Research and Development Methodology

Literature Review
Thenmoly Radhakrishnan
25th of November 2004

A study of cultural behaviour in online retail shopping

1: Introduction

1.1: Background

World wide web have attracted the whole world. The internet exerts an increasingly
strong influence on people`s every day life. This influence change the people`s
shopping behaviour too. The growth of interest in the Internet created a path for this.
When conduct a business Internet is a powerful tool to capture consumers and market
segment. Without any doubt, online business is gaining popularity in the business
world. The U.S department of commerce found the online sales $3.2 billion in1997
and $300 billion by the end of 2002 as more companies went online to conduct
business over the Internet. While online business is expanding at a high growth rate,
the important issue is how to attract the customers from all over the world. The fact is
that online consumers are people from different countries and different cultures, they
tend to have distinct behaviour. Combinations of the different consumers and the
online business lead to an interesting point to make researches, as the same time it will
be a good idea to catch different customers from different countries through the online
business.

When do search in this field “trust in the net” is crossing every where. Consumers
may feel more comfortable to do shopping in the shopping mall than do online
shopping.This is because there is the “fear of being left behind” of their personal
information. As the number of computer crimes keeps increasing everyday. People
become more concerned about the threats to security of their personal information.
The consumers are losing the confidence to give personal information to web sites. In
order to fulfil this title I want to search the “trust and security” part more and more.

1.2:Research Objective

The objective of this study is to analyse how the different cultural behaviour influence
in online retail shopping and in what way it is going to differ in various cultures.

2: Over view of the Field

2.1:The Importance of Online shopping

Since the invention of Internet, the possibilities with regard to the distribution of
goods and /or services have changed substantially. Firms are able to offer
goods/services not only through traditional channels, but also in an online virtual
store. According to Ernst and Young`s Annual Global Online retailing Report (2001),
online shopping will represent 10 to12 percent of all sales in apparel, health, and
beauty, and as much as 25percent of all sales for books, music, software, and
consumer electronics by 2005. Furthermore, the Internet makes an unlimited range of
products and services accessible for consumers all around the world (quelch and
Klein, 1996). Subsequently, people can buy or sell virtually anything, at anytime,
from anywhere, through online shopping. For this reason, Samiee, (2001) declared the
Internet to be “one of the most significant, and perhaps the greatest, marketing tools
for the global market place.” Also as I mentioned in the introduction the U.S
department of commerce found the online sales is nearly $300 billion in 2002.
2.2:Culture Differences
Culture is a term with multidimensional interpretations. According to Hofstede
(1991), the term defined as “the collective mental programming of the mind which
distinguishes the members of one group or category of people from another §n.” In
other words, the individual members of a group share certain ideas, values ,acts, or
emotions with other members of the group. When people believe that a human is
basically good, they tend to have high-trust society. In international marketing, culture
is considered one of the most influential factors that affect the online purchasing.
Therefore , an understanding of the reasons why members of different cultures differ
in online shopping behaviour should be considered the rapid globalization brought by
Internet.

2.3:Risk and Fear of Online Shopping

Using the web is one way of keeping shopping time to a minimum but online
shopping is a relatively new type of shopping method, significant changes must occur
in order to encourage more consumers to shop online. For this to happen, consumers
must recognise that they could obtain a better deal from online shopping than from
traditional shopping channels (Keeney, 1999). According to Alba et al. (1997), there
are four positive factors that affect consumers' decisions to shop online: vast selection,
screening, reliability, and product comparisons. First, people can buy virtually
anything via the Internet just by typing in what they want. Second, most online
shopping sites classify their listings into categories, sub categories, and even sub-sub
categories to facilitate browsing and screening a large number of options (Hunt,
1999). Third, since the Internet is regarded widely as an interactive communication
medium, the ratings and reputations of a certain online retailers are publicly visible to
consumers. Finally, online shopping allows consumers to compare numerous
alternatives and substitute products under a certain category, thereby encouraging
greater price competition even for goods in limited supply (Rowley, 2000). In addition
to the four factors, there is also the convenience factor in that people can shop at any
time with no hassle and little interruption of other activities. Consequently, it is
evident that online shopping is a more innovative, convenient way of shopping than
traditional shopping channels (Szymanski and Hise, 2000). Risk and Fear are enemies
for the online shopping. People consider about security of their personal information
when doing online shopping. As the number of computer crimes keeps increasing
everyday. People become more concerned about the threats to security of their
personal information. The consumers are losing the confidence to give personal
information to web sites.

3: Relevant Researches

Even though almost all previous studies talk about the transaction cost in online
purchasing, I could get much information about the basic structure of the Internet
users, Internet security, online shopping lovers, Internet non shoppers, and categories
of risk when doing online shopping from these previous studies. Some of the related
papers are following here.

1.Enticing online shoppers to buy- A human behaviour study, Alice Richmond:

COMPUTERNETWORKS and ISDN SYSTEMS-1996

The reasons most frequently given for shopping online “to save time” and
“convenience.” There are other reasons; can buy goods and services from all over the
world and it appears a way of show the forwardness to the society. But in practice it is
a cheaper way too. When think about the negative reasons; most frequently cited as
“lack of selection”, “concern about quality” and “concern about security.”, also Credit
card availability and it`s miss use and delivery delay, shipping charges are part of
negative side. He found that that “Convenience and time saving” are the specific
reasons to do online shopping even though the shoppers spent considerably more time
in the shopping mall. Concluded that, online purchasing is a multi-sensory prospect,
dramatically different in response than a print catalogue.

2.Impact of cultural differences on Privacy and security Concerns of Internet Users,

Jiriya Rattanapongpaisan: M.Sc. Thesis in accounting, Swedish School of Economics
and Business Administration, 2001
Jiriya Rattanapongpaisan clearly illustrated the Internet users such as Electronic
messaging, Browsing and trading transactions, also computer security attributes,
behaviour of human and basic outline of different society. I can collect the
information of culture influence on privacy and security concern from her studies,
she found that the cultures seem to have a certain impact on Internet consumer
attributes, the cultural influences are not strong enough to perfectly describe the
online consumer behaviour. She guesses a possible reason may be because of the
globalization of the Internet.

3:Cross –Cultural differences in perceived risk of online shopping, Hanjun Ko,

Jaemin Jung, Joo Yong Kim and Sung Wook Shim: Journal of Interactive
Advertising, Volume 4, Number 2, Spring 2004

There are numerous factors that still make consumers uncertain about online
shopping. Since online shopping incorporates many characteristics of non-store
shopping, it is natural that online shopping shares some of the perceived risk of non-
store shopping. For instance, the Internet , just like any type of non-store shopping,
makes it difficult to examine physical goods; consumers must rely upon somewhat
limited information and pictures shown on the computer screen. Moreover, there is
bound to be much uncertainty regarding system security, reliability, standards, and
some communication protocols. All these factors increase the perceived risk of online
shopping so that more than half of Internet users still have not made an online
purchases.

4: Conclusion

The use of the World Wide Web to showcase consumer products for purchase online
offers many advantages for a retailer in today`s global economy. But business users
do not often make personal online purchase. They mainly use the Internet for business
purposes and look at the Internet in terms of what it can do for their professional life.
Fearful browsers are often practice “Internet Window Shopping.” They do not buy
online for the moment since they distrust the security on the Internet, dislike shipping
charges and are reluctant buying things without seeing them in person. Shopping
avoiders will be difficult to turn into online shoppers. Fun seekers value the
entertainment of the Internet but are afraid of buying online. Furthermore, they have a
relatively low education and income level leaving them not much spending power.
The

reasons most frequently given for shopping online “to save time” and convenience
in themselves do not appear to be strong enough to over come the negatives of
online shopping, most frequently cited as “lack of selection”, “concern about
quality” and “concern about security”. These are differ in people due to their
lifestyle and other social structure, I shall provide how it is going to differ and
influence, from my empirical research later. Still 50 percent of the people are
Internet non shoppers who are Internet users with no online shopping. Risk and
Fear are enemies for the online shopping. The consumers prefer to pay money later
than receiving goods or services, if it happens in practice the online shopping will
get the market segment.

References

1: Enticing online shoppers to buy- A human behaviour study, Alice Richmond:

COMPUTER NETWORKS and ISDN SYSTEMS-1996

2: Online shopping, The Spider`s web

3: Interfaces with other disciplines Predicting online purchasing behaviour; Drik Van
den Poel, Wouter buckinx , from European journal of operational research- 2004
4: Impact of cultural differences on Privacy and security Concerns of Internet Users,
Jiriya Rattanapongpaisan: M.Sc. Thesis in accounting, Swedish School of Economics
and Business Administration- 2001

5: Cross –Cultural differences in perceived risk of online shopping, Hanjun Ko,

Jaemin Jung, Joo Yong Kim and Sung Wook Shim: Journal of Interactive
Advertising- Volume 4, Number 2, Spring 2004

6: Privacy and Security – The Drivers for Growth of E-commerce, Stephen Hinde:
Computers and Security-1998

7: Segmenting Internet shoppers based on their Web-usage-related lifestyle: a cross

cultural validation, Malaika Brengman, Maggie Geuens, Bert Weijters, Scott M.
Smith, William R. Swinyard: Journal of Business research 58 (2005) 79-88

8: Next generation agent-enabled comparison shopping, Soe-Tsyr Yaun, A. Lie:

Expert Systems with Application-2000

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