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E-COMMERCE: Consumer Behavior while Shopping Online & Barriers to E-Commerce in Pakistan.

ABSTRACT: The research focuses on the consumer behavior while internet shopping. The research explores the main reason as to why people shop online in Pakistan and what the products they mostly shop for are. The main reasons what consumers think are the barriers to development of e commerce in Pakistan are. And people from which income group mostly shop online. All of these questions are answered through this research. This research will mainly help the online marketers and vendors in better understanding the consumer behavior. RESEARCH TOPIC: Consumer ehavior while shopping online and the barriers to ! commerce in Pakistan. HYPOTHESIS: ". #nternet shopping doesn$t depend on income level.
2. #nternet shopping doesn$t depend on age. 3. People do internet shopping not %ust for the sake of convenience. 4. &ain factor restricting the development of ! commerce in Pakistan is not illiteracy.

DEPENDENT VARIABLE: #nternet 'hopping( INDEPENDENT VARIABLES: ". #ncome. ). Age *. Convenience. +. Prices of product. ,. Product information. -. 'ecurity of websites.

BACKGROUND OF RESEARCH: Almost two decades ago e commerce throughout the world was not considered an essential in running a business but today in developed countries of the world. businesses are considered to be incomplete if some part of them is not done virtually. ! commerce in Pakistan is considered to be in its infant stage and not well developed enough. And due to this many businesses in Pakistan remain behind their counter parts in other Asian countries like #ndia and &alaysia. This becomes a barrier towards slow growth and low profit of their business because by %ust maintaining the business in real world and not in virtual world. they allow geographical barriers to hinder in the growth of their businesses. The reasons of slow RESEARCH OBJECTIVES: 0ith keeping in view the problem of low growth faced by e commerce in Pakistan. the ob%ectives of the paper are To find out the main barrier to the growth of e commerce in Pakistan 1Problem 'tatement2 To find out whether income and age plays a significant role while people shop online To find out the main reason. why people do internet shopping3 growth of e commerce in Pakistan may be many. through this research we are attempting to find out the main reason behind this restricted growth of e commerce in Pakistan. ecause. until and unless the reason behind it is unknown. the solution cannot be provided. 'econdly. since ecommerce in Pakistan is not well developed enough. the behavior of internet shoppers is still unknown which is also a ha/ard for the firms wanting to start e business. Through this research we attempt to find out the consumer behavior while doing internet shopping. ecause e commerce cannot be taken to a next level until the buyer behavior is unknown.

RESEARCH METHODOLOGY: #n order to achieve our research ob%ectives. our targeted population is the general public in the city of 4arachi. 0e selected a sample si/e of "55 people which included people of all ages belonging to different profession and having different income level. 0e use

Convenience sampling. a mix of old. middle and young age customers were selected to form a sample. 'P'' software is extensively used for analy/ing and interpreting the data.

6orce behind e7commerce and an important role in consumer purchasing decisions.

SURVEY RESULTS 0e did a survey which consisted of a sample si/e of "55. The results that we found out through the survey are following. HYPOTHESIS 1 8o9 Age is not a ma%or factor in deciding whether people shop online or not. 8"9 Age is a ma%or factor in deciding whether people shop online or not.

ANOVAb Model 1 Regression Residual To al Sum of Squares .985 17.765 18.750 df 1 98 99 Mean Square .985 .181 F 5.432 Sig. .022a

a. !redi" ors# $%ons an &' ()* +. ,e-enden .aria+le# /n erne s0o--ing


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P7value is .5)) 1).):2 which is lesser than the significance level of , : therefore we are ;,: confident that ;<., : of the movement in consumer behavior towards internet shopping is explained by age factor. Therefore we re%ect the 8o i.e. Age is not a ma%or factor in deciding whether people shop online or not. AGE * Internet shopping Cross tabulation %oun /n erne s0o--ing 1*S ()* 18425 26435 36445 46455 56 or a+o5e To al 9 27 31 1 7 75 23 5 4 4 4 8 25 HYPOTHESIS 2 8o9 #nternet shopping doesn$t depend on income level 8"9 internet shopping depends on income level. To al 14 31 35 5 15 100

INCOME * Internet shopping Crosstabulation %oun /n erne s0o--ing 1*S /2%3M +elo6 20000 * 20001435000 35001450000 50001465000 65001 and a+o5e To al 6 12 19 19 19 75 Sum of Squares Regression Residual To al .798 17.952 18.750 23 11 2 2 2 8 25 ANOVAb Model 1 df 1 98 99 Mean Square .798 .183 F 4.356 Sig. .039a To al 17 14 21 21 27 100

a. !redi" ors# $%ons an &' /2%3M* +. ,e-enden .aria+le# /n erne s0o--ing P7value is .5*;1*.;:2 which is lesser than the significance level of , : therefore we are ;,: confident that =;.< : of the movement in consumer behavior towards internet shopping is explained by income factor. Therefore we re%ect 8o i.e. #nternet shopping doesn$t depend on income level. 'imilar result is shown by cross tabs and the graphical presentation .'o we can conclude that age and income are important factors which influence the decision of shopping online. The people with lower income don$t shop online often because of their low income as mostly the products available online are original brands are very expensive hence out of affordable range for low income groups. Another reason may be that shopping on internet requires one to have a credit card and most of the people belonging to low income groups don$t maintain a bank account or even if they do they don$t apply for credit cards.

HYPOTHESIS 3 8o9 People don$t shop online for the sake of convenience 8"9 People shop online for the sake of convenience

Do internet shopping because * Internet shopping Crosstabulation /n erne s0o--ing 1*S ,o in erne s0o--ing +e"ause 27( %on5enien"e *as8 "om-arison of -rodu" s 9o6er !ri"es To al ANOVAb Model 1 Regression Residual To al Sum of Squares .978 17.772 18.750 df 1 98 99 Mean Square .978 .181 F 5.393 Sig. .022a 0 36 18 21 75 23 25 0 0 0 25 To al 25 36 18 21 100

a. !redi" ors# $%ons an &' ,o in erne s0o--ing +e"ause +. ,e-enden .aria+le# /n erne s0o--ing P7value is .5)) 1).):2 which is lesser than the significance level of , : therefore we are ;,: confident that ;=.< : of the movement in consumer behavior towards internet shopping is explained by convenience factor. Therefore. we re%ect 8o i.e. People don$t shop online for the sake of convenienc

'imilar result is proved by the above graph. more than -5 people from our sample shop online because is it convenience i.e. it

surpasses all geographical barriers. saves times. purchases can be made at any time be it day or night.

HYPOTHESIS 4 8o9 The main barrier restricting the development of e commerce #n Pakistan is not illiteracy. 8"9 The main barrier restricting the development of e commerce in Pakistan is illiteracy.

ANOVAb Model 1 Regression Residual To al Sum of Squares .986 22.804 23.790 df 1 98 99 Mean Square .986 .233 F 4.237 Sig. .042a

a. !redi" ors# $%ons an &' :9 $(& +. ,e-enden .aria+le# * "omm in !a;is an is 6ell de5elo-ed<

P7value is .5+)1+.):2 which is lesser than the significance level of , : therefore we are ;,: confident ma%ority of the consumer believe that illiteracy is the ma%or barrier in development of ecommerce in Pakistan. Therefore we re%ect 8o.

Correlations * "omm in !a;is an is 6ell de5elo-ed< * "omm in !a;is an is 6ell !earson %orrela ion de5elo-ed< Sig. $24 ailed& 2 :9 $(& !earson %orrela ion Sig. $24 ailed& 2 =. %orrela ion is signifi"an a 0e 0.05 le5el $24 ailed&. 1 100 .204
=

:9 $(&

.204= .042 100 1 100

.042 100

'ame is proved by the graph above. almost half the chunk of the pie chart shows that slow development of e commerce is attributed to illiteracy and then traditionalist nature of Pakistani society and 'ecurity and privacy issues are more responsible of backwardness of e commerce in Pakistan. OTHER FINDINGS

Internet shopping * Information you look for Cross tabulation %oun /nforma ion 8ou loo; for 27( ,e ailed /nforma ion a+ou 0e -rodu" 0 25 25 44 0 44

!ri"e %om-arison 31 0 31

To al 75 25 100

/n erne s0o--ing To al

1*S 23

The above results through analysis show that most of the people while shopping online look for detailed information about the product. 0hereas none of them look for information about the vendor.

$o" many times you actually buy a pro!uct# Frequen" 8 !er"en .alid 2( (l6a8s 374 imes 0alf 0e imes ne5er To al 26 29 14 30 1 100 26.0 29.0 14.0 30.0 1.0 100.0 .alid !er"en 26.0 29.0 14.0 30.0 1.0 100.0 %umula i5e !er"en 26.0 55.0 69.0 99.0 100.0

Above table shows that most of the people 1*5:2 while shopping online. look for information about the product deliberately and when they do so they buy the product actually only half the times. And );: of the people always buy the product when they search for the information related to the product. hop from certifie! "ebsites# Frequen" 8 !er"en .alid 27( 1es Some imes To al 25 59 16 100 25.0 59.0 16.0 100.0 .alid !er"en 25.0 59.0 16.0 100.0 %umula i5e !er"en 25.0 84.0 100.0

>ur another important finding is that most of the people while shopping online shop from websites that are certified and recogni/ed. 'o that means for ,;:

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of the people from our sample are really concerned about security and privacy issues related to shopping online.

?ow. about the most important result from our survey that will help the online marketers and the vendors in making the decision of starting an e business. That is what people really shop for online. The results show that almost +5: of the people in Pakistan shop for software and "+: of the people shop from clothes and dresses. Frequen" 8 !er"en .alid 27( >ouse0olds ?eau 8 -rodu" s %lo 0es and dresses ?randed -rodu" s sof 6ares To al 25 4 5 14 12 40 100 25.0 4.0 5.0 14.0 12.0 40.0 100.0 .alid !er"en 25.0 4.0 5.0 14.0 12.0 40.0 100.0

%umula i5e !er"en 25.0 29.0 34.0 48.0 60.0 100.0

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The results show that most of the people when they visit a website for purchasing a product. come to know about that website from a friend. And even if they come across online ads. they don$t visit those websites. The reason may be they don$t trust the advertisements and since e commerce in Pakistan is not well developed. stated in literature survey and proved by the findings .

of the research@ people may be concerned about the security issues of the websites they visit for the first times. 0hereas when the websites are recommended by their friends and peers they feel satisfied and secure to shop from them because their friends are the satisfied shoppers of that website and their opinion and advice can be trusted completely

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AN IM%O&AN& '(E &ION) CAN E COMME*CE IN %A+I &AN ,E CON IDE*ED -E.. DEVE.O%ED#

Frequen" 8 !er"en .alid 2o Some60 a To al 61 39 100 61.0 39.0 100.0

.alid !er"en 61.0 39.0 100.0

%umula i5e !er"en 61.0 100.0

The research also shows a very important result that -": of the people don$t think that e commerce in Pakistan is well developed. which is also stated in the literature review and is proved through previous researches

C>?CAB'#>?9 6rom the research we can conclude that age and income are important factors which influence the decision of shopping online. The people with lower income don$t shop online often because of their low income as mostly the products available online are original brands and people belonging to low income groups prefer to shop from black markets( where copies of branded products are available easily at very low prices. Then people belonging to age group of ),7+, are the people who mostly shop online. and we can consider that this is so because people belonging to higher age group don$t have much knowledge about technology and believe in shopping the traditional way. The answer of why people shop online is also answered in this research@ people do so because of convenience as shopping online surpasses all the geographical. you can sit in
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Asia and shop from !uropean markets at any time. Cou can sit in your living room and choose from a wide range of products. so the main reason of people logging on to the internet for shopping is convenience(. Another main cultural aspect of Pakistani society is that they rely more on the advice given by their friends and family rather than believing an advertisement no matter how attractive it is. That$s why when people go online shopping they mostly visit those sites that are advised by their friends trusting their opinion that the website is safe. Pakistanis while shopping online mostly shop for software. that may be because e markets in Pakistan is not so well developed that they offer a wide range of products. and the delivery channels that the sites may use may not be "55: efficient. whereas the software is directly downloadable there and then. as soon as you pay for the product the product is yours. The survey also shows that ecommerce is not very much developed in Pakistan. 0hy3 because of illiteracy. And even if people are literate they are not educated enough to know and understand what e commerce really is. 6or example. an "< year old working in a workshop who has passed his "5th grade exam. Although he is literate but he is not educated or learned enough to understand what e commerce is. Then another reason for slow development of e commerce is traditionalist nature of Pakistani society. many people in Pakistan have their family business and have a very loyal set of clients. they earn so much profit from carrying on the business %ust like that they don$t find the need to go Dinternet$. The people in Pakistan when go shopping.

mostly shop from a set of particular shops because they have been shopping from their since a long time and have developed the relationship with the shopkeepers over a long period of time. they trust them that the product they are getting will be worth their money and the shopkeeper will not deceive them. Also most of the people feel more comfortable while dealing with shopkeeper face to face. 'o the solution to these problems cannot be provided readily. #t takes a long period of time to increase the literacy rate of the country and traditions only change when people are more educated and open enough to think that it is perfectly ok if they don$t follow the same line of traditions and trying a new thing is good for them. ut making internet more safe and educating people about e commerce will surely make the businesses turn their ships towards e business. Bibliography Abigail, L. (2009). Numerous Advantages of Online Shopping. USA. Briody. (1999). Customer service Quality in e-business. London. !"n, S. #. (2000). Interactivity as the driving force behind ECommerce . $"%&!i', USA. !o(. (2000). Integration of Quality re ! ost Sale. !ina. onn"llan, ). #. (2001). Challenges to E-"usiness. !i*ago.

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+,ti-rr"., ). ). (2001). Customer Service #actors Influencing Internet Shopping in Ne$ %ealand. /"( )"aland. 0a*1'on, 2. (2008). "enefits on online shopping. A,'tralia. 3,ndi, +. $. (2007). E business in a&istan - Opportunities and 'hreats. /456 (6a1i'tan). /i"l'"n, 0. (1999). (hy do people shop online. !i*ago. 6!o, 4. a. (2009). )rivers of customer intention sto use online ban&ing. 7ai(an. Sa8id, 2. $. (2003, 10 5). 9 *o%%"r*" and it' B,'in"'' in 6a1i'tan. 6a1i'tan. 7,nyo, 7. :. (2008, $ar*! 18t!). "usiness *ecorder , &. 4. ;agg"li' Sa&ri1i', A. . (;ol. 2010 (2010), Arti*l" <2 854516). 6"r*"&tion' to(ard' =nlin" S!o&&ing> Analy.ing t!" +r""1 Uni?"r'ity St,d"nt' Attit,d". I"I+A ublishing,Communications of I"I+A , 13. 4ar1"ntin, 0. a. (2003). 'he online consumer trust construct. $i''i''i&&i Stat", USA.

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