Can Delivery Speed Affect Sale In Ecommerce
Evidence from household appliance
Fengyangzi Zhang*
Department of Logistics Management
School of Economics and Management, BJTU
Beijing, China
14120613@bjtu.edu.cn
Abstract—China’s ecommerce merchants now face fierce
competition in fast delivery that brings difficulty in balancing the
cost and customer satisfaction. This study aims to investigate
Chinese consumers’ cognition on delivery speed when shopping
online. We tested the interaction between delivery speed and
other variations by setting laboratory experiment. It is found that
the delivery speed is not the most important factor affecting the
purchasing intention for China’s online consumers. They are not
sensitive to the difference between 1-day delivery and 7-days
delivery. Although consumers’ preference is not always the same
when facing different products, even the product in the same
category, they consider after-sale policy and even some petty
benefits more attractive. The results suggest that China’s
ecommerce merchants avoid direct competition in fast delivery
by differentiating other services attributes.
Keywords—ecommerce; fast delivery; household appliance;
laboratory experiment; after-sale policy
I. INTRODUCTION
China’s B2C ecommerce is the largest e-marketplace in the
world, with more than 417 million online shoppers,
contributing to more than 11% of the entire retail sales
(CNNIC, 2015). After fierce price war, fast delivery has
become the mainly focus of ecommerce platforms. Now, the
level of delivery speed in China has already reached an
advanced standard around the world. The B2C players are
striving to be the first by launching the policy of one-day
delivery. However, they have to afford the heavy burden on
operating cost. Fast delivery brings higher cost, and many
small-scale ecommerce platforms have to quite the business
due to less profit. The existing B2C merchants struggle with
containing costs while satisfying their customers. However,
does faster delivery necessarily brings higher consumer
satisfaction?
Jiang Chaofeng, the vice president of China Society of
Logistics, said that “on the basis of the customer needs and cost
analyses, logistics is not necessarily the sooner the better. The
blind pursuit of speed may be just a marketing gimmick.” He
also stated that excessive fast delivery competition would bring
pollution and traffic congestion problems, which is obviously
unhealthy for the whole industry to development. The original
CEO of New Egg network, an ecommerce platform in china,
said that delivery speed in China ecommerce market shocked
the USA and the Europe. They simply have no “free shipping”
978-1-5090-1102-5/16/$31.00 © 2016 IEEE
Guang Song
Department of Logistics Management
School of Economics and Management, BJTU
Beijing, China
songguang@bjtu.edu.cn
or “one-day delivery” policy. In fact, higher cost brought by
faster delivery will ultimately be paid by consumers, no matter
explicitly or implicitly. Meanwhile, he addressed consumers in
Europe or America prefer slower logistics than more cost
which may also be the trend of Chinese consumers’ demand for
online shopping in the future. As one of the largest B2C
merchants, JD.com is famous for its logistics speed, but it has
never been profitable since its inception. To achieve its “one-
day delivery”, even”3-hour delivery” policy, self-built logistics
mode has been adopted, and a lot of warehouses have been
built. Spending money on things like that can really burn a hole
in its pocket. But at the same time, the largest B2C ecommerce
in china, Tmall.com, prefers to outsource the logistics service.
Different strategies are considered between the top two on-line
shopping players. Therefore, it is not surprised to question that
whether the delivery speed must be faster. Is there a
magnificent difference between 3-hour deliver and 1-day
delivery or 1-day and 7-days delivery? Whether all types of
goods require fast delivery? As logistics service is described by
several dimensions, such as after-sale policy, packaging etc.
Are other logistics factors more important than delivery speed?
Since the current competition between most ecommerce
platforms is still rather undifferentiated by focusing on
improving the delivery speed, we try to investigate consumers’
cognition in China. Therefore, we aimed to find answers of the
questions above, and identify a more sustainable way for
logistic service industry to development. At meantime, it will
be beneficial to build a healthier environment for ecommerce
market in China.
II. BACKGROUND AND STUDY DESIGN
Service quality, one of the most important aspects, is
defined as the overall support offered by the merchant to
facilitate Ecommerce transaction (DE Lone& McLean, 2004).
In particular, logistics service is especially impactful on
ecommerce customers’ satisfaction (Kent N. Gourde, 2001;
Liu, He, GAO & Xie, 2008), and it is also the core challenge
motivated in this study. Thus, we mainly focus on the study of
logistics service quality.
Park (2009) investigated service quality of multiple
international logistics service companies and proposed 6
aspects influencing consumer satisfaction: assurance,
responsiveness, security, convenience, efficiency, reliability.
Grant (2007) evaluated delivery service quality from four
aspects: reliability, responsiveness, consistency, after-sale The set of 4x2 chi-square test of independence is performed
policy. Thus, after-sales service, flexibility of arrival time, to examine the variables’ interaction with delivery speed,
packaging, cargo consistency and integrity, assurance are which is found significant difference, as shown in Table 3.
considered in the study to test consumers’ cognition of logistics
speed, meanwhile some current sale strategies are also included B. intelligent bracelet data
to better control the experiment. 235 responses are received; the results of consumers’
choices are presented in Table 4.
For better study, washing machine and intelligent bracelet
are chosen as a comparison to see demand divergence between The set of 4x2 chi-square test of independence is performed
products with different characteristics. Domestic appliance is to examine the variables’ interaction with delivery speed,
one of the most sizeable product categories in China’s which is found significant difference, as shown in Table 6.
ecommerce; it also presents the challenge of fierce competition
and service requirement (iResearch, 2014). Washing machine TABLE I. PARTICIPANTS’ CHOICES ON EIGHT PRODUCT ALTERNATIVES
represents the traditional and large-scale appliance whereas
intelligent bracelet is the future consumption growth point. groups LR LR% LASQ LASQ% sum sum%
Both of them had good sales performance on those ecommerce HDspeed 35 15.49% 21 9.29% 56 24.78%
platforms in China. At the same time, compared to washing LCB 25 11.06% 17 7.52% 42 18.58%
machine, intelligent bracelet has higher value per unit, which L AP gift 16 7.08% 25 11.06% 41 18.14%
means more technological content. Thus they are chosen for L G-AP 39 17.26% 48 21.24% 87 38.50%
market’s familiarity with them as well as the need of sum 115 50.88% 111 49.12% 226 100.00%
ecommerce merchants to avoid speed competition further down
the road. TABLE II. CONTROL GROUP & 3 EXPERIMENT GROUPS

Delivery speed is set as a dependent variable, and how it groups LR LASQ sum
changes during different conditions is the main purpose of the H Dspeed 30.43% 18.92% 24.78%
study. We set three experiment groups with one control groups, L (CB,AP gift, G-AP) 69.57% 81.08% 75.22%
altogether 8 independent alternatives for consumers to choose.
The delivery speed is set in high level (1 day delivery) in the TABLE III. DELIVERY SPEED UNDER DIFFERENT CONDITIONS
control group while is in low level (1-7days random delivery)
in those three experiment groups with better after-sale policy or groups LR LASQ
certain sale strategy added to balance the drop in delivery H Dspeed 35 21
speed. The sale strategies, also the potential substitutes for L CB 25 17
delivery speed, are cash back, auxiliary product gift (hereafter L AP gift 16 25
referred as CB, AP gift). Besides, every group has two L G-AP 39 48
alternatives, respectively represents high or low level of Chi-square (3) =8.199, p=0.04
logistics reliability (hereafter referred as LR) and logistic
value-added service quality (hereafter referred as LASQ). TABLE IV. PARTICIPANTS’ CHOICES ON EIGHT PRODUCT ALTERNATIVES
These two variables also act as different conditions the delivery （INTELLIGENT BRACELET）
speed is facing. High level of LR means sellers provide groups LR LR% LASQ LASQ% sum sum%
logistics service as promised and have good service attitude
H Dspeed 38 16.17% 22 9.36% 60 25.53%
(patience, expertise, responsiveness, efficiency). High level of
LASQ means the product is unbroken, appropriately packaged L CB 27 11.49% 39 16.60% 66 28.09%
and is consistent as descripted. Past reputation range level is L AP gift 19 8.09% 20 8.51% 39 16.60%
used to show high or low level of the variables.
L G-AP 29 12.34% 41 17.45% 70 29.79%
Participants are invited to answer two survey-based Sum 113 48.09% 122 51.91% 235 100.00%
experiments where they are presented shopping tasks for home-
use washing machine and intelligent bracelet. After entering TABLE V. CONTROL GROUP & 3 EXPERIMENT GROUPS （ INTELLIGENT
the task, they are asked to choose 1 out of 8 product BRACELET）
alternatives in a website page, designed to mimic the searching
results of an ecommerce platform. The sequence of the eight groups LR LASQ sum
alternatives is randomized at each access. After testing and H Dspeed 33.63% 18.03% 25.53%
modification, the survey-experiment was delivered through L (CB,AP gift, G-AP) 66.37% 81.97% 74.47%
Sojump.com, a website especially for survey designing and
delivering. The responses were collected in a two-week period
in Feb 2016.
TABLE VI. DELIVERY SPEED UNDER DIFFERENT CONDITIONS （
INTELLIGENT BRACELET）
III. RESULTS (FISHER EXACT TEST)

A. washing machine data groups LR LASQ

226 responses are received; results of consumers’ choices H Dspeed 38 22

are presented in Table 1. L CB 27 39
 L AP gift 19 20
L G-AP 29 41
Chi-square (3) =7.862, p=0.05
IV. DISCUSSION (FISHER EXACT TEST)
A. washing machine analysis
1) washing machine summation data analysis
The experiment group with slower delivery but good
after-sale strategy gained most approval(38.5%) from
participants, which shows that consumers would like to
sacrifice delivery speed for more controlable delivery
B. intelligent bracelet analysis
arrival time and better product return policy. delivery
speed is not that unimportant, as control group get 24.78%
approval from consumers.
Experiment groups with slower delivery but cash back
strategy (18.58%) and auxiliary product gift (18.14%)
strategy gained similar approvals from participants. As
we all know, auxiliary products of washing machine
such as water pipe or tap by far, are still at customers’
own expense, some even cost more than hundreds of
Yuan, which are not cheap at all. However, the group
with AP-gift strategy gained the minimum approval
from consumers, which demonstrats that consumers
now would not satisfy with petty benefits when buying
large-scale household appliances but prefer certain
higher service quality.
As CB strategy has similarity with AP-gift strategy in
nature, it means something if merged together as one
experiment group. They both gained less than 20% of
the customers’ choices respectively, but when together,
more than 36%, becoming the second large approval
from participants. Meanwhile, if all three experiment
groups are merged together, fast delivery group gained
only less than 1/4 approval from customers, with more
than 9% of whom do not really care about logistics
reliability.In other words, they in fact can accept longer
delivery time. Thus it is seen that fast delivery is not
irreplaceable.
2) washing machine detail data analysis.
When further refined, more interesting outcomes are
found. Much difference exists between detail data and
summation data.
Unlike the distribution of LR choices, the distribution of
LASQ is not consistent with the summation data
distribution. The difference mainly comes from the
preference of experiment group with AP-gift strategy,
which gained minimum approval (18.14%) in
summation data, but got the second large approval
(11.06%) within participants focusing on LASQ. We
can argue that consumers who think highly of LASQ are
easier to accept AP-gifts to substitute the delivery
speed.
3) washing machine summary
In summary, good after-sale policy can substitute
delivery speed to a large extent. Although AP-gift and
CB strategies have few substitute effect on delivery
speed, they can be significant if combined together.
Meanwhile, all three experiment groups’ effect on
delivery speed also depend on consumers logistics
preference between 2 variations LR and LASQ.
Consumers think highly of LR variation, are more likely
to stick to a high level of delivery speed and choose
cash back to compensate the drop in speed. Whereas
consumers pay more attention to LASQ variation prefer
to sacrifice delivery speed for AP-gifts and a better
after-sale policy.
1) intelligent bracelet summation data analysis
The experiment group with slower delivery but good
after-sale strategy still gained most approval (29.79%)
from participants, but not that much compared to
washing machine experiment data. Quite different from
washing machine data, CB strategy experiment group
gained second large approval (28.09%) from consumers
whereas delivery speed only ranked the third (25.53%),
and AP-gift ranked the bottom (16.6%). Although
difference exists between washing machine experiment
and intelligent bracelet, consumers’ attitude to delivery
speed still can be found. They are still willing to
sacrifice delivery speed for better product return policy.
The AP-gift strategy group is not that welcomed here
probably because auxiliary products of intelligent
bracelet are not as necessary as those of washing
machine. However, if AP-gift strategy and CB strategy
are merged together, they gained the largest approval
from participants. Meanwhile, if all three experiment
groups are merged together, fast delivery group gained
about 1/4 approval only from customers, with more than
9% of whom do not really care about logistics
reliability. In other words, either buying washing
machine or intelligent bracelet, customers chose
similarly that they would like to sacrifice delivery speed
as long as the substitute is good enough.
2) intelligent bracelet detail data analysis
When go further refined, still some difference exists
between detail data and summation data.
Unlike the distribution of LASQ choices, the
distribution of LR is not consistent with the summation
data distribution. The difference mainly comes from the
preference of fast delivery group. fast delivery policy,
which ranked third in summation data, got the largest
approval (16.17%) within participants focusing on LR.
It is easily to understand and from which we can see
that when coming to intelligent bracelet, quite a few
customers sticked to fast delivery service. The substitute
effect on delivery speed is weaker in intelligent bracelet
experiment.
3) intelligent bracelet summary
In summary, good after-sale policy can mostly
substitute delivery speed. The CB strategy experiment
 group gained second large approval whereas AP-gift
strategy ranked the bottom. But they can be significant
if combined together. Meanwhile, all three experiment
groups’ effect on delivery speed also depends on
consumers logistics preference between 2 variations LR
and LASQ. Consumers think highly of LR variation, are
more likely to stick to fast delivery and choose better
after-sale policy to compensate the drop in speed.
Whereas consumers paying more attention to LASQ
variation prefer to sacrifice delivery speed for cash back
and a better after-sale policy.
C. compare and summary
To conclude, we compare the two experiment set for two
kind of household appliances. The common point of two
experiments is that delivery speed can be substituted by other
variations, and after-sale policy is the best replacement in the
cases. The difference of two cases is that the substitute effect is
stronger and AP-gift strategy is preferred in the washing
machine’s test. Thus it should be noticed that cash back
strategy (sometimes equivalent akin mark-down sale) may not
have that much attraction to customer when they buying a
large-scale household appliance online.
V. RESULTS AND ANALYSIS(REGRESSION ANALYSIS)
After the simulation experiment, we asked consumers to
rank those variables appeared in those 8 alternatives. The
outcome is used for weighted value to produce consumer
satisfaction score of each participant. We set the consumer
satisfaction as dependence variable, with 6 independent
variables (delivery speed; service attitude; after-sale policy;
logistics package quality; product integrality & consistency;
sales strategy). The independent data comes from the
alternatives (scored) which participants choose in the
experiment. Two cases’ regression outcomes are shown in
Table 7.
Although the values of R2 are not quite ideal in the two
cases, other tests are all passed, so the outcomes can at least
explain something. Form the two regression analysis outcomes,
it can be concluded that consumers pay more attention to the
after-sale policy. Product integrality& consistency is also
highly valued when customers buy washing machine, whereas
service quality is paid more attention when they buy intelligent
bracelet online.
TABLE VII. TABLE 7.REGRESSION OUTCOME
Std.
Non std. coefficient coefficient
Washing Trial
machine B Std. error version t Sig.
(constant) 5.464 .282 19.359
After-sale P .168 .014 .720 12.396
Product I&C .107 .029 .216 3.716
R2=0.66 F=78.513 F sig. =0.000 DW=2.047
Non std. Std.
coefficient coefficient
Intelligent Std. Trial
bracelet B error version t Sig.
(constant) 7.584 .204 37.144 .000
After-sale P .163 .013 .727 12.896 .000
Product I&C -.151 .028 -.308 -5.466 .000
R2=0.67 F=83.23 F sig. =0.000 DW=1.834
VI. CONCLUSION AND MANAGERIAL IMPLICATION
We investigate consumers’ cognition to delivery speed and
identify its change when facing with different substitutes as
well as under different conditions (different level of LR and
LASQ). We find that delivery speed is not the most important
valued variable for customers when they shop online.
Furthermore, consumers are not sensitive to the difference
between 1-day delivery and 7-days delivery. Besides, although
consumers’ preference is not always the same when facing
different products, they consider better after-sale policy and
sometimes even petty favors more attractive. In the meantime,
how the substitute effect acts is also decided by the level of LR
and LASQ.
Our result is important for industries involved in
ecommerce in China because it strongly suggests that delivery
speed competition is not the only solution. In our specific case
and for other product categories that share similar
characteristics, we suggest that if the merchant would like to
attain better consumer satisfaction but is feeling the pressure on
logistics cost, it should make more effort on the product after-
sale policy, flexibility of arrival time and even some sale
strategy on ecommerce platform in order to attract the
consumers. However, notice that any strategy should be used
according to certain product and different preference of
different consumers. As for products with rather different
characteristics, although the above suggestions are not directly
applicable, we believe that other service variables more
relevant to the particular product could still help the merchant
to differentiate and to gain more consumer satisfaction.
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