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IMR
20,5 A cross-cultural comparison of
Internet buying behavior
534
Effects of Internet usage, perceived risks,
and innovativeness
Cheol Park
Department of Management Information Systems, Korea University,
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Introduction
The Internet is revolutionizing marketing and trade. As the Internet is
essentially a global medium, it is one of the most significant and the greatest
marketing tools for the global marketplace (Samiee, 1998). The global nature of
the Internet, combined with the nature of the communications that it can
convey, makes it a perfect vehicle for international interactive marketing.
International consumer research in a cross-cultural context is needed for a
better understanding of global online consumer behavior (e.g. Javenpaa and
Tractinsky, 1999). Cultural imperatives are likely to have a profound impact on
the adoption and the use of the Internet in international marketing. For
example, since Internet shopping tends to be impersonal, methodical, and
International Marketing Review policy-driven, it is not clear that a Confucian-based culture of personal
Vol. 20 No. 5, 2003
pp. 534-553
interaction is well suited to it. Furthermore, cultures that score high on
q MCB UP Limited
0265-1335
uncertainty avoidance are less likely to be early adopters of Internet marketing
DOI 10.1108/02651330310498771 schemes, even if other cultural imperatives are met. However, some observers
view Internet-based transactions as essentially culture-free and personal owing Internet buying
to the perception that they bring parties closer together (Perterson et al., 1997). behavior
Some researchers found that many international users of the Internet are
similar to US users (Quelch and Klein, 1996). Are Internet users around the
world homogeneous, and is there a worldwide common culture of the Internet?
The tremendous advances in global travel, communication, and media have led
to suggestions that cultures are converging and that the globalization of
535
markets will create, or at least lead to, a common culture worldwide. However,
common or uniform behaviors appear, there continue to be clear differences in
what these behaviors mean to the individuals and groups of different cultures
(Costa and Bamossy, 1995).
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Theoretical background
Internet usage
Studies on the determinants of IT adoption and usage argue that perceived
usefulness and perceived ease of use are primary explanations of computer
acceptance behavior (Davis, 1986, 1989). Similarly, Igbaria et al. (1994) report
perceived usefulness and perceived fun play respective roles in the acceptance
of microcomputer technology. These factors can be applied to explain Internet
usage. Teo et al. (1998) found that perceived usefulness has consistently strong
effects on Internet usage, while the effects of perceived ease of use and
perceived enjoyment are partly supported. Loshe et al. (2000), using panel data,
found that the percentage of panelists making a purchase on the Internet
increases as a function of time spent online. They showed that the longer the
amount of time spent online, the greater the chance of making a purchase
online. Number of months online as well as length of time spent online is an
important predictor of online buying behavior (Bellman et al., 1999). They show
that a typical online buyer has a wired lifestyle. The wired lifestyle variables
include: number of months on the Internet; hours online per week; hours per
week working online; searching for product information online; and the attitude
IMR that email is indispensable. The variables predict buying behavior for 79
20,5 percent of the sample. Similar findings have also been reported by the research
of Citrin et al. (2000) on the role of Internet usage in the acceptance of Internet
shopping.
Perceived risks
536 Many marketing practitioners and researchers continue to be interested in
perceived risk because it is more powerful in explaining consumer behavior
and also because the theory has intuitive appeal and broad application
(Mitchell, 1999). Perceived risk is negatively correlated to self-esteem, rigidity
and risk taking and positively correlated to anxiety (Shaninger, 1976).
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Attitudes toward perceived risk also affects consumer behavior. For some
decision situations like gambling or stock market investing, attitudes towards
perceived risk between subjects make significant differences in risk preference
(Weber and Milliman, 1997). Bhatnagar et al. (2000) argued that the likelihood
of purchasing on the Internet decreases with increases in product risk. Risk
perception is argued to have cross-cultural variation. The perception of the
riskiness of activities threatening health and safety showed cultural variation
(Slovic et al., 1991; Kleinhesselink and Rosa, 1991). Bontempo et al. (1997)
observed cross-cultural differences also in the perception of the riskiness of
financial gambles, comparing students and security analysts from the USA, the
Netherlands, Hong Kong, and Taiwan. Previous research has also
demonstrated the existence of cross-cultural differences in risky choices.
Weber and Hsee (1998) argue that people in socially-collectivist cultures tend to
choose riskier options than those in individualist cultures.
Innovativeness
Innovativeness has received considerable attention among consumer
researchers (e.g. Hirschman, 1980; Midgley and Dowling, 1978; Rogers, 1983).
There are two approaches to innovativeness. Joseph and Vyas (1984) focus on a
cognitive style, global innovativeness, which incorporates an individuals
intellectual, perceptual, and attitudinal characteristics, arguing that this kind of
innovativeness is an important predictor of the adoption of innovations.
Goldsmith and Hofacker (1991) developed the domain specific innovation scale
as a Likert scale, arguing that it is a more useful predictor of the adoption of
innovations by consumers. Innovativeness should also be thought of as a
domain-specific phenomenon, linked to broader innovative traits, but more
predictive of actual behavior in a specific product than is global innovativeness
(Goldsmith and Flynn, 1995). Citrin et al. (2000) adopted the two measures of
innovativeness to explain consumer adoption of Internet shopping. Their
findings indicate that Internet usage and domain-specific innovativeness have
a direct influence on the adoption of Internet shopping. They also report that
domain-specific innovativeness is a moderator of the relationship between
Internet usage and the adoption of the Internet for shopping, but that general
innovativeness does not influence the use of the Internet for commerce. Like Internet buying
perceived risk, consumer innovativeness can be different according to cultural behavior
differences. Hofstede (1980, 1991) identifies three dimensions of national culture
that can be related to consumer innovativeness: individualism, uncertainty
avoidance, and masculinity. Individualism and masculinity are positively
related to consumer innovativeness whereas uncertainty avoidance is the
opposite (Skeenkamp et al., 1999). 537
Cultural differences
People are deeply influenced by the cultural values and norms they hold. Many
researchers have classified cultures around the world in various categories.
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The most typical category is Western vs Oriental culture. The Western cultural
value ascribes individualism and low-context while oriental ascribes
collectivism and high-context (Kim et al., 1998). Individualism-collectivism is
a cultural-level variable referring to the extent to which members of a culture
tend to have an independent versus interdependent construal of the self
(Hofstede, 1980). These cultural values influence consumption related
behaviors (Wang, 1999). Western cultural values describe how an individual
from an individualistic society fulfills his/her needs through a market system
that emphasizes individualistic goals (Tse, 1996). The independent
construction of the self, which is dominant in Western cultures, is rooted in
the belief that distinct individuals are inherently separate (Wong and Ahuvia,
1998). As hedonic value primarily gratifies the internal, private self, Cheng and
Schweitzer (1996) noted that American television ads stressed enjoyment much
more than did Chinese commercials. Collectivists tend to be concerned with
affiliating closely with others, maintaining connectedness, and blending the
self/other boundary (Aaker and Williams, 1998). In collective and high-context
cultures, group bonds and harmony are viewed as important, while analytical
procedures and structures tend to be avoided. On the contrary, in individual
and low-context cultures, explicit communication and clear procedures are
preferred. Such traits were represented in pursuing the values or benefits from
certain activity or behavior. Harmonic and holistic benefits would be preferred
in collective cultures while accurate and analytical benefits are opted for in
individual cultures.
Demographic variables
Demographic variables have been reported as significant variables influencing
on Internet usage and buying. Males were found to use the Internet for
downloading and purchasing activities to a greater extent compared to females
(Teo, 2001). One possible reason is that since males are more likely to be
interested in learning and using PCs compared to females, they are likely to be
more skilled in downloading and purchasing activities on the Internet. Zeffane
and Cheeks (1993) study of computer usage in an Australian
telecommunications organization found that age was negatively correlated
IMR with computer usage. Teo (2001), however, suggested that age was not
20,5 significantly related to usage of the Internet in terms of purchasing.
Research questions
Concerning Internet usage time, one might presume that Americans spend
538 more time on the Internet than Koreans because America is a more developed
country and is of course the origin of the Internet. However, recently Korea
become one of the leading countries of Internet development and there are some
unique cultural and infra-structural points relating to Internet usage.
Korean culture has undergone individualization for decades, although
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collectivism still remains (Han and Shin, 2000). The ideology of independence,
individuality and privacy has not yet been fully developed in Korean society.
Individuals still do not exist alone. Rather, they exist as a part of their extended
family and a collective network. The following concepts are said to be
fundamental to understand the communication behavior of Korean people:
che-myon (described as akin to, but more complex than, Western or Chinese
concepts of face), jung (described as a psychological bond that goes beyond
attachment and love), and noon-chi (described as an aspect of tacit
communication akin to mind reading) (Gudykunst et al., 1996). Because of
che-myon and noon-chi, Koreans usually do not speak to strangers. Likewise,
value placed on harmony with others accounts for the collectivist styles of
communication and for the absence of argumentation and debate in their daily
life (Becker, 1986). But because status effects such as age, gender and
occupation are reduced in computer-mediated communication (see Tan et al.,
1998), many Koreans feel freer when communicating with one another on the
Internet. Furthermore, the low price of Koreas broadband services (Point
Topic, 2002), combined with Koreans family-like social relationships helps to
promote Internet usage.
Koreans may spend more time online, first because they show a high level of
conformity with their peers (Cho and Kim, 2001). People in collectivist societies
conform more to their peers because they regard the behavior and opinions of
their peers as reference points. Korean people a have high degree of conformity
with their peers in using the Internet because Korean society is characterized
by collectivism. Collectivists are concerned with affiliating closely with others,
maintaining connectedness, and blending the self/other boundary. Second,
Koreans lead the world in per-capita broadband usage. High-speed connections
encourage Koreans to use online audio/video components and to play online
games, which are highly time consuming (NetValue, 2001). Since nearly 40
percent of the housing in Korea is apartments, broadband has been relatively
easy and cost-effective to install. Furthermore, the average monthly broadband
subscription is $28 (USD) with unlimited access time, which is highly
conducive to heavy Internet use. This has been possible because the Korean
government had made the information highway a national priority. There are a
lot of PC rooms (like Internet cafes) in Korea as well, which escalates the Internet buying
availability of the Internet. behavior
As stated above, cultural background is a strong determinant of risk
perception (Bontempo et al., 1997), but the perceived risk of online shopping is
not just a cultural matter, because the use of secure transaction systems or
policies on privacy protection will mainly determine the level of perceived risk
(Figure 1).
539
The uptake of B2C e-commerce is constrained by the availability of adequate
infrastructure for secure transactions. This infrastructure is unevenly
distributed across countries. According to OECD, Korea had less than one
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secure server per 100,000 inhabitants in 2000, almost the lowest level among
the OECD countries, while the USA had almost 25 (OECD, 2001b). Secure
servers are essential for e-commerce and trust, so the low availability of secure
servers in Korea makes online shoppers perceive a higher risk. In addition,
Americans have experienced direct marketing through catalogues,
telemarketing, and cable TV for much longer than Koreans have. So,
American consumers who are familiar with direct marketing may perceive less
risk involved in Internet buying.We propose the following research questions:
RQ1. Do Korean Internet users spend more time online than American
users?
RQ2. Do Korean Internet users perceive more risks in Internet buying than
American users?
Other research questions are relating to factors influencing Internet buying
behavior between two countries. The factors we considered were Internet
usage, perceived risks, innovativeness, demographics, and nationality. We
Figure 1.
Secure servers per
100,000 inhabitants
IMR built a conceptual model explaining factors influencing online buying on the
20,5 basis of past studies (e.g. Swaminathan et al., 1999; Lohse et al., 2000; Bellman
et al., 1999; Citrin et al., 2000). The relationships between each exploratory
variable and the dependent variable in Figure 2 were proved to be significant in
past research, but nationality and its interactions has never been considered.
540 Perceived product risks and consumer innovativeness may have different
relationships to the adoption of Internet shopping in different cultures.
According to previous research, both Internet usage and consumer
innovativeness are positively related to the adoption of Internet shopping in
the USA (Citrin et al., 2000). Citrin et al. (2000) found that higher levels of prior
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Internet usage, for purposes other than shopping, result in increased levels of
the use of the Internet for shopping. Domain-specific measures of
innovativeness have yielded more useful predictions of the adoption of
innovations by consumers (e.g. Goldsmith and Hofacker, 1991). It was found
that there is a significant positive relationship between domain-specific
innovativeness and the adoption of the Internet for shopping (Citrin et al., 2000).
Bhatnagar et al. (2000) argued that the likelihood of purchasing on the Internet
decreases with increases in perceived product risk. Perceived security of
transactions had a negative, although marginal, effect on the frequency of
shopping on the Internet (Swaminathan et al., 1999). According to Weber and
Hsee (1998), there are cross-cultural differences in risk perception, but not in
attitude towards perceived risk. The majority of respondents from the PRC,
Figure 2.
Conceptual model of
Internet shopping
USA, Germany, and Poland were willing to pay more for options perceived as Internet buying
less risky. We expect the same result will be found with Internet buying behavior
behaviors.
We considered dependent variables such as Internet buying intention and
online buying experience. Intention to behave (e.g. intention to buy) is widely
regarded as the most immediate antecedent of behavior (e.g. actual purchase).
Online buying experience means adoption of the Internet for shopping, and is
541
usually obtained by asking how often they use Internet for shopping (e.g.
Swaminathan et al., 1999; Citrin et al., 2000). While the experience of Internet
shopping is a measure of behavior, it seems to have an influence on intention to
buy. Ones past experience is an important influencing factor of ones future
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action.
There are few cross-cultural studies on how Internet usage, consumer
innovativeness, and perceived risks influence Internet buying behaviors, so we
attempted to identify cultural differences in these areas on Internet buying
behaviors. This lead us to making following research questions:
RQ3. Is there a cultural difference in the effect of Internet usage on Internet
buying behavior?
RQ4. Is there a cultural difference in the effect of perceived risk on Internet
buying behavior?
RQ5. Is there a cultural difference in the effect of innovativeness on Internet
buying behavior?
Method
Samples and procedures
An online survey was performed for obtaining data. The Korean subjects
consisted of a panel from an online survey company in Korea (www.survey.co.kr).
An HTML-format questionnaire was published on the Web site and the panel
members visited the website and responded to the survey. They were given air
mileage points as rewards. Of the Korean respondents 150 completed the online
survey. Unlike telephone surveys, we could not generate a representative
sample of American Internet users, so the American respondents were
contacted through email, newsgroups, Web-board postings and by inviting
them to visit the online survey site (www.survey.co.kr). Korean traditional
folding fans (bu-chae) were offered as an incentive for them. Of the US
respondents 133 completed the questionnaire. The available lists of e-mail
addresses are usually not representative (Furrer and Sudharshan, 2001), so we
diversified the sources of respondents to newsgroups and Web-boards.
In the Korean sample, 6.0 percent were in their teens, 45.3 percent were in
their twenties, 40.0 percent were in their thirties, and 8.7 percent were over
40 years old. The Korean sample consisted of 55.2 percent males, and 44.7
IMR percent females. The mean period of Internet usage was 3.88 years and the
20,5 mean time of Internet usage per week was 18.15 hours. In the US sample, 6.9
percent were in their teens, 36.2 percent were in their twenties, 32.3 percent
were in their thirties, and 24.6 percent were over forty years old. The American
sample consisted of 56.7 percent males, and 43.3 percent females. The mean
period of Internet usage was 4.84 years and the mean time of Internet usage per
542 week was 11.3 hours.
Our samples were from convenience sampling. Compared with the audience
profile of Nielsen/NetRatings (www.nielsen-netratings.com), the US sample had
slightly more male respondents (56.7 percent, 48.9 percent in
Nielsen/NetRatings), less teenage respondents (6.9 percent, 19.2 percent in
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Measurements
Internet usage. Internet usage is said to have three dimensions: frequency of
Internet usage, amount of daily Internet usage and diversity of Internet usage
(Igbaria et al., 1994). We focused on the first two dimensions by measuring
hours of Internet use. Hours of Internet use per week and number of months on
the Internet were measured by open-ended questions. Number of months on the
Internet was recoded to number of years on the Internet.
Perceived risks. Risk is a multidimensional construct. However, Bhatnagar
et al. (2000) argue that in the case of Internet shopping, two types of risk
product category risk and financial risk are predominant. Product category
risk matters if one has a specific product in mind before getting on the Internet.
Since we focus on the risks involved in buying online regardless of product
category, product risks are measured by concerns about product price and
information. The reliability coefficient for the scale was 0.671 for the Korean
sample and 0.738 for the American sample. Financial risk associated with
Internet shopping is primarily in regard to losing money via credit card fraud.
Perceived security of transactions and concern for privacy are major elements
of financial risk in online transactions. We measured privacy and security risks Internet buying
by a two-item five-point Likert-type scale in which the former were privacy behavior
concerns and the latter were the payment concerns. The reliability coefficient
for the scale was 0.581 for the Korean sample and 0.782 for the American
sample. The relatively lower reliabilities of some constructs might undermine
the significance of the findings and their generalizability, but Nunnallys
guidelines are primarily concerned with the development of finely tuned
543
measures of individual traits to be used for decisions about individual persons
(e.g. GMAT tests). As most marketing research is not of this nature, lower
levels of reliability may be acceptable in marketing research studies (Peter,
1979).
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Results
Cross-cultural differences in Internet usage and Internet shopping behavior
An Independent sample t-test was performed to see if there are any differences
between respondents from Korea and those from America. The results are
presented in Table I.
IMR The period of Internet usage (length) in the US sample was longer than that
20,5 of Korean sample, but the hours of Internet use per week (hours) in the Korean
sample was longer than that of the US sample. This result was consistent with
other research reports (e.g. Nielsen/NetRatings, 2002; NetValue, 2001). Korean
users were more innovative than American users, but showed higher perceived
risk on privacy and security (RISK1) as well as higher perceived risk on
544 product (RISK2) than American users. We could not find any significant
difference in online shopping experience (EXP) nor in the Internet buying
intention (BI) between the two samples.
strong reason to change them (Shimp, 1993). Therefore, we assumed that the
independent variables did not change during the period of our concern and
considered model 1. The explanatory power of the models, as indicated by R 2
for models 1 and 2 was 0.115 and 0.183 respectively.
Model 1 shows that perceived risk on privacy and security (RISK1)
negatively affects online buying experience (frequency of Internet shopping) (b
= 2 1.558, p , 0.05), whereas hours of Internet use is positively related to
online buying experience (b = 0.156, p , 0.01). Nationality (NAT) showed
interactions with perceived risk on privacy and security (RISK1) and hours of
Internet use in model 1. Model 1 also shows that the two variables act
differently in each country. Although perceived risk on privacy and security
perceived risk on product, and length of Internet use) do not interact with
nationality.
The analysis of model 2 shows that domain-specific innovativeness and
online buying experience affect online buying intention (b = 0.430, p , 0.01;
b = 0.027, p , 0.01), but that no variable interacts with nationality. In
summary, we found there are some cross-national differences in experience
(action), but no differences in intention (attitude).
Discussion
Internet usage and Internet buying behaviors
Internet usage time is greater in Korea than in the US but there are no
significant differences in Internet shopping experience or intention between the
two countries. According to Citrin et al. (2000), higher levels of Internet usage
result in increased Internet shopping, but this was not supported in our Korean
sample. One explanation for this is that the Internet is used primarily for the
purposes of education, information searching, online gaming, participation in
community forums, and personal communication in Korea (NetValue, 2001). As
Korea is a collective society, involvement in online communities is higher than
in any other country. The popular Web-sites of Korea are community sites such
as Daum, iloveschool, freechal. Internet users in Korea tend to spend
more time in online communities or communication, but less time shopping.
This may explain why there is no significant relationship between Internet
usage time and Internet shopping experience. There is another explanation for
this. Korea grabbed the top position in the world in terms of e-commerce site
access with 78.2 percent of its Internet users visiting e-commerce sites, but only
28.3 percent of them making secure connections, representing the actual
purchase, which is lower than that of western countries (NetValue, 2001). This
may be somewhat related to the high perceived risk among Korean Internet
users.
Other explanations for the lack of a significant relationship between usage
time and Internet shopping experience in Korea are as follows. Consumers are
shopping differently depending on whether their motivations for searching are
primarily experiential or goal directed (Babin et al., 1994). Goal-oriented Internet buying
shoppers are more interested in buying online than experiential shoppers behavior
(Wolfinbargar and Gilly, 2001). There should be some discrepancy in the
motivations for Internet use between Koreans and Americans. Comparing the
top 50 Web sites (as of March 2002) of Media Metrix US and the top 50 Web
sites (as of April 2002) of Internet Metrix Korea, some differences were found.
Although most sites in both top ten lists were portals, Koreans preferred
547
community portals rather than information portals. Furthermore, there were
two shopping sites (eBay and Amazon) in the US top ten list, while there were
none in the Korean list. If we classify the motivations for Internet usage using
theories of mass communication (Defleur and Ball-Rokeach, 1989), Koreans, as
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culture similar to China, the cushion hypothesis can be an explanation for the
results of this research.
Bellman et al. (1999) explains that while online consumers are concerned,
security and privacy concerns are a decreasingly important predictor of
shopping behavior, because the number of consumers who has a bad
experience with buying online will decrease over time. With the increase of
secure servers and direct marketing in Korea, it is expected that the effect of
perceived risk on Internet buying will decrease accordingly.
Managerial implications
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The finding that Korean online shoppers take risks offers some marketing
implications. It might be important to develop a marketing strategy for
promoting Internet shopping rather than to improve secure e-commerce
systems. For example, discount pricing or convenient purchasing processes
should come prior to protecting personal information or security for payments.
As Korean Internet shoppers prefer big and noted shopping malls where they
feel more secure, marketers of independent Internet shopping malls could
consider strategic alliances with more-established malls to reduce perceived
risks among their customers. This means foreign Internet shopping malls
might be more successful if they align with famous Korean shopping malls in
developing a Korean target market, because familiar brands or store names
could reduce perceived risks involved in online shopping.
The finding that Internet usage time is greater in Korea, but that usage is not
related to Internet buying, implies that Internet marketers in Korea need to
encourage Internet users to convert to Internet buyers. As Koreans use the
Internet for social (e.g. virtual communities) and recreational (e.g. network
games) purposes, Internet marketers should develop strategies that lead them
from communities of fantasy, relationship, and interest towards communities
of transaction (Armstrong and Hagel, 1996). Recently, in Daum (www.daum.
net), the biggest online community site in Korea, sales from of shopping malls
rapidly increased to 73 percent in 2001 from 28 percent in 2000, while the
portion of online advertising decreased to 21 percent in 2001 from 54 percent in
2000 (Yonhap News, 2003). This shows that community sites in Korea are
trying to develop e-commerce transactions.
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Further reading Internet buying
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store loyalty, European Journal of Marketing, Vol. 32 No. 5/6, pp. 499-513.
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Radford, M., Mann, L., Ohta, Y. and Nakone, Y. (1993), Difference between Australian and
Japanese students in decisional self-esteem, decision stress, and coping styles, Journal of 553
Cross-Cultural Psychology, Vol. 24, pp. 284-97.
Skeenkamp, J. and Baumgartner, H. (1998), Assessing measurement invariance in cross-national
consumer research, Journal of Consumer Research, Vol. 25, pp. 78-90.
Slovic, P., Kraus, N.N., Lappe, H. and Majors, M. (1991), Risk perception of prescription drugs:
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