Consumer Attitude towards Online Shopping

The effects of trust, perceived benefits, and perceived web quality

Group Members:
Maham Mukhtar (10951)
Affan Uddin (10457)
Muhammad Shariq (10580)
Usaid Ali Khan (10592)
Syed Saad Hussain (9106)

Report Submitted by Group 7

Introduction:
In the recent years the trend of e-commerce has been increased rapidly with the development of
Internet and easily availability of internet usage. According to world internet stats (2021) the no
of users of internet exceed to 7.87 billion. This number 33.9% of the total population of world in
Pakistan. Easily access available to internet has motivated customers to shop online. According
to university of California, Los Angles (UCLA) communication policy (2001), online shopping
become a third most popular on internet after web browsing and email using. The most popular
items are purchased on internet are books, airline tickets, clothing, electronic items and video
games (ACNielsen Report on Global Consumer Attitude Towards Online Shopping in 2007).
With the help of internet and electronic marketing business companies are interact with different
marketing action such as, market research, inform customers about product features, product
development, promotions, customers services, customers feedback and so on. Online shopping is
a medium of communication and e-commerce. It increases value, quality to delivering customers
benefits and satisfactory. That’s the reason online shopping increase day to day it popularity.
It has benefits but risk is also associated with online shopping. Generally, internet users avoid
online shopping because of lack of privacy, bank fraud, lack guarantee of product quality, non-
delivering risk.
Liao & Chang (2000) the words are (fraud free e-shopping) it was introduced by UK in the 1995
and after two years Singapore and Europe also introduced secured electronic transaction (SET).
Alternatively e-commerce has grown rapidly because of its advantages associated with buy
online due to lower transaction and cost as compared to other shopping. With the help of online
shopping customers buy product very fast. More alternative and can order product and services
with comparative lowest price. (Cuneyt & Gautam 2004)
Customers attitude towards online shopping is refers psychological state in terms of purchase
over internet. Online shopping attitude refers the product purchased through internet. The
process of online buying behavior consists of five steps and it’s similar to traditional shopping
towards. (Liang & lai 2000)
The main idea of the study is to know about the factors which influence the customer’s attitude
towards online shopping. We study how web site quality in terms of interactivity, usability, and
information search abilities affects perceived benefits, electronic word of mouth (eWOM), trust,
and attitude. We also inspect how eWOM affects trust and how the end affects attitude. We also
find the effect of perceived benefits on attitude. Lastly, we explore the facilitating role that
eWOM plays between perceived web quality and trust and the facilitating role that trust plays
between perceived web quality and attitudes.

1-1 Problem Statement:

A number of incensement in variety of firms are exploiting and developing opportunities of
business through internet. Mention statistics shows the fast growth in the field of online
shopping. With this emerging field of shopping the marketer’s interest is also increased in
studying what actually driven customers to shop online. Competition between online sellers have
forced them to gain competitive mark in the online shopping field. In order to gain the
competitive badge in the market they need to know customers attitude towards online shopping.
So it is very important to analyze and identify the factors which motivates consumers to shop
online. Consumer’s demographics age, gender, income and education is equally defines their
strategies.
1-2 Research objective:
Research objective of this paper is to examine consumer’s attitude towards online shopping in
Karachi, Pakistan. The research introduces an integrated model which have perceived web
quality, Electronic word of mouth, perceived web quality, trust along with their relationship in
order to examine their effects on consumer attitude towards online shopping.
1-3 Research Question:
The research question are:
1. What is the impact of product quality on purchase intentions?
2. What factors influence customers to shop online?
3. Effect of trust on purchase online?
4. Who are online buyers in term of demographics?
1-4 Significance of study:
E-commerce provides many of the significance ways to do business. Customer’s attitude towards
online shopping is attracting substantial attention of the consumer in research. There is also need
to adopt the new technology in business. In businesses it is compulsory to know the potential of
customers and their attitude towards online shopping. Fast developing of future trend of it in
Pakistan. Online shopping become a tool of business to do.
1-4 Limitations of study:
Every study has their own limitations and in our study limitation is time limit. At the same time
cost is also limitation of our study. Another is sample size is small. To evaluate “customers
attitude towards online shopping” a large sample size is desirable. Select a truly sample is a
limitation of the study and there are other factors that could have influence to customer’s attitude
towards online shopping nut not included. Another limitation of our study is we need to collect
data from one city which is Karachi Pakistan.
2) Literature and Review:
Attitude is defined as the tendency to learn behave constantly helpful or unfavorable ways with
respect to given object Schiff man et al (2010:234). According to Peter & Olson (2010) attitude
to defined as whole evaluation of person against idea. The attitude of online shopping is person’s
response to the purchase transaction activities Widiyanto and Prasitowati (2015).
The main idea of the study is to forecast a attitude of people of Pakistan towards online
shopping. Two types of attitude are identifies which is attitude towards objects and attitude
towards behavior. This study is measuring Pakistani customer’s attitude towards online shopping
then attitude towards behavior is the one that is relevant to context of the study. We also utilized
relevant literature to develop and support hypothesis.
2-1 Perceived Web Quality:
According to Al-Debei (2015) PWQ defines how internet users assess the overall process carried
out by the web site as ab information system online shopping through web site is called an
information system considering that web site is a kind of system developed using technology to
manage the processes.
Attitudes towards online shopping will be positive influence by Perceived web quality.
2-2 Electronic Word of Mouth:
Electronic word of mouth is a negative or positive statement made by actual potential or
previous. Customers about a product or company in which this information is available to people
via internet Henning- Therau et al (2004:39). According to Charo et al (2015:41) that this form
of online information and knowledge exchange on social media is known as EWOM.
EWOM influence the attitude of internet shopping in online shopping.
2-3 Perceived Benefit:
Perceived benefit in this context as customers beliefs about the extent to which they will be
better than online shopping with certain web sites Kim et al, (2008:547). The perceived benefit
lead to a view of the positive consequence that lead to a specific action (leug, 2013).
Perceived benefits will produce a positive attitude towards online shopping.
2-4 Trust:
Trust is a form of attitude that shows a sense of liking and persist in using a product or brand
Gunwan (2011). Trust is defined as the belied that a part will find what they wanted from the
other party rather than a feared from the party. Mou (2010)
Trust because of high uncertainty and risk in online shopping trust is determinant direct attitude
towards online shopping.
2-5 Research Model:
H1: Perceived benefits have an influence on online shopping.
H2: EWOM has an influence towards consumers
H3: PWQ has an influence on online shopping
H4: Trust has an influence on online shopping

3) Research Methodology:

3-1 Research Approach:

The research approach used for this study is quantitative approach. The quantitative research is
basically done to develop theories or hypotheses and mathematical models related to a particular
phenomenon. The researcher looks for an unbiased result that he can apply to a population and
the analysis of the data is done through the help of statistics. Quantitative approach is basically
used for explanatory research. This approach has many applications in economics, sociology,
psychology and political science. Some examples of quantitative research could be a survey done
to see the impact of purchase intention, trust, responsiveness, customer satisfaction, reliability
and overall service.

3-2 Research Purpose:

The purpose of this research is to examine customer’s attitude towards online shopping in
Pakistan. The research introduce an integrated model which have Perceived benefits, Electronic
word of mouth, Perceived web quality, trust with their relationship in order to examine their
effect on customers attitude towards online shopping.

3-3 Research Design:

Researchers used many different method but the method which we used in this study is
correlation method. The main purpose of our study is to find the relationship between variables
i.e. attitude towards online shopping chosen factors (demographics, , previous online shopping
experience, customers trust and their lifestyle.)

3-4 Data source:

Data collected for this study is primary data as the questionnaire are collected for the first time
regarding consumer attitude towards online shopping in Pakistan.

3-5 Target Population:

The target population in this study is confined age bracket between 18 to 27 years. Target
population in Karachi Pakistan who using online shopping.

3-6 Sample Size:

The sample size of the data collected for this research is 50.

3-7 Data collection tool:

Data collection tool for this study is questionnaire. The questionnaire is filled by the target
population using Likert scale which provides a answers through responses.
S. No Variables & Items 1 2 3 4 5
S.D.A D.A N.S A S.A
A Perceived web site quality
1. Catalogue web sites internal browsing meets my
needs
2. The ordering process used by the catalogue web sites
is simple
3. Catalogue web site web page content quickly loads
4. The catalogue web sites has good internal search
capabilities meets my needs
5. Little search effort is needed to find the needed
products/information in the catalogue retailer web
S
B. E-word of mouth
6. I often read online recommendations to buy products
from this online catalogue retailer
7. I often read positive online comments about this
online catalogue retailer
8.
I often read positive online reviews about the
products of this online catalogue retailer
9. My e-community frequently post online recommendations
to buy from this online catalogue retailer
10. When I buy a product from this online catalogue
retailer, consumer’s online recommendations and
reviews make me more confident in purchasing the
product
C.. Perceived benefits
11. By using online web sites I can shop in privacy of
home
12. I can buy from webs sites whenever I want
13. Buying from these web sites I can save the effort of
buying what I want from offline/traditional stores
D. Trust
14. It is safe to pay money and perform a financial
transaction on these web sites
15. The online catalogue retailer will protect my
financial-related information from being leaked
(hacked)
16. The catalogue retailer web site is secured given that it
uses digital certificates
17. The catalogue retailers web site will not sell my
personal information (e-mail, phone number,
names) to others for commercial use
E. Online shopping attitudes
18. The idea of buying from online catalogue retailer
web sites is a good idea
19. Buying from online catalogue retailer web sites is
better than buying from a real store/shop
20. Buying from online catalogue retailer web sites is a
pleasant thing to do
3-7 Sampling techniques:
Sampling techniques used for this study structural equation modelling (research) techniques to
analyze the relationship.

4 Results:
Data analysis are divided into two parts the first part were used to study demographics
characteristic, online shopping frequency and the second part consists of hypothesis testing.

4-1 Demographic profile:

It shows that the 44% sample bought from one time using online websites. This is an important
that respondent are familiar with online shopping. It also shows two third of the sample is aged
between 18-26 years who are usually the target population for online retailers. The analysis also
shows that the majority of respondent are well educated and 38% respondent’s monthly income
is less than 10,000 Rs. These results are important indicators for customer’s attitude towards
online shopping.

Measures items frequency percentage

How many times did you buy from any Once 22 44%
web site over the last six months? Twice 11 22%
Three times 5 10%
more than three 12 24%

Gender Male 33 66%

Female 17 34%
Age 18-26 42 84%
27-34 6 12%
35-43 2 4%
44 or above 0 0%
Education Under graduate 32 64%

Graduate 12 24%
Post Graduate 1 2%
Others 5 10%

Income Less than 10,000 19 38%

10,000 – 20,000 14 28%
20,000 – 30,000 7 14%
30,000 or above 10 20%
4-2 Data analysis for hypothesis:

Hypothesi Paths β P value

s
H1 PWQ OSA 0.33 0.61
H2 Ewom OSA -0.38 0.868
H3 PB OSA 0.33 0.082
H4 TR OSA 0.37 0.005

The structural findings indicates that all findings are supported to hypotheses H1 to H4 except
H2. Perceive web quality (β = 0.33, p value = 0.61) has positively and significant effect on
online shopping attitude. eWOM (β = -0.38, p value = 0.868)has negative and insignificant effect
on online shopping attitude. Perceived benefits (β = 0.33, p value = 0.082) has positive and
significant effect on online shopping attitude. Trust (β = 0.37, p value = 0.005) has positive and
significant effect on online shopping attitude.

5-1) Discussion:
Discussed of literature review, our empirical results support the validity of hypotheses model in
this research. Generally, the results support the validity of the model which developed. Our
model declares that the consumer’s attitude towards online shopping is determined by perceived
web quality, perceived benefits and trust. The model which developed in this study also declares
that the trust is the product of perceived web quality and EWOM and EWOM is a purposes of
perceived web quality. Lastly, the model also declares that perceived web quality positively and
significantly effects perceived benefits. The results support all formulated hypotheses except the
fourth one which recommends that higher observations of an online shopping web site quality
will result in more positive and satisfactory attitude. The model develop in this research is 34
percent variance is consumers attitude towards online shopping in Pakistan.
Consistent with previous studies (Hassanein and Head, 2007; Lin, 2011), the results of this study
show that trust is a key predictor of consumer attitude toward online shopping (β = 0.30). Indeed,
the important role of trust in e-commerce remained much highlighted in previous studies (Van
der Heijden et al., 2003; Gefen et al., 2003; Limbu et al., 2012). Truly, it has been recommended
that firms that excel in building high levels of trust in an e-commerce web site may prosper more
than those that do not (Gefen and Straub, 2003). This suggests that online shopping businesses in
Pakistan necessity to focus on trust so as to prosper in the cyberspace. For improving the level of
consumer trust, online shopping web sites in Pakistan necessity to pay helpfulness to privacy and
security features as key drivers of falling perceived risks from online consumers viewpoints.
Because privacy and security have been recognize two main problem for the acceptance of
online shopping web sites due to important effects on trusts and starting positive attitude towards
online shopping in future. Truly, privacy is the main problem for customer and thus proper
privacy rules must be place. Company’s policies in addition to government laws and regulation
must be highlight. Furthermore, the features that allows customers to manage their privacy is
successful implement in online shopping web sites. On the other hand security is an important
factor which significantly effect on customers trust. Absence of security in online shopping
website would lead to lower level trust in webs. Thus, online shopping web sites need to handle
all the transaction in positive and secured environment which enjoy strong authentication,
authorization and accountability characteristics.
In this research we also see that higher perceived web quality will lead to higher trust in an
online shopping. PWQ was found that direct analyst of trust (β=0.46). Moreover, PWQ was also
found to an indirect analyst of EWOM. According to our outcomes eWOM is a partial facilitator
between PWQ and trust. We advises that advanced the quality of online shopping websites in
terms of content and system the more helpful EWOM and the higher in trust. Pointing to
improve the quality of online shopping websites companies must be highlight features related to
site design in terms of user’s boundaries arrangement of information. Navigation capabilities,
search facilities, and service and support. Not only has this but also highlighted related to
performances such as, availability, reliability, response time, loading time and transaction speed
need to be effective and continuously improved for better fit the requirements.
The results of this research also specified that the perceived benefits is a major predictor of
consumer attitude towards online shopping. The higher are perceived benefits of online customer
is most favorable attitude they would have in online shopping websites. It looks that the attitudes
of Pakistani online consumers are significantly affected by their observations in relation to the
benefits of online shopping in difference to the offline one (β = 0.33). To advance the benefits
that online consumers may observe in an online shopping web site, businesses need to improve
their delivery time and delivery scope.
Lastly and founded on the above results, we found that trust completely facilitates the
relationship between perceived web quality and online shopping attitudes specified that the direct
effect of perceived web quality on online shopping attitudes was found to be not significant,
though its indirect effect concluded trust was found to be significant.

5-2 Implications:
This research delivers a basis for the future researchers in reviewing the consumer’s attitude
towards online shopping. Moreover researchers can be increasing sample size plus a rural
population that may reflect the whole situation of consumer attitude towards online shopping.
Moreover, the variables that have been recognized in this study may not be enough and more
variable are also considerable in future study. Researchers may also aspects the factors that affect
online shopping attitude, customers’ satisfaction and loyalty.
Findings of this study delivers a mangers advice about attributes which must be built-in in their
products and service quality, mode of deliver, payment gateway, trustworthiness, security and
pricing strategies. Managers do the social media commercial. As, as of recently the online
payment frameworks through credit card are not excessively much accessible, managers should
keep up the money on a delivery program to acquire trust among the consumers. To lift the touch
and feel concern, supervisors can send elective items to the customers to browse alternatives and
pay after they prefer one.

5-3 Limitation and future research:

Despites the importance of this research as it is one of simply a couple to date that has inspected
attitudes of consumers toward online shopping in an under explored country like Pakistan, this
investigation has various limitations that can be tended to in future exploration. Subjects in this
examination can be considered as early adopters of online shopping. Such subjects are portrayed
as close to home entrepreneurs and daring people and hence their discriminations about online
shopping may essentially vary from others (for example non-adopters). Thus, future studies are
advised to nothing in on explicit gatherings of non-adopters, for example, Facebook clients,
experts, understudies, and others. It is likewise fascinating to look at the contrasts as far as
discoveries among such gatherings. Another barrier is gotten from the geological setting of the
current examination; that is Pakistan. Furthermore, online shopping specifically, these
discoveries are not really appropriate to other Asian nations that falled behind or moved past
Pakistan as far as web based business and online shopping. Subsequently, further studies in
various nations would undoubtedly strengthen and approve the discoveries of this investigation.
In addition, this is a cross-sectional study that addresses a cut of time and doesn't show how
attitudes of consumers may change over the long run. We need future studies to utilize a
longitudinal plan as it would show, assuming any, and the progressions in consumers' attitudes
toward utilizing online shopping over the long haul. Future research are extremely encouraged to
studies attitudes of consumers toward other online shopping web sites in Pakistan and discuss
any differences or changes in terms of results.

Conclusion:
This research inspect the attitude of consumer in Pakistan for online shopping. In Pakistan many
online shopping websites are running their business and our results for this research indicates
that attitude towards online shopping in Pakistan is mainly a function of trust and perceived
benefits. But trust was found slightly stronger effect on attitude than perceived benefits.
According to our study results two main aspects are found to affect trust, which are perceived
web quality and EWOM. Perceived web quality was also predict perceived benefits but it has no
attitudes towards online shopping. We recognized that eWOM moderately facilitates the
relationship between perceived web quality and trust and that trust completely facilitates the
relationship between perceived web quality and attitudes toward online shopping.

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