Avatar-equipped e-commerce is an information technology-driven business model in cyberspace. It is one of the most successful online venues developed in Korea. This research explores the process of developing customer loyalty regarding the use of Avatar in online communities and the possibility of the effective use of Avatar in electronic business development. In particular, five different social factors that affect individual users’ satisfaction and loyalty are identified. This conceptualization is built on a number of theories: customer satisfaction, self-identity, social presence, social comparison, and subjective norm. The results indicate strong support for the proposed model. This study is expected to contribute to the literature by assisting managers and academics to understand the nature of customer behavior when using Avatar. The current study will also give insight to the direction of future development of information technology-driven e-commerce.