Consumer Attitudes Towards Online Shopping in Different Countries - the UK and China - Research Paper Example

Consumer Attitudes towards Online Shopping in Different Countries (U.K. and China) Contents Introduction 3 Rational 3 Research Question 4 Research Objectives 4 Literature Review 5 Methodology 10 Research Philosophy 10 Research Approach 10 Research Strategy 11 Research Method 11 Qualitative Analysis 11 Quantitative Analysis 12 Data Collection and Sampling 12 Data Analysis 13 Limitations 14 Ethical Considerations 15 Conclusion 15 Reference List 17 Introduction Individuals living in both developing and developed economies experience higher discretionary spending powers at present, as their per capita income level has improved over time. Consumers have increased their aggregate expenditure on comfort products and services in the market. Under such circumstances, the global retailing industry has considerably developed with the essence of advanced demand for retailing products (Rayport and Jaworski, 2003). The modern consumers aim to practice integrated shopping activities through diversified communication means. The growing popularity in usage of new technical means of communication and electronic gadgets such as, digital media, tablets, Smartphones and special internal shopping application software, has pioneered the consumers’ buying behavioural revolution. The number of Smartphone users in the United States was 82 million in 2010, which is forecasted to be 159 million by 2015 (Ross, 2010). As a result, many traditional retailers are adopting in-store technologies and online selling options whereby they can ensure better communications with potential buyers in the market. This is a research proposal for a dissertation that analyzes consumers’ perception towards online shopping. The current research also aims to estimate the different marketing strategies adopted by the e-commerce companies in various countries such as, the United Kingdom (U.K.) and China. Finally, the researcher will also focus on the possible risks associated with online trading. Rational Consumers are considered to be the primary agents of any consumption, production and retailing process. The method for resource allocation to be adopted in a country considerably depends on demand trends of the consumers. Giant multinational companies cannot frame their marketing strategies without adequate consumer behaviour analysis (Ross, 2010). Hence, it is reasonable to undertake a research work on a topic that is linked with consumer behaviour analysis. Analyzing the rationality behind shopping online is one of the most popular debatable issues in the current era. Some consumers prefer conventional purchasing methods because they fear being cheated in terms of product quality through digital shopping means. However, a large section of individuals prefer online purchasing process to make their choices from a wider variety of products and avail the attractive price discounts offered therein. Furthermore, nature of business of giant online retailing firms are significantly different from that of the conventional vending companies (Ross, 2010). Thus, it is rational to conduct a research on online shopping world. Research Question Major: What are the primal factors influencing consumer attitudes towards online shopping? Minor1: Are business strategies of the online retailing companies dissimilar across different nations? Minor2: What are the business risks faced by the online retailing companies? Research Objectives The research objectives of the dissertation were framed according to the major and minor research questions. These are: To analyze the primal factors influencing consumers’ online purchasing behaviour To analyze the business strategies adopted by the multinational online retailing companies in the U.K. and China To evaluate the business risks faced by the online retailing companies Literature Review Researchers have claimed that electronic commerce has become popular in the last 15 years because of increased usage of internet media (Mansori, Liat and Shan, 2012). It is also stated that online purchasing procedure is the “buying and selling of product, services or information via computer networks, mainly the Internet” (Mansori, Liat and Shan, 2012). A research report of Nielsen Company stated in 2010 that over 27000 buyers from Asia Pacific, Middle East, North America, South America and Europe are regular customers of online retailing companies. So, e-commerce is gradually becoming popular and researchers are greatly willing to analyze factors that influence the consumers’ online purchasing intensions. Most online retailing companies try to judge the buyers’ purchasing intensions before introducing their marketing strategies. The term, e-shopping quality, refers to effectiveness and performance superiority of an e-store as per views of the consumers. A research study had proved that factors such as, delivery service quality, experimental satisfaction, online web content, online private security, web functionality and e-shopping intentions of the buyers, effectively determine online purchasing decisions of the consumers (Wolfinbarger and Gilly, 2001). However, the research stated that of all factors, website content and functionality cause 51.51% variability in digital shopping intensions of the consumers (Wood, 2002). Some research reports have proved that quality of website maintained by an online retailing firm is considerably influenced by nature of the product or service traded (Yoon, 2002). Online shopping intensions of the buyers are dependent on functional or utilitarian dimensions. Usefulness and convenience are the primal factors that determine utility of the online shoppers. Some researchers have stated that online shopping sensitivity of the consumers is highly dependent on certain exogenous elements (Venkatesh and Speier, 2000). Consumer traits, features of the products sold, trust over the online retailing companies and previous digital purchasing experiences are some of these exogenous factors. Figure 1: Consumers Online Procuring Decision (Source: Monsuwé, Benedict and Ruyter, 2004) The above flowchart explains the primary method through which consumers decide their online purchasing decision. Usage, enjoyment and convenience are the most important independent factors as per the flowchart, which are endogenous in nature. Some researchers claim that situational aspects such as, mobility, time pressure, geographical distance and attractiveness of substitutes, are also significant factors influencing online buying behaviours of the consumers (Weber and Roehl, 1999). Online selling means are mainly used by the youth and middle aged educated individuals. Hence, multinational retailing companies experience greater sales through their digital selling sites from countries with high literacy rates. Consumers’ online buying decisions are influenced by both endogenous and exogenous factors. Nonetheless, the retailing companies have minimal control over exogenous aspects. Consequently, business strategies of the online retailing firms are formulated after considering endogenous or variable factors present in each country. The business strategies of online retailing companies are established on grounds of endogenous factors such as, website usage, enjoyment and web usage convenience. These business strategies are often non-standardized in nature. Figure 2: Giant Multinational Online Retailers (Source: Bosomworth, 2014) The above figure shows the result of a research study conducted by the Smart Insights Group. From the figure, it can be stated that Amazon and Home Retailing Group are popular online retailing companies, which have dominant position within the industry. Figure 3: U.K. Leading in Online Sales (Source: Bosomworth, 2014) The above bar graph points out that the occurrence of online trading is highest in the U.K. Figure 4: Cross Country Comparison (Source: Meyer, 2013) The above figure shows that online trading volume in China is lower than that in the U.K. Some researchers have stated that multinational retailing firms such as, Amazon and Home Shop, are presently directing their internationalization strategies towards emerging countries, such as, China, Russia and Brazil (Slywotzky, 2000). The volume of online trade in these countries is low, but is increasing at a steady state owing to escalating per capita income level of the individuals therein. Even so, these internationalization strategies are standalone in nature. Researchers argue that business level strategies of an online retailing company are standardized across countries such as, the U.K. and China (Solomon, et al., 2006). Since the international online selling market is competitive in nature, firms attempt to differentiate their services or product lines by making increased innovation investments. The value chain processes of the companies are constantly improved for ensuring better and quicker delivery of products. The business processes are optimized by conducting services according to the customized requirements of consumers belonging to separate countries. Since the companies operate in a digital marketplace, their business level strategies are generalized across all countries. Then again, the promotional and product selling strategies are differentiated for each country. For instance, Amazon provides greater discounts in the U.K. during Christmas, while its price cutting offers in Chinese markets are given during the Chinese New Year. Furthermore, the company maintains different website outlooks for China and the U.K. Online business bestows numerous cost and revenue related benefits to the retailing companies. Nevertheless, researchers claim that these companies are frequently threatened by cyber crimes (Srinivasan, Park and Chang, 2005). Legal authorities of different countries have introduced regulations in order to prevent the occurrence of cyber crimes, but nature of the same seems to change with advancements made in technologies. Researchers suggest that such crimes are practiced more extensively in the developing economies such as, China, compared to developed markets of countries such as, the U.K (Nielson, 2013). Apart from the risk of cyber crime, online retailing companies face high risk of brand value damage. If the products of a company are not delivered in the right place at the desired time, then its goodwill will decline in the market. The companies also face certain issues regarding consumers trust and security concerning the brand. Experts are of the opinion that risks and problems faced by the online retailing companies can be lowered by way of improved customer relationship strategies (Persaud and Azhar, 2012). Methodology Research Philosophy Research philosophy determines the method whereby valuable information and data will be collected for accomplishing a research work. It also outlines the method of data collection and approaches to be adopted in a research work. The current dissertation will follow the interpretive philosophy of research (Singh and Bajpai, 2008). This is because the researcher would require analyzing features of consumer behaviour and strategies of business firms in the research process. The outcomes of the research process will not be quantified in numeric terms. Research Approach The researcher will follow a deductive research approach for completing the research process. This approach is also known as the theory building research process. The researcher will firstly collect information regarding consumers’ online purchasing intensions. Adequate information on business strategies of the popular online retailing companies and commercial risks they face will also be collected for the research (Srivastava and Rego, 2011). Finally, the researcher will frame productive theories on ground of the analysis results. Research Strategy The research strategy adopted will state factors that will be assumed as exogenous during the research process. If these factors are regarded as variable in nature, then end results of the research will become volatile. The factors, such as, external market characteristics, features of the products sold and trust of consumers in the online retailing companies, will be considered as given (Srivastava and Rego, 2011). Research Method The research method elaborates on steps to be followed by a researcher for completing a research. The dissertation will analyze the research objectives with the help of qualitative as well as quantitative analysis tools. The qualitative analysis will be executed in the form of literature review and case study analysis. The quantitative research will be done through a closed-ended questionnaire survey. Qualitative Analysis The literature review will be a naturalistic review that the researcher will conduct with specialized interpretive skills. The researcher will use longitudinal information in the literature review, which implies that the information will comprise several time series and cross sectional dimensions (Srivastava and Rego, 2011). The dissertation will also include case studies on two popular online retailing companies operating in the U.K. as well as China. The two chosen companies are Amazon and Hope Retail Group. The case studies will include different qualitative as well as quantitative data on business strategies as well as performance and risks faced by these organizations. The information used in the case studies will be longitudinal in nature. Quantitative Analysis The quantitative research approach uses diversified numeric data and technical tools for analyzing any research theory. However, the dissertation will primarily include statistical tools for conducting the quantitative analysis. A closed-ended questionnaire survey will be done, including a series of questions that the respondents would need to answer. Closed-ended questionnaire survey will be employed in the research framework for both time and cost efficiency aspects. The researcher will be able to collect pragmatic information about the consumers’ online purchasing behaviour through this approach. Accordingly, 10 closed-ended questions will be included for analysing causal factors influencing the consumers’ online purchasing intentions. The questionnaire will be directly distributed or digitally mailed to the chosen respondents over platforms such as, Survey Monkeys. The results obtained from the closed-ended survey will be quantified through five points Likert-type scaling instruments (Srivastava and Rego, 2011). The questionnaire will be sent to 100 respondents. It is rational to use quantitative research approach because the end results can be easily examined. The empirical results of the quantitative research will validate interpretations of the qualitative analysis. The respondents will be given 20 minutes to fill up the questionnaire. Data Collection and Sampling The qualitative analysis will be completed with data collected from the secondary authentic sources. These sources will include scholarly journals, books and government published websites. However, the quantitative analysis will be done with data collected through primary research work. Primary data is the data collected by a researcher in a customized manner. The quantitative analysis will be performed through estimation process. Estimation is the procedure wherein the researcher generates ideas about the population parameters on basis of sample observations (Srivastava and Rego, 2011). The estimated population for the quantitative research includes all online consumers in the international market. Nonetheless, it is not feasible to include the entire population in a quantitative research progression. The researcher will select a suitable representative sample from the total population to perform the quantitative analysis. The process of selecting a sample from the population is known as sampling. The sample used in the current research will, hence, be a subset of the population (Srivastava and Rego, 2011). The researcher will employ the stratified random sampling method for selecting an appropriate sample. Here, the researcher will firstly select 50 respondents from the U.K. and 50 from China. Finally, 25 respondents from each stratified category will be selected randomly. The researcher will give the questionnaires to 100 respondents, but following the sample selection process, final sample size will be 50. Data Analysis The quantified results obtained from the closed-ended survey will be interpreted with the help of descriptive statistical tools. Descriptive statistics help to explain the characteristic features of a sample selected from a particular population. Descriptive statistical analysis is the primary method whereby a researcher can understand the nature of a sample given (Srivastava and Rego, 2011). Inferential analysis of any research data cannot be done without adequate descriptive statistical analysis. The researcher will interpret the results of closed-ended survey through univariate descriptive statistical analysis tools. Univariate descriptive analysis includes indexes of central tendency, dispersion, skewness and kurtosis (Srivastava and Rego, 2011). The researcher will interpret the quantitative data with univariate descriptive sample estimators such as, mean, mode and variance. Mean refers to the average value of a set of observations. It is a sample representative index and is highly influenced by extreme observations. Mode represents the observation with the highest frequency in a sample. Variance numerically states the extent to which observations of the sample are scattered. Each answer of the sample will be quantified in terms of five points Likert-type scale, where 1 would represent the weakest preference and 5 would represent the strongest preference. The analysis pattern for the closed-ended survey is explained in the following framework. Question: Do you think the products sold online are less expensive than those traded in conventional markets? Answer: 1=5 respondents, 2=5 respondents, 3=8, 4=12, 5= 20. The mean value for result: Mean = ∑(Value*Number of Observations)/Total Number of Observations = (1*5+2*5+3*8+4*12+5*20)/50=187/50=3.74 = approx (4) Thus, it can be stated that majority of the respondents in the sample perceive that selling price of the products in online markets are less than that in the conventional marketplaces. The mode value of the result is = 5, because 20 respondents rated the answer as 5. Apart from numeric measures, the quantified results will also be analyzed through graphical tools such as pie charts and bar graphs. The quantitative analysis will be executed through statistical software’s such as SPSS, Stata or E-View 6 (Somekh and Lewin, 2004). Limitations The qualitative analysis cannot be done with any primary data. The researcher has selected closed-ended questionnaire survey approach for lowering the cost and time involved in research. Even so, limited information is obtained from this survey approach because answers of the closed-ended survey are scaled in terms of five numeric points. Furthermore, these results might not be recorded correctly and the respondents can imprudently answer to questions given. The researcher will select the sample according to a simple random sampling approach (Peck, Olsen and Devore, 2011). Therefore, there will be minimal scopes for downsizing the sample features as per requisites of the research process. Ethical Considerations The dissertation research process will uphold all ethical and moral norms involved in an academic research. The primary and secondary data used will be highly relevant to the topic. It is believed that analysis results obtained from the information gathered will effectively meet the research objectives (Srivastava and Rego, 2011). End results of the qualitative analysis will not directly influence that of the quantitative research. The respondents of the closed-ended survey will be selected after receiving their personal consents. Personal information pertaining to the respondents and their responses will not be disclosed during or after the research process. Conclusion The research proposal reflects that the extent of online shopping in the digital marketplaces has considerably increased due to increased usage of internet based electronic gadgets. Online shopping is preferred over conventional shopping means owing to several intrinsic causes. The research proposal attempts to analyze chief causal factors influencing the consumers’ online purchasing decisions. The proposal also aims to evaluate business strategies implemented by the multinational online retail companies across the world and estimate the possible commercial risks that they face. The analysis will be done with quantitative and qualitative research tools. The qualitative analysis will involve a literature review and case studies, while a closed-ended questionnaire survey will included for the purpose of the quantitative research. Results obtained from the quantitative research will be analyzed through descriptive statistical measures. The research work will empirically foreground demand and supply side features of the digital business world. Reference List Bosomworth, D., 2014. Mobile Marketing Statistics 2014. Smart Insights, 24 March. Mansori, S., Liat, C. D. and Shan, L. H., 2012. A study of e-shopping intention in Malaysia: The influence of generation x & y. [online] Available at: [Accessed 18 July 2014]. Meyer, C., 2013. E-commerce boom triggers transformation in retail logistics. [pdf] Nes Lang Lasalle Ip, Inc. Available at: [Accessed 18 July 2014]. Monsuwé, T. P., Benedict, G. C. and Ruyter, D. 2004. What drives consumers to shop online? A literature review. International Journal of Service Industry Management, 15(1), pp.102 – 121. Nielson, 2013. Global trends in online shopping. Available at: [pdf] Nielson. [Accessed 18 July 2014]. Peck, R., Olsen, C. and Devore, J. L., 2011. Introduction to Statistics and Data Analysis. Connecticut: Cengage Learning. Persaud, A. and Azhar, I., 2012. Innovative mobile marketing via Smart phones: Are consumers ready. Marketing intelligence and planning, 30(4), pp. 418-443. Rayport, J. F. and Jaworski, B. J., 2003. Introduction to e-commerce. New York: McGraw-Hill. Ross, M., 2010. Maturing ecommerce means web retailers must think differently. [online] Available at: [Accessed 18 July 2014]. Singh, Y. K. and Bajpai, R. B., 2008. Research methodology: Techniques and trends. New Delhi: APH Publishing. Slywotzky, A. J., 2000. The future of commerce. Harvard Business Review, pp. 1- 39. Solomon, M., Bamossy, G., Askegaard, S. and Hogg, M.K., 2006. Consumer behavior: A European perspective. 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Journal of Retailing, 78(1), pp. 77-83. Yoon, S. J., 2002. The antecedents and consequences of trust in online purchase decisions. Journal of Interactive Marketing, 16(2), pp. 47-63. Read More