The Disruption of Swiss Consumer Willingness to Pay by Ultra- Low External Price Cues.

This bachelor’s thesis explores how the arrival of ultra-low-cost global platforms like Temu is reshaping consumer behavior in the traditionally high-income, high-trust Swiss market.

Goal of the study

Switzerland’s e-commerce landscape, dominated by local giants like Galaxus, is facing a "price-disruptive" challenge from international platforms. As platforms like Temu gain rapid popularity, with over 50% of Swiss adults ordered from ultra-low-cost platforms in 2024 (Kuhn, 2025). Concerns have grown regarding their impact on the pricing power of domestic retailers. The study specifically investigates how exposure to these extreme external price signals affects a consumer’s Willingness to Pay (WTP) for comparable products sold by local Swiss shops.

To answer this question, the study tests the following hypothesis:
• H1 (Anchoring effect): Consumers exposed to any low-price prime report a lower
WTP than the control group for the Swiss online retailer’s product.
• H2 (Temu brand-specific effect): Consumers exposed to the Temu product report a lower WTP than those exposed to a neutral low-price product.

Methodology

A quantitative, between-subjects experimental design was conducted using the Contingent Valuation Method (CVM). A final sample of N=94 Swiss residents was randomly assigned to one of three groups:

• Group 1: Exposed to a Temu ultra-low-price anchor (CHF 3.99) for a charging cable.
• Group 2: Exposed to a neutral low-price anchor from Galaxus (CHF 3.99) for a LED light string.
• Group 3: A control group with no price prime.

All participants then stated their maximum WTP for a standard USB charging cable sold by Galaxus.

Results and Discussion

The results strongly confirmed the General Anchoring Effect (H1). Exposure to the CHF 3.99 anchor caused a "statistically highly significant compression" of WTP, slashing the mean valuation by approximately 38.79% compared to the unanchored control group.

Interestingly, the study rejected the Temu Brand-specific Effect (H2). There was no statistically significant difference in WTP reduction between the Temu-branded anchor and the neutral anchor. For low-involvement commodity goods, the numerical magnitude of the price is the dominant psychological driver, overriding complex brand considerations like ethical concerns or quality signals. Essentially, the "extreme price utility" of the anchor overwhelmed higher-order processing regarding brand trust.

Strategic Recommendations for Local Retailers

The findings suggest that Swiss retailers can no longer rely on implicit "Swissness" or trust alone to justify price premiums for low-involvement goods. Instead, they must:

• Premium Category Focus
  Prioritise high-involvement products where quality signals significantly influence purchase decisions (e.g., home appliances, data storage devices) (Dodds et al., 1991).
• Ethical and Origin-Based Positioning
  Emphasise Swiss made attributes, country-of-origin cues, and high-end positioning to reinforce trust and perceived quality (Visbal et al., 2017; Bonelli et al., 2024).
• Non-Price Value Emphasis
  Compete through service-based value such as next-day delivery, risk-free returns, data security, and local support rather than price discounts (Janakiraman et al., 2016; Burstein et al., 2024).
• Reduced Price Salience
  Avoid direct price competition by shifting consumer attention toward superior value and reliability.

References:

•Bonelli, F., Caferra, R., & Morone, P. (2024). In need of a sustainable and just fashion industry: Identifying challenges and opportunities through a systematic literature review in a Global North/Global South perspective. Discover Sustainability, 5(1), 186. https://doi.org/10.1007/s43621-024-00400-5

•Burstein, A., Lein, S., & Vogel, J. (2024). Cross-border shopping: Evidence and welfare implications for Switzerland. Journal of International Economics, 152. https://doi.org/10.1016/j.jinteco.2024.104015

•Dodds, W. B., Monroe, K. B., & Grewal, D. (1991). Effects of Price, Brand, and Store Information on Buyers’ Product Evaluations. Journal of Marketing Research, 28(3), 307–319. https://doi.org/10.1177/002224379102800305

•Kuhn, M. (2025). Beliebte China-Shops: Familien und Frauen kaufen am meisten.

•Visbal, O., Ketty, H.-M., Orozco-Acosta, E., & Herzberg, M. (2017). The Influence of Country of Origin Cues on Product Evaluation: Evidence from Swiss and German Consumers.

•Janakiraman, N., Syrdal, H. A., & Freling, R. (2016). The Effect of Return Policy Leniency on Consumer Purchase and Return Decisions: A Meta-analytic Review. Journal of Retailing, 92(2), 226–235. https://doi.org/10.1016/j.jretai.2015.11.002