factors influencing online shopping

19 July, 2010

Md. Moktar Ali

Assistant Professor

Department of

Marketing

University of Dhaka

Dear Sir,

1 Factor Influencing Online Shopping

Aurora

12th Batch,

Department of Marketing

19th July, 2010

Factors Influencing Online Shopping Behavior

This is the report you instructed us to do on E-commerce. The topic of

assignment was “FACTORS INFLUENCING ONLINE SHOPPING”.

Here we are submitting the report as per your instruction. We’ve tried my best to

follow your instructions and recommendations. Therefore if any discrepancy

arises I’ll be obliged to answer it.

Sincerely,

AURORA

Afrin Azhar 1Tania Tabassum 11Faruk Hossain 35Imtiaz Hossain 81Tamanna Tasmin 95Rukhsana Shirin 99Zahid Hasan Khan 117

12th BatchDepartment of MarketingUniversity of Dhaka


Acknowledgement

This was rather a challenging job. At first we would like to thank almighty ALLAH

for giving me strength to complete this assignment as per instructions.

Our course instructor, MD. MOKTER ALI for giving us support and instructions.

Without his considerate motivations it would not have been possible.

Friends have always been an inspiration and source of motivation for us. For this

particular asignemnt I would like to thank, Sushmita Zaman for lending us her PC

and Reajul Alam for helping us with SPSS analysis.

Last but not the least, our family, for always being my backbone in every step.

Thanking all of them with real graciousness.


Table of Content

Executive summary 4

Introduction 5

Internet and online shopping in Bangladesh 6

B2B E-Commerce and Consumer

Behavior

7

Online Marketing Communication 9

Objective 10

Literature review 10

Conceptual Framework 12

Research framework 13

Model 14

Development of Hypotheses 14

Methodology 16

Data Analysis 17

Conclusion 33

Exhibit 34

Reference 49


Executive summary

Online shopping is one the most apparent reasons. Internet has become the fastest growing shopping

Channel. Online shopping includes the similar simple steps of decision making that of physical

shopping. A report of AcNeilsen in 2007 showed that more than 62 million people all over the world

shopped online in 2006. The number of Internet user and the number of ISPs in Bangladesh are

growing rapidly, Present user base of ISPs in Bangladesh is about 100,000 dial up users and 80, 000

broadband users. The number of ISPs is 146 registered with the appropriate authority. The Internet

facility is still an urban privilege in Bangladesh as the telephone connections are more concentrated

in urban areas, especially Dhaka based. Shopping online is not that much of a common phenomenon

in our country. Based on observation it can be said that only 2 people among 30 does online

shopping, that even once or twice in 10 to 15 years. Online shopping is strongly related with B2C e

commerce. Yet some websites are doing really well in this sector, like haatbazar.com, cellbazar.com

etc. When most people think of B2C e-commerce, they think of Amazon.com. In addition to online

retailers, B2C has grown to include services such as online banking, travel services, online auctions, health

information and real estate sites. The major objective of this paper is to identify and determine the preference

of online shopping. The dependent variable is factors influencing online shopping and the independent

variables are time, convenience, customer service, shopping experience, price, advertisement, speed, security

and trust, product delivery. To find out the most important factor and to analyze the hypotheses regression

analysis, factor analysis and chi-square test has undertaken.


Introduction

Emergence of technological development has altered the stream of everyday life. Starting form

household chores to even governing a nation; superior technologies has tiled a horizontal approach

for the human race. It is a regular phenomenon these days to revolutionize the former technology to

make way for the better and improved one. With the sense to make the best use of this revolution,

firms all over the globe are trying to evolve themselves around this. And as a consequence to this,

the competition is fiercer then ever before now. Everyone is trying to position themselves in the

most unique way possible.

“The easy way to get into a person’s mind is to be first. And if you can’t be the first one, try to be 1 st

amongst the 2nd “[Ries]. This truly revolutionary but most basic concept of positioning indicates to

the die-hard competition that is going on around us. The over communicated society of ours has

cluttered every information. To get through this clutter one suggestion is: Do not try to change the

mind set of the customer. Try to fit in the

perception that already exists in the minds of

the customer. [Ries]. To be unique in this

brutal competition other then just to

understand the mind set but also to provide

the necessary requirements of the customers.

And in this age of technology E-

COMMERECE does that for the firms. EC

brings together the difficult alignment jobs

in every step from production to marketing.

As the popularity of WWW (website) are

increasing day by day, it has manifested

itself in a number of ways like – 1) a number of companies that uses www to communicate with

customers and 2) customers use www for a variety of reasons (gerald haubl, valarie trift, 2000). And

it is obvious that online shopping is one the most apparent reasons. Internet has become the fastest

growing shopping Channel. Even though there is substantial divergence between purchasing system


and user interface, each individual has developed a generalized procedure for purchasing online.

Online shopping includes the similar simple steps of decision making that of physical shopping.

A report of AcNeilsen in 2007 showed that more then 62 million people all over the world shopped

online in 2006. Forrester (2006) anticipated that e-commerce market would grow from $228 billion

in 2007 to $288 billion in 2009 (Narges Delafrooz, 2 Laily Hj. Paim and 3 Ali Khatibi, 2009, 2010). People are

shopping online 24x7 today. Some market sectors, including insurance, financial services, computer

hardware and software, travel, books, music, video, flowers, and automobiles, are experiencing rapid

growth in online sales. For example, in Jan. 1999, Dell Computer Corp. was selling an average of

$14 million of equipment online per day, and Amazon.com has become the third largest bookseller in

the U.S., despite being in business only since 1995 (Bellman, Lohse, Johnson, 1999).

This uprising of internet shopping over brick & mortar shops is likely to continue as it gives some

services over them like – time, speed, product variety etc.

And keeping in pace with this world wide progression, Bangladesh has paved her way into this path.

This paper confers about the factors influencing online shoppers of our country.

Internet and online shopping in Bangladesh

Internet has existed since the late 1960s when a limited number of computers were connected in the

United States to form the ARPANET7. This was mainly used to enable academics and military

personnel to exchange defense information. Recent dramatic growth in the use of Internet has

occurred because of the development of World Wide Web. This became a commercial proposition in

1993. In Bangladesh it has come into operation commercially in the mid-90s. In early 90s,

Bangladesh had access to e-mail via BBS1. Bangladesh Telegraph and Telephone Board (BTTB)

granted licenses to two Internet Service Providers, Information Services Network (ISN) and

Grameen Cybernet to install VSAT2 data circuits in the same yea Bangladesh Telegraph and

Telephone Board (BTTB) granted licenses to two Internet Service Providers, Information Services

Network (ISN) and Grameen Cybernet to install VSAT2 data circuits in the same year. The number

of Internet user and the number of ISPs are growing rapidly, Present user base of ISPs in Bangladesh

1Bulletin Board Systems2Very Small Aperture Terminal, a satellite communications system


is about 100,000 dial up users and 80, 000 broadband users. The number of ISPs is 146 registered

with the appropriate authority. The Internet facility is still an urban privilege in Bangladesh as the

telephone connections are more concentrated in urban areas, especially Dhaka based. Recently

Bangladesh has been connected with information super highway through submarine optic fiber

networks with 16 countries consortium by SEA- ME-WE-4 project. The government of the People’s

Republic of Bangladesh has inaugurated the connectivity on 21st May 2006 although has not started

its operation for public use (Daily Star, 2006, Prothom Alo, 2006). The landing station has been

established in Cox’s Bazaar, the southern City, near the Bay of Bengal

In this overpopulated yet underdeveloped country shopping is one of the most widespread interests

of the citizens. Almost every other day the citizens create a traffic jam of their own in the shopping

malls. But as we stated above that Bangladesh is yet to be developed, so shopping online is not that

much of a common phenomena in our country. Based on observation it can be said that only 2

people among 30 does online shopping, that even once or twice in 10 to 15 years. However, some

young stars and technologically advanced individual are shopping online to get their preferred

special products. We are saying special products because in our country we don’t have that much

online shopping facility including sopping web sites, delivery system, product info etc. Yet some

websites are doing really well in this sector, like haatbazar.com, cellbazar.com etc.

B2C e-Commerce and consumer behavior:

Online shopping is strongly related with B2C e commerce. B2C stands for "business-to-consumer"

and applies to any business or organization that sells its products or services to consumers over the

Internet for their own use. When most people think of B2C e-commerce, they think of Amazon.com.

In addition to online retailers, B2C has grown to include services such as online banking, travel

services, online auctions, health information and real estate sites. B2C e-commerce has continued to

grow steadily. This growth has occurred not only in the developed countries, but in the developing as

well, resulting in an increasingly global community of online shoppers (Brown and Jayakody).

Consumer behavior is the study of when, why, how, and where people do or do not buy product. It

blends elements from psychology, sociology, social anthropology and economics. It attempts to

understand the buyer decision making process, both individually and in groups. It studies


characteristics of individual consumers such as demographics and behavioral variables in an attempt

to understand people's wants (Sandhusen, Richard L, Marketing, 2000). Consumer behavior in

online shopping depends on some variables like, price, fun, environment, customer service, product

variety, trust etc. the sources that can satisfy them on this factors wins the bet of having consumers

satisfaction. And in those sites consumer retention rate will presumably be high.

The model of online consumer decision making is similar to the original model with only difference

in the websites marketing effort.

Fig: Online consumer behavior model


This model describes how consumers make decision while shopping online. The above mentioned

factors influence this decision making. And the online shopping firms intend to keep an sharp eye on

these factors, so that they can serve the customers in order to gain more and more customer retention

rate. Cause the cost of gaining one new customer is much higher then the cost of retaining 5

customers.

Online Marketing Communications:

As like all other sectors, internet has affected marketing in a severe manner. OMC has improved to

be a significant part of a firms overall promotional mix. With the reach of internet, online marketing

mix has paved a smooth way to dominate the field of marketing. Where as OMC in its Early days

was limited to mainly the implementation of corporate websites, greater Possibilities exist today.


OMC today consists of multiple activities. This proposed model of Morten Bach Jensen of The IT

University of Copenhagen, Copenhagen, Denmark shows potential & prioritization of OMC.

Objective of the study:

1. To identify the factors that influence online shopping behavior

2. To determine the most important factor among the proposed factors

3. To determine the importance of each proposed factor

Literature review:

Many authors have discussed on this topic previously. Na Li and Ping Zhang of Syracuse University

have executed an empirical study on consumer online shopping behavior (2002) based on 35 articles.

This study was conducted on independent variables such as demographics, personality traits, website

quality, and vendor/service/product quality. Gerald Haubl and ValerieTrifts of University of Alberta,

Canada conducted another research on consumer decision making in online shopping (2000). This

study was conducted to find out what are the factors that influence decision making in online

shopping. Narges Delafrooz, Laily Hj. Paim and Ali Khatibi of University Putra Malaysia and

Management and Science University studied student’s online shopping behavior (2009, 2010) which

was on empirical level. They worked on two factors – 1) personality attributes and 2) perceived

benefits. They divided perceived benefits into several criteria like, fun, wider collection, price,

customer service etc. MD. Shah Azam of Rajshahi University worked on internet and technology

usage of Bangladesh (2007). Using the factors like, relative advantage, compatibility, trail ability,

complexity and observability he tried to figure out the amount of internet and technology usage in

our country. In, Predictors of Online Buying Behavior (1999): Steven Bellman, Gerald L. Lohse and

Eric. J. Johnson explained about the Wharton Forum on Electronic Committee and their research

project Wharton Virtual Test Market. In another research paper on Factors Affecting Students

Attitude Towards Online Shopping Behavior written by Narges Delafrooz, Laily H. Paim, Sharifah

Azizah Haron, Samsinar M. Sidin and Ali Khatibi the authors have worked on the variables like,

customer service, fun, good collection, good price, convenience etc to focus on students buying

behavior. Variables like, shopping experience, demographic characteristics, products perceptions,


customer service, customer risk were used in the article of Thomas W. Dillon and Harry L. Reif who

tried to indicate the key factors influencing consumers online commodity purchase (2004). A

working paper on comparative analysis among academics, strudents and others on the buying

behavior of online consumers focused on the factors like, convenience, competitive price, reliability,

security, easiness. It is a working paper of European Business Management School, written by, Dr

Panicos Georgiades, Dr Johann duPreez, Dr Bill Dowsland and Dr Antonis Simintiras. Tak-Kee Hui

and David Wan NUS Business School, National University of Singapore, Singapore, using

convenience, price, personality, and user experience, security concerns as independent variables, the

authors have shown the important factors influencing consumers online shopping in Singapore

(2000). In an article on factors affecting online purchasing behavior Hamisah Haji Hasan and Prof.

Samsudin A. Rahim worked on factors like, demographics, price, convenience etc. a detailed study

on Thai consumers online shopping behavior, Siriporn Thananuraksakul, International Graduate

School of Business, Division of Business, University of South Australia showed in detail starting

from e-commerce and internet itself to the factors (2007) and the analysis of those. He chose the

factors like, demographic including age, income, personality, area etc and other factors like, price,

time saving, price, trust, attitude, convenience. A study on usability versus security’s influence on

online consumer shopping was conducted by Rajasee Rege (2007) of Indiana University. Efthymios

Constantinides, who was an assistant professor at the time of writing his article, extended the web

experience as an important factor in influencing online shopping behavior (2004). An empirical

study on consumers online shopping behavior done by Dr Syed Shah Alam of Faculty of Business

Management Universiti Teknologi, Malaysia; Zaharah Bakar, Faculty of Business & Law,

Multimedia University, Malaysia; Dr Hishamuddin Bin Ismail; Dr Hishamuddin Bin Ismail, Faculty

of Business & Law, Multimedia University, Malaysia; Mst. Nilufar Ahsan, Research Fellow, Faculty

of Management, Multimedia University, Malaysia – emphasized on factors like, customer service,

reliability, trust, website design (2008). Taking the factors like retailer, service, environment and

motivation; Na Wang, Dongchang Liu, Jun Cheng of Department of business, Jilin University and

Changchun University of Science and Technology ahs written a paper on Influencing Factors of

Online Shopping (2008). An article on Effective Factors on Iranian Consumers Behavior in Internet

Shopping: A Soft Computing Approach was written by Maryam Ghasemaghaei, Bahram Ranjbarian

and S. Amirhassan Monadjemi of University of Isfahan, where they have taken about 13 factros

which includes price, time, convenience, security etc (2009). Masayoshi Maruyama, Le Viet Trung,

Kobe University conducted research on consumer shopping behavior taking factors such as,


demographics, price, retailer, freshness, new goods, quality safety etc. In The 3rd Saudi International

Conference, Talal Al-maghrabi and Charles Dennis of Brunel University presented a paper on

factors influencing online shopping behavior of Saudi Arabian consumers (2009) taking the

variables such as, site quality, trust, perceived usefulness enjoyment etc. Tzy-Wen Tang and Wen-

Hai Chi, Professor of National Dong-Hwa University, Taiwan worked on the trust factor of online

shopping. A research on online buying behavior was conducted by Thompson S.H.Teo, Yuanyou Yu

of National University of Singapore. Where they focused mainly on, trust factor and the uncertainty

related to online shopping. Trust, service quality, system quality and information quality was the

main variables taken by Irwin Brown and Ruwanga Jayakody University of Cape Town, South

Africa while writing an article about B2C ecommerce success (2008). According to Charles Dennis ,

Bill Merrilees Chanaka Jayawardhena and Len Tiu Wright in their article, E-consumer Behavior

(2009) mentioned, trust and own experience as an important factor. Morten Bach Jensen of The IT

University of Copenhagen, Copenhagen, Denmark shows potential of OMC in his article on Online

Marketing Communication Potential (2007).

Conceptual Framework:

The independent variables for this study are time, convenience, price, shopping experience, product

variety, delivery (Na Li and Ping Zhang , Gerald Haubl and Valerie Trifts, Narges Delafrooz, Laily

Hj. Paim and Ali Khatibi, Steven Bellman, Gerald L. Lohse and Eric. J. Johnson, Narges Delafrooz,

Laily H. Paim, Sharifah Azizah Haron, Samsinar M. Sidin and Ali Khatibi, Thomas W. Dillon and

Harry L. Reif, Dr Panicos Georgiades, Dr Johann duPreez, Dr Bill Dowsland and Dr Antonis

Simintiras. Tak-Kee Hui and David Wan, Hamisah Haji Hasan and Prof. Samsudin A. Rahim,

Siriporn Thananuraksakul, Rajasee Rege, Dr Syed Shah Alam, Zaharah Bakar, Dr Hishamuddin Bin

Ismail, Dr Hishamuddin Bin Ismail, Mst. Nilufar Ahsan, Maryam Ghasemaghaei, Bahram

Ranjbarian and S. Amirhassan Monadjemi, Masayoshi Maruyama, Le Viet Trun,

ThompsonS.H.Teo, YuanyouYu, Tzy-Wen Tang and Wen-Hai Chi, Talal Al-maghrabi and Charles

Dennis) and the dependant variable is consumer preference on online shopping. To find the

dependency on the variable 7 point likert scale is used. The questionnaire has been designed using

open ended, MCQ and likert scale questions.


Research Framework:


Research on factors influencing online shopping

Literature review

Questionnaire preparation

Secondary data

Conduct survey though field work

Primary data

Data Analysis

Selection of variables

Report preparation

Research model:

Hypotheses:

H0 Time is not an important factor influencing online shopping behavior

H1 Time is an important factor influencing online shopping behavior

H0 convenience not is an important factor influencing online shopping behavior


Consumer preference on online shopping

Time

Product Delivery

Convenience

Customer service

Security and trust

Shopping experience

Price

Advertisement

Speed

H2 convenience is an important factor influencing online shopping behavior

H0 Customer service is not an important factor influencing online shopping behavior

H3 Customer service is an important factor influencing online shopping behavior

H0 Security and trust is not an important factor influencing online shopping behavior

H4 Security and trust is an important factor influencing online shopping behavior

H0 Shopping experience is not an important factor influencing online shopping behavior

H5 Shopping experience is an important factor influencing online shopping behavior

H0 Price is not an important factor influencing online shopping behavior

H6 Price is an important factor influencing online shopping behavior

H0 Advertisement is not an important factor influencing online shopping behavior

H7 Advertisement is an important factor influencing online shopping behavior

H0 Speed is not an important factor influencing online shopping behavior

H8 Speed is an important factor influencing online shopping behavior

H0 Product delivery is not an important factor influencing online shopping behavior

H9 Product delivery is an important factor influencing online shopping behavior

Methodology:

To conduct this research the questionnaire has been developed using MCQ and 7 point likert scales

to measure the dependency of the variables. A sample of 30 young students has been selected

randomly. Besides primary data gathered from field work, secondary data is also used form different

published articles. The proposed paper is both qualitative and quantitative in

nature. This has take form of descriptive and exploratory research. To analyze

collected primary data, SPSS has been used. Confirmatory factor analysis,


descriptive statistics is used. To determine the most important factors amongst

the chosen variables linier regression is undertaken using this formula

[Malhotra]:

Here,

Y = Factors influencing online shopping

β 0 = constant ( intercept o the variable)

β 1 = Coefficient of time

X 1 = Importance of time

β 2 = Coefficient of convenience

X 2 = Importance of convenience

β 3 = Coefficient of customer service

X 3 = Importance of customer service

β 4 = Coefficient of Security and trust

X 4 = Importance of security and trust

β 5 = Coefficient of shopping experience

X 5 = Importance of shopping experience

β 6 = Coefficient of price

X 6 = Importance of price

β 7 = Coefficient of advertisement

X 7 = Importance of advertisement

β 8 = Coefficient of speed

X 8 = Importance of speed

β 9 = Coefficient of product delivery

X 9 = Importance of product delivery

e = Error


Y = β0 + β1X1 + β2X2 + β3X3 + β4X4 + β5X5 + β6X6 + β7X7 + β8X8 + β9X9 + e

Data Analysis:

Demographics:

Age of the respondent:

whether shopped online * age of the respondent Crosstabulation

Count

age of the respondent

Total15-20 21-25 26-30

whether shopped online yes 1 7 3 11

no 0 18 1 19

Total 1 25 4 30

From the above table it is clear that the rate of shopping online is high amongst the respondents

whose age is from 21 to 25 where 7 respondents out of 11 did online shopping.

Monthly Income:


whether shopped online * monthly income of the respondent Crosstabulation

Count

monthly income of the respondent

Totalless then 10,000 10,000-15,000 16,000-20,000

more than

20,000

whether shopped online yes 3 4 3 1 11

no 17 1 0 1 19

Total 20 5 3 2 30

The table here indicates that shopping online is a much common activity amongst those whose

monthly income range is 10000-15000tk.

Area:

area * whether shopped online Crosstabulation

Count

whether shopped online

Totalyes no

area motijheel 1 3 4

khilgaon/mogbazar 3 3 6

mirpur/mohammodpur 2 3 5

dhanmondi 2 5 7

gulshan 0 2 2

old dhaka 3 3 6

Total 11 19 30

Respondents living in Khilgaon/Motijheel and old Dhaka has the highest response towards online

shopping where 3 respondents amongst 6 did online shopping, followed by Mirpur/Mohammodpur

and Dhanmondi.

Gender:


whether shopped online * gender of the respondent Crosstabulation

Count

gender of the respondent

Totalmale female

whether shopped online yes 9 2 11

no 7 12 19

Total 16 14 30

Among our respondents, male respondents shop online more then female. Here it is clear as 9 male

respondents and 2 female respondents did online shopping among 30 respondents.

Occupation:

occupation of the respondent * whether shopped online Crosstabulation

Count

whether shopped online

Totalyes no

occupation of the respondent student 7 17 24

service holder 3 2 5

businessman 1 0 1

Total 11 19 30

This table indicates that students have the higher ratio of shopping online then others. As 7

respondents who shopped online were students among the 30 respondents.

Consumer preference level:

Website preference:


preference of website * reasons for prefering the site Crosstabulation

Count

reasons for prefering the site

Totalproduct variety discount offers

shopping there

is fun

offers are

convenient

preference of website amazon.com 6 1 0 0 7

alibaba.com 1 0 0 0 1

e-bay.com 5 1 0 5 11

cellbazar.com 4 2 2 3 11

Total 16 4 2 8 30

For the reason of product variety, most respondent prefer amazon.com; whereas for convenient offer

and product variety respondents prefer e-bay.com and for all the given reasons respondents prefer

cellbazar.com.

Preferred Delivery time:

Frequency Percent

within 1 day 14 46.7

2-3 days 12 40.0

within a week 4 13.3

Total 30 100.0


Product preference:


Frequency Percent

books & articles 14 46.7

music 6 20.0

accessories 6 20.0

software 3 10.0

others 1 3.3

Total 30 100.0

Usefulness of online shopping:


Recall Test of Bangladeshi Online Shops:

recall test of the name of online BD shops * recall test of BD online shop

Crosstabulation

Count

recall test of BD

online shop

Totalyes

recall test of the name of

online BD shops

Cellbazar.com 9 9

Haatbazar.com 2 2

Clickbd.com 5 5

Alibaba.com 1 1

Total 17 17


Extra factors:

Frequency Percent

Product visibility 5 16.7

Product quality 2 6.7

low transportation cost 1 3.3

nothing 21 70.0

relationship 1 3.3

Total 30 100.0

From this table it is clear that most respondents have No opinion about extra factor apart form the given variables. Yet 16% said product visibility is important to them.


Confirmatory Factor Analysis:

FactorsTime shopping online takes little time .852

choosing product takes less time .621

making final order takes less time .403Convenience online shops has huge variety of products .336

payment method is easy .169

free of carrying money always .573

products are available .684

a collection of special products are available .546

online shopping eases physical stress .727Customer Service good after sales service

.852

having user friendly guideline .112

response to complains .396

returning money product .798Security and trust reliability of the authority .636

credit security .803

secrecy of identity .766

non-discloser of data .611Shopping experience whether the environment is enjoyable .810

exciting features of the websites .828

playing games while browsing .245

knowing new people through forums .506Price offer low price .322

offer high priced product .829


charge extra for home delivery .755

Advertisementattractive ads .230

ads provide detailed information .592

frequent ads are shown .765

ads are seen almost everywhere .821Speed browsing speed .776

speedy ordering process .798

products searching speed .674

transaction speed .723Product Delivery scheduled time frame .855

product on the menu .737

compensation for late delivery .742

delivery-man is gentle .589

Taken 50% as a standard for significance, form this able it is clear that in time factor, “making final

order takes less time” is less important as it has 40%. Next in convenience factor, “payment method

is easy” and “online shops has huge variety of products” is less important then others as they have

33% and 16%. In customer service, “good after sales service” is important having 85% and

“returning money product” is also important having 79%. In security and trust, all the attributes are

very important having more then 60%. In shopping experience, “playing games while shopping” is

less important as it has only 24%. When it comes to price, “offers low price” is less important as it

has 32%. In the case of advertisement, “attractive ads” are less important having 23%. Speed is

another most important factor as all its attributes has more then 65%. Last but not the least; product

delivery is another important factor having more then 55%.


Regression Analysis:

In order to do linear regression excluding the unimportant factors another factor analysis is done,

which is represented as BART factor 1 for analysis, representing the variables:

SPSS output Representing variable

BART factor score 1 for analysis 10 Time

BART factor score 1 for analysis 11 Convenience

BART factor score 1 for analysis 12 Customer Service

BART factor score 1 for analysis 13 Security and trust

BART factor score 1 for analysis 14 Shopping Experience

BART factor score 1 for analysis 15 Price

BART factor score 1 for analysis 16 Advertisement

BART factor score 1 for analysis 17 Speed

BART factor score 1 for analysis 18 Product Delivery

The factors that are retained and the factors that are excluded are indicated here:

Factors Attributes Retained ExcludedTime shopping online takes little time ×

choosing product takes less time ×

making final order takes less time ×Convenience online shops has huge variety of products ×

payment method is easy

×free of carrying money always ×

products are available ×

a collection of special products are available ×

online shopping eases physical stress ×Customer Service good after sales service ×


having user friendly guideline ×

response to complains×

returning money product ×Security and trust reliability of the authority ×

credit security ×

secrecy of identity ×

non-discloser of data ×Shopping experience whether the environment is enjoyable ×

exciting features of the websites ×

playing games while browsing×

knowing new people through forums ×Price offer low price ×

offer high priced product ×

charge extra for home delivery ×

Advertisementattractive ads

×ads provide detailed information ×

frequent ads are shown×

ads are seen almost everywhere ×Speed browsing speed ×

speedy ordering process ×

products searching speed×

transaction speed ×Product Delivery scheduled time frame ×

product on the menu ×

compensation for late delivery ×

delivery-man is gentle ×


Regressions:

Coefficients

Model

Unstandardized Coefficients

Standardized

Coefficients

t Sig.B Std. Error Beta

BART factor score 1 for

analysis 10.024 .442 .012 .055 .957


analysis 11.106 .405 .054 .261 .797


analysis 12.874 .358 .450 2.443 .024


analysis 13.594 .383 .306 1.549 .137


analysis 141.208 .434 .622 2.783 .011


analysis 15.349 .411 .180 .849 .406


analysis 16.364 .374 .187 .973 .342


analysis 17.032 .447 .017 .072 .943


analysis 18.866 .533 .446 1.625 .120

a. Dependent Variable: preference of online shopping


From regression analysis we can decide the most important factors affecting online shopping. To

determine these we have to take into consideration the significance level, which should be bellow

0.05. Because the confidence level is 95%, which means up to 5% error is tolerable. So if the value

is below .05, that indicates that it is correct.

From the table above we can see that, BART factor score 1 for analysis 12, which is customer

service is 0.024. Another factor, BART factor score 1 for analysis 14, that is shopping experience is

0.011. So, these two are the most important factor.

Another two factors, BART factor score 1 for analysis 13 and BART factor score 1 for analysis

18, security and trust and product delivery stands close to 0.05. So we can say these two factors are

also important.

From the above graph the statement is clearer.


Model Summary

Model R R Square

Adjusted R

Square

Std. Error of the

Estimate

1 .721a .520 .303 1.62146

a. Predictors: (Constant), BART factor score 1 for analysis 18, BART

factor score 1 for analysis 14, BART factor score 1 for analysis 11,

BART factor score 1 for analysis 12, BART factor score 1 for

analysis 15, BART factor score 1 for analysis 16, BART factor score

1 for analysis 13, BART factor score 1 for analysis 10, BART factor

score 1 for analysis 17

If R. Square is more than 50%, then regression model is correct. Here in this model summery, R.

Square is 52%. So we can say that the proposed regression model is correct. [Malhotra]

Hypotheses Test:

H0/H1:

KMO and Bartlett's Test

Kaiser-Meyer-Olkin Measure of Sampling Adequacy. .500

Bartlett's Test of Sphericity Approx. Chi-Square 1.702

df 1

Sig. .192

For DF (Degree of Freedom) = 1 The Chi – Square should be less than 3.341 [malhotra]. Here chi-

square is 1.702. So here H0 is accepted and HI is rejected. It indicates that time is not an important

factor in online shopping.

H0/H2:




df 1

Sig. .039


As mentioned earlier, chi-square = 4.256. So here H0 is rejected and H2 is accepted. That indicates

that convenience is an important factor in online shopping.

H0/H3:




df 1

Sig. .008

Here Chi-square = 7.007, so H0 Is rejected and H3 is accepted which indicates that customer service

is an important factor.

H0/H4




df 6

Sig. .000

From chi-square table we get that DF6 = 12. This table shows that chi square is 28.745 where DF is

6. So H0 is rejected and H4 is accepted. It denotes that security and trust is an important factor.

H0/H5:




df 3

Sig. .016

As per given chi-square table, DF3 = 7.815. Here chi square is 10.375 and DF is 3, so HO is rejected

and H5 is accepted, which means shopping experience is an important factor.

H0/H6:





df 1

Sig. .072

Here chi square is 3.23, so H0 is accepted and H6 Is rejected. Therefore, price is not an important

factor here.

H0/H7:




df 3

Sig. .043

As chi square is above 8, so we can say that here, H0 is rejected and H7 is accepted, which denotes

that advertisement is an important factor here.

H0/H8:




df 6

Sig. .000

From chi-square table we see DF6=12.592. As chi square here are 26.782 so H0 is rejected and H8

is accepted. That means speed is an important factor here.

H0/H9:




df 6

Sig. .001


As chi square here is 22.335 so H0 is rejected and H9 is accepted. Therefore it is clear that here;

product delivery is an important factor.

Variables Accepted Rejected

Time H0 H1

Convenience H2 H0

Customer Service H3 H0

Security & Trust H4 H0

Shopping Experience H5 H0

Price H0 H6

Speed H7 H0

Advertisement H8 H0

Product Delivery H9 H0

Summary of Hypotheses Test

From this summary it is clear that amongst all the factors, time and is not important factor.


Conclusion & Recommendation

From the above regression analysis, it is clear that among all the variables selected as important

factor for influencing online shopping, customer service, shopping experience is the most important

factor followed by product deliver and security and trust.

And from chi-square test it is clear that except time and price, all the factors are important in online

shopping.

From our analysis we found that most of our respondents shop online for books and articles. People

buy these products mostly to fulfill their hobby. So in this regard they don’t mind waiting long time

to search for the product or it doesn’t bother them if the price is a bit high.

But other factors such as customer service and trust is very important, cause customers wants to get

these materials as per ordered within expected time period without hampering their personal data.

Our research indicates that mostly young people shop online. So shopping experience and speed

playas a important factor here.

Taking into consideration, all these information, our recommendation for Bangladeshi online-shops

are:

1. Reestablish the important factors

2. Building brand image surrounding these factors

3. Analysis over time to find out the validity of these factors

4. Attracting new customers on these factors.

5. Retain the existing customers showing the latest improvements

6. Before changing the whole system in one night, pilot survey should be conducted.


Exhibits:

Factor Analysis:

Time

Communalities

Initial Extraction

shopping online takes little

time1.000 .622

choosing product takes less

time1.000 .622

Extraction Method: Principal Component Analysis.

Total Variance Explained

Compo

nent

Initial Eigenvalues Extraction Sums of Squared Loadings

Total % of Variance Cumulative % Total % of Variance Cumulative %

1 1.245 62.249 62.249 1.245 62.249 62.249

2 .755 37.751 100.000


Convenience:

Communalities

Initial Extraction

products are available 1.000 .689

online shopping eases

physical stress1.000 .689




Compo

nent



1 1.379 68.932 68.932 1.379 68.932 68.932

2 .621 31.068 100.000


Customer service

Communalities

Initial Extraction

good after sales service 1.000 .737

returning money/product 1.000 .737



Compo

nent



1 1.474 73.713 73.713 1.474 73.713 73.713

2 .526 26.287 100.000


Security and trust:


Communalities

Initial Extraction

reliability of the authority 1.000 .404

credit security 1.000 .645

secrecy of identity 1.000 .586

non-discloser of data 1.000 .374



Compo

nent



1 2.009 50.232 50.232 2.009 50.232 50.232

2 1.038 25.951 76.184

3 .727 18.165 94.349

4 .226 5.651 100.000


Shopping experience:

Communalities

Initial Extraction

whether the environment is

enjoyable1.000 .656

exciting features of the

websites1.000 .737

knowing new people through

forums1.000 .240




Compo

nent



1 1.633 54.423 54.423 1.633 54.423 54.423

2 .906 30.190 84.614

3 .462 15.386 100.000


Price:

Communalities

Initial Extraction

offer high priced product 1.000 .666

charge extra for home

delivery1.000 .666



Compo

nent



1 1.333 66.640 66.640 1.333 66.640 66.640

2 .667 33.360 100.000


Advertisement:


Communalities

Initial Extraction

ads provide detailed

information1.000 .487

frequent ads are shown 1.000 .526

ads are seen almost

everywhere1.000 .637



Compo

nent



1 1.650 54.987 54.987 1.650 54.987 54.987

2 .760 25.332 80.319

3 .590 19.681 100.000


Speed:

Communalities

Initial Extraction

browsing speed 1.000 .602

speedy ordering process 1.000 .636

products searching speed 1.000 .454

transaction speed 1.000 .522




Compo

nent



1 2.214 55.362 55.362 2.214 55.362 55.362

2 .822 20.546 75.908

3 .654 16.350 92.259

4 .310 7.741 100.000


Product delivery:

Communalities

Initial Extraction

scheduled time frame 1.000 .730

product on the menu 1.000 .543

compensation for late

delivery1.000 .551

delivery-man is gentle 1.000 .347



Compo

nent



1 2.172 54.297 54.297 2.172 54.297 54.297

2 .795 19.878 74.175

3 .638 15.960 90.135

4 .395 9.865 100.000



Regression:

Variables Entered/Removedb

Model

Variables

Entered

Variables

Removed Method

1 BART factor

score 1 for

analysis 18,

BART factor

score 1 for

analysis 14,

BART factor

score 1 for

analysis 11,

BART factor

score 1 for

analysis 12,

BART factor

score 1 for

analysis 15,

BART factor

score 1 for

analysis 16,

BART factor

score 1 for

analysis 13,

BART factor

score 1 for

analysis 10,

BART factor

score 1 for

analysis 17a

. Enter

a. All requested variables entered.

b. Dependent Variable: preference of online shopping


ANOVAb

Model Sum of Squares df Mean Square F Sig.

1 Regression 56.884 9 6.320 2.404 .049a

Residual 52.582 20 2.629

Total 109.467 29

a. Predictors: (Constant), BART factor score 1 for analysis 18, BART factor score 1 for

analysis 14, BART factor score 1 for analysis 11, BART factor score 1 for analysis 12, BART

factor score 1 for analysis 15, BART factor score 1 for analysis 16, BART factor score 1 for

analysis 13, BART factor score 1 for analysis 10, BART factor score 1 for analysis 17

b. Dependent Variable: preference of online shopping


Questionnaire

[The information provided by you in this survey will only be used for educational purpose. We assure you that the secrecy of your identity and information will be maintained strictly.]

Demographics:i) What is your age?

a) 15 – 20 years b) 21 – 25 years c) 26 – 30 years

d) Above 30 yearsii) What is your monthly income?

a) Less then 10000tk b) 10000 – 150000tk c) 16000 – 20000tk

d) More then 20000tk iii) In which area do you live?

Ans: …………………………………………………………………………………………………iv) What is your occupation?a) Student b) Service holder c) Housewifed) Businessmanv) Gender : Male/Female

Attitude towards online shopping:1. Have you ever shopped online??

a) Yes b) No

2. Which of these websites would you prefer for shopping online?a) Amazon.com b) alibaba.com c) e-bay.com d)

cellbazar.com

3. Why do you prefer this site?a) They have variety of products b) They have amazing discount offers

c) Shopping there is fun d) Their offers are convenient for me

4. Which one of these delivery times would you prefer?a) Within 1 day b) 2-3 days c) within 1 week d)

more then 1 week

5. For which type of product would you shop online?


a) Books & articles b) music c) accessories d) software

e) Others ……………………………. (Please mention)

6. Do you think shopping online is more useful than traditional shopping? a) Yes b) No

7. Do you know any Bangladeshi online shops? a) Yes b) No

8. If yes, name them: …………………………………......

9. Select your opinion upon importance of these factors.

Time

Stronglydisagree

Disagree

Somewhat disagree

Neutral Somewhat agree

agree Strongly agree

Shopping online takes less time

Choosing product takes less time

Making final order takes less time

Convenience

Strongly Disagree

Disagree

Somewhat disagre


agree Strongly agree


e

Online shops has huge variety of products

Payment method is easy

Free of caring money all the time

Products are available

A collection of special products are available

Online shopping eases physical stress

Customer Service

StronglyDisagree

Disagree

Somewhat Disagree


Agree Strongly Agree

After purchasing a product online shops provide good customer service

These websites have user friendly guideline about their product/site

They response very quickly to my complains

If there is any damage or the product is not performing accordingly


they take the product back, returning the money.

Security and Trust

StronglyAgree

Agree Somewhat agree

Neutral Somewhat disagree

Disagree Strongly disagree

The authority of the online shop is reliable

The security of my credit is in good hands here

They keep my identity a secret

They don’t disclose my data

Shopping experience

StronglyAgree

Agree Somewhat agree

Neutral Somewhat disagree

Disagree Strongly disagree

I enjoy the environment of the website

This website has exciting cool features

I can play games while browsing

I get to know new people through their forums


Price

StronglyDisagree

Disagree Somewhat Disagree

Neutral Somewhat Agree

agree Strongly Agree

Online shops offer low price as they don’t have to maintain physical (brick & mortar) shops

Online shops offer high price as their products are of high quality and they have to bear the transportation cost

They charge extra money for home delivery service

Advertisement

StronglyDisagree



Agree Strongly agree

Their advertisements are very attractive

Their advertisements provides detailed information about their servicesThey provide frequent advertisements


Their advertisements are available everywhere

Speed

StronglyDisagree




This website has very good browsing speed

They have a speedy ordering processI can search for variety of products very quicklyThe transaction happens in a matter of no time

Product delivery

StronglyDisagree

Disagree

Somewhat Disagree



They deliver products within scheduled time frameThey deliver the product as it was on the menuIf they are late they compensate for thatThe delivery man is a gentleman

10. How much you prefer to shop online?StronglyDisagree





11. Apart from these factors, what other factors are important for you while shopping online?Ans: ………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

Thank you for your kind co-operation.


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