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Factors Affecting the Acceptance & Adoption of M-Commerce in Pakistan


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Factors Affecting the Acceptance & Adoption of M-Commerce in Pakistan

  2. 2. 1 Introduction 1.1 BACKGROUND OF RESEARCH  3G/4G devices, internet users, services  M-Commerce entering into a developmental phase globally  “the buying and selling of goods and services via mobile/wireless technologies and devices”  M-Commerce includes purchases on websites or apps, in-store or from vending machines; paying for travel, events or bills; or redeeming a coupon *  Broader definitions include all types of mobile transaction such as mobile banking (m-banking) and money transfers (m-money)  Being one of the world’s fastest growing mobile markets in terms of subscriber base and telecommunication sector development, it still lacks advanced mobile applications
  3. 3. 1 Introduction 1.2 SIGNIFICANCE OF STUDY  Great potential for business startups and growth in m- commerce persists however ranks at infancy stage when compared worldwide  Local firms and marketers can acknowledge diversifying their range of operations in the particular category of m-commerce and extending their benefits by adopting it.  Theoretical & conceptual framework used in this research is different from the previous ones and has been referenced from diverse sources  Gap spotting: it is studying an infant concept of m- commerce that is gradually gaining popularity all over the country & first time being written in the context of Pakistan-specific studies
  4. 4. 1 Introduction 1.3 PURPOSE OF STUDY  Provides a thorough analysis of the influencing factors and their interrelationship.  Provide an initiating analysis of user satisfaction and the forms of limitations normally faced in the adoption of m-commerce.  Develop a research plan allowing itself to be used as a blueprint for m-commerce to progress in the future because of the absence of any studies in the precise field of modern business in Pakistan.
  5. 5. 1 Introduction 1.4 RESEARCH OBJECTIVES  to identify user beliefs concerning the effects of discovery and usage of m-commerce services  to determine the effects of information privacy and cost sensitivity on a customer’s willingness to participate in m- commerce, and  to identify a model for use in determining user’s acceptance and willingness to use m-commerce.
  6. 6. 1 Introduction 1.5 RESEARCH QUESTIONS 1. What is the relationship of the level of perceived usefulness with the attitudes towards using M- Commerce technology? 2. What is the relationship of the level of perceived ease of use with the attitudes towards using M-Commerce technology? 3. What is the relationship of the level of perceived trust and privacy in using M-Commerce with the attitudes towards using M-Commerce? 4. What is the relationship of the perceived cost incurred in using M-Commerce with the attitudes towards using M-Commerce? 5. How would development in the M-Commerce sector influence attitudes towards its adoption in Pakistan?
  7. 7. 1 Introduction 1.6 CONCEPTUAL FRAMEWORK
  8. 8. 2 Literature Review 2.1 M-COMMERCE & SERVICES  Mennecke & Strader (2003) "In this new decade, marketing is poised to witness an unprecedented explosion of mobility, creating a new domain of mobile commerce".  M-commerce can be termed as a natural extension or a subset of electronic commerce (e-commerce) (Jwelassi & Enders, 2005).
  9. 9. 2 Literature Review  B2C: Panis et al., (2001) states “The majority of existing mobile commerce services deal with an exchange of product, service or information between B2C”.  mobile financial services and transactions, personalized and location- specific mobile advertising and mobile interactive games.  B2B: Anthony (2006) states “instead of conducting face-to-face meetings or videoconferences, employees can receive valuable information from their managers through calls or text messages to their cell phones.”  mobile inventory management and wireless business re-engineering  C2C: Lori (2010) states “Many individuals are conducting C2C m- commerce activities as a means to acquire products at a more reasonable price, to acquire products that are considered scarce, or to sell items as another source of income”  type business models 2.1 M-COMMERCE & SERVICES
  10. 10. 2 Literature Review 2.1 M-COMMERCE & SERVICES  Entertainment: Music, videos, games, graphics and TV streaming services.  Communication: Short messaging service (SMS), unified messaging, electronic mail, online chat rooms and video conferencing.  Transaction: Banking, broking, shopping, auctions, betting, booking and reservations, mobile wallet, voting, and competition/contests.  Information: News, city guide, directory services, navigation and maps, traffic and weather, corporate information, market data and mobile advertising.
  11. 11. 2 Literature Review 2.2 ADOPTION OF M-COMMERCE  The Technology Acceptance Model (TAM) has been the most commonly used base for studying the adoption of m-commerce, trailed by the Theory of Reasoned Action (TRA) (Fishbein & Ajzen, 1975) as well as the Theory of Planned Behavior (TPB) (Ajzen, 1991). H1: The attitude towards using M-Commerce technology has an influential effect on the intention to adopt M-Commerce technology.
  12. 12. 2 Literature Review 2.2 PERCEIVED USEFULNESS  Perceived Usefulness can be defined as “the degree to which a person believes that using a particular system would enhance his or her productivity” (Davis, 1989).  In recent times, a great number of empirical studies have revealed that perceived usefulness is the key predictor of M-commerce adoption and it captures the perceived benefits associated with using mobile commerce (Wei et al., 2009; Khalifa & Shen, 2008; Kim & Garrison, 2009).  Prior to the user performing a specific behavior, he/she would prefer to search, analyze and study some information on the basis of his demand levels, post series of psychological evaluations or SWOT analysis, user will have behavioral intention while he considers a particular tool or system is useful and has high performance price ratio. H2: Perceived usefulness positively affects the intention of users to adopt mobile commerce.
  13. 13. 2 Literature Review 2.2 PERCEIVED EASE-OF-USE  Perceived ease of use for a system is defined as the specific degree to which a person holds beliefs regarding a particular technology that its usage will be free of any mental effort according to Davis (1989).  Several prior empirical studies have presented a positive influence of perceived ease of use on users in the adoption of m-commerce technologies. (Wei et al., 2008; Khalifa & Shen, 2008; Kim & Garrison, 2009)  Therefore, it can be said that the perceived ease of use reflects the perceived efforts in the usage of mobile commerce by a user (Khalifa & Shen, 2008). H3: Perceived ease of use has a positive effect on the intention to use mobile commerce.
  14. 14. 2 Literature Review 2.2 PERCEIVED TRUST & PRIVACY  Rousseau et. al. (1998) provides the definition of trust as “a psychological state comprising the intention to accept vulnerability based upon positive expectations of the intentions or behavior of another”.  Trust in M-Commerce: ‘the degree to which an individual perceives that usage of m-commerce is secure and comprises of no privacy threats’. Wei et al., (2009)  As m-commerce still currently lies in its infancy stage and numerous payment systems, regulating policies, technical protocols and transaction standards need a standardization check (Min, Ji, & Qu, 2008).  Provided that security and privacy considerations are major hindrances to internet use/commerce, consumers will certainly prefer not communicate and share any personal data in the absence of the trust component (Hoffman, Novak, & Peralta, 1999). H4: The level of perceived trust and privacy in using M-Commerce has a positive relationship with attitudes towards using M-Commerce.
  15. 15. 2 Literature Review 2.2 PERCEIVED COST  Wei et al., 2009: cost factor is one of the elements that could potentially hold back the growth of M-commerce. It can comprise of preliminary purchase cost (for example, hand set fee), ongoing usage cost (for example, subscription fee), service and communication fees, and maintenance/upgrade cost.  A study conducted by Kristina (2002) on the acceptance of mobile service shares revealed that pricing issues appeared as one of the most substantial factors limiting the usage of mobile services.  Likewise the qualitative interviews conducted by (Luarn & Lin, 2005) consequently found that a number of various consumers agree that financial factors significantly influence their intention in the utilization of mobile banking. H5: Cost negatively influences m-commerce behaviour usage intention
  16. 16. 2 Literature Review 2.2 DEVELOPMENT IN PAKISTAN  Kanwal, 2014: currently, the size of the e-commerce market is projected at about Rs3.1bn, whereas m-commerce has hit the Rs15bn mark.  Internet Service Providers Association of Pakistan (ISPAP): 25m internet and 15m smartphone users in Pakistan  There are now almost 30 million internet users and over 15 million mobile phone users in Pakistan which gives an indication of the massive market potential M- commerce has in the economy.  M-commerce has picked up faster than e-commerce because of the fund transfer facilities provided by telecoms, ordinary citizens have been provided a viable solution for their needs.  Kanwal (2014): the potential of growth in e-commerce and m-commerce has also caught the attention of Rocket Internet, a renowned e-commerce-focused venture capitalist company. Rocket currently supports six businesses in the country: Carmundi (online car dealers), Daraz, Easy Taxi, Foodpanda, (marketplace) and Lamundi (realtors). H6: Development in the m-commerce sector of Pakistan and policies towards its implementation lead to a positive influence on the adoption of m-commerce
  17. 17. 3 Methodology 3.1 SAMPLING UNIT  The unit of measurement = individuals.  The target population was picked from the sampling frame of educational institutions, corporations and households limited within Lahore – one of the major metropolitan hubs of Pakistan. 3.2 SAMPLING FRAME  Universities, colleges and households of Lahore which formed an integral part of the sampling frame. Furthermore, the collection of data also incurred from business personnel as they are the people directly usually involved in m- commerce activities.  The sample size fell around 240 question respondents to attain accurate results and to maintain neutrality in the information. Age brackets ranging from 16-40 or above, with a mean age of 26.23 whereas a median age of 25. Adding to that, the sample constituted of 50.4% males and 49.6% females.  Incomes included to determine relationships such as responses in the perceived cost variable linked with the income of person.
  18. 18. 3 Methodology 3.3 SAMPLING METHOD AND TYPE  Random sampling evolves out as the best choice for conducting the research as the populace of customers is high in amount hence, for avoiding bias and maintaining neutrality this study would apply random sampling to keep an equal opportunity for everyone to get chosen.  Furthermore, several sampling techniques have downgraded to becoming either obsolete or outdated. 3.4 TYPE OF RESPONDENTS  Comprised of both the genders and respondents constituted of both m-commerce users in the general public as well as important business personnel  This aided in acquiring the perspective of both the providers and the users of the m- commerce services to keep a balance of neutrality in the study.  Focus was highlighted on individuals who had some kind of prior online shopping experience through Facebook, shopping websites, apps or any other medium.  The respondents were initially inquired whether they had ever used any social media platform for online shopping.
  19. 19. 3 Methodology 3.5 SURVEY INSTRUMENTS DETAILS  A total of 420 questionnaires were circulated to the respondents, randomly, out of which 240 usable questionnaires were received.  Online survey development software called Google Forms was employed to construct the research questionnaire.  Distributed in around ten Pakistani websites and forums while some were personally sent to relevant personnel. Some of the websites were relevant to the telecommunications field whereas the others were general websites for the common public.  The major reason behind selecting chosen survey instead of conducting a practical experiment is due to a limitation of financial resources  Furthermore, a time constraint is attached to this research as well therefore questionnaires serve a better purpose in this case of scenario.
  20. 20. 3 Methodology 3.5 SURVEY INSTRUMENTS DETAILS  A survey questionnaire, comprising of a total number of 40 items, was formulated to measure proposed constructs, based on the existing theories of reference.  A “5 points” Likert-type measurement scale was used to measure the items where “1 = Strongly Agree/Satisfied” and “5 = Strongly Disagree/Dissatisfied”. Variable Name No. of items in the scale Source Perceived Usefulness 5 Min et al., 2008 Ease of Use 6 Islam et al., 2010 Trust/Privacy 5 Mamari, 2007 Perceived Cost 6 Yu, 2012 Development in Pakistan 6 Islam et al., 2010 Attitudes towards using M-Commerce 5 Mamari, 2007 Adoption of M-Commerce 5 Mamari, 2007 Table 1: Sources of Survey Instrument
  21. 21. 4 Results & Findings  Response rate = 57% which was greater than the desirable response rate that should be higher than 20% (Yu and Cooper, 1983)  T-TEST  P-Value < 0.05  RELIABILITY ANALYSIS  Cronbach’s alpha figure > 0.7 Usefulness Ease of Use Development
  22. 22. 4 Results & Findings  Beta Values (Standardized Regression Weights)  Estimates resulting from a regression analysis that have been standardized so that the variances of dependent and independent variables are 1 CFA PATH
  23. 23. 4 Results & Findings 4.1 CONFIRMATORY FACTOR ANALYSIS  AVG VARIANCE EXTRACTED (AVE) > 0.5  CONSTRUCT RELIABILITY (CR) > 0.7 (Fornell et al., 1982)  All the latent variables (except Adoption)  DISCRIMINANT VALIDITY (DV) Squared correlation coefficients of each construct with other constructs should be less than the AVE of each construct (D.U. Kim, 2008; K.S. Kim, 2008)  0.95< STANDARDIZED COEFFICIENT > 0.5 Bagozzi and Yi (1988) Table4.1:ConfirmatoryFactorAnalysisResults Variable AVE CR DV Variable Item Standardized Loadings Adoption - - 0.016 AD1 0.587 AD2 - AD3 - Attitudes 0.511 0.712 0.042 ATT1 - ATT2 - ATT3 0.507 Usefulness 0.633 0.911 - USE1 0.736 USE2 0.876 USE3 0.856 USE4 0.612 USE5 0.824 USE6 0.736 Ease-of-use 0.758 0.939 0.144 EAS1 0.749 EAS2 0.959 EAS3 0.924 EAS4 0.775 EAS5 0.925 Trust 0.510 0.770 0.116 TRU1 - TRU2 0.950 TRU3 0.636 TRU4 0.642 TRU5 0.658 Cost 0.500 0.824 - COS1 0.555 COS2 0.629 COS3 0.874 COS4 0.691 COS5 0.798
  24. 24. 4 Results & Findings 4.1 CONFIRMATORY FACTOR ANALYSIS // assessing model fit  P-value extracted from the results is 0.00.  Kim (2008) proposed the CMIN p-value near to 0 because the p-value is responsive to the sample size.  CMIN/DF = 3.62 which is an acceptable fit to the data.  CFI = 0.734 > than the conventional benchmark of 0.5 (Holtz, 2012)  RMSEA = 0.042 which should be lesser than 0.05
  25. 25. 4 Results & Findings 4.2 PATH ANALYSIS  The beta coefficient of H6 can be used to evaluate that Attitudes have a positive significant relationship with Adoption and hence a one unit increase in Attitudes will result in a degree of 0.752 increase in units in the variable Adoption.  The beta coefficients extracted also demonstrate that the Attitudes towards m-commerce have a strong impact on the Adoption of m- commerce with a positive sign and therefore the hypothesis is accepted.  Development and Cost also prove to have a significant impact on Attitudes Hypothesis Relationships Estimate (β) P Accepted/Rejected H1 Attitudes ← Usefulness .287 .010 Accepted H2 Attitudes ← Ease-of-use .230 .107 Rejected H3 Attitudes ← Trust -.326 .108 Rejected H4 Attitudes ← Cost .515 .018 Accepted H5 Attitudes ← Development .633 *** Accepted H6 Adoption ← Attitudes .752 *** Accepted *** indicates p < 0.05 Table 4.2: Path Analysis Results
  26. 26. 4 Results & Findings 4.2 PATH ANALYSIS // assessing model fit  P-value = 0.000 which proves significance (Dreze et al., 2009).  CMIN/df= 3.78 which is slightly greater than 3 however overall a good model fit can be indicated according to the scale proposed by Barret, 2007.  RMSEA = .118 which is closer to 0 than 1 and thus is an indicator of good fit (MacCallum et al, 1996).  Segars and Grovers (1998): a good model fit is characterized by the values of NFI, IFI, CFI being greater than 0.7.  Hence, the closer the value is to 1 and further from 0, the better the model. The value of CFI = .713, NFI = .65 and IFI = .716.  All three values therefore demonstrate closeness to a good model fit.
  27. 27. 5 Discussion 5.1 INTERPRETATION OF FINDINGS  Attitudes ← Usefulness H1: As in today’s world the modern consumer desires faster, smaller, and greater reliable devices to complement his or her fast paced life style with the addition of more efficiency and some form of value to it.  Attitudes ← Ease-of-Use H2: 1. Any difficulty level faced in the usage of mobile services simply carries no influence on the attitudes of consumers. 2. The questionnaire had a sample mean age of 26.23 and median age of 25 possibly leading to the results getting skewed 3. Several consumers in their age of 20’s have a greater chance of already being equipped with an acceptable level of general knowledge on the usage  Attitudes ← Trust H3:  Possibly signal a growing trust in m-commerce technology with the introduction of new and improved online brands such as that are also trust-worthy.  In Pakistan usually the procedure for making payments is through “cash on delivery” (COD) that eliminates the involvement of credit card transactions through a mobile phone
  28. 28. 5 Discussion 5.1 INTERPRETATION OF FINDINGS  Attitudes ← Cost H4:  Should signal mobile companies to keep the costs of these services low and continue the introduction of several packages and bundles for 3G/4G internet and other services  More economical and convenient than visiting a retail outlet  Attitudes ← Development H5:  Major factor  ‘eGovernment’ can also help bridge communication gaps between the Government and its citizens.  Educating and creating awareness on these services  Adoption ← Attitudes H6:  re-enforces an insight to Pakistani m-commerce marketers and companies
  29. 29. Thank you!