Modeling and simulating Chinese cross-border e-commerce: an agent-based simulation approach

Abstract

Chinese cross-border e-commerce has become the largest in the world, overtaking US e-commerce and representing about 40% of total global e-commerce spending in 2018. This market is highly complex, uncertain, and poorly understood. Surveys and statistics have been used to characterise it, but new approaches are required to better understand its complexity. To address this gap, we present an agent-based model of Chinese cross-border e-commerce. For a realistic representation of the buyers’ decision-making mechanism and some elements of their communication, including word of mouth (WOM), we use endorsements theory, and a survey is used to specify the model. The aim of the study is twofold: (1) to present an agent-based simulation (ABS) model of the Chinese cross-border e-commerce market; and (2) to illustrate the potential of the model to explore future possible configurations of the market and to guide stakeholders’ decision making.