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International Journal of Management and Applied Science, ISSN: 2394-7926 Volume-2, Issue-1, Special Issue-1, Jan.

-2016

CORRELATES OF CONSUMER ONLINE BUYING BEHAVIOUR


1
AHMED AUDU MAIYAKI, 2SANY SANURI MOHD MOKHTAR
1
PhD, Department of Business Administration & Entreprenuership, Bayero University Kano, Nigeria
2
PhD, Quality Management Institute, Universiti Utara Malaysia, 06010 Sintok
E-mail: 1aamaiyakiy@gmail.com

Abstract—The increasing usage of internet provides a developing prospect for online retailers. The purpose of this research
is to ascertain the factors that influence consumer online buying behavior (online shopping intention). To this end, a survey
was conducted by administering questionnaires on respondents. In total, 200 students from University Utara Malaysia (UUM)
were chosen based on convenient sampling method. Descriptive statistics, reliability analysis, and multiple-regression were
employed to analyze the data collected. The results show that price and product variety have significant effect on consumers’
online shopping behavior and online shopping intention. Subsequently, it was recommended that retailers should adopt
appropriate pricing and product assortment strategies which are found to be the most important factors influencing online
buying behavior of consumers.

Keywords— Consumer Behaviour, Online Shopping, Shopping Intention, Price, Product Variety.

I. INTRODUCTION consumers also worry about receiving wrong product


during delivery. This often occurs when the orders
The invention of the internet has significantly are filled manually and mistake was made in the
modified to a great extent the way consumers shop. A online retailer's warehouse. This will most likely
large number of consumers change from tradition result to the loss of consumer.
shopping to the online shopping brought about by the Consumer buying behaviour is the process by which
technological advancement. Hence, now consumers individuals search for, select, purchase, use, and
are more likely to engage in online shopping because dispose of goods and services, in order to satisfy their
they become active virtually and this enables them to needs and desire (Belch & Belch, 1998). Favourable
shop at any time for any product and anywhere consumer buying behaviour leads to bonding between
around the globe. Consequently, there is an the buyer and seller (Maiyaki & Mokhtar, 2011b).
increasing usage of internet and easier paying The consumer buying process is a complex matter as
methods. In Malaysia, internet service providers like many internal and external factors could have an
P1 Wimax, Digi, Maxis and etc and the mobile impact on the buying decisions of the consumer. It is
device have contributed to the expansion of online presumed that for businesses to enhance online
shopping. With mobile devices like smart phones and purchase by customers, they have to identify the key
tablets, people can make online purchases anytime drivers of online purchase. Therefore, in this study,
and anywhere. Over 254,000 of Malaysian online we intend to investigate the key factors that influence
shoppers use their mobile devices for shopping. consumer online shopping and their buying behaviour.
Hence the Malaysian e-commerce industry is growing It is presumed that six factors among others have
and has a great potential for growth. Malaysian spent influences on consumer online buying behaviour. The
RM 1.8 billion through online shopping in the year factors include convenience, price, security levels,
2010 and the market size is estimated to grow to RM product variety, reliability and web design
5 billion in 2015 (The Star online, 2012). According
to the same source, the three top categories of Based on the above, the focus of this paper is to
products or service that mostly attract the patronage investigate the extent to which some selected factors
of Malaysians are travel (RM 435 million), bill affect consumer online buying behaviour. Findings of
payments (RM 329 million), and entertainment and this research are expected to be useful in broadening
lifestyle (RM 255 million). However, the amount of the understanding regarding consumer buying
online shopping revenue in Malaysia is RM1.8 billion. behaviour. Additionally, by understanding the
This amount was found to be less than the amount reasons why consumers buy or not buy online, online
obtainable in other countries of Asia Pacific, such as stores would be able to incorporate suitable
Singapore, RM21.19 billion in year 2010 (The Star marketing strategies, moderate consumers’ concerns
online, 2012). This means that Malaysians are not and convince customers to transfer from offline to
active in online shopping compare to other countries online shopping (Teo, 2006).
in the region. This is because Malaysians are
concerned about the security of the online shopping. II. LITERATURE REVIEW
For example 69% of users consider online credit card
fraud a major concern and 85% of users are Several researchers have carried out studies in the
concerned about being a victim of identity theft effort to assess consumers’ online buying behaviour
(Ipsos-Insight, January 2004). Besides, some of the (Saprikis et. al., 2010). These include those

Correlates of Consumer Online Buying Behaviour

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International Journal of Management and Applied Science, ISSN: 2394-7926 Volume-2, Issue-1, Special Issue-1, Jan.-2016

addressing the factors that have significant effect on credit card number, e-mail address and other privacy
online shopping (Shergill & Chen, 2005; Jarvenpaa & information. Know and Lee (2003) states that the
Todd, 1997; Shah Alam et. al., 2008). Ernst and security for online transactions is a major concern for
Young (2000) reported that internet users purchase customers and it determine their online purchase. In
online because of good product selection, competitive other words the higher the perceived level of security
prices, and ease of use. Similarly, popular literature the higher will be the tendency for customer to
cited ease of shopping comparison, low prices, timely engage in online shopping. Security trust has received
delivery, convenience, time saving, low shipping the most consistent support as a factor that influence
costs, improved customer service, tax exemption online buying (Jarvenpaa et al., 1997; Koufaris &
status and speedy e-mail response, as key reasons for Hampton-Sosa, 2002). To this end we propose that
the increase in online shopping (Lorek, 2010). security level is related with consumers’ online
shopping behaviour.
The relationships between the factors and consumer’s H3: There is a significant relationship between
online buying behaviour have been found to be Security Level and online shopping behaviour
positive in a number of studies which include
Delafrooz et al., (2010), Saprikis et al. (2010),
Shergill and Chen (2005) and Shah Alam et al. Product variety is the quantity of different product
(2008). The key factors that will be investigated are types provided by online retailer. Saprikis et al.
convenience, price, security levels, product variety, (2010) state that online retail shops have more
reliability and web design. Convenience is anything options compared to brick-and-mortar stores and thus,
that saves consumer’s resources like time or energy. the former attracts more customers than the latter. It
In the study of Saprikis et al. (2010), authors refer to means with if the types of product that the online
convenience as time saving and having more time to retailer provided is various than the traditional
evaluate and select the products. Additionally, shopping, consumers will switch to online shopping.
Karayanni (2003) states that convenience means that Hence, we hereby propose that product variety is
online shoppers tend to value avoidance of queues, related with consumers’ online shopping behaviour
availability of shopping on a 24-hour basis and time (online shopping intention).
efficiency. H4: There is a significant relationship between
Product Variety and online shopping behaviour
According to Nielsen (2007), more than 627 million
people in the world have shopped online. Forrester Reliability is the extent to which a consumer trusts
(2006) research estimates e-commerce market the online retailers in their services. These include
reached $228 billion in 2007, $258 billion in 2008 delivering the correct products/service after received
and $288 billion in 2009. The convenience and ease payments from customers. The specifics of reliability
of online shopping encourage consumers to engage in include such things as accuracy in billing, keeping
online shopping. Hence, we propose that convenience records correctly and delivering service at the
is related with consumers’ online shopping behaviour. designated time (Maiyaki, 2012).Vijayasarathy (2002)
H1: There is a significant relationship between states that reliability is closely associated with risk
Convenience and online shopping behaviour since it is a measure of customers’ perceptions of
whether or not merchants can be counted on to
Price is the amount or counter value pay by consumer deliver on their promises. According to Jun et al.
in exchange for a product or service. In the study of (2004) online consumers apparently want to receive
Saprikis et al. (2010), it was found that price have a the right quality and right quantity of items that they
significant influence on consumer online shopping. have ordered within the time frame, promised by the
The findings of the study imply that a price is a factor retailers, and they expect to be billed accurately.
in enhancing online shopping. The result is consistent Accordingly, to be considered as a reliable online
with the findings of Ghani et al. (2001) which equally service provider, an organization must deliver the
discovered that price positively influence online promised services within the promised time frame
purchase behavior. Price is always an important issue (van Riel et al., 2003). The aforementioned show that
for a consumer to decide whether to purchase a reliability is a factor which consumers consider in
product or not. Similarly, Price strategy studies argue online shopping. Thus, we propose that reliability is
that price level and quality are important dimensions related with consumers’ online shopping behaviour.
of competitive strategies in retailing (Morschett et al., H5: There is a significant relationship between
2006). Consequently, we propose that price is related Reliability and online shopping behaviour
with online shopping behaviour of consumers.
H2: There is a significant and positive relationship
between price and online shopping behaviour Website design is the extent to which a service
provider’s website is carefully developed and
Security level is consumer’s perception of how online designed to enable easy access and navigation by
retailers deal with their personal information such as customers. Kim and Lee (2002) states that the web

Correlates of Consumer Online Buying Behaviour

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International Journal of Management and Applied Science, ISSN: 2394-7926 Volume-2, Issue-1, Special Issue-1, Jan.-2016

site design describes the appeal of the user interface (2005) identified web site design characteristics as
design presented to customer. According to Turban the dominant factor which influences consumer
and Ghehrke (2000) elegant design of web site will perceptions of online purchasing. Hence, it can be
attract the intended audiences than a poorly designed proposed that web design is related with consumers’
site. In this way, it is presumed that customers are online shopping behaviour.
willing to visit more often and stay longer with H6: There is a significant relationship between
attractive web sites. Furthermore, Shergill and Chen, web site design and online shopping behaviour

Figure 1. HYPOTHESIZED CONCEPTUAL MODEL

Scale Construction questionnaire were adapted from previous studies.


Previous research developed items and measures for However, the reliability and specifically the internal
the factors involved in this study. These scales consistency of the items were confirmed. In the table
measures are operationalized with formative bellow, various concepts and their indicators are
indicators. Basically, all the items in the shown.

Table 1: ITEM SCALE

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International Journal of Management and Applied Science, ISSN: 2394-7926 Volume-2, Issue-1, Special Issue-1, Jan.-2016

III. METHODOLOGY Table 3: RESULTS OF DESCRIPTIVE


STATISTICS
Given that this research involved assessing the
perception of respondents with regards to certain
variables, survey and hypothesis designs are adopted.
Relevant information was collected from 200 students
of the Universiti Utara Malaysia (UUM). The
students consist of both post-graduate and
undergraduate which were sampled from all the three
colleges in the University. A structured closed-ended
questionnaire was used as the instrument for data
collection. The questionnaire was adapted from
relevant past studies such as Park & Kim, 2003;
Shergill & Chen , 2005; Saprikis et. al, 2010.
Additionally, all the 7 variables involved in the
research were measured using a five-point Likert
scale that ranges from “strongly disagree” (1) to
“strongly agree” (5). As for the analysis, Statistical
Package for Social Science (SPSS) was employed to
run for the descriptive and inferential statistics.

IV. RESULTS

Reliability Test
Before proceeding to the main analysis, Cronbach’s
alpha reliability test was run. Cronbach’s reliability
coefficient indicates the internal consistency and how
well the items under each variable hang together to From the above demographic profile, male
measure that very variable (Maiyaki & Mokhtar, respondents constituted 99 (49.5%) while female
2011a). The closer the Cronbach’s alpha to 1 implies respondents constituted 101 (50.5%). Majority of the
higher internal consistency and thus, more reliable. It respondents were between the age range of 21 to 22
is generally agreed that the value of Cronbach’s alpha and thus, representing 73%. Most of the respondents
must be 0.7 or more to be acceptable; however, lower were Chinese 147 (73.5%) and for religion Buddhist
coefficients may be acceptable (Hair, Money, score the highest frequency of 127 which is
Samouel, & Page, 2007). The result of the reliability equivalent to 63.5%. With regards to marital status
coefficients ranged from 0.759 to 0.823 and thus, all respondents that are single constituted 99.5%.
the factors are reliable as can be seen from the table
below. Multiple Regression Analysis
A multiple regression was run in order to the test the
Table 2: RESULTS FOR RELIABILITY TEST linear relationship between the predictors and
explanatory variables of the study. Hence,
convenience, price, security, product variety,
reliability and design were regressed against online
intention. The model summary, ANOVA and
coefficient tables are presented below:

Descriptive Statistics
The demographic variables analyzed in this study
include gender, age, race, religion, and marital status
as in the table below.

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International Journal of Management and Applied Science, ISSN: 2394-7926 Volume-2, Issue-1, Special Issue-1, Jan.-2016

From table 1 it could be seen that the independent variety are among the key factors that directly affect
variables are able to jointly explain 43.0% variance in online shopping behaviour of consumers. The
online shopping behaviour. This figure is quite findings further suggest that the influence of product
sufficient to indicate the robustness of a model in variety on the online shopping behaviour is stronger
social research. Thus, the whole model is significant than that of price.
as indicated in Table 2 with p < .001. Further analysis
shows that only price and product variety have The result is consistent with the findings of Ghani et
significant relationship with online shopping al. (2001) that has identified price positively
behaviour both with p-value < .001. On the other influencing online purchase intention and behaviour.
hand, each of convenience, security, reliability and The price of the product significantly determines the
web design has no significant association with online customers’ behaviour with regard to online shopping.
shopping behaviour. Based on the above, the research As for the product variety, the positive association
hypotheses were statistically tested as follows: implies that when there is large amount of product
variety, consumers tend more towards online
Table 4: TEST OF HYPOTHESES shopping. This further suggests that when the benefit
of product variety such as: wider product range and
product information are available, customers are will
be more inclined towards online shopping rather than
traditional shopping.

On the other hand, convenience, security level,


reliability and web design were found to have no any
significant relationship with online shopping
intention. This means these factors are no any
significant influence on consumers’ online shopping
behaviour (online shopping intention). The findings
of this studies is not consistent with those of
Ranganthan and Ganapathy (2002), Kim and Lee
(2002) and Than and Grandon’s (2002). The
divergence of the findings could be accounted for by
the differences of the contexts of the various studies.
Furthermore, customers might prefer traditional
shopping because it provides opportunity for social
relationships unlike online transaction which leads to
social isolation. Other consumers regard traditional
shopping as leisure.
V. DISCUSSION
VI. MANAGERIAL IMPLICATIONS
In this research, we set out to determine whether the
selected factors have significant influence on The results of this study provide several important
consumers’ online shopping behaviour. The results implications for online-pricing practice. The results
from this study provide partial support to the indicated that online retailer should adopt appropriate
proposed research framework. Among the hypotheses pricing strategy for online products as this has a
proposed, two were supported. The study established significant positive impact on online shopping
that each of price and product variety has a behaviour. Therefore, online retailers should measure
significant positive relationship with online shopping the customers’ perceptions with respect to price
behaviour. This means that the price and product dimensions in their pricing strategies. For instance,
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International Journal of Management and Applied Science, ISSN: 2394-7926 Volume-2, Issue-1, Special Issue-1, Jan.-2016

the retailers can offer a lower price to customer via EFERENCES


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