Structural Equation Modeling of Factors Influencing the Success of the Wearable Device Industry in Wenzhou

Abstract

This research investigates the key success factors (KSFs) of the wearable device industry in Wenzhou, China, by analyzing the impact of technological, market-related, and sociocultural variables on industry success. Using structural equation modeling (SEM), the study develops a framework to quantify these relationships and provides actionable insights for companies in the wearable technology sector. The research population includes stakeholders such as companies, consumers, industry experts, and government agencies. A sample size of 400 respondents was determined using the Taro Yamane formula, with stratified random sampling ensuring representation across diverse groups. Additionally, qualitative data was collected through interviews with nine small, medium, and large executive officers from three wearable device companies in Wenzhou. The findings reveal that technological, market-related, and sociocultural factors significantly influence the success of wearable devices, with statistical significance at the 0.05 level. The SEM model, KSF = 0.572SF + 0.547MF + 0.324*TF, demonstrates that sociocultural factors (SF) have the strongest impact (0.572), followed by market-related factors (MF) at 0.547 and technological factors (TF) at 0.324. This highlights the importance of aligning products and marketing strategies with Chinese consumer preferences and cultural trends. The model explains 79.40% of the variance in success, with a square multiple correlation of 0.794, confirming its reliability as a forecasting tool. The study provides a valuable framework for companies to guide strategic decision-making, allocate resources effectively, and predict success. By understanding the interconnectedness of these factors, companies can foster collaboration between departments and government agencies to drive innovation and adapt to societal changes. Ultimately, applying the insights from this SEM enables companies to enhance their competitiveness in the dynamic wearable device market through product differentiation, catering to local preferences, and building strong brand reputations. This research contributes to academic understanding and practical applications in the wearable technology industry.