Research project.
1. Introduction/background information
Individuals used to purchase goods and services from traditional markets and stores before the invention of the computer and internet technology. However, the development of the internet and technology across the globe has led to the growth in popularity of e-commerce. E-commerce can broadly be defined as the application of technology in conducting financial transactions. E-commerce occurs when data is processed and transmitted electronically, where it currently features business activities such as online transactions and the use of credit cards. A recent trend of e-commerce named e-shopping has enabled consumers to purchase goods and services virtually. The virtual shopping means that customers can access goods and services without a physical location constraint.
E-commerce has gained popularity in many countries across the globe; due to the rapid growth of the technology industry. A Euro monitor report of 2012 indicated that e-commerce in Saudi Arabia had been expanding significantly, where 60 percent of the citizens were using it at that time. The report indicated that customers in Saudi Arabia were motivated by high disposable incomes and shopping convenience to participate in e-commerce activities such as online shopping and the use of credit cards. However, the report indicated that a lack of self-confidence hindered customers’ participation in e-commerce. The research implies that consumer participation in e-commerce is highly influenced by trust factors, including buyer’s risk perception, seller’s reputation, and motivation to buy. However, the rapid evolution in technology and globalization creates possibilities of rapid change in the e-shopping behaviors among consumers in Saudi Arabia. The rapid evolution in technology and globalization does regular research to determine changes in e-commerce consumer participation necessary. This research will provide the current state of e-commerce in Saudi Arabia and offer a projection regarding its expected changes in the future.
The development of e-commerce in Saudi Arabia cannot be explored without recognizing the involvement of the Saudi Arabian Government in the sector. Notably, e-commerce is a concept that was introduced in the early-1990s. Although the e-commerce sector performed poorly in the 1990s after its inception, as evidenced by the collapse of many e-commerce organizations between 1998 and 2000 during the era of dotcom-bubble, the Saudi Government still saw the need to integrate e-commerce with its economy. In 2004, the Saudi Arabian Government launched several e-commerce initiatives through its ministries. These initiatives played a significant role in promoting the growth of e-commerce in Saudi Arabia through highly responsive information and communication technology, better delivery services, and postal operations and efficient banking. An important initiative adopted by the Saudi Arabian Government in 2004 was the SADAD payment system by the Saudi Arabian Monetary Authority (SAMA). The SADAD payment system was to serve as the funds’ transfer and electronic bill-payment system for the Kingdom of Saudi Arabia (Sait et al., 2004). The SADAD payment system initiative was launched to reduce privacy and transaction risks. It acts as a direct online system that offers consumers a high degree of confidentiality, security, and confidence. Consumers can use the SADAD system to make payment of huge periodic bills such as phone and utility bills and customer-initiated bills such as e-commerce purchases.
Research problem
Although statistics indicated that there was growth in electronically transacted business over the years, there was a need to do a study on the customer’s perception on the ecommerce. In the real world, customers perceive products differently and also where they acquire their daily products. Consumers are always concerned about their security and safety of the products they consume and use at their homes and the workplace. They are also concerned about the price of the product and also the node of payment to use during transaction. Therefore, this research project focus on customer’s perception regarding the electronically transacted business at Jeddah region in Saudi Arabia.
Research Question
What is consumers’ perceptions regarding online shopping in Jeddah?
The objective of the Research
- To identify consumers’ perception in Saudi Arabia regarding e commerce
- To identify the factors that determine consumer’s decisions to use online shopping vs. traditional shopping
- To examine to what extent residents of Saudi Arabia’s preference to pay for products purchased online websites (cash, credit/debit card, apple pay)
- To investigate the reasons for Saudi consumers’ preference for paying through cash, credit/debit card, or apple pay
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Hypothesis on the research objectives.
There was no significant relationship between customer’s perception and the e commerce business in Jeddah region at Saudi Arabia
There were no significant factors that affected how Jeddah people at Saudi Arabia made decisions on how to purchase their products and services from the ecommerce.
There was no significant extent on preferable method of payments of online products at Jeddah region in Saudi Arabia
There were no significant reasons on to why the Jeddah online customers used different modes of payment of online products.
Purpose of the research project
The purpose of the research project was to investigate customer’s perception on ecommerce and the mode of payment they used to obtain goods and service online. This meant that the customers were purchasing products online and knew the implications of ecommerce so the research focused on their perceptions. A group of 264 people from Jeddah at Saudi Arabia were chosen to participate in the project. There were no specific criteria used in choosing the sample from the entire populations since we knew those who participated in ecommerce.
Limitations of the research project.
The research was limited to only Jeddah area in Saudi Arabia. It was also limited on time since only one month was set for the whole study. The study was also limited on the number of people sampled to 264 from the entire population and also biased to those who participated on ecommerce. The project is limited. The researcher used questionnaire to collect data thus it was limited to only literate people alone.
Literature review
Customer perception of e-commerce in the United Arab Emirates
Over the years, e commerce has steadily increased in the United Arab Emirates due to advancement in technology making it the largest region to use online marketing. The research project focus literature review on customer perceptions on ecommerce in the United Arab Emirates. A research by Mohamed and Ahmed of 2014 showed that most customers had embraced new technology and preferred buying their products online including their daily consumption goods. The online business was termed ecommerce in the world. The researchers demonstrated that the United Arab Emirates have embraced online marketing and they bought their products from the ecommerce. Also, studies showed that producers who sold their produce, products and services through ecommerce had increased by 20% (Mohamed & Ahmed ,2014). The research showed that people of united Arab emirate had difference on how they perceived online marketing. The results showed that perception was both positive and negative thus it affected the sellers and buyers in different ways. Besides the demand for shopping online had significantly improved although there was a great issue on consumer data of the United Arab Emirates, on whether the online recorded data was accurate, and safe since most people feared exposing their information to malicious individuals. According to Mohamed and Ahmed (2014), the number of ecommerce customers was projected to increase to approximately ten billons by the end of 2018. The projection meant that the United Arab Emirates would use e-commerce in all their transaction. the increase was due to change in people’s perception on online business and embrace of advanced technology. The increase was attributed to faster delivery since the purchased products were dropped at customer’s convenient area. Also, most producers had implemented the idea of online business in the united Arab emirate increasing product availability. However, the research showed that there was no security on products bought on the e commerce. Most of consumers had a perception that the products may not reach them in time or they might be conned since they never knew where the business was located except been online. Also there was need to address privacy on consumer’s information since most buyers and sellers feared that their important information might leak to malicious people thus destroying their reputation. Mohamed and Ahmed (2014) indicated that there was need for any ecommerce organization to enact policy mechanisms to mitigate cybercrimes and improve cybersecurity thus growth of the online business.
Website privacy trustworthiness
Website privacy trustworthiness is influenced by several factors and impact ecommerce in different ways. For instance, online business provides extensive flow of data and information that facilitates the growth of the ecommerce industry. The security is very essential in e commerce and affects consumer and producer perception on the reliability of the industry in future since people do not want make losses during transaction. The research project would focus on website privacy trustworthiness. For instance, a research done by Alisa, (2017) showed that online marketing had grown by approximately 330 billion and had high potential to grow since resources were not fully exploited. The growth was caused by increased trust between the producers and consumers of online products and services. The results showed that there was mutual trust enabling the success of the e commerce business. Also, the trustworthiness depended on how an online organization guarded their customer’s vital information. According to MIttone,( 2017 ) online business that were more successful had good payment plan that ensured customers were able to make payments of products and services bought online with much ease. According to Erick and Mittone ,(2019 ), they demonstrated that consumer perception on an online organization trustworthiness depended on how they kept the consumer information and how the delivered products to customers at their convenient destinations.
The research of Erik and Mittone , (2019) sampled about 128 members of Mobile lab and asked them to give information on what determined an ecommerce organization trustworthiness and purchasing power of the consumers. The research used interviews and questionnaires as methods of data collection to understand importance of trust in any business. The findings showed that 50% of the online organizations violated their customer privacy since they did have good mechanisms to protect their client’s vital information. The customers explained their disappointments and fears when conducting e commerce business since some people felt that their private information was been released to malicious online people who committed cybercrimes thus increased theft. The people suggested that online business producers to develop strong password and strength the online data protection laws. Also, there was a positive correlation between website privacy trustworthiness and customer’s perception of online business as well as the purchasing intentions. Based on (Erick & mittone,2019) website security and trustworthiness had appositive impact on consumers purchasing power thus it was concluded that website privacy and trustworthiness had an impact on customer’s perception on ecommerce. Also safe payment options indicated that they had a positive impact on customers purchasing power of the online products and services. Also, the findings indicated the online organizations should improve on privacy of their customer’s data and give them assurance that their information was safe and secure. in addition, the findings showed that online organization should invest much time and income in developing their websites to ensure that they have an updated and accurate website since good website indicates quality products and increases customer’s trustworthiness thus positive perception on online business.
Kushwah and Singh’s (2019) observed in their research that the growth of e-commerce had been promoted by its vast potential for technological growth. The researchers observed that technological growth in India, for example, would be promoted by the reduction in the cost of production and environmental boundary escalation hence reducing the limitation for buyer-seller interaction. They observed that the advent of computers and smartphones and the growth in internet technology not only allow people to participate in online shopping but also promotes economic development by promoting participation in international trade, local alternatives consumption, and interaction with international companies. In their report, Kushwah and Singh’s (2019) observed that there were many internet users where their perception on ecommerce had generated much income. A study by Joseph and Joseph (2017) has shown that consumers tend to shop online since it saves them time and money. The study shows that consumers are further attracted to online shopping since they also consider it to be safe. This study shows that consumers not only participate in e-commerce because of the expected pleasure but also due to the expected security (Joseph & Joseph, 2017). Moreover, the study evidence that the change in lifestyle patterns leads to an increase in customer loyalty regarding the use of e-commerce. Chen et al. (2008) observe in their study that perception encourages the buyer to use the e-commerce facilities. The study shows that consumer perception determines the level of compatibility, privacy, and complexity, which are three aspects that influence the use of e-commerce facilities (Chen et al., 2008). Moreover, complexity and privacy are cited in this report as elements determining the difficulty or ease of using e-commerce facilities. The study portrays compatibility as a factor influencing e-transactions use because of a close relationship between cultures, values, and language of consumers. It is hence evident from the study that the success of e-transactions is dependent on consumer loyalty, trust, and satisfaction. Arora and Muttoo (2018) observe in their report that gender and age are the factors influencing consumer participation in e-commerce. In the report, the researchers observed that men between the ages of 25 and 40 years tend to spend more on online transactions compared to their colleagues in other age groups (Arora & Muttoo, 2018). The authors also observe that the income levels of consumers also influence online purchasing. The researchers observe that high-income levels promote the accessibility to online transaction services. People with high-income levels can afford complementary goods or e-commerce, including smartphones, computers, electricity, and the internet. Researchers have shown that governments succeeded in its initial adoption of e-commerce since they discovered the importance of consumers in the institutionalization process. The researchers tasked with the study of the demographic preparedness for the e-commerce discovered various factors influencing the consumer’s adoption decision. Firstly, the researchers observed that consumers consider the benefits of participating in e-Commerce. In this case, consumers consider whether e-commerce will contribute to the improvement of their lives or not (Riorini et al., 2019). Secondly, consumers evaluate the compatibility of e-Commerce with technology. Consumers who are comfortable with the use of the internet, computer, and mobile phone technology had a higher chance of adopting e-commerce than their uncomfortable counterparts.
Research Methodology
Data Collection Technique
The objectives of the research were to identify the respondents’ preferences and thoughts of Saudi Arabian consumers regarding e-commerce. A convenience sample survey was conducted on a sample of 264 respondents was used. We came up with the number of respondents based on a 5% margin of error, a 95% confidence level, and the 3,143,000 population of the citizens of Jeddah in Saudi Arabia. The survey was conducted through online channels to ensure convenience among the respondents. We prepared questionnaires and posted them online and also visited the respondents to observe their consistent in purchasing products and services online. we also did piloting of the questionnaire to test the viability and accuracy of the method in Jeddah in Saudi Arab. We also used data from online organizations to complement our collected data. The entire survey was completed within one week since we were familiar with the area of study and was also faster to obtain secondary data from online organizations and articles.
Sampling technique.
The random sampling technique was employed to choose the respondents, where all respondents had an equal possibility of being chosen. The survey specified feature of closed-ended and open ended questionnaire, where respondents were supposed to choose one option from a fixed list of options and also to give information on where they were to explain the reason for the choices. In most cases, we made most of the questions closed ended since where time-efficient. In addition, it was easy to interpret and code. It is also ideal for a research that has a quantitative research approach.
Data Analysis
Data analysis is a process of inspecting, cleansing, transforming, modelling and interpreting data to with aim of getting useful information to make conclusions from the set type of data (Xia & Gong, 2015). After the data collection process is over, the collected data was edited manually. The data was then recorded and analyzed using the excel sheet. The results findings were then interpreted through the observation of the results. Also, conclusion was derived from the results as well as hypothesis of the research questions were tested.
Research Validity
Reliability refers to the extent to which data collection techniques or techniques will yield consistent findings or similar observations that would result in the same conclusion. Validity refers to the extent to which data collection methods or methods accurately measure what they were intended to measure. Since the research is a quantitative research, closed-ended questions will aid in achieving validity and reliability, as interpretations and conclusion are achieved from the collected and analyzed data.
Research Ethics
The research project topic raised the ethical issue of privacy and confidentiality. However, the respondents and the researchers were aware that the study would be compiled into a report that would be available for public consumption. It was a professional obligation of the researchers to protect the identity of the respondents to avoid the ethical issues of privacy and confidentiality. In this research project, the identity of the participants was withheld for security purposes. Furthermore, the researchers signed the “Low-Risk Assessment for Student Research” by the research center to ensure the highest level of ethical conduct for research at Dar Al-Hekma University. Generally, the study protected the respondent information.
Timescale
The entire process was expected to take a total of one month. One week was dedicated for the compilation and approval of the research proposal and preparation for the survey. The preparation process involved raising resources for the survey, that included computers and software using Survey Monkey. The data collection, analysis, and presentation of the report took the remaining three weeks of the month.
5. Resources
The research project had a small budget since did not involving travelling to long distances to collect data. The respondents were near the university thus readily available for the data collection. we incurred cost in preparing the questionnaires and also piloting them. Also, the was need for bundles to google more information relating to the research project so we incurred cost. The project budget was prepared to success of the research project.