Impact of digital advertising on e-commerce retail sales: A comparative study between China and Japan

Abstract

The objective of this research is to examine the relationship between digital advertising and e-commerce retail sales in China and Japan. Digital advertising is classified as banner advertising, search advertising, social media advertising, and video advertising. Using a data sample from 2008 to 2018, the results show that all the four formats of digital advertising has positive substantial impact on e-commerce retail sales in Japan. In China, social media advertising and video advertising also show strong positive relationship with e-commerce retail sales. On the contrary, findings indicate insignificant positive impact of banner advertising and non-positive impact of search advertising in China. However, these two variables are justified by literature. While this study is restricted within China and Japan, the findings may correspond to those areas where digital advertising is also a major form of advertising strategy and advertisers can use these results for reference when launching advertising events.