Online Shopping Environments In Developing Countries

Chapter 1: Introduction and context

The emergence of online shopping as an alternative to the traditional shopping model has become a global phenomenon. According to Karake-Shalhoub & Qasimi (2006: 4), consumers in both the developed and developing countries have moved with speed and glee to take up this opportunity to enhance the shopping experience and benefit from the ensuing benefits. In spite of the growing number of internet users and frequency of internet use among the current users, there exist variations on the global scale, with most of these variations closely related to the intrinsic features of the local environment. In a study by Alam, et al. (2008), over 600 million individuals have used this model; with the e-commerce market having surpasses $228bn as at 2007, with the projections for placing the figure at $320bn. The increased usage of online shopping is clearly written in the features of the model, with the advantages cutting across shoppers of all ages and demographics.

In most cases socio-economic, cultural, political and infrastructural aspects of the environment contributes to the trajectory taken by the spread of online shopping by consumers within a specific geographical location. Studies by Zwass (1999); Wolcott, et. al. (2001) and Travica (2002) cited in Efendioglu, Yip & Murray (n.d), indicated that infrastructural differences were the main sources of disparity between the consumption of online shopping services across difference environments. Other studies (Mcknight et al, 1998 and Lee & Turban, 2001) have indicated that the cultural and socio-economic factors that have significant influence on online shopping with far reaching impact on the uptake of online shopping by the consumers in the developing countries.

In this study, we take an insightful research into the online shopping environment in the developing countries. Environmental factors have a significant influence on the attitudes and behaviors of consumers, and the main focus of the investigation will be environment in china and how it’s influence on the online shopping aspects of the Chinese population. Through a quantitative and qualitative analysis, the research will depict the acceptance and diffusion of online shopping in China.
Research aims and objectives

The research objective was the exploration of the facets of the environment in china, with a critical investigation of their influence on online shopping. Just like in any other developing country, there are numerous factors that influence the choice of shopping model, with the availability of online shopping facilities being the most prominent. As a result, this study will depict the environmental factors that influence the consumption of internet services as well as the factors influencing the decision of sellers and retailers to offer online shopping services.

The most prominent research questions include:

* How online shopping environment affects customer’s behaviour?

* How online shopping can contribute to promoting social and economic development?

* In China and other developing countries, what problems are online shopping have and how to improve it?

Chapter 2: Literature review

The growing demand for better services by both consumers and shoppers have driven retailers and sellers to invent an endless number of models, each bearing a certain set of advantages of the preceding one. According to research by Alam & Yasin (2010), success in rolling out online shopping facilities is depended on the acceptability of these factors, availability of enabling infrastructures and technical elements as well as positive customer attitude towards the internet as an avenue towards satisfaction of certain needs and wants.

According to Alam & Yasin (2010) the overriding need to ensure customer satisfaction as a way of enhancing customer loyalty remains the most prominent reason behind implementation of strategies in a business. Online shopping, just the traditional model, relies on the ability of the seller to attract and retain customers, thereby augmenting his returns. In most developing countries, the consumption of IT is complicated and hampered by the concentration of SMEs, which remain unviable options for online shopping as indicated by Olajubu, Afolabi & Ajayi (2009). In the business-to-customer (B2C) model, online shopping culminates in the purchasing, selling and exchange of products facilitated by computer networks (internet), with electronic settlement of the transactions.

Numerous models have been proposed to aid in analysis of consumer behavior in response to introduction of novel ICT structures. The most common include Roger’s Diffusion model (Lawson, 2000), the perceived characteristics of innovation (Sideridis, 2010: 67), the reason action theory, the planned behavior theory (Mendes et al, 2004: 58) and the model for technological acceptance (Liu & Ye, 2001: 336).

Infrastructural aspects of online shopping have a significant influence on the ability of individuals to access the goods and complete the transactions as indicated by Teo, Wang, & Leong, (2004). In the developing countries, economic development or underdevelopment has significantly contributed to the slow uptake of online shopping as an option, with most individuals preferring the traditional model. The lack of connectivity and communication infrastructure necessary for implementation of online services by the shoppers limits their choices, while making it an unviable option since only a small number of individuals will be willing and able to utilize the model in most cases, online shopping in developing counties has surfaced as a strategy for a select few categories of goods, limited to a small number of locations where the consumption of internet is significantly reliable. Even in those location, most individuals have not yet fully grasped and appreciated the intricacies of online shopping, thereby leading to the part-consumption of the service.

As indicated by Wang (2003) the key determinants of success or failure depends on the quality of the services on offer and value-addition capabilities of the model in application. In addition to price and online presence, online shoppers are also in search for quality services, and a reason not to prefer the traditional shopping model over the online model. This originates from change in the attitudes of the individuals towards online shopping, mainly hinged on the ensuing trust on the part of the customers (Lee & Turban, 2001). The numerous barriers to development of trust in the business to customer platform are closely related to the online shopping environment, which originated from the differences in both models as observed by Wang (2003).

The environmental factors to be concern about include the political, economic, social, technological, legal and environmental issues (Teo, Wang, & Leong, 2004). Each of these factors has an overriding influence on the ability of consumers to utilize the internet for shopping as well as the availability of the goods online. The unavailability of case work and sufficient information to base the assessments regarding the spread in online shopping and retailing is the most prominent hindrance as observed by Findlay, Paddison & Dawson (1990: 106)

Developing countries have found it necessary to embrace technology as a way of measuring up to the steepening competition on the global scale. The increased competition by the global business unit has made it necessary for every business to avoid passing up on any opportunity to increase and retain its market share. As a result, it has become common for retailers and sellers to avail any kind of service to the consumers, in order to improve their current and future earnings. According to, online shopping is not a silver bullet to improvement in earnings. As indicated by the numerous failed ventures and organizations which relied on online shopping as a core strategic move to improve earnings, there is more to offering the goods and service online.

According to Kamel (2006: 70), technological aspects of online shopping are a major aspect of the online shopping environment. Over the past decade, the number of individuals using the internet for day to day chores has increased tremendously, making it impossible for most individuals to operate without the internet. In the developing countries, investment in online service and communication infrastructure is still in its initial stages. However, the number of individuals consuming internet services grows by the day and for a country like China, it is true to postulate that there are a substantial number of internet users to warrant investment on e-commerce by businesses. In addition to shopping for goods and services, numerous individuals will be searching for information, making it a widely used service. The quality of online services such as website features (Shergill & Chen, 2005) and home page design (Ho & Wu, 1999) were observed to influence the consumers’ ability to choose online shopping.

Political factors also influence the spread of online shopping practices in a developing country. Political structures influence the trajectory of development and availability of resources as well as public policy, which affects the availability of investments in the necessary sectors. As a result, political influence is a major contributor to prevalence of online shopping in a country, especially the developing countries where political structures are either underdeveloped or absent completely. As observed by Wilson (III.) (2004: 223 )“the new technologies have influenced social behavior, accelerated entrepreneurism, enhanced transparency and promoted new ideas….yet the market is substantially driven by competitive jockeying among powerful groups in agencies, ministries, government-owned companies and private bodies, including ISPs and ICPS.” Their influence on the spread of online shopping is undeniable, with the supply-side and demand factors culminating from their actions.

Social factors influence the attitudes and perception of individuals. According to Efendioglu, Yip & Murray (n.d), the long-standing preference of off-line transaction systems have a significant influence on the ability of individuals to migrate to the online facilities. Having served the needs of most individuals for long these off-line models, such as telephone and catalogue sales pose a threat to the implementation of the online shopping owing to their ability to provide the same level of perceived utility, in addition to having inculcated transition trust and the opportunity to socialize, as it is customary in China and other developing countries. As a result, the robotization of the shopping process is bound to conflict with the contemporary perception of the shopping process. According to McKinnon et al (2010: 327), success depends on establishment of online presence by the prospective consumers, and consequently adoption of the new shopping model. Chakrabati (2002: 81) posited that not all goods were suited for online shopping. The type of products on offer and on demand also influenced the spread of online shopping. The Study by Kamel (2006: 66) revealed that developing countries only account for 18.5% of the digitized information, which is small percentage as compared to the rest of the world.

Consumption of infrastructural components has an influence on the environment, owing to the increased generation of e-waste (Zwass, 1996). Lack of disposal mechanisms of such wastes in addition to the increased need for energy to power the systems is bound to influence the environment. With each home having an internet connection, there originates the need for increased generation of energy thereby necessitating development of policies to address the environmental impact.

Karake-Shalhoub & Qasimi (2006: 209) and Kamel (2006: 71) noted that the legal quagmires facing cyber space still dog the developing countries, where legal systems are faced with numerous challenges. The inability to develop sufficient laws regarding conduct in cyber space to match the laws govern the real space is directly attributable to the inability of most individuals to take up online shopping as a viable alternative to traditional shopping. According to Wilson (III) (2004: 300) and Anwer et al. (2010) the unique nature of the internet presents real challenges even for developed countries, with policy agenda lacking with regard to privacy, security, protection of online consumers, electronic signatures, domestic and international trade as well as taxation matters.
Chapter 3: Methodology

The research will comprise of a qualitative and quantitative analysis. Through the use of a 25-question questionnaire, data will be gathered from a selected sample of 200 individuals. The data gathered will be analyzed through statistic means and presented in both tabular and graphical terms. Inferences from the data will be used in the generation of findings and conclusions.

Chapter 4ï¼Å¡Practicalities

The developing economies form a significant portion of the global market place. The immense number of consumers presents a potential market for goods and services, from both developed and developing markets. Rational consumers in search of maximization of utility are bound to prefer the most efficient model and the source of value addition, thereby making it imperative to understand the intrinsic nature of online shopping and the environment in developing countries. This research will present an insight into the challenges and successes of introducing online shopping to China, classified as a developing country, with sufficient data and information to provide guidelines applicable to other developing countries. The inferences and recommendations originating from this research are adaptable to other developing countries with slight customization to cater for differences in environments in the countries in question.

Chapter 5ï¼Å¡Ethical aspects

Owing to the necessity for human participation in the research, ethical issues arose regarding the conduct of the data collection process as well as the use of the findings from the study. As a rule, any data, information and assertions made by the targeted sample was to be used solely for the current project with strict privacy rules. The data collected through questionnaires was to be done on a basis of anonymity of the individuals, thereby making it impossible to tie the responses to a specific individual. Since the assertions made in the study were to be utilized in formulation of conclusions and recommendation, it was deemed representative of the situation and true to the knowledge of the individual. For this reason, the study was to be carried under strict adherence to the University’s policy regarding research involving Human Participants, data and Tissue.