Global e-Business Association

The e-Business Studies - Vol. 17 , No. 5

[ Article ]
The e-Business Studies - Vol. 17, No. 5, pp.3-20
Abbreviation: The e-Business Studies
ISSN: 1229-9936 (Print) 2466-1716 (Online)
Print publication date Oct 2016
Final publication date 30 Oct 2016
Received 14 Oct 2016 Revised 22 Oct 2016 Accepted 27 Oct 2016
DOI: https://doi.org/10.20462/tebs.2016.10.17.5.3

A Study on the Competition Among Social Commerce Company Based on the Theory of Uses and Gratification of Online Consumer
An, Sang Joon* ; Kim, Tae Hwan**
*Assistant Professor, Graduate School of Management MBA, Kyung-Hee University (sejj48@khu.ac.kr)
**Assistant Professor, Dept. of International Trade & Distribution, An-Yang University (thkim@anyang.ac.kr)

소비자의 이용충족에 따른 소셜커머스 업체 간 경쟁에 관한 연구
안상준* ; 김태환**
*경희대학교 경영대학원 조교수 (sejj48@khu.ac.kr)
**안양대학교 국제통상유통학과 조교수 (thkim@anyang.ac.kr)

Abstract

This study is to demonstrate the com petitive relationship of social commer ce companies depending on usage gratification factors for users in Korea by verifying usage gratification factors of consumers based on usage and gratification theory and competitive relationship of social commerce companies through niche theory. As a result of analysis of difference in the niche breadth across dimensions of gratific ations of individual social commerce companies, the hypothesis that niche breadth has difference across compa nies was selected. Accordingly, the hypothesis that there would be high niche overlap among social commerce companies was selected. Although this study is meaningful in that it analyzed the plan to generate successful performance of social commerce and the competitive superiority among companies according to users' gratification in terms of marketing.

초록

본 연구는 소비자의 이용충족요소를 검증하고 이용충족요소를 통해 각 소셜커머스 업체 간 경쟁관계에 대해 적소이론을 통하여 검증하고자 하였다. 분석결과 각 소셜커머스 업체별 및 충족차원별로 적소폭의 차이 분석을 통해 각 업체별로 적소폭에 있어 차이가 있을 것이라는 가설이 채택되었다. 이 중 쿠팡의 경우 대다수 요인에 대해 높은 적소폭을 보임으로써 다른 두 업체에 비해 쿠팡을 가장 보편적인 소셜커머스 서비스로 인식하고 있음을 확인하였다. 그러나 위메이크프라이스의 경우 쾌락성 및 충동성에서 가장 높은 적소폭을 보임으로써 이용자들이 단순한 동기 또는 충동적 동기로 사이트를 방문하는 경우가 많음을 알 수 있었다. 또한 업체 간 경쟁 정도를 파악하기 위해 용이한 방법인 적소중복 분석을 통해서는 분석 대상 업체가 시장에서 전반적으로 치열한 경쟁을 벌이고 있는 것으로 분석됨으로써 소셜커머스 업체 간에 적소 중복에 대해 높은 차이를 보일 것이라는 가설이 채택되었다. 이러한 실증분석을 통한 가설 검증을 통해 실무적 관점의 마케팅 측면에서 소셜커머스의 성공적 성과 창출 방안과 이용 고객들의 충족에 따른 업체 간 경쟁우위를 도출하고 경쟁 정도를 실증적으로 분석하였다는 점에서 연구의 의의를 찾을 수 있다.


Keywords: Social Commerce, Social Network Service(SNS), Niche Theory, Uses and Gratification, Online Consumer, Competitive Relation
키워드: 소셜커머스, 적소이론, 이용충족, 온라인소비자, 경쟁관계


Contents
ABSTRACT
Ⅰ. Introduction
Ⅱ. Theoretical Background
Ⅲ. Design
Ⅳ. Results of Empirical Analysis
Ⅴ. Conclusion
References
국문초록


Ⅰ. Introduction

According to Korean Online Shopping Association(2015), the market size of social commerce has grown from 50 billion won in 2010, the year of first introduction, to 1 trillion won in 2011 and about 5 trillion won at the end of 2014, increased by about 20 times. It means that social commerce has made the growth of about 100 times only within 5 years ever since its introduction in the e-commerce market. This success has been built upon the success of social network services such as Twitter and Facebook. Social commerce has managed to integrate with SNS and its enormous users while allowing people to actively participate its marketing.

Social Commerce, originated from overseas, comes in various forms. Also, in South Korea, Ticket Monster, a social commerce marketplace of which Group on, the world’s largest social commerce marketplace, is the largest shareholder, Coupon, We Make Price and a number of social commerce marketplaces are competing each other while providing similar shopping experiences and services. In the case of social commerce marketplaces in South Korea, special deals are usually offered and they are valid only if a certain number of customers take advantage of them. In other words, a number of social commerce marketplaces offer a group purchase, which is the volume sales at a low unit margin of profit. This strategy also has a marketing-related implication.

In addition, despite of the fact that Social Commerce has the limited scopes of products and services than conventional e-commerce, it utilizes a social networking service to offer a special discount for a group of people who share similar interest. In other words, this way of attracting new customers via social networking is the most noticeable e-business model of the e-commerce market.

This study aims to reveal the competitive edge relationship between social commerce stores by evaluating the use factors and gratification factors of customers and consequently, to deduct the strategic implications based on the revealed core competition factors of companies. To be more specific, this study is to identify and model the competitive relationships between social commerce marketplaces by identifying the needs or wants users of the social commerce marketplaces are attempting to gratify based on the Theory of Uses and Gratification. Using this approach, the identified competitive relationships were verified with such needs and wants of the users based on the Theory of the Niche, as the following.

First, in this study, the needs or wants users of the social commerce marketplaces are attempting to gratify were divided into two aspects: motives for using a social commerce marketplace, and cognitive aspect. To be more specific, motivations for social commerce use should include entertainment, impulsivity, economic efficiency, socialism and convenience, and additionally the brand awareness for a social marketplace itself would also play a critical role. Therefore, this study was trying to verify how these motivations and cognition for social commerce use would affect the needs or wants users of the social commerce are trying to gratify.

Second, the Theory of Uses and Gratifications is rather challenging to be applied to identify competitive relationships of each subject since it mostly focuses on general motivations for use. Therefore, it is possible to compliment this limitation by applying the Theory of the Niche, which focuses on specific subjects(Batt, R., and Moynihan, 2002).

These theories are mostly used to assess media, and this study is to evaluate social commerce marketplaces, built upon social media, sharing certain aspects of media. At the time of writing, there are a number of studies for social media based on the Theory of Uses and Gratifications. Unlike this recent trend, this study aims to reveal competitive relationships of social commerce marketplaces not only with the needs or wants people are attempting to gratify by using social commerce marketplaces, but also by applying the Theory of the Niche.

By exploring competitive relationships between social commerce marketplaces via this approach, it would be possible to provide proper information for building customers’ loyalty that could be used for developing marketing strategies. These findings of this study also identify the uses and gratifications on the social commerce and reveal competitive relationships between social market places, which allows us to have an insight on the desired direction of social commerce for the future. This finding is of particular value as it shows the theoretical frame for marketing strategies for social commerce companies.


Ⅱ. Theoretical Background
1. Fundamental Study of Social Commerce

Social commerce is one of the most recent phenomenon in electronic commerce. Despite of its abrupt growth, there is almost no theoretical study on social commerce.

Stephen and Toubia(2010) defined social commerce as a new business concept and tries to derive an economic value of social networks in the online social commerce market. They propose that the online social commerce market is where sellers are individuals instead firms and a social commerce marketplace ties between sellers are directed hyper-links between their shops. This study found out that allowing sellers to connect generates considerable economic value and the networks’ value lies in making shops more accessible to customers browsing the marketplace(Sang-Jong Gwak, 2008).

Kim Yu-Ri(2011) made a comparison between the online social commerce market and the conventional online commerce market to reveal which one of three aspects of commerce - sales process, products, and firms and players - influences the shopping value and purchase intention of customers.

Kim Jae-Hwi et al.(2011) assessed the effects of special discount, limited opportunity and awareness of other buyers, which are characteristics of social commerce, on the motivations of consumers for purchasing and the effects of social inference of other buyers on decisions of consumers made after the purchase. He identified that discount sensitivity and limited oortunity have strong influences on promoting consumers for making a purchase, and social inference plays a critical role on decisions made after making a purchase at a social commerce marketplace(Goleman, D. 1995). These findings suggest that social commerce marketplaces should focus on not only discount and limited opportunities, but also strategies to activate the inference of other buyers. To obtain longer-term gains, it would be necessary to promote the re-purchase and oral transmission of customers and for this, social commerce marketplaces should find a proper way to utilize the awareness of customers on others and social inference.

2. Study on Gratifications and Cognition

The use gratifications approach suggested by Katz(1959) is meaningful in terms of understanding of the structure and relationship between use motivation, use patterns, and gratifications of users of various media channels. This use gratifications approach basically assumes of active audiences. The active audiences are the ones actively involved in determining what media they engage with in order to gratify their psychological or social needs. Therefore, the use gratifications studies describe the behaviors of active audiences who actively determine which media to use and consequently, gratify their needs rather than passive audiences, the conventional approach to mass media. Therefore, the uses and gratifications theory discusses a communication process as a series of actions made by audiences to choose media, in turn satisfying their needs. From the fact that customers of social commerce are responsible for choosing media for shopping in order to meet their needs, the central concept of this study could be aligned with the uses and gratifications theory.

Lin(1996) offers five types of motivation for Internet use: social identity, social interaction, escape, entertainment and environment monitoring, and Papacharissi and Rubin(2000) identifies five primary motives for Internet Use: interpersonal utility, pass time, information seeking, convenience and entertainment. Information seeking and entertainment were found to be the most strong motivations and then, followed by convenience, pass time, and interpersonal utility.

In this context, Kwon Sang-Hee, Woo Ji-Su (2005) researched major motives and gratifications for Blog use and identified four motives: social interaction, self-fulfillment, information seeking and relaxation and three gratifications: social interaction, information seeking and self-fulfillment. Especially, it was revealed that the more likely to use blogs, social interaction and relaxation could be more likely to be motives for using blogs.

Shim Hong-Jin, Hwang Yu-Sun(2010) approached Twitter users based on the users and gratifications theory and identified several motives including the formation of public opinions, creation of follow groups and convenient communication. It means that Twitter users expect Twitter to be a functional medium to be used for exchanging information and participating in social issues. As revealed, the Theory of Uses and Gratification is one of the most fundamental communication theories used for addressing the motivations for media use or looking at how these motivations affect media use. Since social media is an e-commerce system built upon social networks, audiences can actively make a selection without the limitation of time and space. Using this approach, it would be possible to reveal the motives for social commerce use by focusing on the needs or wants people are attempting to gratify using social commerce.

The uses and gratifications theory assumes that users choose media channels that will satisfy the given needs more than any other. This perspective coincides with the theory of the niche, considering survival of a population as evolution of competition and co-existence.

Also, while the Theory of Uses and Gratifications is focusing on the needs of consumers, the Theory of the Niche focuses on the gratifications of consumers which makes it easier to analyze competitive relationships between social commerce marketplaces.

3. Study on Niche Theory

Niche theory originates from the ecological study of competing animal populations and has been applied to the rivalry in mass media. Sociologists in the 1920s applied the ecological study of animal studies to “human ecology” and John Dimmick et al.(1920), introduced it to social science from the aspect of media economics.

In this theory, ‘breadth’ and ‘overlap’ of Niche Theory are somewhat similar with the concepts of substitution or alternative in Economics. A company extends and varies its business areas to widen the scope of resources, and also strengthen its market dominance via direct competition with other competitive in its core business areas. From this aspect, it would be possible to evaluate the suitability of ecological approach to investigate the competitive relationship in broadcasting.

Dimmick et al.(1984), used the breadth and overlap of “ecological niche” to study the degree of competition between television, radio and newspapers before the advent of internet, and Li (2001) examined the competition between television, newspapers, and electronic news in Taiwan by factors of cognition, efficiency and monitoring, gratification opportunity, and proactivity and claimed that new media channels should have a competitive edge in the factor of gratification opportunity to compete with the existing media channels and validate this claim with the niche analysis.

Among the studies applied of an analysis frame of the Theory of the Niche and the Theory of Uses and Gratifications, Jung Chae-Min et al.(2005), investigated the competitive relationship between terrestrial TV, cable TV, satellite TV and Internet TV and identified that niche breadth of Internet TV is the widest and of cable TV the narrowest. Also, while terrestrial TV shows the narrow niche breadth in aspects of entertainment and convenience along with cable TV, but wide niche breadth in an aspect of information at the level of internet TV. In addition, the niche overlap shows that terrestrial TV and cable TV has a fierce competition, and relatively low with Internet TV, and the niche overlap between these three media is the highest in an aspect of gratification opportunities.

Jung Chae-Min, Park Jong-Goo(2012) examined the competition between newspaper, broadcasting, Internet and SNS for the gratification of users on economic news on the frame of the Theory of the Niche.

The gratifications of users on economic news were assessed for each of 5 categories: general economy, finance, living economy, quality of contents, and gratification opportunity (convenience of use). They identified that the niche breadth of Internet is higher in every category, compared with the others, and newspaper showed low satisfaction on the whole in general. Also, the niche overlap between newspaper and broadcasting was the highest, and Internet and SNS shows several overlaps in various aspects.

Also, there was an attempt to evaluate services provided by the same type of media based on the theory of the niche.

Lee Soo-Young(2003) assessed the relationship between a voice communication service and a text message service with the theory of uses and gratifications and the theory of the niche. Since this study assessed two services provided by one same medium, it was somewhat differed from the hypothesis of the theory of the niche. Still, the theory of the niche shows a relationship between media in figures so it could clearly identify the relationship between these two services.

Besides them, Cha Nam-Gyoung(2002) identified the competition between newspaper, TV news and Internet newspaper and Choi Yung-Sun(2004) assessed the competition between movie theater, VCR, DVD, Internet theater and P2P system. Similarly, a study performed by Kim Young-Su(2006) analyzed the competition between terrestrial DMB, satellite DMB and WiBro.

As stated above, niche theory is the most suitable for analyzing competitive relationships between media channels exploiting the limited resource together or competitive relationships between services provided by the same media channel.

Still, there is almost no study addressing the competitive relationship in social commerce with niche theory. Thus, this study was developed upon previous studies applying niche theory for exploring of competitive relationships between various medial channels and applying uses and gratifications theory for addressing of competitive relationships in the social commerce market.


Ⅲ. Design
1. Study Model

This study aims to analyze and reveal competitive relationship between companies by factor of gratifications of their users as shown from the study of Cho Eui-Yung(2002). As stated above, this study examines the social media market which is a form of Internet-based “social media”. Therefore, this study addresses uses and gratifications of users in consideration of this special feature of social media and niche theory seems to be the most suitable analysis method since it is often applied for the analysis of competitive relationships in mass media.

2. Hypothesis

After reviewing the previous studies, it was decided to apply niche theory for revealing competitive relationships of Ticket Monster, Coupang and Wemakeprice, which are targeting the limited common resource of customers of the social commerce market. It is because of that niche theory seems to be the most theory to address competitive relationships in mass media. A questionnaire was prepared based on results of the previous studies. Respondents were the ones who have purchased a product once or more at social commerce marketplaces.

Three questions were addressed: (1) “How broad the niche breadth is between these three social commerce marketplaces?”, “How big the niche overlap is between these three social commerce marketplaces?” and “Which one of these three social commerce marketplaces has demonstrated superiority in competition?” To investigate these study questions, two hypotheses were formulated as the following.

1) Hypothesis on Niche Breadth

Before setting up of a hypothesis for this study, it would be necessary to review major findings of previous studies.

Kim Yoo-Jung(1995) identified that terrestrial TV show higher niche width for cognition, regularity of viewing hour and pass time and VCR shows higher niche width for variety of selection. Cable TV show relatively even, but lower niche width for all 5 gratifications – emotion, cognition, regularity of viewing hour, variety of selection and pass time.

Song Kyung-Hee(1998) claimed that cable TV is not a satisfactory media in Korea yet. She identified that terrestrial TV is more satisfactory for cognitive and/or habitual aspects than cable TV and also, terrestrial TV and Home Video have higher niche breadth than cable TV. With reference of findings of these previous studies, this study aims to investigate social commerce, which is a new social network means, on the frame of satisfactory niche, niche overlap and competitive advantages. To address these questions, this study proposes the following hypothesis.

H1: There will be a difference in the niche breadth between Coupang, Ticket Monster and We Make Price for gratification and cognition aspects of social media use.

2) Hypothesis on Niche Overlap between Marketplaces

Niche overlap measures the degree of similarities on resource consumption patterns between groups. A high degree of overlap would be shown in marketplaces utilizing very similar resources. Lee Seung-Won et al.(2014), investigated the niche overlap between Twitter and Facebook, and self-satisfaction showed the lowest niche overlap, indicating that this aspect was the most competitive aspect, along with entertainment. On the other hand, social relationship and communication convenience showed higher niche overlap. Based on these findings, the following hypothesis is proposed. This hypothesis will be validated with niche overlap between social media marketplaces.

H2 : There will be a difference in the niche overlap between Coupang, Ticket Monster and We Make Price for gratification and cognition aspects of social media use.

3. Methodology
1) Research Targets and Methods

To apply an analysis frame of the niche theory, subjects should have an experience of using the targeted media. Therefore, Coupang, Ticket Monster and We Make Price have been selected as subjects of this study since these three social commerce marketplaces occupy about 90% of the entire social commerce market. With reference of findings of the previous studies, gratification factors for customers of social commerce were identified and selected for a self-administered questionnaire.

The target population for this study consists of customers using all three social commerce marketplaces (Coupang, Ticket Monster and We Make Price). The respondents were 300 females and males in their 20s or older. The questionnaire was distributed for 7 days both online and offline and a total of 267 questionnaires were used for the analysis. With the collected test, the frequency and t-test were conducted using SPSS and the niche analysis was executed using Excel.

2) Questionnaire

The questionnaire was prepared by referring the survey questions on the uses and gratifications for social commerce of a study of Kim Min-Su(2012) and a survey of Choi Sung-Ho(2013). Total of 30 gratifications were questioned as shown in the <Table 1> on a 5 point scale (1 = strongly disagree, 5= strongly agree).

<Table 1> 
Composition of the Questionnaire (hedonic, impulsiveness, economic, sociality, convenience and cognition)
Variables Contents Reference
Gratifications hedonic 5 Babin et al.(1994), Jarnal et al.(2006), Arnold and Reynolds(2003)
impulsiveness 5 Rook and Fisher(1995), Hausman(2000), Kendra et al.(2007)
economic 5 Li et al.(1999), Mckinney (2004), To et al. (2007), Chul Park(2009), Chang et al.(2010)
sociality 5 Arnold and Reynolds(2003), Jarnal et al.(2006), To et al.(2007), Jae-Hyun Ryu, Chul Park(2007), Chang et al.(2010)
convenience 5 Rohm and Swaminathan(2004), Mckinney(2004), To et al.(2007)
Cognition 5 Ganesan(1994), Doney and Cannon (1997), Jarvenpaa et al.(2000), Teo and Liu(2007)

4. Analysis of Niche Theory

The analysis frame of niche theory consists of three components as the following. First, the concept of niche breadth is related with the diversity of resources that one media or media company can employ with to satisfy the needs or wants of users for media. Niche breadth is a standardized number in the range of 0~1 and the closer it gets to 1, it means that it uses more diverse resources.

Second, niche overlap is a measurement of the competition of two media or media companies over the same resource. It is a standardized number in the range of 0~1. As it gets closer to 0, the degree of resource sharing becomes higher, and lower as it gets closer to 1.


[Figure 1] 
Calculation of Niche breadth

u, l = the upper and lower bounds of a scale (u=5, l=1)

GO = a gratification obtained rating on a scale

N = the number of respondents using a media

n = the number of respondents

K = the number of questions included in each dimension

k = questions




[Figure 2] 
Calculation of niche overlap

i, j = media i, media j

GO = a gratification obtained rating on a scale for i and j

N = the number of respondents using both media i and j

n = the number of respondents

K = the number of questions included in each dimension

k = questions




Ⅳ. Results of Empirical Analysis
1. Demographic Features of Respondents

As demographic features of respondents, 47.6% was male and 52.4% was female and for the education background, high school graduates was 6.4%, of the lowest, and college graduates was 36.3%, of the highest percentage. By age, a group of 30~39 years old took 57.7%, followed by a group of 20~29 years old, of 24%, and 40~49 years old, of 11.2%. By job, office workers took the largest portion, of 38.6%, and followed by students, of 29.2% and by household income, a group of 3~4 million won was the largest group, of 31.9%, and followed by 2~3 million won, of 19.1% and less than 1 million, of 16.1%. These demographic features of respondents are summarized in the <Table 2>.

<Table 2> 
demographic features of respondents
Frequency (n) Percent (%)
Gender Male 127 47.6
Female 140 52.4
Total 267 100.0
Education High school diploma 17 6.4
Undergraduate student 56 21.0
Bachelor’s degree 97 36.3
Graduate student 62 23.2
Master or doctoral 35 13.1
Total 267 100.0
Age 20s 64 24.0
30s 154 57.7
40s 30 11.2
50s 19 7.1
60s or more 0 0.0
Total 267 100.0
Job Student 78 29.2
Public servant 14 5.2
Office worker 103 38.6
Professional 13 4.9
Education 2 0.7
Self-employed 15 5.6
Housewife 23 8.5
Others 19 7.1
Total 267 100.0
Income
(million won)
Less than 1 43 16.1
1 ~ up to 2 37 13.9
2 ~ up to 3 51 19.1
3 ~ up to 4 85 31.9
4 ~ up to 5 32 11.9
5 ~ up to 6 11 4.1
6 or higher 8 3.0
Total 267 100.0

49.1% of respondents said that they usually use Coupang, followed by Ticket Monster, of 25.8% and We Make Price, of 19.3% and others, of 5.8%. Also, 69.4% of respondents answered that they access to social commerce marketplaces using smartphones. It might be attributable to the fact that 81.7% of respondents in 20s and 30s.

2. Reliability and Validity Analysis
1) Measurement of Major Variables

With reference of findings of previous studies, 6 variables, hedonic, impulsiveness, economic, sociality, convenience and cognition were selected as variables. They were evaluated on a 5 point scale (1 = strongly disagree, 5= strongly agree). In order to assess these variables, previous studies on the uses and gratifications for social commerce use; Park Churl, 2009; To et al, 2007; Rook and Fisher; 1995; Babin et al, 1994) were combined and modified.

2) Hedonic

In this study, hedonic is defined as ‘the tendency to use a social commerce marketplace due to its ability to release stress, pass time and entertain.” A five item scale was developed by combining and modifying the hedonic scales of Babin et al.(1994), Arnold and Reynolds(2003), Jamal et al.(2006). Each item was measured on a 5 point scale (1 = strongly disagree, 5= strongly agree).

3) Impulsiveness

In this study, impulsiveness is defined as “the tendency to use and visit a social commerce marketplace on impulse without careful thought.” Barratt introduced Barratt Impulsiveness Scale in 1959 for the measurement of impulsiveness and it has been continuously updated and modified and currently, BIS-11 is used. Kendra et al.(2007) selected and modified the impulsive scale items of BIS-11 and suggested three large classification categories of impulsiveness, which are attentional impulsiveness, motor impulsiveness and non-planning impulsiveness. Stern(1962) suggested low prices, mass distribution, self service, massive advertising, attracting shop display, short service life, small size and light weight, and easy storage as major factors of impulsive shopping.

Rook and Fisher(1995) viewed shopping impulsiveness as customers’ unconscious tendency to shop on impulse without careful thought and Piron(1997) described impulsive shopping from 13 different dimensions. A five item scale was developed by combining and modifying the impulsive shopping scales of Rook and Fisher(1995) and Kendra et al.(2007) Each item was measured on a 5 point scale (1 = strongly disagree, 5= strongly agree).

4) Economic

In this study, economic is defined as customers’ tendency to visit and use SCS due to low prices and special offers.

A five item scale was developed by combining and modifying the impulsive shopping scales of Li et al(1999), Mckinney(2004), To et al.(2007), Park Churl(2009), and Chang et al.(2010). Each item was measured on a 5 point scale (1 = strongly disagree, 5= strongly agree).

5) Sociality

In this study, sociality is defined as customers’ tendency to visit and use SCS due to social influence of others. A five item scale was developed by combining and modifying the impulsive shopping scales of Arnold and Reynolds(2003), Jamal et al.(2006), To et al.(2007), Yoo Jae-Hyun, Park Churl(2007), Chang et al.(2010). Each item was measured on a 5 point scale (1 = strongly disagree, 5= strongly agree).

6) Convenience

In this study, convenience is defined as customers’ tendency to visit and use SCS since it is easy to identify and use the desired coupon and/or product. A five item scale was developed by combining and modifying the impulsive shopping scales of Mckinney(2004), Rohm and Swaminathan(2004), and To et al.(2007). Each item was measured on a 5 point scale (1 = strongly disagree, 5= strongly agree).

7) Cognition

In this study, cognition is defined as “the sum of various assessments about social commerce, including the identity and image of social commerce marketplaces and social commerce itself.” A five item scale was developed by combining and modifying the impulsive shopping scales of Ganesan(1994), Doney and Cannon(1997), Jarvenpaa et al,(2000) Teo and Liu(2007). Each item was measured on a 5 point scale (1 = strongly disagree, 5= strongly agree).

3. Validation

To conduct a niche analysis between social commerce marketplaces, it is necessary to prepare items for a questionnaire for evaluating variables. For this, scores of three social commerce marketplaces for each variable were averaged and then, exploratory factor analysis was conducted using these average scores. Also, a varimax rotation, which is the most common of the orthogonal rotation, was used for the analysis and a factor loading of 0.50 or above and Eignen Value of 1.0 or above were considered significant. To measure of adequacy of variables, KMO(Kaiser Meyer Olkin) measure was used and it showed that KMO of the factor analysis of this study is 0.874, which is close to 1, indicating that variables of this study are adequate for the factor analysis.

This study identified 6 variables, including hedonic, impulsiveness, economic, sociality, convenience and cognition, which are also the motivations for social commerce use. Factors for each variable were classified into six and the total predictable variation for these 4 factors was 70.14%, representing that these factors are sufficient enough for explanation of the corresponding variable. Items within each factor were removed when its factor loading was less than 0.5. Therefore, total of 5 items, sociality no.2 for sociality (sharing shopping information with others), sociality no.3 (visit due to a recommendation of acquaintances), convenience no. 4 for convenience (coupon convenience), cognition no.3 for cognition (often encounter via media) and cognition no.5 (generally positive reputation), were removed. Moreover, to investigate the reliability of these factors, Cronbach’s Alpha was measured and Cronbach’s Alpha for each and every factor was found to be above 0.6, showing that they are all reliable.

<Table 3> 
Factor Analysis and Reliability Analysis
Measure Gratifications Cognition Cronbach's α
hedonic impulsiveness economic sociality convenience
hedonic 4 .889 .079 .119 .046 .120 .064 .867
hedonic 3 .852 .020 -.093 .071 -.097 .141
hedonic 1 .794 .025 -.066 .120 -.195 .045
hedonic 2 .667 .221 .142 -.049 -.007 .142
hedonic 5 .655 .158 .345 -.126 .170 .015
impuls 5 -.005 .813 .155 .084 .130 .249 .803
impuls 3 .153 .808 .080 .090 .233 .163
impuls 2 .116 .707 .242 .346 .131 .042
impuls 1 .213 .607 .291 .233 .015 .073
impuls 4 .159 .604 .376 .203 .295 .180
economic 1 .043 .244 .727 .223 .123 .123 .858
economic 3 .008 .287 .685 .275 .198 .161
economic 4 .206 .154 .662 -.042 -.082 .189
economic 5 -.142 .075 .519 .384 .072 .359
economic 2 .222 .141 .509 .227 .175 .280
Social 1 -0.55 .257 .107 .829 .122 .112 .771
Social 4 -.090 .219 .186 .764 .245 .051
Social 5 .042 .186 .288 .650 .024 .313
conven 2 -.120 .091 -.043 -.004 .731 .278 .873
conven 1 -.067 .111 .241 .300 .730 .085
conven 3 .074 .262 .064 .045 .717 .115
conven 5 .058 .293 .468 .152 .550 .020
cognition 2 .127 .098 .130 .130 .195 .818 .820
cognition 1 .152 .280 .225 .225 .200 .740
cognition 4 .266 .257 .082 .082 .163 .706
eigen value 3.463 3.370 3.320 2.608 2.553 2.475 -
variable 32.36 40.78 49.01 57.00 63.86 70.14 -

4. Verification of Hypothesis
H1: There will be a difference in the niche breadth between Coupang, Ticket Monster and We Make Price for gratification and cognition aspects of social media use.

Niche breadth is a standardized number, ranged from 0 to 1, indicating a decree of a certain media for its capability of satisfying a certain type of needs and wants of its users for its use. If every respondent gives the highest score for each and every item for a certain type of gratification, niche breadth becomes 1, and if every respondent gives the lowest score for each and every item, it becomes 0. When niche breadth is closer to 1, it could be considered that the width of utilization of resources is wide and consequently, there is a relatively large possibility of attracting general users. When it is closed to 0, it could be interpreted that the width of resource utilization is limited and it is likely to attract a more specific type of users.

<Table 4> 
Factors specific Niche breadth of Big 3 Social Commerce
Type Niche Breadth (Uses and Gratification) Cognition Total
Hedonic Impulsiveness Economic Sociality Convenience
Coupang .496
(2)
.565
(2)
.761
(1)
.369
(2)
.622
(2)
.662
(1)
.579
(1)
Ticket
Monster
.450
(3)
.458
(3)
.721
(2)
.389
(1)
.760
(1)
.551
(3)
.554
(2)
We Make
Price
.554
(1)
.600
(1)
.699
(3)
.350
(3)
.563
(3)
.545
(2)
.551
(3)
Note : 0 = Minimum breadth, 1 = Maximum breadth,
( ) represents the niche breadth ranking of a social commerce marketplace for each factor

From the aspect of gratifications, Coupang shows niche breadths in a range of 0.369 to 0.761. The factor with the highest niche breadth is economic, and followed by cognition, convenience, impulsiveness, hedonic and sociality. Ticket Monster has niche breadths, ranged 0.389 to 0.0760. The factor with the highest niche breadth is convenience, and followed by economic, cognition, impulsiveness, hedonic and sociality. We Make Price shows the niche breadths in a range of 0.350 to 0.699. The factor with the highest niche breadth is economic, and followed by impulsiveness, convenience, hedonic, cognition and sociality. These findings support the aforementioned hypothesis that there will be a difference in niche breadth between social commerce marketplaces. Comprehensively, Coupang has higher niche breadth. It means that users find Coupang as the most general social commerce site. In other words, Coupang has diverse resources to fulfill the motivations for social commerce use. On the other hand, We Make Price, having the lowest niche breadth, could be considered to offer only a specific type of gratification. These findings somewhat coincide with the current status of social commerce market in South Korea, where Coupang obtains the highest sales and takes a dominant position while the remaining 2 marketplaces are competing each other as runner-up. In the case of We Make Price, it shows the highest niche breadth for hedonic and impulsiveness. It means that users make a visit to this site solely to release stress or on impulse.

H2: There will be a difference in the niche overlap between Coupang, Ticket Monster and We Make Price for gratification and cognition aspects of social media use.

Niche overlap is a measurement of the degree of dependency of different media on the same resource and their functional similarities, which indicate the degree of competition. The smaller the niche overlap, the higher the degree of competition. The lowest value of niche overlap is 0, indicating that the niche two media are completely overlapping and in a perfect competition. On the other hand, the lower niche overlap indicates that the two media have a low degree of functional similarities, which means that they use different resource and they are likely to supplement each other rather than competing. In this study, since a 5 point scale is used, when niche overlap is closer to 0, two media are more likely to compete, and when niche overlap is closer to 4, they are rather independent and rather supplement each other.

<Table 5> 
Factors specific Niche overlap of Big 3 Social Commerce
Type Niche Breadth (Uses and Gratification) Cognition Total
Hedonic Impulsiveness Economic Sociality Convenience
Coupang-
TMon
.515
(1)
.854
(2)
.616
(2)
.456
(1)
.966
(2)
.901
(2)
.718
(2)
TMon-We
Make Price
.609
(2)
.760
(1)
.589
(1)
.622
(2)
.642
(1)
.801
(1)
.670
(1)
Coupang-
We Make
Price
.731
(3)
1.059
(3)
.631
(3)
.625
(3)
1.142
(3)
.961
(3)
.858
(3)
Note : 0 = Minimum Niche Overlap, 4 = Maximum Niche Overlap
( ) represents the niche overlap ranking of a social commerce marketplace for each factor

First, with regard to hedonic factor, niche overlap between Coupang and Ticket Monster is the highest (0.515), followed by of Ticket Monster and We Make Price (0.609), and of Coupang and We Make Price (0.731). Second, for the factor of impulsiveness, niche overlap between Ticket Monster and We Make Price is the highest (.760), followed by of Coupang and Ticket Monster (0.854), and of Coupang and Ticket Monster (1.059). Third, with regard to the factor of economic, niche overlap between Ticket Monster and We Make Price is the highest (0.589), followed by of Coupang and Ticket Monster (0.616), and of Coupang and We Make Price (0.631). Fourth, for the factor of sociality, niche overlap between Coupang and Ticket Monster is the highest (0.456), followed by of Ticket Monster and We Make Price (0.622), and of Coupang and We Make Price (0.642). Fifth, for the factor of convenience, niche overlap between Ticket Monster and We Make Price is the highest (0.642), followed by of Coupang and Ticket Monster (0.966), and of Coupang and We Make Price (1.142). Sixth, for the factor of cognition, niche overlap between Ticket Monster and We Make Price is the highest (0.801), followed by of Coupang and Ticket Monster (0.901), and of Coupang and We Make Price (0.961). In general, niche overlap of these marketplaces is closer to 0 than 4, representing that these three marketplaces are having a fierce competition. This finding support the hypothesis 2.

Especially, since niche overlap between Ticket Monster and We Make Price is the highest, it is possible to assume that these two marketplaces is having the most severe competition and it is somewhat similar with their current user numbers and page views. Then, it is followed by niche overlap between Coupang and Ticket Monster (0.718), and Coupang and We Make Price (0.858).


Ⅴ. Conclusion

This study aimed to examine the uses and gratifications of customers for social commerce from the analysis frame of the theory of uses and gratification in order to reveal and model how such uses and gratifications of social commerce users influence competitive relationships between social commerce marketplaces. For this purpose, competitive relationships between social commerce marketplaces were evaluated based on the theory of niche using the selected factors of the uses and gratifications for social commerce. As for the factors of the uses and gratifications for social commerce, this study classified them into dimensions of motivations and cognition for social commerce use. To be more specific, this study identified six motivations of consumers for using social commerce marketplaces: hedonic, impulsiveness, economic, sociality and convenience and also, for the gratifications perspective, the awareness of a social commerce marketplace was selected. These factors were verified and evaluated and then, subject to a niche analysis using the verified factors of gratifications. The findings of this study are as the following.

First, the differences in niche breadth between social commerce marketplaces were analyzed to validate the hypothesis 1 and it was identified that the niche breadths of Coupang is in a range of 0.369 and .761, and Ticket Monster in a range of 0.389 and 0.0760 and We Make Price in a range of 0.350 and 0.699. These data support the hypothesis 1. Comprehensively, Coupang has higher niche breadth. It means that users find Coupang as the most general social commerce site. In other words, Coupang has diverse resources to fulfill the motivations for social commerce use. On the other hand, We Make Price, having the lowest values of niche breadth, shows relatively higher niche breadth for the factors of hedonic and impulsiveness. It means that consumers are likely to visit this site simply to release stress or on impulse. Therefore, it would be advisable for Coupang to develop and execute marketing strategies to earn trust of customers as the top ranking social commerce marketplace. On the other hand, We Make Price should focus on securing competitive edges in aspects of convenience and economic.

Second, niche overlap is the measurement of a degree of competition between social commerce marketplaces and in general, niche overlap of these three social commerce marketplaces is closer to 4 rather than 0, indicating that they are having a fierce competition. These findings validate the hypothesis 2. Especially, niche overlap between Ticket Monster and We Make Price is the highest (0.670), showing that these two marketplaces have the most severe competition, followed by of Coupang and Ticket Monster (0.718), and Coupang and We Make Price (0.858). This analysis result clearly reveals the current status of the social commerce market where a number of social commerce marketplaces compete for survival. From the fact that the niche overlap between Ticket Monster and We Make Price for economics is the highest, it would be reasonable to assume that they should focus on securing of an economic advantage (0.589) and in the case of We Make Price, it should seek for a chance to raise its customer awareness.

As shown from these findings, a social commerce marketplace should try to exploit its special characteristics to attract consumers instead of building up of a specific brand image. Moreover, it would be ideal for social commerce to develop an efficient means to utilize its unique feature of mouth effects and raise its awareness.

This study made a comparison of gratifications of consumers who have an experience of shopping at each and every of top three social commerce marketplaces in South Korea by applying the theory of the niche. According to the theory of the niche, a feature of new media which is already recognized raises a level of gratification of consumers for its use. Still, this study does not explicitly investigate whether these factors of uses and gratifications for social commerce use have fulfilled the motivations of actual users for using social commerce marketplaces. It is necessary to analyze a theoretical relationship between the theory of the niche and the theory of uses and gratifications, but this study does not address it. Therefore, it is too early to conclude that the factors of gratifications of these three social commerce marketplaces are the factors of determination for actual users of these social commerce marketplaces.

In addition, there could be various underlying dimensions for the gratifications and motivations for social commerce use, such as personal characteristics, purpose of use and environment of users. Therefore, in the future study, it would be necessary to evaluate the effects of competitive resources of social commerce marketplaces on actual selective use of social commerce and to include various environmental factors to identify how they are related with the competition in the social commerce marker. Furthermore, it will be helpful for supplementing the analysis of this study on competitive relationships of social commerce marketplaces to have an insight on their competitive advantages.


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