The Role of Product Transparency and Pricing Strategy on Customer Behavior: Moderating Impact of Market Competition

This study investigates the influence of Product Transparency (PT) and Pricing Strategy (PS) on customer behavior, specifically examining Market Competition (MC) as a moderating factor. Grounded in Signal Theory, the Theory of Planned Behavior (TPB), and Social Exchange Theory (SET), we propose a model where customer trust and perceived value mediate the impact of firm strategies on purchase decisions and customer retention. Using a two-wave time-lagged design with anonymous respondent matching, data were analyzed from e-commerce consumers in China and Pakistan using PLS-SEM multi-group analysis. The findings reveal that market competition undermines the positive relationships in the model, with a greater impact in China than in Pakistan. In general, the results suggest that market competition negatively influences the efficiency of product transparency and pricing strategies in shaping customer trust, perceived value, customer retention, and purchase decisions, which is why firms should be able to adjust these strategies to the levels of market competition and country context. This research provides critical theoretical insights into signal translation and offers practical guidance for international e-commerce managers to refine their customer relationship strategies in highly competitive digital environments.