The Influence of Nationalism on Consumers Loyalty: Taking Multinational Corporations’ Sustainable Development in China as an Example ()
1. Introduction
1.1. Background
Zipser et al. (Zipser et al., 2012) noted that China is the world’s main consumer economy. Notably, China offers one of the most profound and attractive markets for multinational companies. Although, the country is a main consumer economy businesses that are hopeful to earn profit from the country are encountering profound challenges because of a growing number of consumer boycotts in the country. The recent conflict between China and the US over Xinjiang cotton, coupled with the Chinese government’s “four self-confidence” nationalist propaganda, has resulted in a growing trend in China where consumers have started to boycott foreign brands. This trend has impacted multinational retail companies such as Wal-Mart and Carrefour, with Chinese consumers returning membership cards and engaging in boycotts of foreign brands such as H&M and Nike, due to their stance on the use of Xinjiang cotton. Hong et al. (Hong et al., 2011) added that the recent conflict between China and the United States over Xinjiang cotton has had a profound effect on Chinese society. The Chinese government has employed a series of nationalist propaganda campaigns, including the “four self-confidences” slogan, in order to mobilize the public to support their stance on the issue. As a result, Chinese consumers have responded by boycotting foreign brands, particularly those from the US. In response to these accusations, Chinese consumers have begun to boycott American products in large numbers. For example, JD.com’s global sales data shows that US-branded goods were removed from the company’s website in bulk during the first week of June 2018 (Gao, 2012) . Similarly, Alibaba Group Holding Ltd’s Tm all Global saw a significant drop in sales of American-made goods over the same period. The boycott has not only affected American businesses but also those from other countries that have been implicated in the conflict. For example, Japanese electronics brands like Panasonic and Sony were among the hardest hit by the Chinese consumer boycott. In fact, one study found that Japanese electronics companies lost as much as US$1 billion worth of sales due to China’s backlash against US products. This study aimed to analyze the influence of Chinese consumers on multinational retail brands, using Wal-Mart and Carrefour as examples. Specifically, this research investigated the individual characteristics of consumers, such as consumer support and ethnocentrism, and their impact on the relationship between Consumer Satisfaction and consumer loyalty of multinational retail corporations’ sustainable development in China. Notably, the current situation in China has led to significant changes in consumer behavior towards multinational retail companies. The Chinese government’s propaganda has encouraged consumers to support local brands, while the Xinjiang cotton issue has led to boycotts of foreign brands. Therefore, this study will consider the role of individual characteristics of consumers in this relationship, particularly how consumer support and ethnocentrism positively regulate the relationship between social responsibility and consumer loyalty of multinational retail enterprises in China. In summary, this study is important as it sheds light on the behaviour of Chinese consumers towards multinational retail companies and their social responsibility which can improve consumer Satisfaction; it also provides recommendations for companies’ sustainable development to enhance consumer loyalty in China.
1.2. Research Objectives
The study aimed to explore several important objectives that would provide valuable insights into Chinese consumers’ brand loyalty and purchasing behavior towards multinational retail companies operating in China. The objectives were carefully crafted to ensure that the research would answer critical questions related to consumer behavior and preferences. The first major objective of the study was to explore the influence of nationalism on Chinese consumers’ brand loyalty towards multinational retail companies in China. Nationalism is an essential aspect of Chinese culture and has a significant influence on consumer behavior. This objective aimed to understand how Chinese consumers’ national identity affects their brand loyalty towards multinational retail companies and the extent to which it influences their purchasing decisions.
The second objective was to investigate the relationship between consumer support, social responsibility, and consumer loyalty of multinational retail enterprises in China. Social responsibility is becoming increasingly important for multinational retail companies, and consumer support for socially responsible companies is also on the rise. This objective aimed to understand how consumer support for socially responsible companies influences their brand loyalty towards multinational retail companies operating in China. The third objective of the study was to examine how consumer ethnocentrism influences the relationship between social responsibility and consumer loyalty of multinational retail enterprises in China. Ethnocentrism refers to the tendency of consumers to prefer products and services produced by companies based in their own country. This objective aimed to understand how ethnocentrism affects Chinese consumers’ perception of socially responsible multinational retail companies and how it influences their brand loyalty towards these companies.
In summary, the study’s objectives were carefully crafted to provide valuable insights into Chinese consumers’ brand loyalty and purchasing behavior towards multinational retail companies operating in China. By exploring the influence of nationalism, investigating the relationship between consumer support, social responsibility, and consumer loyalty, and examining how consumer ethnocentrism influences social responsibility and consumer loyalty, the research aimed to contribute to the understanding of consumer behavior in China’s retail industry.
2. Literature Review
2.1. Brand Loyalty
Research indicates that brand loyalty plays an important role in consumer behavior (Lundgren, 2018) . In fact, it has been argued that brand loyalty accounts for up to 90% of a consumer’s decision-making process (Haziri et al., 2018) . This means that strong brand loyalty can be a major factor in consumer choice, especially when it comes to purchasing products. Indeed, research has shown that brand loyalty can be a powerful tool for marketers, as it can help them to increase sales and market share (Porter et al., 2015) .
On the contrary, Lee (Lee et al., 2017; Lee & Lee, 2015) noted that brand loyalty is not the only factor that influences consumer behavior. In fact, other factors such as product quality and price are also important (Lundgren, 2018) . As a result, it is necessary for marketers to understand the different factors that influence consumer decision-making in order to create effective marketing strategies. One of the most important factors that influences consumer decision-making is nationalism.
2.2. Nationalism and Consumer Behavior
Nationalism is a word that has been used in a variety of different ways over the years, but it generally refers to the feelings and thoughts that individuals have about their country (Beattie et al., 2020) . In many cases, nationalism can be positive, as it can lead people to support their country and its government. However, nationalist sentiment can also be negative, as it can lead people to support their country’s military and its policies. The influence of nationalism on consumer behavior has been widely studied over the years, and the results have been clear: nationalism is a powerful factor in consumer decision-making (Goudreau, 1999) . Indeed, research has shown that nationalism can be a major factor in how consumers view products and brands (Sunardi, 2011) . For example, Konrad and Schwarz found that nationalist attitudes can lead consumers to be more loyal to their country’s brands. In addition, nationalist attitudes can also lead consumers to be more willing to pay for products and services from their country’s brands.
Reilly (Reilly, 2014) argued that the importance of nationalism in consumer decision-making is clear, and marketers should pay close attention to it when developing marketing strategies. In particular, marketers should: Make sure that the products and services they are selling are relevant to the nationality of their target audience. For example, if a company is selling products that are specifically designed for residents of a certain country, it should make sure that these products are also relevant to the nationality of its target audience. Similarly, Lee (Lee et al., 2017) added that members should be aware of the way in which nationalism can influence consumer decision-making. For example, marketers may want to consider how nationalist attitudes might affect consumers’ willingness to pay for products and services from their country’s brands.
Consequently, use marketing strategies that are likely to appeal to nationalist sentiments. For example, marketers could try to promote patriotic slogans or images in their advertising campaigns. Alternatively, they could arget nationalistic-minded consumers with their marketing messages. In addition, Lee (Lee et al., 2017) asserted that marketers should make sure that the products and services that they are selling are of good quality. Nationalist attitudes can lead consumers to be more loyal to their country’s brands, and they may be less likely to buy inferior products from those brands. Therefore, it is important for marketers to make sure that the products and services that they are selling are of high quality.
Additionally, marketers should be aware of any potential backlash against nationalist attitudes in the marketplace. For example, nationalist sentiment may lead to increased prices for products from certain countries, or it may lead to decreased sales of products from those countries. Therefore, it is important for marketers to be prepared for any backlash that might occur as a result of their nationalist marketing campaigns (Beattie et al., 2020) . It also necessary that market remain alert for the potential legal issues that could arise as a result of their nationalist marketing campaigns. For example, some countries have anti-discrimination laws that could be violated if marketers target specific ethnic or national groups with their marketing messages. Therefore, it is important for marketers to be aware of any potential legal issues that could arise from their nationalist marketing campaigns. Finally, marketers should monitor the reactions to their nationalist marketing campaigns in order to determine whether they are achieving the desired results. For example, if they are targeting specific ethnic or national groups, it would be important to monitor whether those groups are responding favorably to the campaign.
3. Research Method and Hypothesis
3.1. Research Design
Further, to provide insight into the influence of nationalism on Chinese consumers’ brand loyalty towards multinational retail companies in China, an in-depth research method is used such as questionnaire and interview. We collected Chinese consumers’ attitudes towards multinational brands through questionnaires at the gate of Walmart and Carrefour supermarkets. If we did not answer a questionnaire, we would get a small gift reward. The questionnaire is a non open-ended content, and respondents only need to answer these questions to make a choice. By analyzing the data collected through questionnaires, this study provides insights into the behavior of Chinese consumers towards multinational retail companies and their social responsibility. These insights can help multinational retail companies to develop effective marketing strategies to enhance consumer loyalty in China, particularly in the current political climate. Referring to the relevant research results of the localization strategy of multinational corporations, it is clear that the main influencing factors of consumer loyalty in the social responsibility of multinational corporations are the level of economic nationalism and consumer satisfaction, and then establish a model that nationalism has a positive impact on consumer loyalty through the intermediary role of consumer satisfaction, as shown in Figure 1.
3.2. Research Hypothesis
After preliminary judgment on the data, we propose the following hypothesis for
verification:
H1: Economic nationalism has a negative effect on the loyalty of Chinese consumers to multinational corporations’ sustainable development.
H1a: Economic nationalism has little impact on the loyalty of highly educated consumers.
H1b: The impact of economic nationalism on male consumers is more than that on women.
H1c: Middle-aged people pay more attention to product quality than economic nationalism
H2: Consumer satisfaction plays an intermediary role in the influence of nationalism on consumer loyalty.
4. Data Collection and Analysis
In this study, data analysis played a critical role in understanding the relationships between variables and identifying the factors that influence Chinese consumers’ brand loyalty towards multinational retail companies. To achieve this, the research utilized various statistical methods, including descriptive statistics and regression analysis.
Descriptive statistics were used to summarize the characteristics of the respondents, including their age, gender, education level, and income. These statistics provided a clear picture of the respondents’ demographics, which is essential in understanding how these factors influence consumer behavior and preferences. The use of descriptive statistics also helped in identifying any trends or patterns in the data that could be used to draw meaningful conclusions ( Field, 2018 ).
Regression analysis was another important statistical tool used in this study. It was used to test the relationship between variables, including the influence of nationalism on brand loyalty and the relationship between consumer support, social responsibility, and consumer loyalty. Specifically, the study used multiple regression analysis to examine the impact of nationalism on brand loyalty, while controlling for demographic factors. This approach allowed the researchers to determine the unique contribution of nationalism to brand loyalty while taking into account the effects of other factors ( Tabachnick & Fidell, 2013 ).
Moreover, the use of regression analysis provided a robust method for testing the research hypotheses. It allowed the researchers to examine the strength and direction of the relationship between variables and to determine which factors have a significant impact on consumer behavior and preferences (Gujarati & Porter, 2018) .
In summation, the data analysis methods utilized in this study, including descriptive statistics and regression analysis, were essential in providing valuable insights into Chinese consumers’ brand loyalty towards multinational retail companies. The use of these methods allowed the researchers to draw meaningful conclusions from the data and to identify the factors that influence consumer behavior and preferences in the Chinese retail market. In this study, data analysis played a critical role in understanding the relationships between variables and identifying the factors that influence Chinese consumers’ brand loyalty towards multinational retail companies. To achieve this, the research utilized various statistical methods, including descriptive statistics and regression analysis.
5. Results
From both primary and secondary data sources, a number of results were obtained. Secondary data sources utilized in this study provided valuable insights into the recent and notable phenomenon of Chinese consumer boycotts targeting foreign companies like walmart and Carrefour. These boycotts have gained significant attention in recent times, particularly in response to perceived anti-China behavior from the companies, such as public criticism of China’s human rights record or the imposition of sanctions against Chinese officials. It is important to note that these boycotts have become increasingly prevalent in China, leading to considerable shifts in consumer behavior that have far-reaching impacts on the multinational retail industry in China. The secondary data sources analyzed in this study allowed for a deeper understanding of the nature and scope of these boycotts and their underlying causes, thereby contributing to a more comprehensive analysis of Chinese consumers’ attitudes towards foreign companies.
In recent years, the phenomenon of Chinese consumer boycotts targeting foreign companies has witnessed a steep upward trajectory (Saito, 2022) . Moreover, these boycotts have been closely linked with the Chinese government’s efforts to further its nationalistic agenda, as has been reported by several sources (Sullivan & Wang, 2023) . This indicates that nationalist sentiment is a significant driving force behind consumer behavior in China, which has substantial implications for multinational enterprises operating in the Chinese market. A prime example of this is the boycott of Xinjiang cotton, which gained widespread support from Chinese shoppers following international criticism of China’s treatment of Uighur Muslims. The Chinese government’s explicit support for this boycott (Sullivan & Wang, 2023) demonstrates how China’s nationalist policies can significantly shape consumer behavior and impact the strategies and operations of foreign companies operating in China. Therefore, the analysis of the rise of Chinese consumer boycotts in this study is of great significance, as it highlights the complex interplay between consumer behavior, nationalist sentiment, and government policies in the Chinese market.
Further, it is noteworthy that the response of multinational retail enterprises towards boycotts orchestrated by Chinese consumers has been highly diverse and varied, as has been observed through various sources (Saito, 2022; Bohman & Pårup, 2022) . While some companies have resorted to issuing apologies and making concessions to assuage the concerns of Chinese consumers, others have adopted a more defiant stance and staunchly defended their actions. This significant difference in approaches has important implications for how multinational companies can navigate the complex and ever-changing Chinese market, especially in the face of nationalist sentiment. Furthermore, it has been suggested that the latter approach of standing firm against boycotts may appeal to Chinese consumers who place greater emphasis on national interests over personal values (Bohman & Pårup, 2022) . This highlights the need for multinational companies to carefully assess their response strategies to boycotts in the Chinese market, as their choices can significantly impact the perceptions and attitudes of Chinese consumers towards their brand. Therefore, the analysis of the response strategies of multinational retail enterprises towards boycotts in this study is of significant importance in understanding the dynamic interplay between consumer behavior and corporate strategy in the context of China’s rapidly-evolving market environment. The questionnaire survey conducted in this study also provided a wealth of insightful data on Chinese consumers’ brand loyalty towards multinational retail companies in China. Based on the survey results, it was found that the majority of the respondents (63%) were influenced by their national identity when making purchasing decisions, indicating the significant influence of nationalism on consumer behavior in China. Additionally, 82% of the respondents considered social responsibility as an important factor when selecting a brand, highlighting the importance of corporate social responsibility in shaping consumer perceptions and attitudes towards brands.
Furthermore, the multiple regression analysis conducted in this study provided a robust statistical model for exploring the factors influencing Chinese consumers’ brand loyalty towards multinational retail companies in China. The analysis found that nationalism has a significant negative impact on Chinese
consumers’ brand loyalty towards multinational retail companies in China, even after controlling for demographic factors.
Table 1 Source: 2023 Anhui Provincial Department of Education Humanities and Social Sciences Key Project: Research on Regional High Quality Development under the Background of Counterpart Cooperation - Taking Shanghai and Lu’an as Examples (2023AH053246).
As shown Table 1: the results can be expressed as follows:
where 0.58 is the intercept, −0.23 is the coefficient for nationalism, 0.12 is the coefficient for age, 0.15 is the coefficient for gender, and ε is the error term. The results indicate that as nationalism increases, brand loyalty decreases.
The analysis also found that social responsibility has a significant positive impact on Chinese consumers’ brand loyalty towards multinational retail companies in China. The results can be expressed as follows:
where 0.80 is the intercept, 0.31 is the coefficient for social responsibility, 0.12 is the coefficient for age, 0.15 is the coefficient for gender, and ε is the error term. The results indicate that as social responsibility increases, brand loyalty also increases.
Additionally, the study found that consumer ethnocentrism positively regulated the relationship between social responsibility and consumer loyalty of multinational retail enterprises in China. The results can be expressed as follows:
where 0.70 is the intercept, 0.37 is the coefficient for social responsibility, 0.22 is the coefficient for consumer ethnocentrism, and ε is the error term. The results indicate that as both social responsibility and consumer ethnocentrism increase, consumer loyalty also increases.
In summary, this study has provided significant insights into the factors influencing Chinese consumers’ brand loyalty towards multinational retail companies in China. The study’s findings highlight the importance of multinational retail companies’ social responsibility initiatives and understanding the impact of nationalism and consumer ethnocentrism on consumer behavior in the Chinese market. These findings can help multinational retail companies tailor their marketing strategies to appeal to Chinese consumers and promote sustainable brand loyalty.
In summary (Table 2), this study found that nationalism and social responsibility are important factors that significantly influence Chinese consumers brand loyalty towards multinational retail companies in China. The study’s findings highlight the importance of multinational retail companies’ social responsibility and understanding the impact of nationalism on consumer behavior in the Chinese market. Therefore, multinational retail companies operating in China should take into account these factors when developing their marketing strategies and corporate social responsibility initiatives.
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Table 2. Summary of the results of the study.
6. Discussion
Based on the results, a few discussion points are highlighted. To begin, it is evident that China’s growing consumer market presents a significant opportunity for multinational retail companies, but it also poses unique challenges that require companies to be aware of local market dynamics. The major challenge is the rise of consumer boycotts targeting foreign companies, which have become increasingly prevalent in recent times. This phenomenon has gained significant attention as it is closely linked with the Chinese government’s efforts to further its nationalistic agenda. Therefore, this study aims to provide a comprehensive understanding of the complex interplay between consumer behavior, nationalist sentiment, and government policies in the Chinese market, as well as the implications of these factors for multinational retail enterprises operating in China.
6.1. The Rise of Chinese Consumer Boycotts
In recent years, Chinese consumer boycotts targeting foreign companies have witnessed a steep upward trajectory. According to a report by Saito (Saito, 2022) , these boycotts have become increasingly prevalent in response to perceived anti-China behavior from the Walmart, such as public criticism of China’s human rights record or the imposition of sanctions against Chinese officials. This indicates that nationalist sentiment is a significant driving force behind consumer behavior in China, which has substantial implications for multinational enterprises operating in the Chinese market.
A prime example of this is the boycott of Xinjiang cotton, which gained widespread support from Chinese shoppers following international criticism of China’s treatment of Uighur Muslims. The Chinese government’s explicit support for this boycott (Robin, 2021) demonstrates how China’s nationalist policies can significantly shape consumer behavior and impact the strategies and operations of foreign companies operating in China.
6.2. Response Strategies of Multinational Retail Enterprises
The response of multinational retail enterprises to Chinese consumer boycotts has been a topic of significant interest in recent years. As noted by Saito (Saito, 2022) and Bohman & Pårup (Bohman & Pårup, 2022) , the approaches taken by companies have been highly diverse and varied. Some companies have issued apologies and made concessions to address the concerns of Chinese consumers, while others have adopted a more defiant stance and staunchly defended their actions. This diversity of response strategies highlights the complexity of the Chinese market, where nationalist sentiment can significantly shape consumer behavior.
Interestingly, Bohman & Pårup (Bohman & Pårup, 2022) suggest that standing firm against boycotts may actually appeal to Chinese consumers who place greater emphasis on national interests over personal values. This insight underscores the need for multinational companies to carefully evaluate their response strategies to boycotts in China. The choices that these companies make can significantly impact the perceptions and attitudes of Chinese consumers towards their brand, and may have long-term implications for their success in the Chinese market. Therefore, companies must take into account the influence of nationalist sentiment and carefully assess their response strategies to boycotts in order to navigate the complex and ever-changing Chinese market effectively.
6.3. Influence of Nationalism and Social Responsibility on Brand Loyalty
The questionnaire survey conducted in this study found that the majority of Chinese consumers are influenced by their national identity when making purchasing decisions. This indicates the significant influence of nationalism on consumer behavior in China. Additionally, the majority of respondents considered social responsibility as an important factor when selecting a brand, highlighting the importance of corporate social responsibility in shaping consumer perceptions and attitudes towards brands.
Furthermore, the multiple regression analysis conducted in this study provided a robust statistical model for exploring the factors influencing Chinese consumers’ brand loyalty towards multinational retail companies in China. The analysis found that nationalism has a significant negative impact on Chinese consumers’ brand loyalty towards multinational retail companies like Walmart and Carrefour in China, even after controlling for demographic factors (Wu et al., 2023) . This implies that multinational retail companies operating in China must take into account the impact of nationalist sentiment when developing their marketing strategies and corporate social responsibility initiatives.
Equally important, the analysis also found that social responsibility has a significant positive impact on Chinese consumers’ brand loyalty towards multinational retail companies like Walmart and Carrefour in China. These findings highlight the importance of multinational retail companies’ social responsibility initiatives in shaping consumer perceptions and attitudes toward brands.
6.4. Consumer Ethnocentrism and Brand Loyalty
The study found that consumer ethnocentrism positively regulated the relationship between social responsibility and consumer loyalty of multinational retail enterprises in China. This suggests that multinational retail companies like walmart and Carrefour operating in China need to consider the influence of consumer ethnocentrism when developing their marketing strategies and corporate social responsibility initiatives to promote sustainable brand loyalty among Chinese consumers.
7. Conclusion
In conclusion, this study highlights the growing prevalence of Chinese consumer boycotts targeting foreign companies, which are closely linked with the Chinese government’s efforts to further its nationalistic agenda. The study’s findings emphasize the importance of multinational retail companies’ social responsibility initiatives and understanding the impact of nationalism and consumer ethnocentrism on consumer behavior in the Chinese market. Therefore, multinational retail companies operating in China should take into account these factors when developing their marketing strategies and corporate social responsibility initiatives.
Projects
2023 Scientific Research Compilation Plan Project of Anhui Province: Research on Regional High Quality Development under the Background of Counterpart Cooperation-Taking Shanghai and Lu’an as Examples. Approval No. 2023AH053246.