online shopping habits-Chapter 2


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online shopping habits-Chapter 2

  1. 1. 6 CHAPTER-2 REVIEW OF LITERATURE 2.1 INTRODUCTION A lot of studies have been conducted globally as well as national level in order to find out the online shopping habits of people. In this chapter we conduct a brief survey of such works which enable us to have a better perception of the topic and to study the outcome of such previous works and to make comparisons. 2.2 ONLINE SHOPPING HABITS-LITERATURE REVIEW Khalifa and Limayem (2003) in a research entitled "Drivers of internet shopping" applied well-established behavioral theories to explain Internet consumer behaviour. Then, they conducted a longitudinal survey study to identify key factors influencing purchasing on the Web and to examine their relative importance. The results indicate that the intentions of Internet consumers are significantly affected by the perceived consequences of online shopping, the consumers’ attitudes towards it, and social influence. Kim and Park (2003) in a study "Identifying key factors affecting consumer purchase behaviour in an online shopping context" investigated the relationship between various characteristics of online shopping and consumer purchase behaviour. Result of the online survey with 602 Korean customers of online bookstores indicate that information quality, user interface quality and security perceptions affect information satisfaction and relational benefit that in turn, are significant related to each consumers’ site commitment and actual purchase behaviour. Ying (2006) in his study "Essay on modeling consumer behaviour in online shopping environments" examined online purchase behaviour across multiple shopping sessions. Shopping cart abandonment is the bane of many e-commerce websites. He investigated abandoned shopping carts in an online grocery shopping setting. Specifically, he developed a joint model for the cart, order, and purchase quantity decisions. The interdependence between the three decisions is captured by the correlations between the error terms. Empirical analysis shows that not all abandoned shopping carts result in lost sales. Customers routinely pick up abandoned carts and complete the final orders. Among the factors that propel
  2. 2. 7 customers to continue with aborted shopping are the time of shopping, time elapsed since the previous visit, the number of items left in the abandoned cart, and promotion intensity. The study offers marketers important managerial implications on how to mitigate the shopping cart abandonment problem. Demangeot and Broderick (2007) in a research entitled "Conceptualizing consumer behaviour in online shopping environments", seek to adopt a holistic approach to consider how consumers perceive online shopping environments. The conceptual model proposes that consumers perceive these environments in terms of their sense-making and exploratory potential, and it considers the influence of these on user involvement with the website, shopping value and intention to revisit Findings indicate that sense-making and exploratory potential are distinct constructs; exploratory potential mediates the relationship between sense-making potential and involvement. Furthermore, involvement is essential in producing shopping value and intention to revisit. A survey conducted by MasterCard worldwide, (December 2008), on 5037 respondents across 10 markets: Australia, China, Hong Kong, India, Japan, Singapore, South Korea, Thailand, UAE and South Africa, revealed that Online shopping in the Asia-Pacific region is accelerating at an annual rate of 23.3 percent to hit US $168.7 billion by2011, with the region's new markets such as China and India fuelling this growth. MasterCard Worldwide published its latest Insights Report, “Economic Crisis and Preference for Online Shopping in Asia/Pacific, Middle East and Africa”, which shows that in India the average frequency of online purchases increased to 2.9 in fourth quarter of 2008,up from 2.6 during the same quarter in 2007. The survey showed that the Asia-Pacific region was found to be an active one for online shopping, where 76 percent of respondents said they intend to make a purchase in the next six months. The survey also highlighted the rise of shoppers in the fast-growing markets of China and India. The rising population of upper- middle income urban elites is likely to boost the online shopping markets in China and India underpinned by a paid pace of urbanization, robust economic expansion and rising spending power. Activity from these markets is expected to topple the current "pre-eminence" of Japan and South Korea in terms of share of the total online form of shopping in India. Chen (2009) in his dissertation entitled "Online consumer behaviour: an empirical study based on theory of planned behaviour " extends theory of planned behaviour
  3. 3. 8 (TPB) by including ten important antecedents as external beliefs to online consumer behaviour. The results of data analysis confirm perceived ease of use (PEOU) and trust are essential antecedents in determining online consumer behavior through behavioral attitude and perceived behavioural control. The findings also indicate that cost reduction helps the consumer create positive attitude toward purchase. Further, the findings show the effects of two constructs of flow –concentration and telepresence, on consumers’ attitude. Concentration is positively related to attitude toward purchase, but telepresence likely decreases attitude due to the consumers’ possible nervousness or concern about uncertainty in the online environment. A study by ACNielsen (2009), covering 38 markets and over 21,100 respondents across the globe has revealed that more Indians are taking to shopping online. It suggested an upward trend in online shopping across the world. A significant observation of this study was that India beat the global counterparts in number of purchases per month, with a mean of 5.2 purchases against the global average of 4.9. In India, books followed airline reservations closely, with 35% of netizens buying them online. Nearly 24% have bought electronic items and more than 20% have purchased items such as apparel, music and electronic entertainment such as movies, DVDs and games. The most favoured mode of payment for online purchases in India is the use of credit cards followed by cash-on-delivery. Online shopping in India is poised for greater acceleration as more manufacturers and providers integrate the Internet into their sales model. As PC and internet penetration grows, the key to increasing online purchases will remain in the hands of marketers in India. In a study of 300 university students in India, Khare, (2010) found a positive relationship between innovativeness/novelty seeking behavior and online shopping behaviour. In addition, these students were interested in online shopping since they provided the latest information about products and services, and were convenient. Barnes and Guo (2011) in a study "Purchase behaviour in virtual worlds: An empirical investigation in Second Life" developed and tested a conceptual model of purchase behaviour in virtual worlds using a combination of existing and new constructs. They examined a kind of shopping behaviour that consumers spend noticeable amount of money for shopping from internet. Factors of their model were external motivators like perceived value, instinct motivators
  4. 4. 9 like perceived happiness, social factors and consumers’ habits. The result of study indicated that one's habits, external and instinct motivators have great effect on shaping online shopping behaviour of them. A study conducted by Knowledefaber (2011) about the E-tailing landscape in India reveals that rapidly increasing internet user base and rising middle class with disposable income has contributed to the growth of online shopping habits. Secure online transaction environment, measures like cash-on-delivery, focus on customer service, etc. have motivated Indian consumers to place their trust in online shopping. Mady (2011) found Indian consumers prefer pioneering brands as opposed to follower brands. In addition, Majhi, Majhi & Panda. (2012) studied online shoppers in India and found the combination of psychological and cultural inputs were of greater importance than either psychological or cultural inputs individually. Another study by Jusoh and Ling (2012) on the internet viewing and buying habits of university students in India reveals that books, music, games and video were the most purchased items. Again, these items were for information or entertainment and were relatively low cost items. The ability to shop anytime was the most cited reason for shopping online. The latest among such studies was the report published by MasterCard Worldwide on 20th March 2013. The survey, which serves as a benchmark that measures consumers’ propensity to shop online, was conducted across 25 markets between November and December 2012. The report for the Asia/ Pacific region included interviews with 7,011 respondents from 14 markets who were asked questions about their online shopping habits. China leads the region overall as the market with the most propensity to conduct online shopping (102 Index Points), ahead of New Zealand (87), Australia (85), Singapore (84), and South Korea (82). China’s score has increased by 4 Index Points from last year’s index. Two-thirds (68%) of New Zealand respondents use the internet for online shopping among other activities, and 82.3% shopped online in the past three months. Singapore and Hong Kong, Asia’s premier shopping hubs, recorded the biggest increases in online shopping behaviour with both markets registering a 9 Index Point increase in 2012.However India shows a slight decline in the propensity to consume online. MasterCard Worldwide Index for different countries is given below: Table 2.1
  5. 5. 10 Propensity to shop online Country 2011 2012 Trend China 98 102 Australia 85 85 Singapore 75 84 Thailand 88 80 Japan 81 80 Taiwan 80 80 Hong Kong 70 79 South Korea 92 82 India 81 78 Indonesia 76 78 Vietnam 74 73 Malaysia 79 71 Philippines 64 71 New Zealand 86 87 Source: MasterCard worldwide index 2.3 RESEARCH GAP Although there wereso many studies covering the various aspects of the online shopping habits, we could not find one based on Kerala’s background. Kerala is a fast growing economy which immediately adapts itself to the changing global trends. We felt it as a serious research gap and our study is an attempt to fill the lacuna. Further, the local trends may have its owncharacteristics which might be contrary to that of global trends. A study taking students and teachers exclusively as the population can also be considered as a fresh contribution to the field of study.