RELATED LITERATURE

Foreign Literature:
Modern e-commerce platforms have revolutionized how businesses operate by
offering many online services and products. These platforms cater to various
industries, including electronics, high-tech gadgets, health and beauty products,
food, fashion, sports, and travel. Additionally, these platforms handle a considerable
volume of financial transactions with utmost efficiency. (Tran, L., 2021). In this
literature, the author discussed the perceived effectiveness of e-commerce platforms
(PEEP) and their impact on sales. Additionally, the author addressed the security
risks associated with online transactions, such as personal information leakage,
which can negatively affect online sales. (Hubert et al., 2017, as cited in Tran, L.
2021).

This literature serves as a vital secondary data source for evaluating the effect of e-
commerce or online business transactions on service quality. Furthermore, the
information on the importance of e-commerce platforms serves as a guiding principle
for this study.

According to (Soegoto, E., & Rafi, M. 2018), electronic commerce can be

categorized into two types of applications: business-to-business (B2B) and business-
to-consumer (B2C) commerce. B2B refers to the purchasing and selling products
and services between businesses, whereas B2C pertains to the purchasing and
exchanging of goods or services from businesses directly to consumers. In the
modern technological world, consumers can also purchase goods from various
websites over the internet, in addition to retail stores or restaurants.

The literature of (Soegoto, E., & Rafi, M. 2018) highlights that the Internet has greatly
enhanced the efficiency of business transactions. This literature is relevant for the
current study as the Internet is a crucial tool for online transactions. The author's
insights on business-to-business (B2B) and business-to-consumer (B2C) commerce
are also significant as they provide a foundational understanding of commerce.

Local Literature:
With a high e-commerce penetration rate of 41%, the Philippines has emerged as a
critical market for entrepreneurs seeking a competitive edge in the virtual
marketplace. This trend has significant implications for businesses operating in the
country and underscores the need to develop effective strategies to leverage this
trend to drive growth. (“Philippine E-Commerce Roadmap,” 2015, as cited in
Catedrilla, 2017). The author (Catedrilla, J. 2017), also stated that numerous startups
nowadays leverage social media sites to launch their businesses, owing to their
user-friendliness and broad connectivity. This trend has spurred private and
government sectors to invest in expanding internet and network infrastructure,
providing Filipinos with better connectivity and online presence.
This literature regarding the e-commerce penetration rate in the Philippines will serve
as a valuable source for the present study. It provides insightful information about the
percentage of individuals using e-commerce platforms to purchase and sell goods
and services. The relevance of this literature is significant, as it emphasizes the
statistics specifically related to e-commerce in the Philippines, which can be helpful
for the present study.

The Philippines boasts a considerable populace with a notably high inclination

towards using the internet and mobile phones. The Department of Trade and
Industry views this trend as favourable for the market's progression. (DTI, 2016, as
cited in Clarete, 2019). The e-commerce industry in our country exhibits a high
degree of concentration, which indicates a lack of competition. It is worth noting that
Lazada, a platform controlled by Alibaba, is the leading platform for e-commerce in
our country. The number of merchants participating on this platform has doubled,
with 4,000 merchants. Late entrants into the e-commerce industry face significant
disadvantages due to scale economies, particularly if they are inadequately
capitalized. (Clarete, R. 2019).

This literature serves as a pertinent secondary source for the present study as it
presents insightful statistics on the number of people utilizing the Internet to
purchase and sell goods and services. Moreover, the statistics provided by the DTI,
which highlight the positive impact of e-commerce on market progression, are of
relevance to the present study, as they serve as a valuable guideline for evaluating
the efficacy of e-commerce.

Foreign Literature
According to (Fasiha, F. et al., 2022), Companies should be aware of the peculiar
characteristics of services that enable them to meet consumer needs effectively. The
characteristics of services include the following: Firstly, services are intangible,
meaning they cannot be seen or felt before consumption. This nature suggests that
the quality of a service cannot be easily seen, measured, or judged beforehand.
Secondly, services are not durable, meaning they are only valid for a limited time.
The duration of a service depends on several factors, including the situation or
conditions under which the service is provided. Thirdly, quality service is crucial;
consumers pay great attention to it when purchasing goods or services. The quality
of a service is often a deciding factor for consumers when choosing between
different providers.

This literature serves as a necessary guide to determine the level of service quality
offered by businesses in an online business transaction in the present study. As per
(Fasiha, F. et al., 2022), service quality is often the decisive factor for consumers
when selecting different providers. This statement emphasizes the significance of
service quality for businesses in retaining customers and establishing brand loyalty.
The quality of a product or service has a significant impact on its performance and
customer satisfaction. This is a vital consideration as it influences how customers
perceive the service's ability to meet their needs and how they evaluate the overall
buying experience. However, defining quality for services can be challenging due to
three key features: intangibility, heterogeneity, and inseparability of production and
consumption. As a result, service quality is defined based on the customer's
perception of it. (Stefano, N. et al., 2015).

The literature suggests that service quality is crucial to business performance and
customer satisfaction. (Stefano, N. et al., 2015) define service quality as the
customers' perception of it. This literature holds relevance to the present study that
aims to evaluate the level of service quality provided by businesses in online
transactions, as perceived by the respondents.

Local Literature:
As per (Brucal S. et al., 2022), higher service quality levels result in increased
customer satisfaction, ultimately leading to repeat business and higher income. It is
important to note that professional services have unique characteristics that must be
factored in when evaluating service quality, including price, service image, and
customer satisfaction. Although the authors assessed only the service quality
provided by accounting firms in the Philippines, their study provided crucial insights
into the impact of service quality on customer satisfaction.

According to (Jou, Y.T. et al., 2023), SERVQUAL is a well-established methodology

for assessing service quality in the marketing and business sectors. The primary
objective of SERVQUAL is to meticulously analyse the efficiency of the services that
is provided by a firm to improve customer satisfaction. By adopting this approach,
companies can obtain valuable insights into how they can improve their goods and
services and better meet the needs and expectations of their consumers. (Balinado,
J. et al., 2021, as cited in Jou Y.T. in 2023).

The literature of (Brucal S. et al., 2022) and (Jou, Y.T. et al., 2023) are relevant to
the present study because they discussed the significance of service quality in
businesses. As per (Brucal S. et al., 2022), the level of service quality impacts
customer satisfaction, which leads to repeat business and increased revenue.
Additionally, information about SERVQUAL is crucial to the present study, as the
researchers will use it to determine customers' perceptions of the effectiveness of
online business transactions towards the service quality dimension.
RELATED STUDIES

Local Studies:
The study by (Abeabe P. et al., 2022) aimed to determine the effectiveness of e-
commerce in the Philippines. The study also assessed the advantages and
disadvantages of e-commerce and its contribution to the business industry. Their
study concluded that e-commerce is used to buy, sell, and check products online.
With technological advancements, e-commerce has become widespread, and almost
everyone uses it.

This is similar to the present study because it delves into the importance and
advantages of e-commerce. Hence, the findings of the authors could provide
valuable insights into e-commerce or online business transactions.

As per (Serrano, A. & Urbina, M. 2021), small and medium-sized enterprises (SMEs)
can benefit from online transactions as they provide user-friendly, well-designed, and
easily accessible systems that enhance their marketability. Their study primarily
focused on the behaviour of SME consumers and the effectiveness of online
transaction services as a marketing tool. The authors aimed to evaluate the
continuous improvement of online transaction services in the City of Santa Rosa,
Laguna. Their findings indicated that the level of performance of online transaction
services, including factors such as customer support, ease of use, reliability,
transaction efficiency, service security, and customer awareness, significantly
influence customer perception regarding the efficiency, complementariness,
flexibility, and satisfaction associated with online transaction services.

This study highlights the correlation between customer satisfaction and the level of
performance of online transaction services. The results of the study will serve as a
valuable source of information for assessing consumers' perceptions regarding
online business transactions.
Foreign Studies:
In the study of (Soegoto, E. S., & Rafi, M. S. F. 2018), The authors determined the
impact of Internet media on business transactions and the economy. According to
their findings, the Internet has proven to be an effective tool in improving business
transactions. Additionally, the authors examined whether internet-based applications
can further enhance business transactions. They discovered that online applications
with multiple options provide consumers with greater convenience. As a result, the
Internet is becoming the primary medium for sales, surpassing traditional methods.

The authors of the study have highlighted the significance of the internet in
enhancing business transactions. From their findings, it can be inferred that the
internet has paved the way for online businesses to flourish. Furthermore, the study
indicates that the internet has become the primary medium for sales, surpassing
traditional methods. The findings will serve as a valuable source of information for
the present study because it highlights the significant impact of the Internet or in
improving business transactions.

According to (Assensoh-Kodua, A. 2015), perceived trust, social norms, and user

satisfaction are key factors determining people's intention to continue using online
social networking platforms for conducting business transactions. The author also
highlights the importance for individuals who offer commercial services on online
social networking technologies to prioritize building trust and maintaining user
satisfaction to sustain their businesses.

The study conducted by (Assensoh-Kodua, A. 2015) is relevant to the present study

as it emphasizes the importance of building trust and relationships with customers. It
sheds light on the significance of customer perception in maintaining a business. The
present study aims to determine the effectiveness of online business transactions
regarding service quality. It will serve as a guideline or secondary data as it
highlights the importance of customer perception in maintaining a business. The
study will also aim to determine the respondents' perception of the level of service
quality businesses provide during online transactions.

Local Studies:
The study conducted by (Pamatmat, F. et al., 2018) aimed to establish a correlation
between the dimensions of service quality and the level of satisfaction among
Philippine State University students about the services offered. The authors identified
five service quality dimensions: assurance, empathy, tangibles, responsiveness, and
reliability. The findings of the study of (Pamatmat et al., 2018) suggested that
students' satisfaction level was closely related to their observations of the five
service quality dimensions earlier mentioned.

These findings will serve as a valuable guide for this study, which will examine the
customers' perceptions of the effectiveness of online business transactions towards
the service quality dimensions. The study also utilized the SERVQUAL method to
determine students' satisfaction level with the quality of services provided by their
university. The results showed that the students' satisfaction is connected to their
observations regarding the five service quality dimensions: reliability, assurance,
tangibles, empathy, and responsiveness.

The research conducted by (Santos, M. et al., 2022) aimed to evaluate the level of
service quality provided by online sellers during the COVID-19 pandemic in Iloilo
City. The study utilized the SERVQUAL method to determine the service quality
level. The findings of the research concluded that the service quality offered by
online sellers in Iloilo City is exceptional in the industry. The study did not find any
significant differences in service quality levels concerning reliability, responsiveness,
assurance, and empathy among the respondents as a whole or when sorted by age,
gender, education, income, and location.

This study, which focuses on determining the effectiveness of online business

transactions towards the dimension of service quality, will only focus on the
respondents residing within the Philippines. This research can provide valuable
guidance and insights, as it focuses on the service quality of online sellers in Iloilo
City.

Foreign Studies:
According to (Vu, N. 2021), SERVQUAL is a multidimensional instrument used for
research purposes, designed to capture the perceptions and expectations of
customers. The diagnostic value of SERVQUAL is supported by models that form the
conceptual framework for scale development. The author's findings suggest that
customer satisfaction and loyalty are significant indicators of an organization's long-
term performance. Organizations that need to improve their service quality risk losing
a substantial number of existing customers. It has been observed that customers
tend to remain loyal to companies that offer services at an affordable price while
providing high value. However, it should be noted that customer satisfaction does not
guarantee customer loyalty, and even loyal customers may not recommend their
services to others. Therefore, providing services with a unique selling point that
exceeds customer expectations is imperative, providing more substantial incentives
to recommend others. Surveys are an effective way to generate ideas for quality
improvement but ensuring that they are not based on flawed methods is essential.

The findings of (Vu, N. 2021) would be an excellent guideline in determining the

effectiveness of online business transactions towards the dimensions of service
quality and how to utilize the SERVQUAL model to determine the level of service
quality.

The SERVQUAL model provides a framework that identifies five crucial dimensions
(reliability, responsiveness, assurance, empathy, and tangibles) that determine the
quality of a service. Usability is also an important factor to consider when evaluating
service quality. Customers tend to evaluate a service system based on six key
factors: self-control, concern, attentiveness, empathy, flexibility, and communication
skills. Among these, the most critical customer service skill is respect, which involves
treating others as you want. Patience is another invaluable skill, mainly when dealing
with customers who have problems and require someone to listen to them. (Sugiarto,
S. & Octaviana, V, 2021).

According to the findings of the authors, it can be inferred that the quality of service
is determined by multiple dimensions, all of which are interdependent. These
dimensions include Tangible, Reliability, Responsiveness, Assurance, and Empathy,
and are found to have a positive impact on overall service quality. This is also similar
to the present study as it utilizes the SERVQUAL method to measure customers'
perception of the service quality online sellers provide in e-commerce transactions.
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