Consumers Perception Towards Online Shopping In Singapore Marketing Essay

During the few past old ages, the Internet has grown to new degrees non even envisioned. The Internet alterations the manner people live, work and purchase. Demangeot & A ; Broderick ( 2007 ) province that ‘Internet provides great advantages for the consumers, such as assortment of merchandises, services and monetary values from different providers

Using Internet installations, commercial administrations can develop new markets ; and better the fight of the company ( Eastlick et al. , 2006 ) . However, the Internet may besides make menaces to some organisations.

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The figure of Internet users is increasing twelvemonth by twelvemonth. Figure 1 shows the growing of Internet users globally.

The fast growing of e-shopping and the increasing figure of e-retailers has created an highly competitory market topographic point ( George, 2004 ) . Competing issues create a demand for directors to understand factors which influence people utilizing Internet as a new buying media ( Fraser et al. , 2005 ) . It is becomes indispensable for the companies to understand benefits and hazards of online shopping in order to underscore the benefits and minimise hazards.

Figure 1 Growth of Internet Users in the World

Beginning: hypertext transfer protocol: //

1.2. Background of the State

Singapore is an industrial state, which has a extremely developed market- based economic system. Entire Singapore population is 4,987,600 ( Singstat, June 2009 ) from which 72.4 per cent has an entree to Internet at place ( Singapore Internet Statistics, 2010 ) . Figure 2 illustrates the Internet users ‘ growing in Singapore, which is 180.8per cent for the nine old ages period from 2000.

Figure 2 Internet Use

hypertext transfer protocol: // # Asia

Based on research, conducted by IPSOS in 2007 ( Figure 3 ) , more than 60 % of online users in Singapore usage online shopping, which gives high potency for on-line trade market.

Figure 3 Online shopping statistics

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1.3 Aims, research inquiries and research hypotheses

This survey is intended to understand the purchasing procedure and behavior of on-line consumers.

The basic aims of the survey are:

To find consumer behavior in online environment

To place the chief influencers in on-line purchasing procedure

To place people ‘s attitude towards benefits and hazards of online shopping

Based on aims identified, the undermentioned inquiries are raised:

What are the chief factors that influence consumer buying determination online?

Is there any differences between online and offline consumer?

What consumer sections are more likely to shop online?

Is there any connexion between identified factors and consumer section groups?

Based on aims and inquiries above, gestating model for this research has been developed. The of import variables are clearly showed through logical logical thinking in the model. Based on this model, the nothing and alternate hypotheses are developed as the followerss:

There is a difference every bit good as no difference in perceptual experience on benefits of Internet buying between online and offline consumers

There is a difference every bit good as no difference in sensed hazards towards Internet buying between online and offline consumers

1.4. Scope

With the fast growing of Internet commercialism it becomes really of import for companies to analyze consumer behavior ( Jobber, 2001 ) . If the influencing factors in the on-line purchasing and merchandising procedure can be identified, than it can be meaningful for the online companies to give much accent on these factors. The bulk of companies want to increase the overall volume of the concern because this can take to important decreases in costs and competitory advantages ( Kotler, 2003 ) . This research will pay attending to consumer behavior in the online environment, supplying theoretical information about online buying behavior of the consumers.

Additionally, the present survey is an effort to acquire insight into people ‘s perceptual experiences towards online shopping in Singapore. This survey will stipulate on the perceptual experience of Internet users towards benefits and hazards associated with online shopping and how company can avoid clients ‘ concerns about online shopping.

Chapter Two:

Literature reappraisal

2.1 Introduction

Presently, e-commerce is acquiring immense attending from a scope of administration and clients due to the fact of fast Internet development ( Lee & A ; Lin, 2005 ) . Online shopping, as a portion of E-commerce, is going a inclination in Singapore ( Rotem-Mindali et al. , 2006 ) . Online shopping has both advantages and disadvantages. Buying behavior is determined by consumers ‘ position of benefits and hazards of online shopping. This literature reexamine intends to reexamine of all the relevant factors. First, the definition of e-commerce and its growing will be defined. Second, theories sing consumer perceptual experience and behavior will be reviewed. Finally, the chief benefits and hazards will be summarized.

2.2. Definition of E-commerce

There are different definitions of what is e-commerce. E-commerce is a really wide term used to depict procedure where electronic connexions make resources exchange be possible ( Vrechopoulos et al. , 2001 ) . In context of the Internet, E-commerce is used as a general term. The definitions of e-commerce are focused on purchasing and selling utilizing the Internet. Harmonizing to Mark van Ketel and Tim D. Nelson ( 2009 ) electronic commercialism ( e-commerce ) , a subset of e-business, includes selling goods and services, every bit good as buying and exchanging over the Internet. Torkzadeh and Dhillion ( 2002 ) depict e-commerce as a purchase and sale over the Internet. This includes the procedure of happening a merchandise, telling and having every bit good as costs and benefits of a merchandise or service.

By and large, E-commerce can be broken into two chief classs:

Business to concern ( B2B ) is where concern makes on-line minutess with other concerns ( Turban et al. , 2003 )

Business to consumer ( B2C ) is where on-line minutess are made between a concern and an single consumer ( Wareham, 2000 ) .

2.2.1 The importance of E-commerce

Harmonizing to Carla et Al. ( 2006 ) Internet is a powerful instrument to purchase, sell and administer goods and services worldwide in a fast growth supply concatenation. Internet provides possible market that has no or small limitations, such as geographics or clip ( Blackwell, 2000 ) . E-commerce provides tremendous chances for growing and development. Through the Internet people can pass on with each other over huge distances. It allows commercially traveling concern and people to a market in which everything that is for sale is advertised and everything that is wanted for purchase is requested someplace ( Kanttila, 2005 ) .

Over the old ages E-commerce altering the manner concern used to work. Harmonizing to Wareham, E ( 2000 ) “ Expedia sells more than $ 14 million worth of hotels and air hose reserves a twenty-four hours from its web-site ” Federal Express in Singapore began to salvage $ 10,000 a twenty-four hours by making client service section online ( Kotler, 2003 ) .

The Internet provides concerns with the chance to sell their merchandises to 1000000s of people, 24 hours a twenty-four hours ” ( Bellman, 2006 ) . Buyers and Sellerss can therefore reach each other with no or small cost.

The development of e-commerce is frequently claimed to be reshaping about all industries ( Pawlyna, 1999 ) . It influences the operation of administrations and people ‘s activities greatly and brings cardinal alterations to the manner that concern is conducted. E-commerce can heighten administrations ‘ public presentation by touchable and important operational efficiency ( Mutz, 2005 ) .

2.2.2 The growing of E-commerce and online shopping

The B2C and Internet use rates are doing stable advancement and lifting invariably. Electronic retailing, the B2C section of e-commerce, is set to turn exponentially in the following few old ages ( Siyal et al. , 2006 ) . Entire on-line retail gross is increasing twelvemonth after twelvemonth and anticipating to increase in the nearest hereafter ( Shu et al. , 2006 ) . The addition of B2C e-commerce can non assist but to impact people ‘s attitude to purchase goods. Presently, one in 10 Singapore grownups can be categorized as frequent online buyers ( Shun, 2006 ) .

Soon around 72.4 per cent of Singapore families are web-connected ( Singapore Internet Statistics 2010 ) , besides this place is expected to turn over the following decennaries ( Singstat, 2009 )

In the early phase of growing, e-retailing, the B2C section of e-commerce is set to turn exponentially in the following few old ages ( Tan, 2007 ) . However, online shopping still remains as yet a minority chase with purchases concentrated in a relatively narrow scope of classs such as vesture and package, music and traveling ( Shun, 2006 ) .

2.3. Cleavage of Online consumers

Vrechopoulos et Al. ( 2001 ) segmented e-shoppers based on demographic, behavioral and attitudinal features. Figure 4 illustrates categorization of different sections of online shopping. Brown et Al. ( 2003 ) sort e-shoppers harmonizing to buying motives for shopping, which illustrated in Figure 5.

Figure 4 Vrechopoulos, Siomkos and Doudikis ‘s Cleavage of e-shoppers


On-off shoppers

Online shoppers

Interested in on-line shopping

Social and demographic variables


Chiefly work forces

Work force and adult females





University and graduate student surveies

University surveies

Degree of income

Above norm

Average or above

Material position




Scientists, professionals, working in the private sector

Scientist, public and private sector employees



Home shopping motives

Time salvaging, gap hours

Time salvaging, opening hours, exclusivity

Online shopping motives

Fast bringing, low monetary values, scope of merchandises and opening times

Home bringing, low monetary values, scope of merchandises and opening times

Preferable payment method

Cash on bringing, recognition cards

Cash on bringing

Willingness to pay more than through traditional channels



Willingness to pay bringing costs



Beginning: Adopted by an writer from Vrechopoulos, A. , Siomkos, G. & A ; Doudikis, G. ( 2001 )

Figure 5 Cleavage of online consumers harmonizing to purchase motives

Type of shopper

Purchase motives

Personalised shopper

Personal relationship with the marketer. Service adapts to shopper ‘s demands

Recreational shopper

Enjoys the act of shopping

Economic shopper

Achieve the nest quality-price relationship for the purchase

Involved shopper

Enjoys shopping and values personal dealingss

Convenience shopper

Valuess clip and attempt. Enjoy reduced monetary values

Local shopper

Loyal to a trade name or store in their local country

Apathetic shopper

Rejects the act of shopping. Values the convenience of Internet

Beginning: adopted by an writer from Brown, M. , Pope, N. , Voges, K. , ( 2003 )

2.4 Consumers behaviour theories

2.4.1 Consumers perceptual experience and consumer behavior

Pawlyna ( 1999 ) identified perceptual experience as an instigator of behavior. Additionally, perceptual experience can be considered as a procedure of information extraction. Even in the same world, different people tend to comprehend otherwise. It ‘s critical to understand, that people ‘s perceptual experiences are more of import than the world in selling ( Kotler, 2000 ) . The factors, which influence consumer ‘s buying behaviour online can be identified by understanding client behavior.

In most surveies perception identified as input, while behavior as end product, and treated as two separate phenomena. Rotem-Mindali ( 2006 ) suggested that perceptual experience and behaviors are two sides of the same phenomenon and are closely related to each other. Current survey considered perceptual experience and behavior as one built-in portion in order to understand client perceptual experience and grounds which affect it.

2.4.2 Consumer determination procedure

There are several theoretical accounts ( see Appendix 1 ) , which describes client buying behavior, though they all have similar properties that should be considered as cardinal phases upon which the consumer ‘s behavior is developed. Figure 6illustratesmain stairss involved in consumer determination procedure.

Figure 6 Consumer determination procedure theoretical account

Beginning: Adopted by an writer fromhttp: //

Sensitivities ( Before Purchase ) :

This phase includes past experiences, client ain personality and self-concept, attitudes and sentiments in general, every bit good as on specific merchandises.

Product Need:

Buyuko et Al. ( 2004 ) stated that purchaser recognises a demand which can be satisfied by a merchandise or service, as a consequence of either cognitive activity or some environmental stimulation. It can be simplified that the demand is frequently caused by internal or external stimulations.

Information Search:

The hunt may originate on an internal and external footing ( Goh, 1999 ) . Harmonizing to Donald ( 1974 ) this phase includes all hunts of the internal and external environments for the alternate solutions every bit good as for information which can assist in evaluating of those options. The hunt for the information normally includes old experiences and should be relevant to the present purchase state of affairs.

Evaluation of Options:

This phase involves comparing of options from physical and cognitive activities. Consumers compare assorted trade names by taking in consideration several properties ( Kotler, 2000 ) . Properties used for the rating of options by consumers are besides known as pick standards. Figure 7shows a sum-up of these pick standards. Additionally, distinction and figure of options, clip force per unit area every bit good as degree of engagement will reflect the extent of job work outing. As shown in Figure 8the extent to which client involved in determination devising procedure influence each phase of client determination doing procedure.

Figure7Choice standards used for the rating of options by consumers

Beginning: Adopted by an writer from Bellman, S. , Johnson, E. J. , Lohse, G. L. , & A ; Mandel, N. ( 2006 ) .A

Figure 8 Purchase Involvement and Stages of consumer determination devising procedure

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Purchase Activity:

This phase consist of client engagement in doing an existent fiscal determination every bit good as direct physical activities involved in determination devising procedure about doing purchase or non. Besides this phase includes the existent dealing. However, client ‘ determination can be postponed, modified, or avoided due to influence of perceived hazard involved in purchase determination ( Kotler,2000 ) . Therefore, it is indispensable for sellers to acknowledge and understand factors that might arouse perceived hazard and happen out solutions to minimise that ( Bellman et al. , 2006 ) .

Post Purchase Behaviour:

Harmonizing to Kotler ( 2000 ) the current phase chiefly concerned with merchandise or service purchased by the client. This degree requires client ‘s experience of satisfaction or dissatisfaction about purchased merchandise or service, which farther will act upon subsequent behavior of consumer. Harmonizing to Fox all et Al ( 1998 ) satisfaction or dissatisfaction created by merchandise or service will do major impact on future purchase determinations.

Sensitivities ( After Purchase and Use ) :

After the procedure of buying the purchaser ( or non- purchaser ) should be left with cognitive content ( Gunasekaran et al. , 2004 ) , which can be differ from that which present at the early phases. Consumers ‘ attitude, information and experience may be changed due to factors of clip and events ( Hawkins, 1989 ) . All of the above can act upon the hereafter purchase determination of the same type.

2.4.3. Consumer behavior in Online Environment

When consumers shop online, they perform a similar sequence of undertakings to offline shoppers ( Mowen et al. , 2003 ) . Besides, on-line environment provides more information sing each options, besides on-line environment is more flexible and clip salvaging. Internet has important impact on each phase of traditional determination devising procedure. Final client determination depends on several factors, which are illustrated in Figure 9.

Figure 9 Main factors that influence client buying determination

Beginning: Adopted by an writer from Buyuko & A ; Zumi ; Kan, Gulcin ( 2004 )

Figure 9 presented factors, which lead to the determination procedure, which is described below.

Problem acknowledgment:

Feeling the demand or acknowledge the job is the get downing point. The Internet can bring forth the demand or job by itself and besides can promote clients to get down the information hunt procedure ( Breitenbach and van Doren, 1998 ) .

Information Search:

Internet is one of the powerful beginnings of information, it has great advantages to hive away and treat the information ( Buyuko & A ; Zumi, 2004 ) , and due to the above Internet has a deep impact on the Information Search phase. Harmonizing to Wareham ( 2000 ) Internet provides broad entree to information base for the consumers. Comparing to the traditional environment Web is less dearly-won and necessitate less clip for information hunt ( TurbanA et al. , 2002 ) . One of the of import differences between online and offline environment is the costs for the features and properties for which information can be obtained, are normally lower in online ambiance ( Kanttila, 2005 ) .

Still, the Internet has far less impact for the merchandises that are perceived as low hazard and that are bought often ( Mutz, 2005 ) . Additionally, the Internet is much less effectual for value expressive merchandises than for functional merchandises, which attributes can be easy compared online ( Rayport et al. , 2003 ) .

Merchandise Evaluation:

This phase requires clients to do concluding value judgement through measuring different information. The chief benefit of on-line stores is their ability to hive away big sum of content at a comparatively low cost ( Rotem-Mindali et al. , 2006 ) . Therefore, this can be turned to advantage when clients measuring the merchandise. On another manus, Internet provides deficiency of tangibleness, which leads to troubles in measuring merchandises.

Purchase Activity:

Current phase involves issues sing minutess, which include the undermentioned stairss:

Agree contractually on purchase

Wage for the purchase

Wait for the bringing

Receive physical bringing

This phase can be influenced by different consumer-related factors, such as monetary value, trustiness, handiness or diverseness of picks. Harmonizing to Jobber ( 2001 ) this phase is besides influenced by client engagement, which is shown in Figure 6. Therefore, client will transport out really extended rating when the purchase is really affecting. On the reverse, purchases with low engagement will take to simple rating and speedy determination devising ( Schiffman, 2004 ) .

Post Purchase Activities:

This phase is concerned with the satisfaction or dissatisfaction after purchase is made ( Solomon et al. , 2002 ) . Internet provides good potency for client satisfaction, every bit good as aid to retain them. Web site can supply free client support services, which will promote repetition visits. Additionally, value-added services or feedback can be provided to the clients in order to retain bing clients and pull new ( Siyal et al. , 2006 ) .

2.5. Benefits of the online shopping

As discussed antecedently, there are a batch of factors that affect consumers ‘ buying procedure. Those factors reflect both, advantages every bit good as disadvantages of Internet as a shopping medium. The advantages or benefits of online shopping considered by clients described as the followerss.

2.5.1 Convenience

The clients expect on-line shopping to be easier and more convenient than every bit comparison to traditional ( Shun, 2006 ) . Convenience is looking really obvious at the phase of information hunt. Harmonizing to Kotler ( 2003 ) ‘The Internet is an about perfect market due to the fact that information provided instantly and purchasers can do a comparing of offers globally ‘ . As a consequence, consumers require minimum attempt and clip in order to compare and contrast competitory merchandises.

2.5.2. Time salvaging

Harmonizing to Rayport et Al. ( 2003 ) those who buy dressing on Web most frequently appreciate clip salvaging. The procedure of turn uping merchandisers, happening points and procure offerings is easier in on-line environment ( Maruca, 1999 ) , which means online shopping can conserve on clip. Consumers do non necessitate go forthing their houses and exhausted clip for going in order to do ware. Additionally, on-line environment allows shoping for needed points by size, class or monetary value. Browsing and clip benefits of online shopping represent the positive perceptual experience of e-satisfaction ( Lichtenthal, 2004 ) .

2.5.3. Merchandise related benefits

Comparing with a conventional retail merchant, e-retailer is able to offer a more broad scope of merchandises, because e-retailer do non hold physical limitations in footings of the sum and cost of floor infinite which is needed to expose goods ( Kanttila, 2005 ) . Furthermore, it is less dearly-won and easier for e-retailer to organize confederations with other provider, which brings more extended stock lists.

2.5.4. Lower monetary value

Internet enhances client cognition about pricing. In on-line environment clients are able to see sites of rivals and compare the monetary values ; moreover mediators provide monetary value comparings, which make procedure of rating more convenient and clip economy ( Gunasekaran et al. , 2004 ) . This transparence of monetary value additions the competition between e-retailers and drives the monetary value down. Furthermore the cost for executing online concern is lower than for offline ( e.g. minimum staffing cost, no retail infinite costs ) , this besides lead to lower monetary values ( Brown et al. , 2003 ) . However, some researches show those consumers are ready to pay for the online merchandises same as for offline in exchange for the convenience ( Rayport et al. , 2003 ) .

2.6. Perceived hazards of online shopping

Perceived hazard can be defined as the uncertainness which arise when client can non foretell the effects of purchase determination ( Farley et al. , 1973 ) . The degree of hazard can change depending on persons, personality, state of affairs and merchandise. However, perceived hazard can be reduced to some acceptable degree in any purchase state of affairs.

2.6.1. Hazard of privateness

Privacy may intend diverse things to different people. By and large privacy refers to a moral right of persons to avoid break breaks into their personal life and personal businesss by 3rd parties ( Rotem-Mindali et al. , 2006 ) . Privacy is the chief factor which stops many consumers from online shopping. Most of the clip persons get afraid that their private information can be sold, used, shared or discovered in an wrong mode. Harmonizing to Kanttila ( 2005 ) A frights and concerns of online buying cut down online buying determinations.

2.6.2. Security hazard

Security hazards are frequently related to privateness issues. Security, particularly on-line payment security is one of the chief concerns for the consumers in e-shopping ( Shun, 2006 ) . Even the Internet and advanced engineering bettering fast, there are still high proportion of on-line users who are really cautious about doing on-line purchase due to the concerns over recognition and debit card security. Majority of clients have concerns whether the company is legal and private information will be non distributed to 3rd parties, due to high per centum of hackers runing online ( Siyal et al. , 2006 ) .

2.6.3. Lack of review before purchase

Absence of direct sensory cues is another sensed hazard, which is frequently mentioned both by sellers and clients. Harmonizing to Schiffman & A ; Kanuk ( 2004 the fact that consumers are unable to touch merchandises offered online is considered as important drawback. This fact leads to more uncertainnesss sing online shopping, because consumers have uncertainties about quality of the purchased merchandise. This is besides the ground why a batch of merchandises which require high engagement are rarely purchased online ( Rayport et al. , 2003 ) .

2.6.4. Hazard of bringing

Another drawback of on-line purchase is clip between the purchase was made and clip it received. When buying online, consumers can non obtain the purchased merchandise straight after dealing ( Mutz, 2005 ) . After the dealing was made the merchandise will make client via home/office bringing sometime subsequently. Therefore the dependability of bringing is another refering issue.

Additional job which involved in bringing procedure is speed. One more issue to see about place bringing is the presence of client at place ( Lichtenthal, 2004 ) . Sometimes clip of the bringing can be unsure, and such state of affairs can besides take to uncertainness.

2.6.5. Hazard of returning

Merchandise returns are indispensable for the clients ‘ convenience and satisfaction. Majority of researches shows that the rate of online returns are low, nevertheless it is merely due to the fact that clients find the procedure of returning is excessively complex ( Constantinides, 2004 ) . Such dissatisfied clients are improbable to go on online shopping in future ( Case, 2002 ) . Another issue in returning goods is that money normally are paid through recognition or debit card, and here originate another job of returning money back on the client history, which depend non on e-company, but on the bank through which purchase was done.

2.7. Drumhead

It is inarguable that the Internet has become an of import portion of people ‘s lives, enabling the fast growing of e-commerce. Currently, e-commerce is doing betterments in clients ‘ satisfaction and attempts to affect more people in on-line concern environment ( Chen & A ; Dubinsky, 2003 ) .

Consumer perceptual experience is the Godhead of client public presentation, at the same clip client actions are the end product of consumer perceptual experience ( Citrin et al. , 2000 ) . It is utile to understand factors which influence purchasers ‘ perceptual experience and buying behavior. The version of Internet creates a great impact on buying behavior by supplying more information, easing rating and determination devising, and after-sales feedback.

Additionally, on-line shopping includes different benefits and hazards related to factors act uponing consumer buying behavior. The chief benefits of online shopping are:


Time salvaging

Great merchandise pick

Merchandise customization

Lower monetary values

The most common sensed hazards of online shopping are:

Privacy hazards

Security hazards

Lack of review

Delivery issues

Inconvenience of returning


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