulation can work effectively. After all, consumers’ lifestyle and personal identifying information is more valuable to online marketers for the purpose of matching relevant ads and promotions with consumer interests and hobbies. However, the unwillingness to provide sensitive information also implies that social media companies have to try harder to convince SNS users to buy a product or service with a
bank card on SNS. To grow social commerce in China, social media companies need to communicate to SNS users that it is safe and secure to disclose any type of personal information on SNS and to conduct any kind of business transaction (including online banking) there. Young Chinese girls exhibited a higher level of online information privacy concerns and risk perceptions so that they were less likely to divulge personal identifying and sensitive information (p < .10) on SNS than young men. It may be explained by the fact that young Chinese men trust online companies, Internet marketers and laws more than their female counterparts. Online companies and Internet marketers need to make more effort to gain and sustain young female SNS users’ trust and to alleviate their risk of online disclosure. It might be more ef-
Table 5. Predictors of intent to disclose three types of personal information online (N = 489)
Gender
Disclosure Intent 1
Disclosure Intent 2
Disclosure Intent 3
β
β
β
ns
-.081†
-.126**
Age
ns
ns
ns
SES (Family income)
.137**
.081†
ns
Personal income
ns
ns
ns
SNS use
ns
.08†
ns
Prior negative experience
ns
ns
.096*
a
Online privacy concerns
.126*
.147*
Perceived trust
.107*
.087†
.257***
Perceived risk
.135*
.149*
ns
Total R
.113
.097
.121
2
Multiple regression results. † p < .10, * p < .05, ** p < .01, *** p < .001, ns = not significant. a Gender: dummy coded as 1 = male, 2 = female.
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38 International Journal of E-Business Research, 10(2), 23-44, April-June 2014
fective and efficient to target to male SNS users when you are trying to recruit early adopters of social commerce. Young Chinese consumers’ family annual income positively predicted their willingness to disclose lifestyle information. It is not surprising as most Chinese college students depend on their parents for tuition and living expenses. Young Chinese consumers from better-off families have means to buy more products and services. Accordingly, they are more likely to discuss consumer experiences on SNS. It suggests that targeted advertisements and promotions on SNS might be more relevant and effective for young Chinese consumers from upper middle class families.
LIMITATIONS AND FUTURE RESEARCH External validity of the current study should be strengthened by future research as the survey data were collected from a large convenience sample of college students at five public universities in Beijing. The participants do not represent China’s college student population very well. As some gender differences were identified, future research should include more male respondents. Finally, a survey study cannot help us infer causality although structural equation modeling can provide supporting evidence for a causal model. Future research could investigate the influence of other factors on social media users’ intent to disclose personal information such as familiarity with entity and compensation. Further studies should also examine whether social media users’ prior negative experience, online privacy concerns, trust and perceived risk influence their privacy protection behaviors including refusal, misrepresentation, removal, negative word-of-mouth, complaining directly to online companies, and complaining indirectly to third-party organizations. It will also be useful to study these topics in a cross-cultural and global context. Experiments should be conducted to determine causality of these variables.
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APPENDIX Table 6. Social media and privacy web survey (selected questions) Social Media Use
1. How much time do you spend on social networking websites (e.g., Facebook, MySpace, LinkedIn, Classmates, etc) on a typical day? _________ hour ______ minutes
Prior negative experience*1
1. I have seen my personal information misused by companies without my authorization. 2. I feel dissatisfied with my earlier choice to provide my personal information to Internet marketers. 3. My experience in responding to Internet advertising is very unsatisfactory. 4. In the past, my decision to provide my personal information to Internet marketers has not been a wise one.
Concern for Information Privacy*2
Collection 1. It usually bothers me when online companies ask me for personal information. 2. When online companies ask me for personal information, I sometimes think twice before providing it. 3. It bothers me to give personal information to so many online companies. 4. I’m concerned that online companies are collecting too much personal information about me. Unauthorized secondary use 1. Online companies should not use personal information for any purpose unless it has been authorized by the individuals who provided information. 2. When people give personal information to an online company for some reason, the online company should never use the information for any other reason. 3. Online companies should never sell the personal information in their computer databases to other companies. 4. Online companies should never share personal information with other companies unless it has been authorized by the individuals who provided the information. Improper access 1. Online companies should devote more time and effort to preventing unauthorized access to personal information. 2. Online companies’ computer databases that contain personal information should be protected from unauthorized access—no matter how much it costs. 3. Online companies should take more steps to make sure that unauthorized people cannot access personal information in their computers. Error 1. Online companies should take more steps to make sure that the personal information in their files is accurate. 2. Online companies should have better procedures to correct errors in consumers’ personal information. 3. Online companies should devote more time and effort to verifying the accuracy of the personal information in their databases. 4. All the personal information in online companies’ computer databases should be doublechecked for accuracy—no matter how much this costs.
Internet users’ perceived risk*3
1. In general, it would be risky to give (the information) to online companies. 2. There would be high potential for loss associated with giving (the information) to online firms. 3. There would be too much uncertainty associated with giving (the information) to online firms. 4. Providing online firms with (the information) would involve many unexpected problems. 5. I would feel safe giving (the information) to online companies (reverse coded).
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44 International Journal of E-Business Research, 10(2), 23-44, April-June 2014
Table 6. Continued Social Media Use
1. How much time do you spend on social networking websites (e.g., Facebook, MySpace, LinkedIn, Classmates, etc) on a typical day? _________ hour ______ minutes
Trust in privacy and laws of Internet advertising*4
1. I believe that my Internet service provider uses my data only for a purpose that I have approved. 2. I believe that an Internet marketer would use my data only for a purpose that I have approved. 3. I believe that consumers’ online data privacy is protected by laws.
Social media users’ intent to disclose online*5
1. How likely would you reveal personal information about your lifestyles (such as product/ brand preferences, interests and hobbies) in social media (e.g. QQ personal space, Renren.com etc.)? 2. How likely would you reveal personal identifying information (such as name, email address, telephone number) in social media (e.g. QQ personal space, Renren.com etc.)? 3. How likely would you reveal sensitive personal information (such as medical information, national ID number) in social media (e.g. QQ personal space, Renren.com etc.)? (1) Very unlikely. (2) Somewhat unlikely. (3) Neutral. (4) Somewhat likely. (5) Very likely.
*The response options ranged from 1, “strongly disagree” to 5, “strongly agree” *1Adapted from Cho and Cheon (2004). *2 Adapted from Smith et al. (1996). *3Adapted from Malhotra, Kim, and Agarwal (2004). *4Adapted from Merisavo et al. (2007). *5 Adapted fromAndrade et al. (2002).
Hongwei “Chris” Yang (Ph.D., Southern Illinois University) is an Associate Professor of Advertising in the Department of Communication at Appalachian State University. Hongwei Yang is keenly interested in marketing and advertising via new media such as Internet, mobile devices, and social media. He has published research in International Journal of Mobile Marketing, Chinese Journal of Communication, Journal of Targeting, Measurement and Analysis for Marketing, Asia Pacific Journal of Marketing and Logistics, Journal of International Consumer Marketing, Journal of New Communications Research, Journal of Consumer Satisfaction, Dissatisfaction, & Complaining Behavior, Journal of Computer Information Systems, and Journal of Asia-Pacific Business.
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