Factors That Influence Consumer Behavior Toward Online Shopping in Saudi Arabia

Abstract

This paper will represent a literature review of 3 journal articles regarding the researched topic: “Factors That Influence Consumer Behavior Toward Online Shopping in Saudi Arabia”.  A copy of every article’s abstract will be attached. Furthermore, the paper will provide an analysis of the articles’ parts that will be used in the current research. Finally, a copy of the conclusion from the selected articles will end every piece of analysis.

Research Questions of the Study:

1. What are the factors influencing consumer behavior toward online shopping in Saudi Arabia?

2. What is the connection between the factors influencing consumer behavior and online shopping in Saudi Arabia?

Research Objectives of the Study:

1. To establish the relationship between the factors affecting consumer behavior and online shopping in Saudi Arabia.

2. To identify the factors influencing consumer behavior toward online shopping in Saudi Arabia.

“Understanding the Effects of Social Media and Mobile Usage on E-Commerce: An Exploratory Study in Saudi Arabia” by E. Makki and C. Lin-Ching

Abstract

The social media and mobile usage in Arab World is exhibiting substantial growth throughout the past few years, especially in Saudi Arabia. The economy of Saudi Arabia is also growing fast as well as internet usage and social media penetration. However, the growth of E-commerce in the country is not consistent with the growth of the forgoing factors or with the neighboring countries. The progress of E-commerce in Saudi Arabia was formerly studied by investigating various obstructions and motivations of E-commerce. This paper is conducted to explore the effects of social media and mobile usage on E-Commerce by studying consumer behaviors and E-commerce websites in the country. A comprehensive online survey was created to collect over 1,000 valid responses from Saudi individuals. A dynamic website was also created to collect data from more than 160 E-commerce sites in Saudi Arabia. In this paper, we examine the effects of social media and mobile usage resulted from our data analysis. We found that social media and mobile usage play significant roles on E-commerce in Saudi Arabia. The findings provide new guidance to the online retailers to better utilize the social media and mobile marketing to enhance their business.

A Summary of the Parts That Will Be Used in the Current Research

Social media and mobile usage have rapidly gained popularity in Saudi Arabia, especially among shoppers. The penetration of social media and the Internet into this process has influenced the economic growth of the country. However, the growth of E-commerce is not in line with that of the neighboring countries. Previously, studies were conducted determined to identify the factors affecting E-commerce in Saudi Arabia by evaluating and analyzing the obstacles and motivating factors. The paper under consideration seeks to establish the effect of social media and mobile usage on E-commerce in Saudi Arabia (Makki & Lin-Ching, 2015). The study managed to collect 1000 valid opinions from the survey respondents. Also, a website was developed for the collection of information from other 160 related websites. This research was conducted to evaluate the significance of the role of social media and mobile usage in Saudi Arabia. The article was written based on the analysis of the data collected by this research. Relevant information was gathered explaining the adverse effect of mobile usage and social media on E-commerce, and particularly online shopping. Therefore, this study will be an important piece of the current research because its results and findings have clearly established how mobile usage and social media affect online shopping. The study is interested in factors that influence consumer behavior toward online shopping. Social media and mobile usage have proved to be an important segment and therefore will illustrate how they influence consumer behavior and, thereafter, online shopping.

Acceptance of E-commerce in developing and developed countries has been widely studied by different people for numerous reasons (Makki & Lin-Ching, 2015). The studies have generally focused on the factors that influence the growth of E-commerce. Since the implementation of E-commerce began, many studies have shown its pitfalls and the ways of improving them. E-commerce has a lot of benefits to the economic growth of a country because it makes trading easier and faster. Although there have been a large number of studies on this topic, not many of them focused on the specifics of Saudi Arabia’s market and consumer behavior. It is therefore important to include this piece of academic literature in the current study since the mentioned article will be of great help in customizing common factors that influence consumer behavior to Saudi Arabia.

According to Makki and Lin-Ching (2015), many shoppers have recently found inspiration and motivation to buy items online through social media. They are able to get advice and access discounts through the Internet. Social media and mobile usage are evidently of huge advantage to E-commerce since they enable customers to get reviews, recommendations and prices very fast. The research sheds light on such key conditions of a purchase as trust and how to avoid fraud online. This paper is determined to address questions that will be answered on behalf of potential online customers. The number of transactions in E-commerce in developing countries has rapidly grown. This makes a significant impact on the economic growth of the countries. The research gives evidence of E-commerce’s growth by quoting the numbers from 0.27 trillion in 2002 to 10 trillion in 2012 (Makki & Lin-Ching, 2015). The recent research conducted in Saudi Arabia revealed that there is very little information on the effects of mobile usage and social media and further research is recommended to be conducted. From the information available it is projected that transactions by E-commerce in Saudi Arabia will reach 13.3 trillion by the end of year 2015. This is possible if 8% of the trade is done online. Currently, the research reveals that 25% of people using the Internet in Saudi Arabia contribute greatly to E-commerce (Makki & Lin-Ching, 2015). There has been evident progress on the mobile and internet usage in this country. The practice was accepted culturally making it easy to infiltrate and widely spread among the population. It is evident that the anticipated numbers are very possible to meet in the the reality keeping in mind that 95% of the Saudi population own mobile phones at the rate of 1.8, meaning that there are 18 mobile phones for every ten people. A recent report from the MasterCard Foundation indicates that Saudi Arabia appears third in smartphone usage, which is reflected in the intensity of internet usage. The reports indicate that Saudi Arabia ranks first in the online video reviews. The numbers show that Saudis view 90 million videos a day, making it up to 7 videos per every Saudi internet user. The intensity of internet usage in the country is also confirmed by the growth of Twitter usage rate by 3000% from 2011 to 2012. The rate’s growth witnessed by Saudi Arabia is ten times greater compared with the average growth rate in any other county in the world. It is also reported that there were 50 million tweets from Saudi Arabia monthly in 2012 and this number grew rapidly up to 150 million tweets in 2013 (Makki & Lin-Ching, 2015). This growth can be evaluated in relation to the impact it causes on E-commerce. This study will be important to the current research because it clearly explains the consumer behavior in online shopping. It indicates how the studied factors influence the decisions of customers while shopping online.

According to Makki and Lin-Ching (2015), it is evident that people in Saudi Arabia prefer using their mobile phones and social media while making purchases online. Social media have proved to be an effective means of E-commerce since it deals with advertising products and trademarks. It is also helpful in creating awareness among the shoppers. The report indicates that friends’ and family’s reviews and recommendations play a major role in inspiring the decision of a consumer. Social media gives the platform for profitable deals and large discounts. However, a suggestion was given to study closer the effect of mobile usage and social media on E-commerce in Saudi Arabia . Since the current study is dedicated to the factors influencing consumer behavior toward online shopping in Saudi Arabia, the information given in the above-mentioned article is quite essential to increasing the study’s credibility because the points stated in the research under consideration are clearly in line with the objectives of the current study. For instance, the article explains how trust affects the consumer’s decision to buy products online.

A Copy of the Conclusion

Saudi consumers prefer to shop online using mobile devices. Social media has substantial impact on consumers’ decision making for online purchasing. Social media, in general, greatly assist in the increase in public E-commerce awareness. Social media, especially Instagram, can be a very effective tool in increasing product awareness and delivering the E-marketing promotion. The significant potential of social media and mobile usage on E-commerce in Saudi Arabia warrant further investigation.

“An Investigation of the Important Factors Influence Web Trust in Online Shopping” by Y. Koksal and S. Penez

Abstract

The proportion and importance of online shopping rises day after day all over the world even though it contains some risks. The primary purpose of this study is to examine important factors that influence web trust and online shopping. By taking advantage of literature studies, four factors (web security, consumer reviews of website, availability, and experiences) have been determined and face-to-face survey method was conducted. 392 participants involved in the research and the data have been collected in Antalya and Burdur provinces of Turkey. The relationship between these four factors and web trust has been tested within the scope on online shopping by using Structural Equation Modelling (SEM) analysis method. The obtained findings show that web trust has an significant impact on online shopping that is influenced by web security, availability, and experiences, whereas consumer reviews of website have no impact.

A Summary of the Parts That Will Be Used in the Current Research

Even though online shopping or E-commerce contains numerous risks, it has gained enormous popularity among people around the world. The main objective of this article is to thoughtfully establish the factors that affect web trust and online shopping (K?ksal & Penez, 2015). After conducting research on several studies that have been already done, it became evident that there are four factors affecting web trust and online shopping, which include web security, customers’ feedback, availability, and previous experiences. The research adopted interviews as the major data collection tool. The survey included 392 participants from Antalya and Burdur in Turkey. Structural equation modeling methods of analyzing were used for testing the validity and reliability of the collected data. The interviews were conducted online, and the received results evidently showed the relationship between web security, availability, experience, web trust and online shopping. However, there was no connection established between customers’ reviews and recommendations, and E-commerce. Among the factors that influence consumer behavior are web trust, availability and experience. Therefore, this article will be essential to collecting data for the current research since it emphasizes the key elements of this paper.

Moreover, online shopping has become the most adopted internet service among its users. In the past, the most important factor to consider while shopping online was the quality of the product. This has, however, changed since almost any product can be bought today. Online shopping has rapidly gained popularity because of the many merits that come with it. Shoppers now can buy whatever they need without necessarily visiting real stores (K?ksal & Penez, 2015). Through the Internet, customers are also able to consult with product vendors, receive recommendations and read other customers’ feedback. This possibility largely affects their decision-making process. It is evident from this piece of work that the quality of products sold online does not affect the decision of a person intending to shop online. While conducting the research into the factors affecting online shoppers in Saudi Arabia, relating the topic to different factors discussed in this article will be useful.

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Online shopping has created a new way of purchasing items for many people. In the United States, the recent research indicated that customers are more interested in privacy and confidentiality that is offered by a website than by any other means. For instance, if a website takes adequate measures to assure its customers’ security, it obviously gains their trust. According to K?ksal and Penez (2015), the customers’ trust is one thing that should not be gambled upon because studies have established a correlation between trust and the decisions that customers make regarding buying products online. It is therefore evident that matters of trust should be handled with utmost care. The paper is determined to illustrate the relationship between online shopping and each of the mentioned factors. The following factors will be discussed separately to clearly explain why they are important to studying the factors influencing consumer behavior in Saudi Arabia. Consumers’ views may be the same even though they do not come from the same region. When customizing the study to the realities of Saudi Arabia, considering such factors as trust, security, support of live agents and experiences will be highly useful.

Web Security. This factor is defined as the sum of procedures and practices that a website employs to ensure the reliability and predictability of web browsers, servers and other means of communication with the website using the Internet (K?ksal & Penez, 2015). A web structure is highly complicated and detailed, making it very difficult to ensure web security. It is, however, important to adopt strategies and structures that will help establish trust.

Consumers’ Feedback on the Website. Enabling the customers to post their reviews about a product they bought on the Internet has become a common practice. There are positive and negative reviews depending on the customer’s level of satisfaction. It is obvious that positive feedback is likely to boost sales while the negative ones have an adverse effect. About 90% of online shoppers have reported to be reading reviews online, while 83% say that the reviews actually affect their decision to buy (K?ksal & Penez, 2015).

Availability. Being always available to assist clients is one of the main factors that affect a company’s sales. Even though online shopping is conducted through the Internet, it also requires a support team of live agents to always be online in case customers need assistance. The live agent should be able to guide the customers through the website and answer questions if any arise. A study conducted on online shoppers revealed that 44% of them believe that a successful website should be able to provide chat services (K?ksal & Penez, 2015). One more advantage of live chatting is that it enables the customers to either rate the website or provide it with their feedback immediately.

Experiences. The experience that customers have while shopping will always reflect their online shopping culture. While customers find some websites sophisticated, there are some that are very simple and easy to use. The experience they got when they shopped last will also impact their level of trust.

Web Trust. The issue of trust is the primary reason why most people tend to avoid online shopping (K?ksal & Penez, 2015). Customers can make up their minds to actually buy products and services only if they are totally convinced in their trustworthiness. The company’s reputation on the Internet depends on how it handles exchange cases, delivery methods and web security.

According to K?ksal and Penez (2015), it is evident that there is a connection between these factors – availability, experiences, web security, and web trust – and online shopping. These factors influence the decisions of customers to buy products online because they are related to the website itself. This is, however, not valid in the case of customers’ reviews since they are majorly written in regard to the experience after using the product and not the website, while actual reviews on a website itself are very few. The study conducted face-to-face interviews when collecting data for this study. Even though all the mentioned factors influence online shopping, web security takes the lead since it directly influences web trust.

A Copy of the Conclusion

The data set of the research was compiled through face-to-face survey method with 392 participants in Antalya and Burdur provinces of Turkey. The basic purpose of this study is to Journal of Marketing and Management, 6 (1), 28-40, May 2015 37 examine whether or not there is a significant relationship between web security, consumer reviews of websites, availability, experiences, web trust and online trust. The obtained findings indicate that web trust has a significant impact on online shopping that is influenced by web security, availability, and experiences, whereas consumer reviews have no impact. To share privacy information and credit card details on internet, consumers need to feel comfortable. Web security, that relieves customers when compared to their worries on internet, has a critical role on web trust. The hypothesis result show that there is a significant relationship between web security and web trust (H1) (Table 4, p<0.01). Comments on websites mostly focus on products rather than website itself. Hence comments about websites are less in amounts so that these comments do not remarkably affect consumers’ decisions. For instance, amazon.com –one of the global online shopping websites- deals with the concerns of consumers as a trustworthy brand. On the other hand, consumer does not make their decision according to other comments about websites when it comes to buy things which are not that expensive like books. The hypothesis that was rejected is H2 that there is no a significant relationship between customer reviews and web trust (p>0.05).

Numerous e-commerce web sites have supported live chats to keep customers on the website.

As a result of such real time chatting, customers build up confidence in online shopping experience and there also occurs improvements in conversion rates. In a survey conducted by American online, 68% of their customers took live chat sessions and 63% got back to the web site for repeat purchase.2 The finding that availability affects web trust is found at the hypothesis H3, which is accepted (p<0.01). Customers feel comfortable themselves when they don’t live any difficulties or terribleness after first shopping experience on the website. The related hypothesis H4 indicated that there is a significant relationship between experience and web trust (p<0.01).

“Driving Online Shopping: Spending and Behavioral Differences Among Women in Saudi Arabia” by T. Al-maghrabi and C. Dennis

Abstract

This study proposes a revised technology acceptance model that integrates expectation confirmation theory to measure gender differences with regard to continuance online shopping intentions in Saudi Arabia. The sample consists of 650 female respondents. A structural equation model confirms model fit. Perceived enjoyment, usefulness, and subjective norms are determinants of online shopping continuance in Saudi Arabia. High and low online spenders among women in Saudi Arabia are equivalent. The structural weights are also largely equivalent, but the regression paths from perceived site quality to perceived usefulness is not invariant between high and low e-shoppers in Saudi Arabia. This research moves beyond online shopping intentions and includes factors affecting online shopping continuance. The research model explains 60% of the female respondents’ intention to continue shopping online. Online strategies cannot ignore either the direct and indirect spending differences on continuance intentions, and the model can be generalized across Saudi Arabia.

A Summary of the Parts That Will Be Used in the Current Research

This study is interested in creating acceptance of a new technology that is projecting to use expectation confirmation theory in measuring differences in gender in regard to online shopping among women in Saudi Arabia. The sample size for this study was 650 women. It was identified that the subjective norms, usefulness, and enjoyment are the factors influencing continuance in online shopping among Saudi women. According to Al-maghrabi and Dennis (2010), there is an equal number of women spending considerable big amounts of money on shopping online and those who spend little. In the past, women were more concerned about the quality of products they bought online than men, however this feature is changing. Even though beliefs of both kinds of shoppers are the same, the real degeneration of the quality concerns is evident. The purpose of this research is to go a step further from the factors affecting online shopping and concentrate on its continuance. Reports about the results have showed the rate of women willing to continue shopping online to have gone up to 60%. The study is also determined to shed light on the direct or indirect disparity in continuance of the process. Since many shoppers in the world are women, it is possible that this ratio is also relevant in the case of Saudi Arabia. This article is helpful in studying the factors that influence the consumer behavior in Saudi Arabia because it adopts technology that enables comparing the factors affecting online shopping.

According to Al-mghrabi and Dennis (2010), there are many factors affecting the economic growth in the world. Globalization takes the leading position because it includes many segments, interested in ensuring that the growth targets are met. Lack of options to purchase products locally, global corporations, advancement of technology, and acceptance of online shopping have created a boundary-free trading environment. E-commerce has ushered in a new era in business, when a company can reach its potential clients regardless of their location. Companies can cover a wider scope since they are able to sell to clients worldwide. The Internet has also made great changes in the way customers consume products and how products are customized and distributed. Among the advantages of trading online is that it is both an effective and cheap channel of communicating and buying products from different people. This is evident from the rapid growth that has been witnessed over the years. For instance, in 1991 there were only 3 million people using the Internet in the world. This has, however, changed over a period of 8 years, when the number of internet users reached 250 million people (Al-maghrabi & Dennis, 2010). Internet usage has also enabled E-commerce’s growth. In the past, even though people used the Internet, they were still scared to transact online. In 1999. 63 million of the Internet users managed to accept online shopping as a way of acquiring products and services. The research clearly explains the importance of online business to the economy. It defines how E-commerce works, and outlines the possible factors that may affect consumer behavior. Using this article is helpful because it represents a different angle in finding information for the current research.

According to the research, gender greatly affects the process of buying in terms of decision-making. The report indicates that women are easily convinced to use technology and they are also likely to accept new technological means depending on the opinions of other people. Men, however, rely on their own opinions on technology because they evaluate how useful it is to their lives (Al-maghrabi & Dennis, 2010). It is, however, advantageous for online shopping since in many families women make the majority of basic decisions and are the backbone when it comes to shopping. A broad variety of products online and the task of making shopping decisions enables suggesting that women get the required enjoyment and satisfaction from online shopping. From the available information on continuance of online shopping, it is clear that not enough study has been conducted on the topic and especially in regard to women in Saudi Arabia. This paper is determined to encourage the use of a conceptual model that will compare and evaluate different factors such as gender and create understanding of the issue in the context of Saudi women. The approach proposed in this study is quite useful to the current study since it enables instant analysis of several factors and therefore helps in studying the factors affecting consumer behavior within the shortest time possible.

The technology of acceptance model (TAM) is used in this study to represent the review of the theory of reason action (TRA) designed for users adopting new technology systems. It is determined to evaluate and compare the factors influencing computer acceptance and has the ability to analyze the users’ behavior using a wide range of computer programs. According to Al-maghrabi and Dennis (2010), the major factors influencing online continuance of shopping are usefulness and the ability to access the Internet without problems.

It is evident that the results of this study make a significant contribution to the current paper. The article clearly illustrates the methods it intends to use in establishing the factors that affect continuance of online shopping among the heavy and light spender women in Saudi Arabia. The results indicate that enjoyment, subjective norms, and the perceived usefulness influence the intentions of women in Saudi Arabia to continue using E-commerce either directly or indirectly. The study also illustrates how women accept new technology without much resistance in comparison with men. Al-maghrabi and Dennis (2010) clearly exposes reasoning behind women relying on other peoples’ opinions, whereas men mainly depend on their own opinion and carefully analyze the technology to evaluate its usefulness. This is advantageous to continuance of online shopping made by women since they are the ones who, in most cases, bear the responsibility for the family shopping. The study also succeeds in filling the information gap by choosing a unique topic of the study and making it relevant to the target group. Even though the current study focuses only on online shopping, it is quite important to adopt this article because it concentrates not only on the time one spends on shopping, but also the continuance of women shopping in Saudi Arabia. This research is advantageous since it is one of the few covering the topic of women in Saudi Arabia, who are actually the leading gender when it comes to shopping.

A Copy of the Conclusion

From a theoretical standpoint, these results contribute to existing literature in several ways. First, we enhance e-shopping literature by providing insights into the factors that seem to affect online shopping continuance intentions for women with high and low spending habits in Saudi Arabia. We also posit that enjoyment, subjective norms, and perceived usefulness have direct and indirect effects on continuance intention. Furthermore, the greater positive indirect effects of site quality on perceived usefulness, subjective norms, and enjoyment and that of trust on enjoyment and subjective norms suggest that online retailers should increase the positive perceptions of trust and site quality to make their e-shopping environment more useful and enjoyable. To have a significant effect on e-shopping Talal Al-maghrabi and Charles Dennis 43 continuance intentions, any e-shopping environment should encourage a shopping experience that is useful and enjoyable. Second, the results support previous research that shows perceived usefulness reflects the utilitarian aspects of online shopping, and perceived enjoyment reflects its hedonic aspects. In our study, enjoyment has the strongest effect on e-shopping continuance intentions, which confirms that enjoyment in an online shopping environment is important and has a direct effect for women with either high or low online spending habits in Saudi Arabia. Moreover, this result demonstrates that perceived enjoyment has a stronger direct and indirect effect on e-shopping continuance intentions. Usefulness came next as it is an important criterion for female consumers when they select online stores; it can increase their satisfaction. Consumers may continue using an e-commerce service they consider useful, even if they are dissatisfied with it (Bhattacherjee 2001a). Third, few prior studies use SEM as their methodological approach, and even fewer apply invariance analysis to verify behavioral online spending differences with a sample obtained from Saudi Arabia. This study addresses this knowledge gap.