Culture, convenience or efficiency: Customer behaviour in choosing local or foreign banks in China

Abstract

Purpose

The purpose of this paper is to define and test a supplier selection model for Chinese and foreign banks in China.

Design/methodology/approach

In total, 12 reasons affecting customers' choice in selecting Chinese or foreign banks are developed and their respective importance are tested through 2,000 questionnaires which were distributed over the city‐zones of Hangzhou.

Findings

Supplier performance in terms of responsiveness is of particular importance in preferring foreign banks, which are seen to have an advantage in terms of professionalism, innovation and client‐orientation. For Chinese banks only one selection reason belongs to an inherent advantage, a large and convenient network, with the other reasons deriving from government's protection and historical conditions. Surprisingly, cultural aspects such as “guanxi” or personal relationship are only of minor importance.

Research limitations/implications

Differentiates customers only by way of age and salary and focuses on the eastern urban population. Another shortcoming is the lack of extended qualitative research.

Practical implications

With the transition of the market for financial services in China customers will have increasing options to choose between Chinese and foreign banks. This paper offers valuable information regarding customer selection processes in China.

Originality/value

With most cross‐comparative research based on standard cultural dimensions, this study focuses on specific behaviour of Chinese customers in selecting services with Chinese or foreign banks, finding cross‐national differences to be less important than the characteristics of the specific market or product. This work also adds to the ongoing research agenda concerning Chinese customers' behaviour and Chinese banking.

Citation

Heijes, C. (2008), "Culture, convenience or efficiency: Customer behaviour in choosing local or foreign banks in China", Chinese Management Studies, Vol. 2 No. 3, pp. 183-202. https://doi.org/10.1108/17506140810895889