19 July, 2010
Md. Moktar Ali
Assistant Professor
Department of
Marketing
University of Dhaka
Dear Sir,
1 Factor Influencing Online Shopping
Aurora
12th Batch,
Department of Marketing
19th July, 2010
Factors Influencing Online Shopping Behavior
This is the report you instructed us to do on E-commerce. The topic of
assignment was “FACTORS INFLUENCING ONLINE SHOPPING”.
Here we are submitting the report as per your instruction. We’ve tried my best to
follow your instructions and recommendations. Therefore if any discrepancy
arises I’ll be obliged to answer it.
Sincerely,
AURORA
Afrin Azhar 1Tania Tabassum 11Faruk Hossain 35Imtiaz Hossain 81Tamanna Tasmin 95Rukhsana Shirin 99Zahid Hasan Khan 117
12th BatchDepartment of MarketingUniversity of Dhaka
2 Factor Influencing Online Shopping
Acknowledgement
This was rather a challenging job. At first we would like to thank almighty ALLAH
for giving me strength to complete this assignment as per instructions.
Our course instructor, MD. MOKTER ALI for giving us support and instructions.
Without his considerate motivations it would not have been possible.
Friends have always been an inspiration and source of motivation for us. For this
particular asignemnt I would like to thank, Sushmita Zaman for lending us her PC
and Reajul Alam for helping us with SPSS analysis.
Last but not the least, our family, for always being my backbone in every step.
Thanking all of them with real graciousness.
3 Factor Influencing Online Shopping
Table of Content
Executive summary 4
Introduction 5
Internet and online shopping in Bangladesh 6
B2B E-Commerce and Consumer
Behavior
7
Online Marketing Communication 9
Objective 10
Literature review 10
Conceptual Framework 12
Research framework 13
Model 14
Development of Hypotheses 14
Methodology 16
Data Analysis 17
Conclusion 33
Exhibit 34
Reference 49
4 Factor Influencing Online Shopping
Executive summary
Online shopping is one the most apparent reasons. Internet has become the fastest growing shopping
Channel. Online shopping includes the similar simple steps of decision making that of physical
shopping. A report of AcNeilsen in 2007 showed that more than 62 million people all over the world
shopped online in 2006. The number of Internet user and the number of ISPs in Bangladesh are
growing rapidly, Present user base of ISPs in Bangladesh is about 100,000 dial up users and 80, 000
broadband users. The number of ISPs is 146 registered with the appropriate authority. The Internet
facility is still an urban privilege in Bangladesh as the telephone connections are more concentrated
in urban areas, especially Dhaka based. Shopping online is not that much of a common phenomenon
in our country. Based on observation it can be said that only 2 people among 30 does online
shopping, that even once or twice in 10 to 15 years. Online shopping is strongly related with B2C e
commerce. Yet some websites are doing really well in this sector, like haatbazar.com, cellbazar.com
etc. When most people think of B2C e-commerce, they think of Amazon.com. In addition to online
retailers, B2C has grown to include services such as online banking, travel services, online auctions, health
information and real estate sites. The major objective of this paper is to identify and determine the preference
of online shopping. The dependent variable is factors influencing online shopping and the independent
variables are time, convenience, customer service, shopping experience, price, advertisement, speed, security
and trust, product delivery. To find out the most important factor and to analyze the hypotheses regression
analysis, factor analysis and chi-square test has undertaken.
5 Factor Influencing Online Shopping
Introduction
Emergence of technological development has altered the stream of everyday life. Starting form
household chores to even governing a nation; superior technologies has tiled a horizontal approach
for the human race. It is a regular phenomenon these days to revolutionize the former technology to
make way for the better and improved one. With the sense to make the best use of this revolution,
firms all over the globe are trying to evolve themselves around this. And as a consequence to this,
the competition is fiercer then ever before now. Everyone is trying to position themselves in the
most unique way possible.
“The easy way to get into a person’s mind is to be first. And if you can’t be the first one, try to be 1 st
amongst the 2nd “[Ries]. This truly revolutionary but most basic concept of positioning indicates to
the die-hard competition that is going on around us. The over communicated society of ours has
cluttered every information. To get through this clutter one suggestion is: Do not try to change the
mind set of the customer. Try to fit in the
perception that already exists in the minds of
the customer. [Ries]. To be unique in this
brutal competition other then just to
understand the mind set but also to provide
the necessary requirements of the customers.
And in this age of technology E-
COMMERECE does that for the firms. EC
brings together the difficult alignment jobs
in every step from production to marketing.
As the popularity of WWW (website) are
increasing day by day, it has manifested
itself in a number of ways like – 1) a number of companies that uses www to communicate with
customers and 2) customers use www for a variety of reasons (gerald haubl, valarie trift, 2000). And
it is obvious that online shopping is one the most apparent reasons. Internet has become the fastest
growing shopping Channel. Even though there is substantial divergence between purchasing system
6 Factor Influencing Online Shopping
and user interface, each individual has developed a generalized procedure for purchasing online.
Online shopping includes the similar simple steps of decision making that of physical shopping.
A report of AcNeilsen in 2007 showed that more then 62 million people all over the world shopped
online in 2006. Forrester (2006) anticipated that e-commerce market would grow from $228 billion
in 2007 to $288 billion in 2009 (Narges Delafrooz, 2 Laily Hj. Paim and 3 Ali Khatibi, 2009, 2010). People are
shopping online 24x7 today. Some market sectors, including insurance, financial services, computer
hardware and software, travel, books, music, video, flowers, and automobiles, are experiencing rapid
growth in online sales. For example, in Jan. 1999, Dell Computer Corp. was selling an average of
$14 million of equipment online per day, and Amazon.com has become the third largest bookseller in
the U.S., despite being in business only since 1995 (Bellman, Lohse, Johnson, 1999).
This uprising of internet shopping over brick & mortar shops is likely to continue as it gives some
services over them like – time, speed, product variety etc.
And keeping in pace with this world wide progression, Bangladesh has paved her way into this path.
This paper confers about the factors influencing online shoppers of our country.
Internet and online shopping in Bangladesh
Internet has existed since the late 1960s when a limited number of computers were connected in the
United States to form the ARPANET7. This was mainly used to enable academics and military
personnel to exchange defense information. Recent dramatic growth in the use of Internet has
occurred because of the development of World Wide Web. This became a commercial proposition in
1993. In Bangladesh it has come into operation commercially in the mid-90s. In early 90s,
Bangladesh had access to e-mail via BBS1. Bangladesh Telegraph and Telephone Board (BTTB)
granted licenses to two Internet Service Providers, Information Services Network (ISN) and
Grameen Cybernet to install VSAT2 data circuits in the same yea Bangladesh Telegraph and
Telephone Board (BTTB) granted licenses to two Internet Service Providers, Information Services
Network (ISN) and Grameen Cybernet to install VSAT2 data circuits in the same year. The number
of Internet user and the number of ISPs are growing rapidly, Present user base of ISPs in Bangladesh
1Bulletin Board Systems2Very Small Aperture Terminal, a satellite communications system
7 Factor Influencing Online Shopping
is about 100,000 dial up users and 80, 000 broadband users. The number of ISPs is 146 registered
with the appropriate authority. The Internet facility is still an urban privilege in Bangladesh as the
telephone connections are more concentrated in urban areas, especially Dhaka based. Recently
Bangladesh has been connected with information super highway through submarine optic fiber
networks with 16 countries consortium by SEA- ME-WE-4 project. The government of the People’s
Republic of Bangladesh has inaugurated the connectivity on 21st May 2006 although has not started
its operation for public use (Daily Star, 2006, Prothom Alo, 2006). The landing station has been
established in Cox’s Bazaar, the southern City, near the Bay of Bengal
In this overpopulated yet underdeveloped country shopping is one of the most widespread interests
of the citizens. Almost every other day the citizens create a traffic jam of their own in the shopping
malls. But as we stated above that Bangladesh is yet to be developed, so shopping online is not that
much of a common phenomena in our country. Based on observation it can be said that only 2
people among 30 does online shopping, that even once or twice in 10 to 15 years. However, some
young stars and technologically advanced individual are shopping online to get their preferred
special products. We are saying special products because in our country we don’t have that much
online shopping facility including sopping web sites, delivery system, product info etc. Yet some
websites are doing really well in this sector, like haatbazar.com, cellbazar.com etc.
B2C e-Commerce and consumer behavior:
Online shopping is strongly related with B2C e commerce. B2C stands for "business-to-consumer"
and applies to any business or organization that sells its products or services to consumers over the
Internet for their own use. When most people think of B2C e-commerce, they think of Amazon.com.
In addition to online retailers, B2C has grown to include services such as online banking, travel
services, online auctions, health information and real estate sites. B2C e-commerce has continued to
grow steadily. This growth has occurred not only in the developed countries, but in the developing as
well, resulting in an increasingly global community of online shoppers (Brown and Jayakody).
Consumer behavior is the study of when, why, how, and where people do or do not buy product. It
blends elements from psychology, sociology, social anthropology and economics. It attempts to
understand the buyer decision making process, both individually and in groups. It studies
8 Factor Influencing Online Shopping
characteristics of individual consumers such as demographics and behavioral variables in an attempt
to understand people's wants (Sandhusen, Richard L, Marketing, 2000). Consumer behavior in
online shopping depends on some variables like, price, fun, environment, customer service, product
variety, trust etc. the sources that can satisfy them on this factors wins the bet of having consumers
satisfaction. And in those sites consumer retention rate will presumably be high.
The model of online consumer decision making is similar to the original model with only difference
in the websites marketing effort.
Fig: Online consumer behavior model
9 Factor Influencing Online Shopping
This model describes how consumers make decision while shopping online. The above mentioned
factors influence this decision making. And the online shopping firms intend to keep an sharp eye on
these factors, so that they can serve the customers in order to gain more and more customer retention
rate. Cause the cost of gaining one new customer is much higher then the cost of retaining 5
customers.
Online Marketing Communications:
As like all other sectors, internet has affected marketing in a severe manner. OMC has improved to
be a significant part of a firms overall promotional mix. With the reach of internet, online marketing
mix has paved a smooth way to dominate the field of marketing. Where as OMC in its Early days
was limited to mainly the implementation of corporate websites, greater Possibilities exist today.
10 Factor Influencing Online Shopping
OMC today consists of multiple activities. This proposed model of Morten Bach Jensen of The IT
University of Copenhagen, Copenhagen, Denmark shows potential & prioritization of OMC.
Objective of the study:
1. To identify the factors that influence online shopping behavior
2. To determine the most important factor among the proposed factors
3. To determine the importance of each proposed factor
Literature review:
Many authors have discussed on this topic previously. Na Li and Ping Zhang of Syracuse University
have executed an empirical study on consumer online shopping behavior (2002) based on 35 articles.
This study was conducted on independent variables such as demographics, personality traits, website
quality, and vendor/service/product quality. Gerald Haubl and ValerieTrifts of University of Alberta,
Canada conducted another research on consumer decision making in online shopping (2000). This
study was conducted to find out what are the factors that influence decision making in online
shopping. Narges Delafrooz, Laily Hj. Paim and Ali Khatibi of University Putra Malaysia and
Management and Science University studied student’s online shopping behavior (2009, 2010) which
was on empirical level. They worked on two factors – 1) personality attributes and 2) perceived
benefits. They divided perceived benefits into several criteria like, fun, wider collection, price,
customer service etc. MD. Shah Azam of Rajshahi University worked on internet and technology
usage of Bangladesh (2007). Using the factors like, relative advantage, compatibility, trail ability,
complexity and observability he tried to figure out the amount of internet and technology usage in
our country. In, Predictors of Online Buying Behavior (1999): Steven Bellman, Gerald L. Lohse and
Eric. J. Johnson explained about the Wharton Forum on Electronic Committee and their research
project Wharton Virtual Test Market. In another research paper on Factors Affecting Students
Attitude Towards Online Shopping Behavior written by Narges Delafrooz, Laily H. Paim, Sharifah
Azizah Haron, Samsinar M. Sidin and Ali Khatibi the authors have worked on the variables like,
customer service, fun, good collection, good price, convenience etc to focus on students buying
behavior. Variables like, shopping experience, demographic characteristics, products perceptions,
11 Factor Influencing Online Shopping
customer service, customer risk were used in the article of Thomas W. Dillon and Harry L. Reif who
tried to indicate the key factors influencing consumers online commodity purchase (2004). A
working paper on comparative analysis among academics, strudents and others on the buying
behavior of online consumers focused on the factors like, convenience, competitive price, reliability,
security, easiness. It is a working paper of European Business Management School, written by, Dr
Panicos Georgiades, Dr Johann duPreez, Dr Bill Dowsland and Dr Antonis Simintiras. Tak-Kee Hui
and David Wan NUS Business School, National University of Singapore, Singapore, using
convenience, price, personality, and user experience, security concerns as independent variables, the
authors have shown the important factors influencing consumers online shopping in Singapore
(2000). In an article on factors affecting online purchasing behavior Hamisah Haji Hasan and Prof.
Samsudin A. Rahim worked on factors like, demographics, price, convenience etc. a detailed study
on Thai consumers online shopping behavior, Siriporn Thananuraksakul, International Graduate
School of Business, Division of Business, University of South Australia showed in detail starting
from e-commerce and internet itself to the factors (2007) and the analysis of those. He chose the
factors like, demographic including age, income, personality, area etc and other factors like, price,
time saving, price, trust, attitude, convenience. A study on usability versus security’s influence on
online consumer shopping was conducted by Rajasee Rege (2007) of Indiana University. Efthymios
Constantinides, who was an assistant professor at the time of writing his article, extended the web
experience as an important factor in influencing online shopping behavior (2004). An empirical
study on consumers online shopping behavior done by Dr Syed Shah Alam of Faculty of Business
Management Universiti Teknologi, Malaysia; Zaharah Bakar, Faculty of Business & Law,
Multimedia University, Malaysia; Dr Hishamuddin Bin Ismail; Dr Hishamuddin Bin Ismail, Faculty
of Business & Law, Multimedia University, Malaysia; Mst. Nilufar Ahsan, Research Fellow, Faculty
of Management, Multimedia University, Malaysia – emphasized on factors like, customer service,
reliability, trust, website design (2008). Taking the factors like retailer, service, environment and
motivation; Na Wang, Dongchang Liu, Jun Cheng of Department of business, Jilin University and
Changchun University of Science and Technology ahs written a paper on Influencing Factors of
Online Shopping (2008). An article on Effective Factors on Iranian Consumers Behavior in Internet
Shopping: A Soft Computing Approach was written by Maryam Ghasemaghaei, Bahram Ranjbarian
and S. Amirhassan Monadjemi of University of Isfahan, where they have taken about 13 factros
which includes price, time, convenience, security etc (2009). Masayoshi Maruyama, Le Viet Trung,
Kobe University conducted research on consumer shopping behavior taking factors such as,
12 Factor Influencing Online Shopping
demographics, price, retailer, freshness, new goods, quality safety etc. In The 3rd Saudi International
Conference, Talal Al-maghrabi and Charles Dennis of Brunel University presented a paper on
factors influencing online shopping behavior of Saudi Arabian consumers (2009) taking the
variables such as, site quality, trust, perceived usefulness enjoyment etc. Tzy-Wen Tang and Wen-
Hai Chi, Professor of National Dong-Hwa University, Taiwan worked on the trust factor of online
shopping. A research on online buying behavior was conducted by Thompson S.H.Teo, Yuanyou Yu
of National University of Singapore. Where they focused mainly on, trust factor and the uncertainty
related to online shopping. Trust, service quality, system quality and information quality was the
main variables taken by Irwin Brown and Ruwanga Jayakody University of Cape Town, South
Africa while writing an article about B2C ecommerce success (2008). According to Charles Dennis ,
Bill Merrilees Chanaka Jayawardhena and Len Tiu Wright in their article, E-consumer Behavior
(2009) mentioned, trust and own experience as an important factor. Morten Bach Jensen of The IT
University of Copenhagen, Copenhagen, Denmark shows potential of OMC in his article on Online
Marketing Communication Potential (2007).
Conceptual Framework:
The independent variables for this study are time, convenience, price, shopping experience, product
variety, delivery (Na Li and Ping Zhang , Gerald Haubl and Valerie Trifts, Narges Delafrooz, Laily
Hj. Paim and Ali Khatibi, Steven Bellman, Gerald L. Lohse and Eric. J. Johnson, Narges Delafrooz,
Laily H. Paim, Sharifah Azizah Haron, Samsinar M. Sidin and Ali Khatibi, Thomas W. Dillon and
Harry L. Reif, Dr Panicos Georgiades, Dr Johann duPreez, Dr Bill Dowsland and Dr Antonis
Simintiras. Tak-Kee Hui and David Wan, Hamisah Haji Hasan and Prof. Samsudin A. Rahim,
Siriporn Thananuraksakul, Rajasee Rege, Dr Syed Shah Alam, Zaharah Bakar, Dr Hishamuddin Bin
Ismail, Dr Hishamuddin Bin Ismail, Mst. Nilufar Ahsan, Maryam Ghasemaghaei, Bahram
Ranjbarian and S. Amirhassan Monadjemi, Masayoshi Maruyama, Le Viet Trun,
ThompsonS.H.Teo, YuanyouYu, Tzy-Wen Tang and Wen-Hai Chi, Talal Al-maghrabi and Charles
Dennis) and the dependant variable is consumer preference on online shopping. To find the
dependency on the variable 7 point likert scale is used. The questionnaire has been designed using
open ended, MCQ and likert scale questions.
13 Factor Influencing Online Shopping
Research Framework:
14 Factor Influencing Online Shopping
Research on factors influencing online shopping
Literature review
Questionnaire preparation
Secondary data
Conduct survey though field work
Primary data
Data Analysis
Selection of variables
Report preparation
Research model:
Hypotheses:
H0 Time is not an important factor influencing online shopping behavior
H1 Time is an important factor influencing online shopping behavior
H0 convenience not is an important factor influencing online shopping behavior
15 Factor Influencing Online Shopping
Consumer preference on online shopping
Time
Product Delivery
Convenience
Customer service
Security and trust
Shopping experience
Price
Advertisement
Speed
H2 convenience is an important factor influencing online shopping behavior
H0 Customer service is not an important factor influencing online shopping behavior
H3 Customer service is an important factor influencing online shopping behavior
H0 Security and trust is not an important factor influencing online shopping behavior
H4 Security and trust is an important factor influencing online shopping behavior
H0 Shopping experience is not an important factor influencing online shopping behavior
H5 Shopping experience is an important factor influencing online shopping behavior
H0 Price is not an important factor influencing online shopping behavior
H6 Price is an important factor influencing online shopping behavior
H0 Advertisement is not an important factor influencing online shopping behavior
H7 Advertisement is an important factor influencing online shopping behavior
H0 Speed is not an important factor influencing online shopping behavior
H8 Speed is an important factor influencing online shopping behavior
H0 Product delivery is not an important factor influencing online shopping behavior
H9 Product delivery is an important factor influencing online shopping behavior
Methodology:
To conduct this research the questionnaire has been developed using MCQ and 7 point likert scales
to measure the dependency of the variables. A sample of 30 young students has been selected
randomly. Besides primary data gathered from field work, secondary data is also used form different
published articles. The proposed paper is both qualitative and quantitative in
nature. This has take form of descriptive and exploratory research. To analyze
collected primary data, SPSS has been used. Confirmatory factor analysis,
16 Factor Influencing Online Shopping
descriptive statistics is used. To determine the most important factors amongst
the chosen variables linier regression is undertaken using this formula
[Malhotra]:
Here,
Y = Factors influencing online shopping
β 0 = constant ( intercept o the variable)
β 1 = Coefficient of time
X 1 = Importance of time
β 2 = Coefficient of convenience
X 2 = Importance of convenience
β 3 = Coefficient of customer service
X 3 = Importance of customer service
β 4 = Coefficient of Security and trust
X 4 = Importance of security and trust
β 5 = Coefficient of shopping experience
X 5 = Importance of shopping experience
β 6 = Coefficient of price
X 6 = Importance of price
β 7 = Coefficient of advertisement
X 7 = Importance of advertisement
β 8 = Coefficient of speed
X 8 = Importance of speed
β 9 = Coefficient of product delivery
X 9 = Importance of product delivery
e = Error
17 Factor Influencing Online Shopping
Y = β0 + β1X1 + β2X2 + β3X3 + β4X4 + β5X5 + β6X6 + β7X7 + β8X8 + β9X9 + e
Data Analysis:
Demographics:
Age of the respondent:
whether shopped online * age of the respondent Crosstabulation
Count
age of the respondent
Total15-20 21-25 26-30
whether shopped online yes 1 7 3 11
no 0 18 1 19
Total 1 25 4 30
From the above table it is clear that the rate of shopping online is high amongst the respondents
whose age is from 21 to 25 where 7 respondents out of 11 did online shopping.
Monthly Income:
18 Factor Influencing Online Shopping
whether shopped online * monthly income of the respondent Crosstabulation
Count
monthly income of the respondent
Totalless then 10,000 10,000-15,000 16,000-20,000
more than
20,000
whether shopped online yes 3 4 3 1 11
no 17 1 0 1 19
Total 20 5 3 2 30
The table here indicates that shopping online is a much common activity amongst those whose
monthly income range is 10000-15000tk.
Area:
area * whether shopped online Crosstabulation
Count
whether shopped online
Totalyes no
area motijheel 1 3 4
khilgaon/mogbazar 3 3 6
mirpur/mohammodpur 2 3 5
dhanmondi 2 5 7
gulshan 0 2 2
old dhaka 3 3 6
Total 11 19 30
Respondents living in Khilgaon/Motijheel and old Dhaka has the highest response towards online
shopping where 3 respondents amongst 6 did online shopping, followed by Mirpur/Mohammodpur
and Dhanmondi.
Gender:
19 Factor Influencing Online Shopping
whether shopped online * gender of the respondent Crosstabulation
Count
gender of the respondent
Totalmale female
whether shopped online yes 9 2 11
no 7 12 19
Total 16 14 30
Among our respondents, male respondents shop online more then female. Here it is clear as 9 male
respondents and 2 female respondents did online shopping among 30 respondents.
Occupation:
occupation of the respondent * whether shopped online Crosstabulation
Count
whether shopped online
Totalyes no
occupation of the respondent student 7 17 24
service holder 3 2 5
businessman 1 0 1
Total 11 19 30
This table indicates that students have the higher ratio of shopping online then others. As 7
respondents who shopped online were students among the 30 respondents.
Consumer preference level:
Website preference:
20 Factor Influencing Online Shopping
preference of website * reasons for prefering the site Crosstabulation
Count
reasons for prefering the site
Totalproduct variety discount offers
shopping there
is fun
offers are
convenient
preference of website amazon.com 6 1 0 0 7
alibaba.com 1 0 0 0 1
e-bay.com 5 1 0 5 11
cellbazar.com 4 2 2 3 11
Total 16 4 2 8 30
For the reason of product variety, most respondent prefer amazon.com; whereas for convenient offer
and product variety respondents prefer e-bay.com and for all the given reasons respondents prefer
cellbazar.com.
Preferred Delivery time:
Frequency Percent
within 1 day 14 46.7
2-3 days 12 40.0
within a week 4 13.3
Total 30 100.0
21 Factor Influencing Online Shopping
Product preference:
22 Factor Influencing Online Shopping
Frequency Percent
books & articles 14 46.7
music 6 20.0
accessories 6 20.0
software 3 10.0
others 1 3.3
Total 30 100.0
Usefulness of online shopping:
23 Factor Influencing Online Shopping
Recall Test of Bangladeshi Online Shops:
recall test of the name of online BD shops * recall test of BD online shop
Crosstabulation
Count
recall test of BD
online shop
Totalyes
recall test of the name of
online BD shops
Cellbazar.com 9 9
Haatbazar.com 2 2
Clickbd.com 5 5
Alibaba.com 1 1
Total 17 17
24 Factor Influencing Online Shopping
Extra factors:
Frequency Percent
Product visibility 5 16.7
Product quality 2 6.7
low transportation cost 1 3.3
nothing 21 70.0
relationship 1 3.3
Total 30 100.0
From this table it is clear that most respondents have No opinion about extra factor apart form the given variables. Yet 16% said product visibility is important to them.
25 Factor Influencing Online Shopping
26 Factor Influencing Online Shopping
Confirmatory Factor Analysis:
FactorsTime shopping online takes little time .852
choosing product takes less time .621
making final order takes less time .403Convenience online shops has huge variety of products .336
payment method is easy .169
free of carrying money always .573
products are available .684
a collection of special products are available .546
online shopping eases physical stress .727Customer Service good after sales service
.852
having user friendly guideline .112
response to complains .396
returning money product .798Security and trust reliability of the authority .636
credit security .803
secrecy of identity .766
non-discloser of data .611Shopping experience whether the environment is enjoyable .810
exciting features of the websites .828
playing games while browsing .245
knowing new people through forums .506Price offer low price .322
offer high priced product .829
27 Factor Influencing Online Shopping
charge extra for home delivery .755
Advertisementattractive ads .230
ads provide detailed information .592
frequent ads are shown .765
ads are seen almost everywhere .821Speed browsing speed .776
speedy ordering process .798
products searching speed .674
transaction speed .723Product Delivery scheduled time frame .855
product on the menu .737
compensation for late delivery .742
delivery-man is gentle .589
Taken 50% as a standard for significance, form this able it is clear that in time factor, “making final
order takes less time” is less important as it has 40%. Next in convenience factor, “payment method
is easy” and “online shops has huge variety of products” is less important then others as they have
33% and 16%. In customer service, “good after sales service” is important having 85% and
“returning money product” is also important having 79%. In security and trust, all the attributes are
very important having more then 60%. In shopping experience, “playing games while shopping” is
less important as it has only 24%. When it comes to price, “offers low price” is less important as it
has 32%. In the case of advertisement, “attractive ads” are less important having 23%. Speed is
another most important factor as all its attributes has more then 65%. Last but not the least; product
delivery is another important factor having more then 55%.
28 Factor Influencing Online Shopping
Regression Analysis:
In order to do linear regression excluding the unimportant factors another factor analysis is done,
which is represented as BART factor 1 for analysis, representing the variables:
SPSS output Representing variable
BART factor score 1 for analysis 10 Time
BART factor score 1 for analysis 11 Convenience
BART factor score 1 for analysis 12 Customer Service
BART factor score 1 for analysis 13 Security and trust
BART factor score 1 for analysis 14 Shopping Experience
BART factor score 1 for analysis 15 Price
BART factor score 1 for analysis 16 Advertisement
BART factor score 1 for analysis 17 Speed
BART factor score 1 for analysis 18 Product Delivery
The factors that are retained and the factors that are excluded are indicated here:
Factors Attributes Retained ExcludedTime shopping online takes little time ×
choosing product takes less time ×
making final order takes less time ×Convenience online shops has huge variety of products ×
payment method is easy
×free of carrying money always ×
products are available ×
a collection of special products are available ×
online shopping eases physical stress ×Customer Service good after sales service ×
29 Factor Influencing Online Shopping
having user friendly guideline ×
response to complains×
returning money product ×Security and trust reliability of the authority ×
credit security ×
secrecy of identity ×
non-discloser of data ×Shopping experience whether the environment is enjoyable ×
exciting features of the websites ×
playing games while browsing×
knowing new people through forums ×Price offer low price ×
offer high priced product ×
charge extra for home delivery ×
Advertisementattractive ads
×ads provide detailed information ×
frequent ads are shown×
ads are seen almost everywhere ×Speed browsing speed ×
speedy ordering process ×
products searching speed×
transaction speed ×Product Delivery scheduled time frame ×
product on the menu ×
compensation for late delivery ×
delivery-man is gentle ×
30 Factor Influencing Online Shopping
Regressions:
Coefficients
Model
Unstandardized Coefficients
Standardized
Coefficients
t Sig.B Std. Error Beta
BART factor score 1 for
analysis 10.024 .442 .012 .055 .957
BART factor score 1 for
analysis 11.106 .405 .054 .261 .797
BART factor score 1 for
analysis 12.874 .358 .450 2.443 .024
BART factor score 1 for
analysis 13.594 .383 .306 1.549 .137
BART factor score 1 for
analysis 141.208 .434 .622 2.783 .011
BART factor score 1 for
analysis 15.349 .411 .180 .849 .406
BART factor score 1 for
analysis 16.364 .374 .187 .973 .342
BART factor score 1 for
analysis 17.032 .447 .017 .072 .943
BART factor score 1 for
analysis 18.866 .533 .446 1.625 .120
a. Dependent Variable: preference of online shopping
31 Factor Influencing Online Shopping
From regression analysis we can decide the most important factors affecting online shopping. To
determine these we have to take into consideration the significance level, which should be bellow
0.05. Because the confidence level is 95%, which means up to 5% error is tolerable. So if the value
is below .05, that indicates that it is correct.
From the table above we can see that, BART factor score 1 for analysis 12, which is customer
service is 0.024. Another factor, BART factor score 1 for analysis 14, that is shopping experience is
0.011. So, these two are the most important factor.
Another two factors, BART factor score 1 for analysis 13 and BART factor score 1 for analysis
18, security and trust and product delivery stands close to 0.05. So we can say these two factors are
also important.
From the above graph the statement is clearer.
32 Factor Influencing Online Shopping
Model Summary
Model R R Square
Adjusted R
Square
Std. Error of the
Estimate
1 .721a .520 .303 1.62146
a. Predictors: (Constant), BART factor score 1 for analysis 18, BART
factor score 1 for analysis 14, BART factor score 1 for analysis 11,
BART factor score 1 for analysis 12, BART factor score 1 for
analysis 15, BART factor score 1 for analysis 16, BART factor score
1 for analysis 13, BART factor score 1 for analysis 10, BART factor
score 1 for analysis 17
If R. Square is more than 50%, then regression model is correct. Here in this model summery, R.
Square is 52%. So we can say that the proposed regression model is correct. [Malhotra]
Hypotheses Test:
H0/H1:
KMO and Bartlett's Test
Kaiser-Meyer-Olkin Measure of Sampling Adequacy. .500
Bartlett's Test of Sphericity Approx. Chi-Square 1.702
df 1
Sig. .192
For DF (Degree of Freedom) = 1 The Chi – Square should be less than 3.341 [malhotra]. Here chi-
square is 1.702. So here H0 is accepted and HI is rejected. It indicates that time is not an important
factor in online shopping.
H0/H2:
KMO and Bartlett's Test
Kaiser-Meyer-Olkin Measure of Sampling Adequacy. .500
Bartlett's Test of Sphericity Approx. Chi-Square 4.256
df 1
Sig. .039
33 Factor Influencing Online Shopping
As mentioned earlier, chi-square = 4.256. So here H0 is rejected and H2 is accepted. That indicates
that convenience is an important factor in online shopping.
H0/H3:
KMO and Bartlett's Test
Kaiser-Meyer-Olkin Measure of Sampling Adequacy. .500
Bartlett's Test of Sphericity Approx. Chi-Square 7.007
df 1
Sig. .008
Here Chi-square = 7.007, so H0 Is rejected and H3 is accepted which indicates that customer service
is an important factor.
H0/H4
KMO and Bartlett's Test
Kaiser-Meyer-Olkin Measure of Sampling Adequacy. .390
Bartlett's Test of Sphericity Approx. Chi-Square 28.745
df 6
Sig. .000
From chi-square table we get that DF6 = 12. This table shows that chi square is 28.745 where DF is
6. So H0 is rejected and H4 is accepted. It denotes that security and trust is an important factor.
H0/H5:
KMO and Bartlett's Test
Kaiser-Meyer-Olkin Measure of Sampling Adequacy. .533
Bartlett's Test of Sphericity Approx. Chi-Square 10.375
df 3
Sig. .016
As per given chi-square table, DF3 = 7.815. Here chi square is 10.375 and DF is 3, so HO is rejected
and H5 is accepted, which means shopping experience is an important factor.
H0/H6:
34 Factor Influencing Online Shopping
KMO and Bartlett's Test
Kaiser-Meyer-Olkin Measure of Sampling Adequacy. .500
Bartlett's Test of Sphericity Approx. Chi-Square 3.228
df 1
Sig. .072
Here chi square is 3.23, so H0 is accepted and H6 Is rejected. Therefore, price is not an important
factor here.
H0/H7:
KMO and Bartlett's Test
Kaiser-Meyer-Olkin Measure of Sampling Adequacy. .615
Bartlett's Test of Sphericity Approx. Chi-Square 8.173
df 3
Sig. .043
As chi square is above 8, so we can say that here, H0 is rejected and H7 is accepted, which denotes
that advertisement is an important factor here.
H0/H8:
KMO and Bartlett's Test
Kaiser-Meyer-Olkin Measure of Sampling Adequacy. .584
Bartlett's Test of Sphericity Approx. Chi-Square 26.782
df 6
Sig. .000
From chi-square table we see DF6=12.592. As chi square here are 26.782 so H0 is rejected and H8
is accepted. That means speed is an important factor here.
H0/H9:
KMO and Bartlett's Test
Kaiser-Meyer-Olkin Measure of Sampling Adequacy. .703
Bartlett's Test of Sphericity Approx. Chi-Square 22.335
df 6
Sig. .001
35 Factor Influencing Online Shopping
As chi square here is 22.335 so H0 is rejected and H9 is accepted. Therefore it is clear that here;
product delivery is an important factor.
Variables Accepted Rejected
Time H0 H1
Convenience H2 H0
Customer Service H3 H0
Security & Trust H4 H0
Shopping Experience H5 H0
Price H0 H6
Speed H7 H0
Advertisement H8 H0
Product Delivery H9 H0
Summary of Hypotheses Test
From this summary it is clear that amongst all the factors, time and is not important factor.
36 Factor Influencing Online Shopping
Conclusion & Recommendation
From the above regression analysis, it is clear that among all the variables selected as important
factor for influencing online shopping, customer service, shopping experience is the most important
factor followed by product deliver and security and trust.
And from chi-square test it is clear that except time and price, all the factors are important in online
shopping.
From our analysis we found that most of our respondents shop online for books and articles. People
buy these products mostly to fulfill their hobby. So in this regard they don’t mind waiting long time
to search for the product or it doesn’t bother them if the price is a bit high.
But other factors such as customer service and trust is very important, cause customers wants to get
these materials as per ordered within expected time period without hampering their personal data.
Our research indicates that mostly young people shop online. So shopping experience and speed
playas a important factor here.
Taking into consideration, all these information, our recommendation for Bangladeshi online-shops
are:
1. Reestablish the important factors
2. Building brand image surrounding these factors
3. Analysis over time to find out the validity of these factors
4. Attracting new customers on these factors.
5. Retain the existing customers showing the latest improvements
6. Before changing the whole system in one night, pilot survey should be conducted.
37 Factor Influencing Online Shopping
Exhibits:
Factor Analysis:
Time
Communalities
Initial Extraction
shopping online takes little
time1.000 .622
choosing product takes less
time1.000 .622
Extraction Method: Principal Component Analysis.
Total Variance Explained
Compo
nent
Initial Eigenvalues Extraction Sums of Squared Loadings
Total % of Variance Cumulative % Total % of Variance Cumulative %
1 1.245 62.249 62.249 1.245 62.249 62.249
2 .755 37.751 100.000
Extraction Method: Principal Component Analysis.
Convenience:
Communalities
Initial Extraction
products are available 1.000 .689
online shopping eases
physical stress1.000 .689
Extraction Method: Principal Component Analysis.
38 Factor Influencing Online Shopping
Total Variance Explained
Compo
nent
Initial Eigenvalues Extraction Sums of Squared Loadings
Total % of Variance Cumulative % Total % of Variance Cumulative %
1 1.379 68.932 68.932 1.379 68.932 68.932
2 .621 31.068 100.000
Extraction Method: Principal Component Analysis.
Customer service
Communalities
Initial Extraction
good after sales service 1.000 .737
returning money/product 1.000 .737
Extraction Method: Principal Component Analysis.
Total Variance Explained
Compo
nent
Initial Eigenvalues Extraction Sums of Squared Loadings
Total % of Variance Cumulative % Total % of Variance Cumulative %
1 1.474 73.713 73.713 1.474 73.713 73.713
2 .526 26.287 100.000
Extraction Method: Principal Component Analysis.
Security and trust:
39 Factor Influencing Online Shopping
Communalities
Initial Extraction
reliability of the authority 1.000 .404
credit security 1.000 .645
secrecy of identity 1.000 .586
non-discloser of data 1.000 .374
Extraction Method: Principal Component Analysis.
Total Variance Explained
Compo
nent
Initial Eigenvalues Extraction Sums of Squared Loadings
Total % of Variance Cumulative % Total % of Variance Cumulative %
1 2.009 50.232 50.232 2.009 50.232 50.232
2 1.038 25.951 76.184
3 .727 18.165 94.349
4 .226 5.651 100.000
Extraction Method: Principal Component Analysis.
Shopping experience:
Communalities
Initial Extraction
whether the environment is
enjoyable1.000 .656
exciting features of the
websites1.000 .737
knowing new people through
forums1.000 .240
Extraction Method: Principal Component Analysis.
40 Factor Influencing Online Shopping
Total Variance Explained
Compo
nent
Initial Eigenvalues Extraction Sums of Squared Loadings
Total % of Variance Cumulative % Total % of Variance Cumulative %
1 1.633 54.423 54.423 1.633 54.423 54.423
2 .906 30.190 84.614
3 .462 15.386 100.000
Extraction Method: Principal Component Analysis.
Price:
Communalities
Initial Extraction
offer high priced product 1.000 .666
charge extra for home
delivery1.000 .666
Extraction Method: Principal Component Analysis.
Total Variance Explained
Compo
nent
Initial Eigenvalues Extraction Sums of Squared Loadings
Total % of Variance Cumulative % Total % of Variance Cumulative %
1 1.333 66.640 66.640 1.333 66.640 66.640
2 .667 33.360 100.000
Extraction Method: Principal Component Analysis.
Advertisement:
41 Factor Influencing Online Shopping
Communalities
Initial Extraction
ads provide detailed
information1.000 .487
frequent ads are shown 1.000 .526
ads are seen almost
everywhere1.000 .637
Extraction Method: Principal Component Analysis.
Total Variance Explained
Compo
nent
Initial Eigenvalues Extraction Sums of Squared Loadings
Total % of Variance Cumulative % Total % of Variance Cumulative %
1 1.650 54.987 54.987 1.650 54.987 54.987
2 .760 25.332 80.319
3 .590 19.681 100.000
Extraction Method: Principal Component Analysis.
Speed:
Communalities
Initial Extraction
browsing speed 1.000 .602
speedy ordering process 1.000 .636
products searching speed 1.000 .454
transaction speed 1.000 .522
Extraction Method: Principal Component Analysis.
42 Factor Influencing Online Shopping
Total Variance Explained
Compo
nent
Initial Eigenvalues Extraction Sums of Squared Loadings
Total % of Variance Cumulative % Total % of Variance Cumulative %
1 2.214 55.362 55.362 2.214 55.362 55.362
2 .822 20.546 75.908
3 .654 16.350 92.259
4 .310 7.741 100.000
Extraction Method: Principal Component Analysis.
Product delivery:
Communalities
Initial Extraction
scheduled time frame 1.000 .730
product on the menu 1.000 .543
compensation for late
delivery1.000 .551
delivery-man is gentle 1.000 .347
Extraction Method: Principal Component Analysis.
Total Variance Explained
Compo
nent
Initial Eigenvalues Extraction Sums of Squared Loadings
Total % of Variance Cumulative % Total % of Variance Cumulative %
1 2.172 54.297 54.297 2.172 54.297 54.297
2 .795 19.878 74.175
3 .638 15.960 90.135
4 .395 9.865 100.000
Extraction Method: Principal Component Analysis.
43 Factor Influencing Online Shopping
Regression:
Variables Entered/Removedb
Model
Variables
Entered
Variables
Removed Method
1 BART factor
score 1 for
analysis 18,
BART factor
score 1 for
analysis 14,
BART factor
score 1 for
analysis 11,
BART factor
score 1 for
analysis 12,
BART factor
score 1 for
analysis 15,
BART factor
score 1 for
analysis 16,
BART factor
score 1 for
analysis 13,
BART factor
score 1 for
analysis 10,
BART factor
score 1 for
analysis 17a
. Enter
a. All requested variables entered.
b. Dependent Variable: preference of online shopping
44 Factor Influencing Online Shopping
ANOVAb
Model Sum of Squares df Mean Square F Sig.
1 Regression 56.884 9 6.320 2.404 .049a
Residual 52.582 20 2.629
Total 109.467 29
a. Predictors: (Constant), BART factor score 1 for analysis 18, BART factor score 1 for
analysis 14, BART factor score 1 for analysis 11, BART factor score 1 for analysis 12, BART
factor score 1 for analysis 15, BART factor score 1 for analysis 16, BART factor score 1 for
analysis 13, BART factor score 1 for analysis 10, BART factor score 1 for analysis 17
b. Dependent Variable: preference of online shopping
45 Factor Influencing Online Shopping
46 Factor Influencing Online Shopping
Questionnaire
[The information provided by you in this survey will only be used for educational purpose. We assure you that the secrecy of your identity and information will be maintained strictly.]
Demographics:i) What is your age?
a) 15 – 20 years b) 21 – 25 years c) 26 – 30 years
d) Above 30 yearsii) What is your monthly income?
a) Less then 10000tk b) 10000 – 150000tk c) 16000 – 20000tk
d) More then 20000tk iii) In which area do you live?
Ans: …………………………………………………………………………………………………iv) What is your occupation?a) Student b) Service holder c) Housewifed) Businessmanv) Gender : Male/Female
Attitude towards online shopping:1. Have you ever shopped online??
a) Yes b) No
2. Which of these websites would you prefer for shopping online?a) Amazon.com b) alibaba.com c) e-bay.com d)
cellbazar.com
3. Why do you prefer this site?a) They have variety of products b) They have amazing discount offers
c) Shopping there is fun d) Their offers are convenient for me
4. Which one of these delivery times would you prefer?a) Within 1 day b) 2-3 days c) within 1 week d)
more then 1 week
5. For which type of product would you shop online?
47 Factor Influencing Online Shopping
a) Books & articles b) music c) accessories d) software
e) Others ……………………………. (Please mention)
6. Do you think shopping online is more useful than traditional shopping? a) Yes b) No
7. Do you know any Bangladeshi online shops? a) Yes b) No
8. If yes, name them: …………………………………......
9. Select your opinion upon importance of these factors.
Time
Stronglydisagree
Disagree
Somewhat disagree
Neutral Somewhat agree
agree Strongly agree
Shopping online takes less time
Choosing product takes less time
Making final order takes less time
Convenience
Strongly Disagree
Disagree
Somewhat disagre
Neutral Somewhat agree
agree Strongly agree
48 Factor Influencing Online Shopping
e
Online shops has huge variety of products
Payment method is easy
Free of caring money all the time
Products are available
A collection of special products are available
Online shopping eases physical stress
Customer Service
StronglyDisagree
Disagree
Somewhat Disagree
Neutral Somewhat agree
Agree Strongly Agree
After purchasing a product online shops provide good customer service
These websites have user friendly guideline about their product/site
They response very quickly to my complains
If there is any damage or the product is not performing accordingly
49 Factor Influencing Online Shopping
they take the product back, returning the money.
Security and Trust
StronglyAgree
Agree Somewhat agree
Neutral Somewhat disagree
Disagree Strongly disagree
The authority of the online shop is reliable
The security of my credit is in good hands here
They keep my identity a secret
They don’t disclose my data
Shopping experience
StronglyAgree
Agree Somewhat agree
Neutral Somewhat disagree
Disagree Strongly disagree
I enjoy the environment of the website
This website has exciting cool features
I can play games while browsing
I get to know new people through their forums
50 Factor Influencing Online Shopping
Price
StronglyDisagree
Disagree Somewhat Disagree
Neutral Somewhat Agree
agree Strongly Agree
Online shops offer low price as they don’t have to maintain physical (brick & mortar) shops
Online shops offer high price as their products are of high quality and they have to bear the transportation cost
They charge extra money for home delivery service
Advertisement
StronglyDisagree
Disagree Somewhat Disagree
Neutral Somewhat agree
Agree Strongly agree
Their advertisements are very attractive
Their advertisements provides detailed information about their servicesThey provide frequent advertisements
51 Factor Influencing Online Shopping
Their advertisements are available everywhere
Speed
StronglyDisagree
Disagree Somewhat Disagree
Neutral Somewhat agree
Agree Strongly agree
This website has very good browsing speed
They have a speedy ordering processI can search for variety of products very quicklyThe transaction happens in a matter of no time
Product delivery
StronglyDisagree
Disagree
Somewhat Disagree
Neutral Somewhat agree
Agree Strongly agree
They deliver products within scheduled time frameThey deliver the product as it was on the menuIf they are late they compensate for thatThe delivery man is a gentleman
10. How much you prefer to shop online?StronglyDisagree
Disagree Somewhat Disagree
Neutral Somewhat agree
Agree Strongly agree
52 Factor Influencing Online Shopping
11. Apart from these factors, what other factors are important for you while shopping online?Ans: ………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………
Thank you for your kind co-operation.
53 Factor Influencing Online Shopping
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56 Factor Influencing Online Shopping
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