The main background of this dissertation is the online shopping facility in Saudi Arabia. In context with this, the dissertation addresses the factors promoting online shopping facility in Saudi Arabia along with the factors that hinder this system. The basic purpose is to identify the level of feasibility in providing online shopping facility to the customers in Saudi market. “To what extent, is it feasible for Saudi business organisations to invest in providing online shopping facilities to the customers?” is the main research question that has been addressed throughout the study. Mixed methodology has been used to have in-depth knowledge about the topic and to review feasibility of online shopping in this market. Survey methodology has been used to collect primary information from the strategic managers of different business organisations in Saudi Arabia. Secondary analysis has been conducted to have an idea about the topic from the other researchers’ viewpoint.
Chapter 1: Introduction
Online shopping facility is one of the main advantages that Internet gives to people across the world. Online shopping facility is the most effective way to shop with detailed product information and choice in comparison to offline shopping (Windham 2000, p. 164). Feasibility of online shopping is determined through various factors, such as technology friendliness among customers, their lifestyles, technological advancements in a particular region (Clarke and Flaherty 2005, p. 56). In this context, the dissertation sheds light on the examination of feasibility of online shopping facility, specifically in the context of Saudi Arabian markets.
1.2 Background of the Research
The main background/field of the research is related to marketing practices. Online shopping facility is one of the effective ways to market products and services largely and easily. As it considers various critical success factors linked to online shopping like trust, reliable quality, economies of scale, and effective market offering (Botha, Bothma and Geldenhuys 2008, p. 257). It refers to the process of buying products or services via online means. Service of online shopping is directly related to the technological advancements and frequency of using Internet by the people across the world (Gao 2005, p. 52). In this context, the dissertation casts light on the usage of Internet in Saudi market and individuals’ friendliness with the technology, so as to test the feasibility of providing online shopping facility to Saudi people.
Online shopping makes easy for customers to buy required products without moving anywhere, which lastly saves time and other related expenses (Online Shopping–Easiest Way to Shopping 2012; Nagel 2010, p. 6). Moreover, online shopping facility gives detailed product information, which can further be used for making comparison with other brands (Norman 2012). This means online shopping gives an opportunity to compare product price and its features, and avail the best product offerings (Krafft and Mantrala 2010, p. 357). The trend of online shopping is not increasing fast in the developed countries, but people in developing countries are likely to use this facility to purchase different categories of products, such as electronics, health and beauty, jewellery, and apparel (Advantages and Disadvantages of Online Shopping 2008). Moreover, organisations can provide more detailed information about products and services, along with deals and discounts, so as to hold customers, which in turn, maintains market share and sales (Khosrow-Pour 2006, pp. 30-33; Flick 2009).
Feasibility of online shopping is based on several determinant factors. It is essential for the business organisations to consider usage of Internet facilities by the immediate population and techno savvy customers, advancements in web facilities, trends and life styles of people, etc., to have sustainable practices of online shopping (Anderson 2011).
In context to feasibility of online shopping in Saudi Arabia, it is found that the share of Internet users relative to total population has largely increased over the years; it was 0.9% in 2000, 10.8% in 2005, and 38.1% in 2010 (Saudi Arabia: Internet Usage and Marketing Report). About 43.6% of the total population (11,400,000) is using Internet in Saudi Arabia as on December 2011.
As per Arab Advisors Group Report (2011), the most purchased products are electronics and software that are purchased by 58% and 50% people respectively (Saudi Arabia 2012). This reveals that a good percentage of Internet users buying products or services with using the online facility in Saudi market that is a new trend of shopping has started emerge in Saudi’s culture (Oxford Business Group 2008, 169). The market of Internet in the Middle East countries (including Saudi Arabia, Iran, Iraq, Jordan, Kuwait, Oman, Bahrain, Yemen, Lebanon and Turkey) have been improving and developing at a larger extent. All these factors must be comprised by Saudi organisations to furnish online shopping facilities in Saudi markets.
1.3 Aims and Objectives
The research study aims to identify and evaluate opportunities and threats of giving online shopping facilities to Saudi customers. The defined research aim is helpful in identifying factors supporting online shopping along with factors obstructing business organisations in providing online shopping facilities to the current and prospective customers. Therefore, the main aim of this study is to check feasibility of online shopping developments within Saudi market.
The key objectives going to be addressed in this research study are depicted as follow:
- To assess the actual developments of Internet market in Saudi Arabia.
- To determine opportunities or favourable aspects of providing online shopping facilities to Saudi customers by business organisations.
- To determine main problems in providing online shopping facilities to customers in Saudi Arabian business world.
- To identify the difference between individuals’ preference of online shopping in Saudi Arabia country and other countries.
- To recommend practical suggestion to address challenges/threats in the way of providing online shopping facilities.
1.4 Significance of the Research
As reviewed earlier, online shopping has become a popularised trend in the existing business environment all over the world. This research would prove to be a new step towards the promotion of online shopping. The area of this topic is quite broad, as a large number of people are using Internet for shopping purpose, and thus, it is easy to know about individuals’ perceptions about online shopping (Jeffreys 2010).
This research studies has explored several factors that are helpful for the business managers in Saudi Arabia to flourish their online shopping practices to a more progressive level. The facts and findings explored in this research are quite useful and significant for Saudi organisations to promote online shopping habits among immediate customers. Moreover, this study is quite helpful to identify factors that promote and hinder the online shopping facility in Saudi market. This will be helpful for organisations in flourishing online shopping to serve their current and prospective customers with quality information and help in purchasing product at any time from anywhere. This research work is quite significant in terms of practical applications through which organisations or marketers can know the usual preferences and trends of using Internet in Saudi Arabia.
Other than the related field, this research work, would also add a new dimension in the existing knowledge area related to research on the subject of Internet and online shopping related practices among customers. The new researchers in this field can have a clear idea about this topic by using this research study. Overall, this research is quite attractive in terms of practical and theoretical knowledge that can be used to have knowledge about online shopping, benefits along with factors promoting/impeding online shopping, and current status of online shopping in Saudi market.
1.5 Outline of the Chapters
The dissertation covers different chapters/sections to give a clear and complete picture of the overall research study. It is highly essential to include all necessary and relevant sections related to research, such as review of current researchers, research methodology, findings and analysis, and conclusion and recommendations. The glimpses of different chapters covered under this study are mentioned as under:
Critical Review of Literary Source: A number of related and relevant scholarly articles and academic books about online shopping facility, requisite for online facility, and online usage in Saudi markets are being critically reviewed. This section provides detailed knowledge about the topic.
Research Methodology: The research methodology used for data collection along with justification is being depicted under this section. Additionally, this chapter covers research approach, research design, research philosophy, and ethical considerations.
Findings and Analysis: The findings generalised from survey process are depicted and analysed in the findings and analysis’ chapter. This chapter helps in generalising key facts related to the topic in order to address the research aims, objectives, and questions.
Discussion: The key outcomes and significances of research in relation to the literature review (articles reviewed) are covered under this chapter. Firstly, key findings from the data analysis are depicted, and further, their significance is discussed in context to the literature review.
Conclusion and Recommendations: Under this chapter, all the main concluding points are covered to address the research aims and objectives, and questions. Moreover, it covers some practical recommendations.
1.6 Summary of the Chapter
Online shopping is a quite interesting area of the research study, as it is commonly and highly preferred by a large number of people. People experience more convenience after shopping online as compared to offline shopping, as it renders numerous benefits to the customers, like easy selection, easy delivery, fewer expenses, less time, and easy comparison between two brands. The research aims to identify and evaluate the feasibility of providing online shopping facility to customers in Saudi market. It is summarised that the research sheds light on Saudi people’s preferences towards online shopping to test the feasibility of providing online shopping facility.
Chapter 2: Literature Review
The advancements in the technology have greatly been inducing demand of online shopping facilities (Fleischmann and Klose 2005). Internet allows individuals across the globe to shop via online means, and thus, online shopping is the result of the Internet technology, as this technology makes it possible for people to buy any item anywhere at anytime by making instant payment or payment on delivery via shopping websites. The trend of the online shopping is increasing day by day because of high convenience in terms of time and costs.
In this advanced technological world, consumers are inclined to be more time savvy, and thus, they are more likely to do online shopping (Hauser 2009). As such, online shopping gives numerous benefits, like saving of time, easiness, saving of money, quality information, and easy selection and delivery (Springer 2002, p. 23). Providing online shopping facilities to the customers by leading business organisations would lead to benefits for customers and organisations. The given chapter of the dissertation is doing secondary analysis of related literary sources to identify and evaluate the feasibility of offering online shopping facility in Saudi Arabia. The main focus of this chapter is to depict online shopping facility and its benefits, emerging trend of online shopping, feasibility of promoting online shopping in Saudi Arabia, factors hindering online shopping, and critical success factors. A thorough review of this chapter gives an in-depth knowledge about the opportunities and threats of offering online shopping in Saudi Arabia.
2.2 Conceptual Framework
The conceptual framework is aimed at evaluating the feasibility of providing online shopping facility in Saudi Arabia (Duncan 2012). The main purpose behind conducting research in this area is to identify the extent to which the development of online shopping is feasible for the customers in Saudi market. A secondary analysis is being conducted in different areas to have general and related information about the topic. This helps in determining the preference of Saudi people for online shopping in relation to in-store shopping. The outcome of the study points out the factors that are promoting online shopping; along with this, hindrances in the way of sluggish growth of online shopping are also looked out.
The conceptual model proposed in this chapter gives an overview of factors that promote Saudi online shopping facility on the basis of the critical review of previous studies. To determine the feasibility of online shopping environment in Saudi Arabia, this model reflects various factors as opportunities or threats in context of the online shopping facility, such as customers’ trust, friendliness to Internet, online preference, security, lifestyle and socioeconomic levels, and government support. Although shopping of products via online means gives cost and time advantages to the customers, but there exist few aspects that hinder online shopping environment. Some of these aspects are security and privacy issues, language differences, and high customers trust on in-store shopping and other alternatives, like convenience store and retail outlets. Overall, online shopping environment is directly influenced by the prevailing culture of the country.
As such, the conceptual framework covers every aspect linked to the online shopping facility in Saudi Arabia to reflect on the feasibility of offering this facility. This framework considers the main headings that are to be covered in the literature review chapter including online shopping, benefits of using online shopping compared to in-store shopping, growing trend of online shopping across the world, factors that promote online shopping in Saudi, factors that induce hindrance in offering online shopping facility, and lastly success factors that lead to growth in online shopping environment in Saudi Arabia. Online shopping trend has been emerging in Saudi market rapidly, as a large number of people have become friendly with Internet (Patrick 2011). In Saudi Arabia, around 48.36% of Internet users buy items through online means, as surveyed in 2008 (Oxford Business Group 2008). The increased use of Internet in Saudi Arabia provides an opportunity for a flourishing online shopping facility. Altogether, this model gives clear glimpses of the concepts explored in context to the research topic.
The given conceptual model is further being used to generalise the main findings of the research. For this, the conceptual framework is tested through developing relevant and well versed questionnaire. In this questionnaire, all variables are used as a base for developing topic relevant questions for survey. Lastly, results of the survey data will be used to test the conceptual model.
2.3 Online Shopping Facility and Its Benefits
The trend of online shopping has been experiencing rapid increase in the recent years due to the increasing number of Internet using people among the global population. In this concern, Gay et al. (2007) have noted that Internet acts as an interactive communication medium that promotes online shopping. The competitive picture of large scale industries has changed after the evolution of Internet technology, as this technology gives a consideration to both cost and time constraints (Gay, Charlesworth and Esen 2007, p. 9). Pre-sale (offer of product and service information and other offers), sale phase (customisation, taking order, adding to cart, and checkouts), and post-sale phase (customers’ feedbacks, offering loyalty rewards, and serving them with excellent online customer service) are the three different phases of sales using Internet (Gay, Charlesworth and Esen 2007, p. 66). Internet, as a technology, allows customers to buy items at anytime and from anywhere without any time and cost issues (Ronchi 2003).
Moreover, Internet technology aids organisations in increasing their geographic coverage or market share. Altogether, Internet technology gives an advantage of online shopping by enabling both customers and organisation to keep interactive communication. Due to increased usage of Internet technology, the number of online shoppers is rising in confidence, and thus, it is reviewed that this facility not only saves time and costs, but it also provides enough information for decision making (Gay, Charlesworth and Esen 2007, p. 9).
Liu (2007) reflects that online shopping facility is one of the shopping patterns that are performed via online means or Internet. It is reviewed that Internet as a shopping medium is influenced by various factors, such as users’ friendliness, relative advantage, compatibility, enjoyment, and security and privacy risk. Online shopping facility serves customers with high shopping convenience by giving advantage of time and effort saving. This type of shopping facility not only reduces problems related to travelling, parking, information search, buying decision, and comparison, but it also allows customers to access detailed quality information easily and speedily, which in turn makes buying decision-making fast. The competitive prices are enjoyed by customers while shopping, as this facility cuts down distribution channels and other costs (Liu 2007, p. 33-35). In the same context, Rohm et al. (2004) have stated that motivational factors related to online shopping such as access varied range of information for shopping and convenience. In evidence to this, motivation theory is applied by Roham to support human motivation is highly essential in all aspects as motivation in any form (cognitive or affective) are contributed towards satisfaction and induced them towards online shopping (Roham and Swaminathan 2004). Certain factors are related to the success of online shopping, such as good enjoyment, flexibility to use Internet, technology compatibility with customers’ needs, and low security and other issues (Liu 2007, p. 36-38).
Forsythe, Liu, Shannon, and Gardner (2006) have reflected about the perceived benefits and risks associated with online shopping. It is critically reviewed that individuals intensively use the Internet for having any information about product or service selection and buying. Customers prefer to shop online, so that they can access various benefits, like convenience of buying, selection of product, shopping comfort, and new experience. Online shopping facility gives the benefit of shopping in privacy, saves time, and keeps off time limit issues. Furthermore, it is reviewed that shopping via online means helps in purchasing items from anywhere, and makes selection from a broad range of products (Hill and Jones 2012). With using this facility, it becomes easy to access a number of brands at one time that in turn makes product selection easy and effective. Online shopping gives good shopping experience and enjoyment to the customers by reducing disorderly fighting, waiting time, and unavailability of products related problems. On the other hand, some perceived risks associated with online shopping are time and convenience risk, security and privacy risk, and product risk (Forsythe, Liu, Shannon and Gardner 2006). From this, it is reviewed that perceived benefits of online shopping are relatively higher than risks in contrast to offline shopping. Woodruffe-Burton, Eccles and Elliott (2002) have supported online shopping by applying a theory of shopping that trend of shopping has greatly been changed. Today, shopping is regarded as a leisure activity that has largely been affected by nature of the current trend of shopping. As per this theory, customers are more likely to seek information from innovative means and give more preference to convenience (Woodruffe-Burton, Eccles and Elliott 2002).
According to Hassanein and his associates (2007), online shopping is defined as a new medium of buying and selling products. It helps in keeping interactive communication between marketers and customers. It is critically identified that online shopping lacks sociability and human warmth as compared to offline or in-store shopping; but online shopping is preferred by a large number of people because of some positive aspects, like saving time and travelling costs, and making purchases easy at anytime from everywhere. Various benefits of using online shopping mode, as reviewed from this article, are easiness to use, enjoyment, and high availability of product information (Hassanein and Head 2007). Heijden and his associates have stated there are various factors that influence the customers’ behaviour to shop online or using electronic means for shopping. The two most important perspectives are found in context to online shopping trust oriented perspective and technology oriented perspective. Both these perspectives are highly essential and important factors directly linked to online customer behaviour as lack of trust and technical knowledge resist traditional customers’ behaviour to move towards online shopping. TAM (Technology acceptance model) gives focus on attitudes, intention, beliefs and opens behaviour that affects actual behaviour of customers (Heijden, Verhagen and Creemers 2003).
Zhou, Dai, and Zhang (2007) have noted that online shopping has been increasing over the years. It is identified that this facility has increased retail sales to $329 billion in 2010 from $172 billion in 2005. This shows that increased use of Internet directly adds to sales growth. On the other side, using online shopping facility imparts various benefits to the customers, such as easy access to product-information from anywhere, high convenience, easy buying decision, lower costs, and high customer service and attention (Zhou, Dai and Zhang 2007). Overall, rapid technological advancements, along with Internet usage, increase the use of online shopping mode.
2.4 Emerging Trend of Online Shopping Facility
Online shopping has now become a usual practice for people across the world, as it serves the customers with a number of benefits, in contrast to offline shopping. The trend of using online shopping facility is increasing with the rapid use of Internet or electronic means. With reference to this, Alam, Bakar, Bin Ismail and Ahsan (2008) have expressed that the e-commerce or online shopping experiences have rapidly grown over the years. Online business transactions are increasing at a high rate, which is evident from the fact that 627 billion people or more around the globe have been using online means for shopping. Moreover, it is found that e-commerce market has increased over the years, which was $258 billion in 2007, $258 billion in 2008, $288 in 2009 and $316 billion in the year 2010 (Alam, Bakar, Bin Ismail and Ahsan 2008).
Online shopping is generally used for the purpose of buying apparels and other accessories, airline ticket booking, electronics, software and books. Alam and his associates have also stated that the young customers give more preference to online shopping, as they use internet for such purposes at a higher rate. Internet is used by the people commonly for seven purposes, such as 8.3% people use internet for online shopping, 43.1% for entertainment, 45% for communication purpose and 1.8% for other purposes as found in this article (Alam, Bakar, Bin Ismail and Ahsan 2008).
The news article on the Global Internet Users’ depicts that around 59% of individuals are linked to Internet for various purposes, such as checking bank account details and statement, personal emails and shopping purpose. In Saudi Arabia, around 29% of Saudis are connected to Internet for e-banking. Today online shopping has become a trend for the people connected with Internet. In support with this, it is seen that highly developed countries are using online shopping at a larger extent, such as 74% in Germany, 74% in Great Britain, 68% in Sweden, and 65% and 62% in United States and South Korea respectively. In case of developing countries, 21% users are involved in online shopping (Global Internet Users Manage Finances (59%), Shop (51%) and Look for Jobs (41%) online 2012). Overall, people connected to Internet in developed and developing countries use the online means for shopping purpose.
The report based on ‘Middle East Internet & B2B E-Commerce’ reflects that the online market in the Middle East has developed rapidly. As per the recent record of Internet users in the Middle East, Internet has highly been used by Saudi Arabians, as of 2011. The report recorded Qatar and the United Arab Emirates as the highest Internet penetration countries. As per the recent data, rate of Internet penetration of total population is 35.6% as of December 31, 2011 (Internet World Stats 2012). The usage of internet in the Gulf Cooperation Council (including Saudi Arabia, Kuwait, Oman and Bahrain) has increased by 30% or more during 2000 to 2010. This indicates an increase in the trend of online shopping in Saudi Arabia, UAE and Israel. It is also identified that internet penetration and confidence in Saudi Arabia is quite high, which is the ultimate reason of the strong growth of B2C E-Commerce in this nation. Altogether, it is found that the trend of online shopping is increasing because of improved Internet connections and its high usage by more customers (Middle East Internet & B2C E-Commerce Report 2012).
The article, “Mobile Shopping on the rise in Kingdom” also states that 46% of Saudi shoppers access internet, mainly for the purpose of online shopping. The young customers, aged between 18-24 years are more likely to prefer online shopping in Saudi Arabia. It is also found that the trend of online shopping is growing popular in Saudi region of the Middle East. Online shopping is vastly used for different purposes, like 64% of the users use it for purchasing music, while 50% for air ticket booking, and 57% and 48% for computer software and gaming purpose respectively (Mobile shopping on the rise in Kingdom 2012).
In the same context, Sait and his associates (2004) have reflected the adoption and perspectives of e-commerce in Saudi Arabia. It is identified that the people of Saudi Arabia have been using internet for several years. This means that the people of Saudi Arabia have been associated with Internet over a long run. Adoption of E-Commerce is directly influenced by various factors. Some of these factors are usage of internet service in a particular region, internet experience, internet privacy, easiness of E-Commerce, and technology suaveness. IT vision pursues Saudis to adopt E-Commerce, and thus, it is reviewed that a strong customer base is using internet in this region, as a result, showing strong growth of online segment (Sait, Al-Tawil and Hussain 2004). From this, it is inferred that high level of Internet access in this country is a vital opportunity, as it is stated in this article that internet subscribers in Saudi Arabia are 584,000 in number (Sait, Al-Tawil and Hussain 2004).
2.5 Feasibility of Promoting Online Shopping in Saudi Arabia
Monsuwe et al. (2004) have stated various factors that promote online shopping. Online shopping trend is affected by various factors prevailing in the country, along with the other factors. The factors that drive online shopping in any country are current experience of online shopping, culture, consumer traits, lifestyle, knowledge and friendliness with internet technology. Additionally, the other factors, such as ease of use, enjoyment, and security and privacy issues are the other factors that influence online shopping. From this article, it is identified that promotion of online shopping system is directly affected by service excellence, experience, computer anxiety and enjoyment while shopping online. All these factors positively affect online shopping that in turn increases shopping via online mode. Product characteristics are also the key determinants that promote online shopping (Monsuwe, Dellaert and Ruyter 2004). Overall, it infers that online shopping must consider various aspects to promote this facility.
In this context, AlGhamdi and Drew (2011) have stated about prevailing key drivers and opportunities for online shopping facilities in Saudi Arabia. Information and technology revolution in Saudi Arabia has promoted a new wave of E-Commerce or online shopping. In the Middle East, Saudi Arabia is on the top position as the fastest growing Information and Communication Technologies (ICT) marketplace. Despite this, the speed of e-commerce activities in this country is not so fast and effective. There exist various drivers of e-commerce in Saudi market, like high speed Internet connection at lower cost, support by the government, secure online payment option, competitive prices and educational programs (AlGhamdi and Drew 2011; Eid 2011).
It is critically reviewed that the government supports E-Commerce by performing the role of facilitator, supervisor and controller. The interest of customers is quite secure in online retailing, as the government has set up the rules and regulations resulting into high customers trust. Saudi post offers service to subscribe main boxes in the post offices, which is another factor that promotes online shopping in this market. SADAD, the E-payment system in Saudi Arabia, offers customers to make bill payment through all banks in the Kingdom of Saudi Arabia. This system is highly used for E-Governmental activities and perceived security is quite high, which leads in building trust between online retailers and customers (AlGhamdi and Drew 2011). Moreover, it is also inferred that the number of internet users in Saudi Arabia has increased to 11 million in the first half of 2010. At the same time, subscriptions for broadband have reached 3.20 million people, which is 11.9% of the total population. This factor promotes online shopping facility in Saudi Arabia.
Moreover, Al-Ghaith et al. (2010) have noted that organisations have experienced enormous opportunities due to advancements in electronic service technology. An organisation can keep competitive image and market share by using Internet as the e-commerce means. In addition to this, online shopping facilities for the customers would lead in improving productivity and return on investment, and reducing operating costs. The high reliance on Internet/technology is one of the existing opportunities for online shopping in Saudi Arabia. From this, it can be made out that Saudi people highly rely on the information technologies, such as computer and internet. Moreover, business class in Saudi Arabia highly uses internet for gathering market information and for communication purpose. As compared to other countries, the use of Internet services and computers by Saudi Arabia is relatively higher (Al-Ghaith et al. 2010).
Al-Saggaf (2011) has noted that the use of online services by Saudi people is booming in the local and global marketplaces with increasing Internet access, as reviewed. In relevance to the current status of Internet in Saudi Arabia, it is reviewed that around 14.26% or 3.5 million population of Saudi Arabia uses Internet for online/ e-commerce transactions (Al-Saggaf 2011).
In the similar way, Simsim (2010) has noted that the number of users of Internet at the global level has vastly been increasing, which brings enormous revolution in the business world. In context to Saudi Arabia, the rate of Internet service penetration reached at 26.8% as of September 2009. It has also been found out that 7.7 million people in Saudi Arabia are using Internet, as of 2009. From this, it is reviewed that usage of Internet is spreading in Saudi at great extent that is a tremendous opportunity for providing online shopping (Simsim 2010). Al-maghrabi et al. (2009) have stated that electronic commerce has rapidly been developed over the years, which ultimately has added benefits to businesses, such as increased market share and competitive position. It is identified that Middle East has experienced a rapid growth in the transactions of online business trading (Al-maghrabi, Dennis and Haliday 2010).
Al-Mowalad and Putit (2012) have stated about various factors that influence behaviour of Saudi Arabian people in using online shopping system. It infers that rapid use of technology helps individuals to shop anytime from anywhere, and along with this contributes in the economic development by promoting global business. Online shopping, in the Middle East and Gulf countries, has shown enormous growth. In support with this data, it is found that users of internet in Saudi Arabia have increased from 2001 to 2011, which has been 1 million to 12.5 million respectively. This is one of the positive growth signs for the promotion of online shopping facility. Internet penetration at the same time is 44% of the total population, as reviewed in this article. To increase the uptake of online shopping in the markets of Saudi Arabia, the organisations must undertake various factors, such as trust, privacy risk, customer preferences and experience (Al-Mowalad and Putit 2012).
2.6 Factors Hindering Online Shopping Facility
Al-Ghamdi, Drew, and Al-Ghaith (2011) have elucidated that the retailers’ adoption of online shipping in Saudi industry is influenced by both positive and negative issues. In Saudi Arabia, online shopping is not commonly used by the people because of various issues, like lack of awareness and ineffective educational programs. In this context, it is reviewed that flourishing of online shopping facility is not easy in Saudi Arabia due to various challenges. Saudi’s culture is one of the greatest challenges or factors that hinder online shopping in Saudi Arabia. The prevailing culture of Saudi Arabia is based on the reserve beliefs, attitudes, behaviours and values. The prevailing culture in Saudi Arabian market is not promoting the online system due to lack of customers’ trust Al-Ghamdi, Drew and Al-Ghaith 2011).
Delivery system is another factor that hinders online shopping in Saudi Arabia. In Saudi Arabia, companies do not have the home address and thus, it is not possible to deliver product to the customers anywhere. Availability of limited online payment options in Saudi Arabia hinders promotion of online shopping in this market. Due to this, customers are not able to make payment by using credit cards. The infrastructure in Saudi Arabia is not suitable for online shopping facility because of poor Information and Communication Technology systems. Broadband is not provided in the remote areas of the country that keep people in those areas from adopting online shopping facility. Lack of experience in using online shopping facility is another problem in the online system promotion, as Saudi Arabian people do not trust highly in making purchases via internet (Al-Ghamdi, Drew and Al-Ghaith 2011; Dai 2011, p. 460).
AlGhamdi, Drew and Alhussain (2012) have described that the usage of Internet is rapidly increasing over the years. Number of internet users in the Middle East and the world has continuously been increasing, but despite this, providing online shopping facility in Saudi market is not quite feasible. This is because of various issues, such as lack of national information network and infrastructure. As compared to other nations in the world, Middle East is lagging behind with the use of online shopping facility because of low internet penetration. The main reason behind this fact is the last initiation of internet use by Saudi people and unavailability of broadband subscription in remote areas of Saudi Arabia. This is a major challenge and factor that hinders online shopping facility. The people in Saudi Arabia do not fully accept online shopping facility, due to the prevailing culture and lack of knowledge about online shopping benefits (AlGhamdi, Drew and Alhussain 2012).
Aleid and his associates (2009) have revealed that e-commerce is one of the great opportunities to promote economic activities. The number of internet users in Saudi Arabia has been increasing, and despite this, the people are least interested in online shopping. One of the limitations, inferred from this article is lack of clarity of addresses for shops and homes. This factor induces hindrance in offering online shopping facility. Moreover, lack of knowledge about online shopping system is another factor that hinders this facility in Saudi market. Due to lack of sufficient information about this facility, people in Saudi Arabia are afraid of shopping online. The security and privacy issues in the online shopping system are other factors that cause hindrances in providing online systems popularity in Saudi Arabia (Aleid, Rogerson and Fairweather 2009).
2.7 Critical Success Factors for Growth of Online Shopping Facility
The success of anything largely depends on directly associated Critical Success Factors (CFS). In context with online shopping facility, different authors depict various CFS for the growth of online segment. According to Botha et al. (2008), there are various critical success factors for online shopping that are needed to be considered, to serve customers with quality information and customer service. The success of online shopping is directly linked with customers and thereby, with customer targeting, product information, and communication are to be considered as (Botha, Bothma and Geldenhuys 2008, p. 285).
Moreover, Botha and his associates have put forward, different other CFS linked to online shopping, such as customer trust, website personalisation, quality information, competitive pricing, broad range of products and easy procedure of payment. Due consideration to all these factors would aid in gaining customers satisfaction, as personalisation of a website not only greets an individuals’ need, but it fulfils personal preferences through providing a wide choice for products and their related information (Botha, Bothma and Geldenhuys 2008, p. 285).
Filipe and Obaidat (2008) have revealed various success factors that induce customers to buy through online mode. The most common success factors linked to online offerings are perceived service quality, customers trust, quality information and choice, product offering, convenience and comfort. Critical success factors are referred as a combination of factors related with website and customers. Filipe and his associates (2008) have classified CFS for online shopping into two areas, such as website-centric and customer-centric. The first category of CFS focuses on the factors that contribute to the website success. The key factors, considered in this context, are ease of using internet shopping website and quality of service. The factor of ease in using website helps in giving reliable internet shopping facility to customers, so that they can use online shopping conveniently and effortlessly. Service quality factor helps in fulfilling expectations of customers (Filipe and Obaidat 2008, p. 101).
On the other hand, customer centric viewpoint is the other crucial area needed to be looked out for the growth of online shopping. While offering online shopping facility, it is essential to consider education level of customers, as this factor aids in knowing the likeliness of purchasing via internet. Moreover, innovativeness is another factor needed to be employed, as this can help to know the innovative tendencies of customers towards using online shopping. Trust is one of the key factors that influence customers to shop online. Organisations building a customer’s trust in online shopping facility can positively influence the practice of online shopping. Compatibility of the customers’ shopping needs with online shopping is also considered in order to influence customers’ attitude towards online shopping facility (Filipe and Obaidat 2008, p. 100; Zeithaml, Parasuraman and Malhotra 2002).
In the similar context, Lee and Lin (2005) have mentioned different dimensions of e-service quality that positively influence customers’ purchase intention and satisfaction. It is critically reviewed that customer satisfaction and service quality both are highly affected by different CSFs of online shopping, such as website design, trust, responsiveness, privacy and security and easiness. Organisations can attain competitiveness in online shopping segment by considering these aspects. Customers’ viewpoint related to service quality must be considered to make online shopping process easy for them (Lee and Lin 2005). Overall, service quality is based on various dimensions of e-service quality that influence customer satisfaction and purchase intentions.
2.8 Research Question and Sub-Questions
On the basis of conducted literature review, the following main research question is being developed “To what extent, it is feasible for Saudi business organisations to invest for providing online shopping facilities to the customers?” The following sub-questions are being addressed in relevance to the main research question:
- What are online shopping facilities and their ultimate benefits to people and organisations?
- What is the level of frequency of using the Internet by the people of Saudi Arabia?
- To what extent individuals prefer online shopping in Saudi Arabia?
- What are the main obstacles in the development of online shopping facilities in Saudi market?
This chapter has covered critical review of different secondary sources, like books, scholarly articles, and online articles to have an in depth knowledge about the research topic. Online shopping has become a trend across the globe because of increased usage of internet. There are various advantages of using online shopping facility, such as low cost, easy delivery, buy anytime from anywhere, easy comparison with other brands, and having detailed product or service information. The trend of online shopping facility is rapidly rising in Saudi Arabia because of the higher number of internet users than other countries in the Middle East. Young customers are more likely to shop via online means, as they are more connected with internet. The feasibility of online shopping in Saudi Arabia is mainly focused under this chapter, looking at various factors promoting and hindering online shopping in Saudi Arabian market. The critical success factors for the growth of online shopping have also been reviewed with conducting secondary analysis, such as easiness, flexibility, privacy and security, internet friendliness and product information.
Chapter 3: Methodology
Research methodology is a pertinent section that provides details about research method chosen for the research study and the rationale behind the chosen particular method. This part of the dissertation covers different sections to explore pertinent and relevant data (Mertens 2005). As per Saunders Onion Model, the research study follows different layers to address the research question (Piepenburg 2011, 44; Dalcher and Brodie 2007, p. 12). As per the specified research question, primary and secondary data collection methods are used to collect relevant data. Afterwards, the research method is selected from the different methods, such as survey, case study, experiment, grounded theory, interview, and secondary analysis method. Research approach is the next layer of this model that addresses the research question, such as quantitative (deductive) and qualitative (inductive) ones. Lastly, research philosophy has been chosen from different approaches, namely post-positivism, pragmatism, constructionism, and advocacy (Piepenburg 2011, 44).
(Source: Dalcher and Brodie 2007)
3.2 Research Approach
Quantitative and qualitative are the two available approaches that can be used to address the research problem. The nature of the research problem is considered as the main base behind selecting the research approach. Therefore, nature of the research problem needs to be considered while adopting a particular approach. Quantitative approach (deductive) has been taken into consideration to test the feasibility of providing online shopping facility to Saudi people. It is a quite suitable approach through which numeric data can easily be collected and further tested with the scientific standards (Creswell 2002, p. 153). The quantitative approach is helpful in identifying behavioural dimensions of the people in Saudi Arabia about usage of Internet and friendliness of using the online shopping facility.
Moreover, quantitative approach is appropriate for analysing feasibility of online shopping in Saudi market, as under this, quantitative scales/values can be used to collect related information from the target people (Creswell 2002, p. 153). This approach is helpful in accessing available facts related to the topic, which leads to enhancement of knowledge about the factors that promote and hinder the online shopping facility. As such, quantitative approach (deductive) moves from the general information to the specific one.
The conclusion about the feasibility of online shopping facility for Saudi Arabians can logically be derived only by using quantitative data, as this approach generates from theory and proceeds towards confirmation. This means that quantitative approach is the best approach to derive relevant information about people’s perceptions about online usage, familiarity with Internet, and frequency of using Internet from the available reports and facts. The empirical evaluations are taken into consideration in the quantitative research approach. Therefore, the use of quantitative approach makes it easy to determine the level to which online shopping facility matches with a prevailing environment or culture in Saudi market.
Quantitative approach is appropriate to be used to present data numerically, as in this research, data collection is done through using primary method of data collection (survey through questionnaire) that demands numerical representation and manipulation of observations; and thus, this approach is chosen to infer and explain the results derived from the survey related to online shopping facilities’ feasibility in Saudi Arabia. The preference to use online shopping facility and friendliness to use Internet by Saudi people can be covered by using quantitative research method.
Quantitative approach is given priority over qualitative (inductive) approach because qualitative approach does not support number representation and data analysis. There are high chances of biased views in the qualitative approach because the researcher interprets the research as per his own views (Maxwell 2005).
3.3 Research Design
The commonly used research design is exploratory, descriptive, and causal. The descriptive research approach has been used for this research study and data analysis. This is quite an appropriate approach to do in-depth research study because it allows using qualitative or quantitative data (Brewster 2012). Descriptive design is chosen to describe the related data and characteristics about the results related to the topic (Offredy and Vickers 2010, p. 48). By using descriptive research design, it could be easy to explore the characteristics of the selected population and use this information to derive out logical conclusions and facts. The statistical information related to the topic can be explored with this research design along with people’s experience about online shopping and usage of the Internet, which is another reason behind choosing this.
The perceptions/preferences of Saudi people can easily be discussed and described by using descriptive research design. This research design is useful to answer whether offering of the online shopping facility to customers in Saudi Arabia is feasible or not. Descriptive research design makes the collection of information related to the topic easy through which research question and its related sub-questions can be concluded (Monsen and Horn 2007, p. 5). This is another valid justification of using descriptive approach.
Exploratory research design has not been chosen in this research study, because its findings and results are tentative in nature in contrast to the conclusive nature of findings/results in the descriptive research design. Moreover, this research design mainly relies upon qualitative data rather than quantitative one in order to answer research questions; and thus, it has not been appropriated for this study. Statistical information about online shopping facilities has been collected via survey in this research study. Causal research design is not appropriate for this research since it depends on the experiments (Rofianto 2011). Overall, descriptive one is the best chosen research design to answer the research question using the quantitative approach.
3.4 Research Philosophy
Based on the research nature and approach, positivism approach is preferred in contrast to interpretivism approach. Positivism is the most suitable one for this research, as it keeps true objectivity of the research study. The research on the feasibility of providing online shopping facility in Saudi Arabia has been based on the set guidelines/formats; and thus, positivism approach is followed, as it is based on the scientific nature. Deductive approach has mainly been followed under this philosophy, and the same approach has been followed during this research study (Heppner, Wampold and Kivlighan 2008, p. 12). This is another reason behind choosing the positivism approach.
Under the positivism approach, the findings of the research are applicable to the total population. The use of this philosophy helps in accessing viewpoints or experiences of the whole population to explore the online shopping facilities’ feasibility in the Saudi market. The philosophy supports quantitative approach, instead of qualitative approach, to examine observations. This means the use of positivism philosophy helps in analysing the results quantitatively or numerically. The philosophy follows a structured approach that leads to high reliability. Overall, positivism approach enhances the reliability level of research results through avoiding personal biases (Wilson 2010, p. 9).
3.5 Research Method for Data Collection
In this research work, the defined research question and sub-questions have been researched by using the survey method to know outlook of Saudi people about the usage of online shopping facility. In addition to this, secondary analysis is used to explore already available information about the topic.
3.5.1 Advantages and Disadvantages
Survey method is relatively cheaper and quicker in terms of cost and time of collecting responses (Axinn and Pearce 2006). Survey makes it easy for the researcher to approach large population and sample size. This signifies that the large population characteristics can easily be depicted with using survey with a satisfactory response rate. Survey can be conducted by using various ways, like mail survey, phone survey, and face to face survey. The researcher can enjoy high flexibility and rapid collection of data with using phone survey (Fowler 2002). . In the same way, online survey saves unneeded cost and time, and it is also convenient and flexible (Schonlau, Fricker and Elliott 2002, p. 28). The researcher can observe the attitude of individuals and enjoy satisfactory response rate by using the survey method.
Despite the advantages, there are certain disadvantages of the survey methodology. Survey is based on the initial research design that is fixed throughout the data collection process; and thus, there remains a high inflexibility. Sometimes, a large number of people selected for the research may not reply willingly and show less interest in giving responses. This results into low response rate and lack of data authenticity (Walsh and Wigens 2003). Another disadvantage of this method is high inappropriateness of questions, as the researcher needs to develop general questions to reconcile the selected population.
Secondary analysis method is relatively cheaper and faster, as relevant data can easily be accessed through reviewing available literary sources. This method gives an opportunity to access top scholars’ research works that in turn ensures quality of information (Advantages and Disadvantages of Using Secondary Analysis 2011). Secondary analysis is a flexible approach, under which, a number of authentic sources related to the topic can be identified and critically evaluated to improve the in-depth knowledge. Secondary analysis is the best source of data collection that can be used to support findings.
On the negative side, use of secondary analysis is not appropriate to know about defined subgroups’ interests; and thus, this method can only be used for reference purpose (Advantages and Disadvantages of Using Secondary Analysis 2011). Secondary analysis has limited relevance to the research study, as it is based on the researchers’ own views and thoughts related to the topic. This method is not always authentic because of information gaps (Simonton 2003).
3.5.2 Justification of Chosen Research Method
The mixed methodology is useful to accumulate pertinent information about the topic. Primary information has been collected through conducting a survey via questionnaires. This method of data collection makes it easy for the researcher to get real-life experiences and views of the target sample population (Axinn and Pearce 2006). In this research, survey through questionnaire is the appropriate methodology to know Saudi customers’ views about online shopping and use this information to assess the feasibility of providing online shopping facilities in Saudi Arabia’s market.
The relevant questions can be asked during the survey process to a large number of people in order to address the defined research aim, objectives and research questions, such as friendliness of using the Internet, frequency of shopping via online means, lifestyles, and factors to promote online shopping in Saudi market. The survey method enhances the flexibility of the research findings and analysis because experiences of the large sample population can be collected and used to infer results (Hair, Celsi, Money, Samouel and Page 2011, p. 12). The results collected through the survey method ultimately prove to be helpful in knowing the extent of investment for providing online shopping facilities to customers in Saudi Arabia.
Secondary data analysis has been undertaken to collect secondary information related to the research area. This is an appropriate method to enhance deep knowledge about the feasibility of providing online shopping to Saudi customers, as under this method, authentic scholarly articles are to be critically reviewed. Another justified reason of selecting secondary analysis is to address the research aim and objectives about online shopping facilities in Saudi Arabia with authentic facts and evidences.
3.5.3 Resources Access to Primary and Secondary data
Different resources are used to collect the required primary data pertaining to the research topic. Some considerable resources required include comprehensive questionnaires having open and close ended questions, Internet, computer system, capital, and time. The close ended questions help in collecting the target population’s level of assessment with the given options. Open ended questions aid in sharing real experiences of these people in brief. The people in the Saudi market have been approached to assess the feasibility of providing online shopping. For this research study, the strategic managers and people from the administration of different business organisations in Saudi Arabia have been targeted through providing the survey questionnaire via online method because of low cost and time consumption (Schonlau, Fricker and Elliott 2002, p. 28). Moreover, the written consent is necessary from the associate sample population prior to sending them the questionnaire to keep a high response rate and data authenticity.
The scholarly journal articles relevant and related to online shopping from the already available secondary data sources are helpful is this section. The information related to online shopping trends and factors promotes the online shopping facility in Saudi Arabia; and threats for online shopping facilities are acknowledged through using various academic books, articles and magazines. A thorough reviewing of these resources provides a substantial knowledge about the existing status of online shopping within Saudi Arabia. Moreover, the differences between Saudi online shopping and that of other countries researched are identified through secondary sources, like online articles, academic publications, online news articles and magazines, and referred journals from online databases, like Ebsco.
3.6 Sampling Strategy
For this research study, the strategic managers of different business organisations in Saudi Arabia have been approached to collect the primary data. These people constitute the sample because they have a good knowledge about Saudi market, along with customers’ preferences and lifestyles. The online survey has been conducted in this research; and thus, questionnaires have been provided to the strategic managers via online means in order to approach them conveniently. Managers in different business organisations operating in Saudi Arabia have been approached for conducting the survey. Sample size of 150 managers from the total managers working in Saudi’s based firms is to be sampled. All in all, this sample size is adequate, as it consists of managers, who have a broad knowledge about the prevailing market conditions and customers in Saudi Arabia. Random sampling process is going to be used to make a selection of participants as it gives an equal chance of being selected to each participant in this research (Levy, and Lemeshow 2011, p. 433). This sampling strategy ensures high flexibility and true presentation of the sample population.
3.7 Data Analysis Process
Data analysis is another significant part of the dissertation that helps in generalising main findings and results. An appropriate analysis of data keeps high relevancy of the research results with the defined aim, objectives, and questions. The graphical technique is useful in depicting participants’ responses about the feasibility of online shopping in Saudi Arabia. The graphical method is appropriate for this study in order to reflect responses with an effective presentation. This method is helpful in reflecting the level of assessment through presenting different percentages out of the total population. All responses are presented by creating pie charts including title and percentage to reflect understandable derivations related to the research results.
3.8 Ethical Considerations
The aspects related to ethics must be considered while conducting the research study, as it keeps fairness in the research process. Ethical considerations not only help in keeping off ethical dilemmas, but they also maintain flexibility and transparency. Some of the major ethical aspects needed to be regarded by the researcher are mentioned as follows:
- The researcher needs to take voluntary consent of the chosen people, so that they can participate in the survey process cheerfully and with interest. Participants are not to be forced to take part in the survey (Gregory 2003).
- The information collected during the survey process is only used for the purpose of generalising results and data analysis. This information is not provided to anyone for their personal use, so as to keep privacy (Iltis 2006).
- The strategic managers are chosen on the random basis from the total population to keep fairness in the selection. This directly leads in keeping off biasness.
- The questions covered in the questionnaire are kept relevant to the research work by considering the language part in order to avoid any kind of emotional harm to the participants.
- The aspects of objectivity and subjectivity are also considered in this research study to make the research work free from any personal bias and to give fair consideration to both the aspects (Ethical Considerations 2004).
- The results of the research are accurately depicted; and thus, the survey process is conducted within the context of the research topic.
- The use of secondary sources is made only for the reference purpose; and thus, the secondary information is not originally copied from the sources to avoid plagiarism issue.
This chapter covers research approach, research design, research philosophy, data collection method, resources to access primary and secondary information, sampling strategy, and lastly, the ethical issues. Quantitative (deductive) research approach has been followed to derive out final results. Descriptive design has been used to generalise main results to address aim, objectives, and questions. The research data is collected by using survey through questionnaire as the primary source of data collection, and secondary analysis as the secondary source of data collection.
Chapter 4: Data Analysis
Data findings chapter is considered as the main chapter of the dissertation in which, key objectives of the research to be addressed such as actual development of internet, favourable opportunities for online facility, major problems of online shopping facility and Saudi’s customers’ preference to online shopping. This chapter covers responses/results that have been collected during the survey in context to objectives so that relevant findings related to opportunities and threats of providing online shopping facility would easily be generalised at the end. In this chapter, responses of 150 strategic managers of different business organisations operating in Saudi Arabia is being presented and analysed to explore current market trend and people preference towards online shopping.
4.2 Findings and Analysis of Research Results
From the complete filled questionnaires of 150 managers working in Saudi’s based organisations; it is found both male and female participated in the survey. 80% were male participants and 20% were female participants out of the total population sample of 150 managers (Shown in below Figure)
Majority managers (85%) have had experience of more than 5 years, while; some others 15% managers have experienced of 2-5 years (Shown in below Figure).
In order to analyse feasibility of providing online shopping facility to the people in Saudi Arabia, number of relevant questions were asked to the directly associated people. When it was asked to state your experience about feasibleness of online shopping facility, 45% replied ‘Yes’ as usage of internet in Saudi Arabia has continuously been increased. On the other hand, 35% respondents were stated ‘somewhat extent’ in response to the same while; 15% replied ‘No’ and 5% were neutral (Shown in below Figure).
When managers were asked about their satisfaction level from the information and communication technology developments in Saudi Arabia, 30% managers said they are highly satisfied with the ICT developments, while; other 35% said that they are somewhat satisfied with these developments. There are 20% managers who are neither satisfied nor dissatisfied with the information and communication technology developments made in Saudi Arabia. Only 15% mangers were found not satisfied with these developments (Shown in below Figure).
In relation to opportunities for online shopping facility in Saudi Arabia, 25% managers said that increased trend of online shopping and internet usage is the major opportunity that makes online shopping facility favourable in Saudi Arabia. 20% said that information and technology revolution is the major opportunity in Saudi to make online shopping feasible. 15% managers said that high speed internet connectivity provides a good opportunity for developing online shopping facility. Government support and education programs were referred by 15% managers as a good opportunity. Other than this, 25% managers, said that all specified opportunities are quite feasible in Saudi Arabia (Shown in below Figure).
When managers were asked about any idea related to determinant factors of online shopping continuation, 80% managers said that yes they have a good idea; while other 20% said that they have no idea (Shown in below Figure).
In relation to the same question, when managers were asked to define those determinant factors, 20% said that perceived usefulness is a major factor, 15% said that enjoyment is an important factor, 25% said that subjective norms are major determinant factors that can continue online shopping in Saudi Arabia. Rest 40% managers said that all the above factors are equally important in Saudi Arabia for making online shopping trends feasible and successful (Shown in below Figure).
When managers were asked that with the increased internet access in Saudi Arabia, the perception and preference of people is shifting towards online shopping, 50% managers strongly agreed that yes it is true, and other 20% agreed on this point. Only 10% managers were neutral on this point, and 20% managers were disagreed. This data represents that majority managers consider that increased usage of the internet has been definitely shifting preferences of customers towards online shopping (Shown in below Figure).
In relation to the same question, when managers were asked that if you are strongly agreed with this point, please respond the current status of internet in the market, all the managers said that internet usage has been rapidly increasing in Saudi Arabia due to new developments in information and communication field. Along with this, government support to the new ICT development is also a factor that is increasing internet usage in Saudi Arabia. The educational level and awareness of Saudi people has been increasing towards the use of internet, and its benefits and this is the reason that their interest level is increasing day by day.
When managers were asked about the major benefits that customers can gain by the provision of online shopping facility, it was responded by 20% managers that online shopping facility will provide time saving benefits to customers. 25% managers said that cost saving is the major benefit that customers will have through online shopping. Rest 15% said that with the use of online shopping facility, customers will have a good degree of convenience for purchasing anytime and from anywhere. 20% managers said that high availability of production information and easy comparison of products is the major benefit that customers can have only in online shopping, and that can induce them to purchase such products on a good level. The rest 20% managers said that all the above are major benefits that customers in Saudi Arabia can have from online shopping facilities and these benefits are quite effective to induce Saudi customers to use online facilities on priority and making online shopping trends feasible in Saudi Arabia (Shown in below Figure).
When managers were asked that whether current beliefs, behaviour and intention of customers directly affect their preference to online shopping, it was responded by 55% managers that yes customer behaviour attributes affect their preferences to online shopping to a great level. 25% managers said that these customers’ attributes namely behaviour, intention, and beliefs of customers affect their online shopping preference to some extent. On the other hand, only 20% managers were neutral on this point. From this data, it has been interpreted that customer perception and beliefs are the major determinant factors responsible for inducing their purchasing behaviour towards online shopping (Shown in below Figure).
When managers were asked about two major factors that customer trust and technical know how are important for customer behaviour shift towards online shopping, 45% managers strongly agreed that yes these factors are very important to make shift in the customer behaviour towards online shopping; while 25% agreed that yes these are the important factors for determining online shopping behaviour of customers. 20% managers were neutral on this point, and only 10% disagreed that trust and technical knowledge of customers are important factors to determine consumer behaviour towards online shopping (Shown in below Figure).
In the same line, when managers were asked about problems that may hinder the provision of online shopping facility to customers in Saudi Arabia, 20% managers said that lack of awareness among customers is a major problematic factor, 15% managers said that culture is a major problem that affects the process of online shopping facility to customers 25% said that lack of advanced ICT systems is also a major problem against providing online shopping facility to customers in Saudi Arabia. 10% managers said that security and privacy issues are the major critical factors that affect the provision of online shopping facility in a critical manner. Rest 30% managers said that all the specified problems collectively affect the process of providing online shopping facility to customers. From all this data, it has been analysed that there are multiple factors that affect the provision of online shopping facilities in Saudi Arabia (Shown in below Figure).
When managers were asked about factors that are important for feasibility of online shopping in Saudi Arabia, 10% managers said that customer trust is an important factor 15% managers said that website personalisation is an important factor, other 15% said that quality information is important, 20% said that competitive pricing is an important factor, 10% said that broad product range is an important factor, 10% said that easy procedure of payment is an important factor for making online shopping feasible in Saudi Arabia. Rest 20% managers said that all the specified factors are equally important for feasibility of online shopping in Saudi Arabia (Shown in below Figure).
When managers were asked about the development of e-commerce in Saudi
Arabia as a prosperous idea for providing online shopping facility in Saudi Arabia, 80% manage said yes the provision of e-commerce is really beneficial and other 20% were neutral on this point. According to managers, e-commerce is beneficial for enabling internet technologies. In the present developed world, e-commerce has been having rapid growth. E-commerce readiness in Saudi Arabia is quite high, and with the introduction of internet, e-commerce practices have been improving (Shown in below Figure).
From findings of this data analysis chapter, it has been summarised that in Saudi Arabia, there is a high feasibility for online shopping practices for customers. In Saudi Arabia, the usage of the internet has been increasing, and with the increasing support of government, Saudi Arabia will have a significant growth of online shopping facilities.
This research study is mainly objective to examine the feasibility of online shopping facilities in Saudi Arabia. For such purpose, data collected under this research has defined several factors that are helpful for promoting online shopping practices in Saudi Arabia and problems that may be encountered in the process of making online shopping practices feasible in Saudi Arabia. The data findings generated from the research study are quantitative in nature, and their analysis is also done in a quantitative manner. In the following discussion chapter, the detailed analysis of findings is done, as well as, these are also supported from findings of literature review.
From data findings, it has been analysed that there is a good degree of feasibility for online shopping in Saudi Arabia because customers’ interest in online shopping has been increasing. On the basis of data findings, it has been discussed that the level of online shopping is highly feasible in Saudi Arabia. In support of this, literature data also reflects that consumers in Saudi Arabia have now being having increased use of e-commerce practices through shopping online. Out of the total population about 14.26% customers prefer online shopping. Saudi Arabian market has been developing as online market place for customers (Oxford Business Group 2008).
The data discussion reflects that there are frequent developments in the field of information and communication technology in Saudi Arabia because most of the business managers are satisfied with the ICT developments occurring in the country, and these developments have increased usage of internet among Saudi customers on a preferable level. This discussion is also supported by the literature data findings that specify that in Saudi Arabia, ICT revolution has made a significant growth due to rapid developments in the infrastructure of information and communication technology background and usage of internet services among customers. At the present date, the rate of domestic broadband penetration has increased to more than 44% in comparison to year 2005 (Al-Daweesh 2011). However, there is a significant need in Saudi Arabia to have an establishment of a favourable ICT environment so that contribution of online shopping can be increased in Saudi economy.
On the basis of the primary data findings, it has also been discussed that there is a good range of opportunities that Saudi Arabian market can utilise for having feasible developments in online shopping practices. The major existing opportunities in Saudi market for feasibility of online shopping are a revolution of information and communication technology, high speed internet connection and government support towards ICT developments. All these factors are quite opportunistic for Saudi Arabian marketers to make online shopping feasible in the country. The literature data findings also support this discussion by stating that advancements in the e-commerce practices and high use of the internet have created new opportunities for business organisations to establish a good online shopping base in Saudi Arabia. High speed internet connections have resulted into 100% increase in the online transactions rate in Saudi Arabia. The sales through internet in Saudi Arabia have increased to a good level in the country and are expected to rise in the near future. Government support to ICT developments and online transactions has also been proved a significant factor in the promotion of online shopping in Saudi Arabia (Al-maghrabi and Dennis 2008).
Data findings discussion also reflects that continuation of online shopping can be determined through different factors including usefulness of online shopping, degree of enjoyment that online shopping provides to customers, subjective norms and several other factors. All these factors contribute to different levels in the continuation of online shopping trends in Saudi Arabia. The literature data also supports that customers’ acceptance towards online shopping increases through different factors such as easiness of use of this process and its utility and benefits for customers over traditional store shopping practices. In comparison to developed nation, the customer acceptance level towards online shopping is less in Saudi Arabia and thus, there is a great need to improve new ICT developments for making customers attitude positive towards online purchasing (Brosdahl and Almousa 2010). In the retail sector of Saudi Arabia, the rate of online shopping is increasing as customers feel enjoyment and other benefits such as time saving in the online shopping.
On the basis of data findings, it has been discussed that in Saudi Arabia, the rate of internet usage has been increasing, and as a result, the customer attitude has been shifting towards online shopping trends. The increasing usage of the internet is making customers aware of benefits of online shopping. The perceived value of customers towards online shopping has been transforming on a rapid rate. This discussion of primary data findings is also supported by literature data that e-commerce has made the transformation in the shopping behaviour of customers in Saudi Arabia (Al-maghrabi, et al 2011). In Saudi Arabia, the usage of the internet has been increasing rapidly and thus customers are opting to use online shopping options over offline services.
The discussion on data findings reflects that in the existing ICT environment of Saudi Arabia, usage of the internet has been increasing at a rapid pace. People in Saudi Arabia are very much keen to use internet services due to increase in educational level and awareness. The increasing use of the internet has made the people of Saudi Arabia connected with people around the world. The traditional transaction practices of customers have been transformed as a result of increasing use of internet. New internet facilities have rendered several benefits to customers (Aljabre 2012). The usage of the internet has been growing tremendously in Saudi Arabia.
The internet growth and population statistics of Saudi Arabia also reflects that users of the internet have been increasing every year in Saudi Arabia, which reflects that customers are shifting towards the use of online services at the present date. Increasing access to the internet has made people aware towards benefits of online shopping to local customers as with the help of these facilities customers have found new opportunities and trends of shopping.
The discussion on data findings also reflects that online shopping is a very beneficial practice in the present business world from both customers and business people’s point of view. The online shopping facility not only provides time saving benefits to customers but also saves the cost incurring in transportation activities associated with the purchasing process. Along with this, data discussion also reflects that through using online shopping facilities, customers gain a high degree of convenience in their purchasing process because they get options to buy their required products at any area and at any time. The internet availability of a larger range of products also makes customers attracted to use online shopping practices in a favourable manner. All these benefits are not only for a particular region but equally beneficial for all. The literature also supports that online shopping has several primary and secondary benefits for customers. The primary benefits of online shopping include convenience of customers and timesaving that is the main reason, which make customers prefer online shopping over traditional methods (Windham 2000). Rather than other modes of shopping, buying online is considered as the most convenient way by customers. The main reason of e-business success in the present world is also the same. The other beneficial aspects of online shopping for customers are its influence on customers all over the world and fun and information availability about products (Liu 2007).
From the overall analysis of data findings, it is discussed that personal beliefs, intention and behaviour of customers are the major determinant factors in Saudi Arabia that makes customer prefer online shopping facility on priority. The cultural beliefs of customers in Saudi Arabia are different from other regions, and this is the reason that preference of these customers towards online shopping is also different from customers of other cultural backgrounds. The literature data also reflects that in Saudi Arabia customer purchasing habits are highly influenced by their cultural norms and beliefs (Al-Ghaith, Sanzogni and Sandhu 2010). The literature data reflects that in Saudi culture, consumer beliefs towards online shopping have a high concern for security aspects. In the adoption of online shopping practices by Saudi customers their beliefs and past experiences play a very crucial role (Al-Ghaith, Sanzogni and Sandhu 2010). The cultural beliefs and values of Saudi customers are the most effective predictors towards adoption of online shopping.
In the online shopping practices of customers, several other factors also play a significant role such as trust level of customers and their technical know how. Trust is the most important factor in online shopping adoption by customers. Security and privacy of information is the main base for winning the trust of customers towards online shopping. The literature data reveals that trust of Saudi customers in online shopping practices is not much strong, and this has a profound impact on their degree of acceptance towards online shopping and electronic commerce practices (Al-Maghrabi and Dennis 2011). Technical advancements in Saudi Arabia are also critical factors for adoption of online shopping practices in Saudi Arabia. In online purchases, several problems are involved related to digital technologies about which, Saudi customers are not much aware and thus, they face problem related to technical knowledge base (Al-Maghrabi and Dennis 2011).
Though the use of the internet has been increasing in Saudi Arabia, yet there exist some critical problems in the ICT environment of Saudi Arabia that affects the feasibility level of online shopping practices in the region. The discussion of data reflects that some problems are related to online shoppers while; others are related to information and communication technology background. Problems related to shoppers are lack of awareness among Saudi people towards online shopping practices and usage of internet facilities. The other problem is the cultural influence of Islamic practices over Saudi population. People in Saudi Arabia have cultural influenced perceptions towards online shopping practices. Problems related to ICT system and security and privacy aspects and low advancements in the field of ICT are the major factors that affect the feasibility of online shopping in Saudi Arabia. This is also supported by literature data that in the provision of online services, companies have to consider cultural values of customers as purchase decision of customers and adoption of internet banking are highly influenced by cultural values. In Saudi Arabia, customer experience reflects that customers have a low degree of knowledge and expertise related to online shopping and thus, their trust and satisfaction cannot grow to an effective level (AL-Ghamdi 2009). In relation to ICT advancements, though some organisations in Saudi Arabia have adopted ICT practices, yet there is a need for new advancements in order to make online shopping practices secure and safe (Al-Zahrani 2006).
The discussion also represents that Saudi Arabian people are already using online shopping practices, yet to make these practices more feasible and effective in the country, there is a need to consider some important factors including trust, quality of information, easy payment mode, pricing, availability of a broad range of products and website personalisation are major factors that are needed to enhance the feasibility of online shopping trends in Saudi Arabia. Collective support to all these factors is significant to improve the level of online shopping in Saudi Arabia. The literature data also supports this discussion by exploring that in Saudi Arabia, the Ministry should focus on increasing interactivity of websites to deliver quality based information to customers (Abanumy and Mayhew 2006). The website accessing process should be based on low cost and even customers should be provided discounted priced products through online shopping.
The discussion of data findings reflects that in Saudi Arabia, e-commerce developments are being made on rapid rate. New developments in the e-commerce field have been carrying out in Saudi Arabia, yet there is a need to make significant improvements in the same field. The literature data reflects that accessibility of e-commerce practices has been increasing rapidly in Saudi Arabia. Saudi Arabia is following internationally accepted guidelines of e-commerce practices. Saudi Arabia has been undertaking new initiatives of e-commerce with the incorporation of new ICT advancement (Abaumy, Al-Badi and Mayhew 2005). Thus, e-commerce prosperity of Saudi Arabia is also a supportive feature for online shopping feasibility.
Chapter 5 Conclusions and Recommendations
In context to online shopping, it can be concluded that the trend of online shopping in Saudi Arabia has greatly been emerging due to an increased number of internet users. Online shopping is one of the preferable choices for shopping by the large number of customers because of various advantages such as easy shopping across the world, detailed product information and easy comparison among wide product range. In addition to these, online shopping facility to customers keeps off time and distance related issues that ultimately enhances the feeling of pleasure and gives them a great shopping experience.
It can be inferred that online shopping facility to customers is highly good for them to have numerous advantages. On the basis of discussion, it can also be concluded that online shopping facility also renders benefits to the business organisation by opening the way for approaching more and more prospective customers across the world including remote areas. It contributes in adding market share and build worldwide market image as a whole. On the basis of this, initiation of online shopping facility in Saudi Arabia renders enormous benefits and opportunities for customers and business organisation as a whole that directly address the main research aim. Research aim of the study is also to explore threats or obstacles in the way of online shopping facility.
In context to the aim, feasibility of online shopping facility in the country is looked in respect to the determinant factors including ICT infrastructure, individuals’ knowledge and awareness, legislation rules and regulations, prevailing culture and lifestyle trend. All these determinant factors are crucial for inducing the individuals’ towards online shopping and thereby, it can be concluded that sustainable practice of online shopping can highly be improved by considering these factors. Altogether, it is inferred that feasibility of online service and ICT are directly linked to each other.
Moreover, it can be concluded that number of internet users in Saudi Arabia has greatly been increased over years. As per recent figures of 2010, internet users are accounted to 11 million; while, broadband subscription has increased to 3.20 million. In context to the first objective, it can be said that internet market in Saudi Arabia has actually been developed, which is evident from an increased number of users. This is referred as one of the favourable opportunity of providing online shopping facility to the people in Saudi Arabia. In context to the first objective, it can be said that internet market in Saudi Arabia has actually been developed, which is evident from an increased number of users. From the findings section, it can be concluded that number of opportunities facilitates online shopping in Saudi Arabia such as a revolution of information and technology, increased trend of shopping via online means, increased internet usage, high speed of internet connections/broadband and educational programs.
It can be inferred in context to the second objective that local and global marketplaces in Saudi is flourishing at the rapid extent as the number of business organisations and customers are involved in online and e-commerce transaction. Additionally, 44% of the total population in Saudi Arabia penetrates Internet services that are another favourable opportunity to furnish online shopping facility to Saudis. In relevance to the same, survey findings reveals that online shopping facility in Saudi Market is being feasible as young people in this country are likely to do online shopping regardless of any issue of time and distance. They conceived online shopping as the best way for having convenient shopping experience and buy value for money products by making easy comparison between the wide range of products and services available in the market. In the similar context, it is inferred from data analysis that perceived usefulness and enjoyment are the other determinants that contributes towards online shopping facility development. Altogether, it is good to state that online shopping facility allows people in Saudi Arabia to enjoy benefits such as less time consumption, low cost for travelling and comfort.
In relevance to the third objective, it can be concluded that online shopping facility is not as easy in Saudi Arabia due to slow development of e-commerce. This is mainly because of lack of awareness, trust and privacy issue, unclear rules and regulations, and lack of ICT infrastructure. All these are the major issues obstructing in the way of providing online shopping facility by the business organisations in Saudi Arabia. The culture of Saudi Arabia is another factor that affects the development of online shopping facility as they are not highly aware of benefits of internet due to lack of advance technological development and education level. On the basis of this, it can be said that although internet penetration in Saudi’s market has rapidly been increased, but certain obstructions must be looked out to keep continuation towards online shopping trend. It is concluded that culture of Saudi’s market prevent the development of online shopping due to the difference in the individual’s attitudes, values, behaviours and beliefs. Trust is the other factor that affects the adoption of online shopping because individuals in this country do not trust in online shopping. In the similar context, certain other factors such as lack of availability of various online payment options and unsuitable ICT infrastructure are the other factors that have caused the problem in online shopping as inferred from the discussion. On the basis of both sides of online shopping facility, it can be concluded that business organisations can feasibly provide and execute efforts for online shopping option to individuals in Saudi Arabia, but there requires considering determining factors to get success.
In respect to the last objective, it can be said that individuals preference towards online shopping in Saudi Arabia is highly different from the other countries due to differences in their culture, knowledge and education level and friendliness to the internet. Therefore, it can be concluded that people connected to internet in Saudi Arabia equals to around 29%, while; in the other developed nation’s users of the internet are more than 50% such as 68% in Sweden, 74% in UK and Germany and 62% in the US. Overall, it is concluded that online shopping facility is feasible in Saudi Arabia, yet there are some constraints that need to be overcome to have a successful implementation of online facility.
On the basis of the overall discussion, online shopping facility to customers in Saudi Arabia is feasible for business organisations, but there requires to be considered following suggestions for making this process easy and profitable. Online shopping facility to customers renders benefits to organisations operating in Saudi Arabia such as high customer base, easy approach to customers across wide market, high market share and revenues. On the other hand, lucrative benefits of online shopping facility to the clientele are easy shopping, detailed product knowledge and convenience. For attempting initiatives for online shopping facility, it is essential to consider including considerations related to Saudi’s customers along with the market for Information and Communication Technology (ICT). Some of the practical recommendations are mentioned as follows:
- Business organisations in Saudi Arabia are recommended to apply various evaluation factors while; providing online shopping facility such as customer focus, assurance, interaction, content and lastly appearance (Alotibi 2013). Inclusion of all these factors would lead in improving customers’ awareness and building up their trust in using this facility. Element of customer focus and assurance would keep away problems related to culture, security and privacy that hinder feasibility of online shopping in Saudi’s culture, ultimately enhancing the extent of utilisation and trust, as a result. Overall, this suggestion is good in terms of gaining Saudi’s customers trust towards using online shopping facility.
- Another recommendation is for Saudi’s government that would provide support to the commercial organisations operating in this country. In the Arab world, slow adoption and development of e-commerce is being discovered as a serious issue for the entire economy (AlGhamdi, Drew and AlFaraj 2011). For this, the government of Saudi Arabia is recommended to look after ICT infrastructure development as this would increase coverage and use of internet services in Saudi’s market. Feasibility of providing online shopping facility would effectively be improved by way of good ICT infrastructure as it puts up a wide range of technologies to make service delivery efficacious in terms of the consumer’s satisfaction.
- Moreover, the government of Saudi Arabia is also suggested to provide clear rules and regulations for internet usage. Additionally, legislation rules and procedures for the purpose of protecting the individual’s rights should be looked after. It would be easy for organisations to hold customers’ trust by clearly stating legislation rules and regulations as it would not only contribute in protecting the individuals’ right of assurance and safety, but also support in dealing against security and privacy issues (AlGhamdi, Drew and AlFaraj 2011). This is one of the applicable suggestions for improving feasibility of online shopping facility in Saudi Arabia as security and privacy are the major problem in the way of online facility in this country.
- Awareness about online shopping facility to people in Saudi Arabia should be improved by the provision of educational programs. This suggestion would provide a great assistance in dealing with the issue of lack of awareness of internet usage and its related benefits. Due consideration to this suggestion by Saudi’s government and organisations would lead in gaining individuals’ trust, ultimately increasing the number of internet users as a whole. Educational programs for improving awareness would not only enhance Saudi’s knowledge about benefits of internet usage, but it directly contributes in increasing their frequency of using internet means for shopping purpose in Saudi Arabia. In Saudi Arabia, education and awareness is highly essential for the government and business organisations to modernise better access to ICT services (Fatani 2009). Overall, education revolution in Saudi Arabia will add to the understanding of internet usage for people in remote areas.
Besides, certain other recommendations are being included in context to the research work so that it would make better for generalising relevant and valid findings in relevance to the research subject.
- To make this research better, it is suggested to use interview with the people involved in ICT field along with survey with strategic managers of different organisations. Interview with ICT professionals would help in gathering more relevant and in-depth information about the ICT infrastructure in Saudi Arabia for providing online shopping facility. This would be helpful to know the extent to which, Saudi’s market is to be feasible for online shopping facility or what factors in this market cause obstacle, in the development of electronic commerce. Interview is a good source of collecting valid information on the research topic along with ICT professionals’ opinion and experience against information and communication scenario (Arbnor and Bjerke 2009).
- In future, research on online services feasibility in Saudi Arabia’s context will exhaustively be conducted to look into pertinent information and further will use valid information to support primary information as evidences. The problem of time constrains in searching sufficient secondary sources would be dealt by searching information from academic books and scholarly articles. Overall, this suggestion is quite useful to generalise relevant findings to the research topic.
- In Saudi Arabia, concept of e-government must be supported to improve the efficiency of online practices in customer centric manner. In the e-government projects main emphasis should be given on the provision of on-line services through reformulation in the role of government. The participation of citizens in the e-commerce practices should be given full political and administrative support to increase e-readiness of citizens through providing them attractive online services (Sahraoui, Gharaibeh and Al-Jaboori 2006). Implementation of new online services in Saudi Arabia should be done through including a high degree of interactivity so that rate of internet penetration increases and attractiveness towards e-commerce can be enhanced among all class of customers.
All the above recommendations are quite effective and useful to enhance online shopping practices in Saudi Arabia through increasing awareness among customers and supported government practices to undertake new initiatives towards ICT innovation and e-commerce practices.