Factors of the Thai Consumers Decision on Online Shopping - Dissertation Example

? THAI ONLINE SHOPPING DECISIONS 0 Introduction 1 Background information The invention and application ofinternet in shopping has particularly been pointed as a great revolution in trade and shopping (Singsangob, 2005, p. 1-2; Hsu and Bayarsaikhan, 2012, p. 167). Specifically, internet has been used in among other means the aid to trade and shopping. From the ‘Nielsen Global Consumer Report June 2010’, online trading practices has had a great influence on shopping for goods and services (The Nielsen Company, 2010, p. 2). Customers are seen as kings in their own accord as their behaviors in purchases are dependent on the treatment given by sellers. Moreover customers preferences and needs influence the suppliers production practices in that suppliers would not supply the goods that have lower reception within the market and thus customers say proves supreme. The supremacy of the consumers is not only explained through the fact that it is through the ‘consumer’ that the producers remain in business and make their gains. As a king is special in how he is to be handled, a customers in a like manner requires proper treatment in order to sustain them. Online customers require treating well through good treatment in order to retain them for their own benefits or that of the suppliers. Despite the emergence and embrace of online trading avenues as discussed above, there are ongoing debates concerning the effectiveness of online practices as compared to the physical retail trade. The supporters of physical shopping reason that shopping from physical outlets is easy and entails little logistics as compared to the internet buying. Online shopping or trade is highly acknowledged from the spheres of debate that it provides a customer with an opportunity to access easily and exchange notes on various products in order to make informed decisions. Besides, time and resources are saved over the internet as one would access the items from the comfort of own office. Cultural orientation, proficiency in internet use as well as institutional frameworks would best explain the factors that influence personal decision to engage in online trade. This paper focuses critically on reasons and factors that influence the people of Thailand to engage in online trade through special attention on influencing factors such as level of literacy, awareness campaigns, cultural values as well as government policies. Besides, the experience in using online shopping means by the Thai people would be instrumental in influencing the current as well as future tendencies in shopping from internet. For instance, fast moving beauty products for the women or female genders may record better reception as compared to other products for the opposite gender. Much of the past studies that have addressed the topic of online shopping and factors that influence the decisions have confined much attention to the risks perceived while engaging in online purchasing habits. Emphases have been that the risks as identified all over the world go a long way in influencing the decisions as well as behaviors of consumers through online purchasing. However, a new dimension of looking to the online shopping is through considering the benefits that come with the practice. The world has increasingly been embracing technological advancement especially concerning internet use through diversified platforms such as through computer systems as well as through mobile telephones. This in effect has been claimed to have influence on perceptions of individuals concerning online business transactions. This study therefore focuses on and considers main factors of consumers’ decision on online shopping as regards to the people of Thailand. It will show the problem for applying the result to solve problem with Thailand’s online shopping system for improvement and development in the future. However, the question that will guide our study is ‘what influence factors affect the Thai consumers’ decision on online shopping?’Through evaluation of the UK and Thailand online shopping practices, the study will be in a position to understand what basic factors work to support or discourage the practice of shopping through the internet as opposed to the physical shopping. The study utilizes the personal experiences as revealed by customers within UK and Thailand to understand what favors the shopping method or what discourages when using the method for consumer goods and services. 2.0Literature review 2.1Introduction Thailand has had tremendous impact in commerce and trade frameworks over ages with the current era pointing out to the most dynamic time in history of the country and commerce. Notable changes that have characterized the business environment in the country are the use of internet for normal business transactions as well as for auction purposes (Laosethakul, 2005, p. 1; Sophastienphong, nd, p. 19-25 of 43). People of all age groups as well as races have adopted the business niche as presented by the internet and technology advancement to exploit the best of the commerce world (Mannisto, 1999, p.2 of 13; Nejadirani et al, 2011, p. 756). More notable factor is in the adoption of internet as a means to advertise and communicate between the buyers and the sellers. This have had great success within the United Kingdom and much can be borrowed from the country to other developing countries such as Thailand (Anon, 2007, p. 1). Moreover, the existence of online stores have greatly reduced the essence of middlemen in commercial transaction as the existence of the virtual stores allow direct engagement of customers and the sellers by just a click of a mouse. Many factors are at play in defining the preference of people to adopt the method of trade as against the traditional physical store method. In particular, this section of study intends to evaluate the existing literature on the use of internet for shopping in consumer goods as well as services. Various studies have been carried out to ascertain the factors and effects of these factors in controlling the tendencies of people in participation g in the online shopping mechanisms. However, the factors vary in effect where some of the factors are influential in changing the perceptions of the people, the attitude as well as their intentions in participation in trade over the internet. This stage of the study analyzes various case studies that have been conducted in the boast in almost similar themes to this and analyze their findings. Through their finding, the study will identify the gap that exists between the past studies and the status and thus confirm the place of this study in contributing to the overall theme. 2.2 Trust in online shopping Trust is a basic concern in consideration of decisions taken regarding adoption of internet shopping in Thailand.Prompongsatorn and team undertook a research study concerning the factors that are responsible in influencing Thai people’s trust in use of internet for shopping in consumer goods as well as services. The study undertook a qualitative analysis of data from questionnaires through which the researchers formed three models of evaluation. The researchers adopted favorable models in analysis and interpretation of the results of the SPSS program through which trust in internet usage was found to be a component of reputation, security, ease of use, usefulness as well as integrity. The models as used were ‘the role of culture in e-commerce as used for Egyptian consumers’, ‘model of trust in internet shopping’ and ‘the role of trust in customer online-using behavior’ (Prompongsatorn et al, 2012, p. 736-745). The study had a conclusion that integrity, privacy, security, perception of reputation, usefulness and ease of use has a direct implication to the trust of Thai people in matters of internet use for consumer shopping. Therefore, the study recommended that increasing the trust of Thai people in internet use would increase the tendency of involvement in shopping through the online method in Thailand. From the study, the perceived reputation of internet shopping method directly influences the shopping habits. The security in terms of personal information as well as security for financial transactions in online shopping contributes to building customer satisfaction in the method. Privacy in internet shopping refers to disclosure of customer’s information to unintended persons while the trust revolves around the efficiency with which the services are rendered, which equally influence the internet shopping practices of the Thai people. In the event that the online businesses have well programmed websites, customers enjoy using it hence positively affecting the online shopping practices of consumer goods and services. The integrity in matters of online shopping is interpreted in matters of reasonable prices as well as the combat of fraud practices in the shopping process. The study therefore emphasized the need for the internet service providers and the sellers to be in forefront in creating good will for the target consumers through ensuring that such factors as security and privacy of the customers is guaranteed. Positive attitude ascertained through consumer security and secrecy positively influences the tendencies of individual citizens to engage in shopping consumer goods as well as services from the internet (Hirst andAshwin, 2009, p.185). 2.3 Consumer rights and security Individual consumer rights as well as privacy have played a critical part in influencing attitudes of potential consumers of products especially within the online shopping method. In particular, Pukawan carried out a study that was meant to evaluate the preferences and attitudes of online users with a special attention to Thailand and her privacy rights. The tools applied within the study were questionnaires which investigated three main phenomenon namely the ease at which people take the disclosure of their profiles online, the role of government in regulating online crime in the country as well as actual existence of cybercrime within the online shopping. Sign test procedure of statistical analysis was employed to carry out the tests and analysis of the data as was collected through the questionnaires. The analyzed data revealed that there is a typical deep-rooted attitude within the Thai people concerning their privacy and security in online involvement. These findings therefore confirmed the research thesis in speculating that consumer rights and privacy are influential in determining consumer’s decisions and intentions to engage in online shopping activities. Moreover, the findings of the study were instrumental in providing the framework through which legislations on online regulation should be based. Other beneficiaries of the study would be regulators in telecommunications sectors, policy makers in Thailand and the general cyber space users in the country as the privacy and own right to safeguard personal information is paramount. However, from theliterature reviewed by the study, the legal framework of the country regarding cyber space is properly framed. Nevertheless, the security rights of individuals in Thailand have not kept pace with the advancement of technology as is experienced and thus the mounting concern. Human dignity, rights and security have not been at its best especially concerning cyber space and technological advancement (Pukawan, 2007, 1-14; Kelly, 2007, p. 15-16). The Thai people are therefore cautious about their personal data and are hesitant to reveal it on online transactions and this would explain their deep-rootedattitudes that they have over online shopping. However, any move to assure them of privacy and secrecy in handling of their information by the regulatory bodies would boost their perceptions about online shopping. For instance, UK has made great strides in addressing the issue of customer rights and this confirms their security within the consumer legal frameworks within the country (Anon, 2002-2011, p. 1-5). However, the concern on security and privacy in online trade has not only been restricted to commodity business but has also taken shapein service industry as is the case with internet banking (Rotchanakitumnuai and Speece, 2004, p.270; Zheng, 2006, p. 92-94) 2.4 Attitude and online shopping Marketing of health foods and products have become very dynamic in the world due to the high competition arising from the many practitioners and because of dynamics in marketing procedures. In particular, purchases of the health food and products rely heavily on the marketing strategies adopted as well as the ease of access as distinguished by the online shopping stores as compared to the normal physical stores that we are used to. Leelayouthayotin studied the factors that influence online purchase intention within Thailand with a special attention on health food consumption. There have emerged virtual businesses stores online through which persons can now easily do their consumption purchase for goods and services. Based on identified research gaps that existed between the findings of factors influencing people decision to shop online, this study concentrated on the factors that either encourage or discourage consumers intentions to purchase from the online especially health products. For the sake of speed and ease of cost, the study employed the use of online survey tools to collectdata, which used mailed self-administered questionnaires. The PCA (product and company attribute) as well as PR (perceived risk), perceived usefulness and ease of use as well as customer experience were the outcome of the study which revealed the influence on encouraging or discouraging online shopping for health products Thailand. The study faced the challenges of multi responses from target groups, lack of much of previous studies to rely on and the concern of external validity as the data was collected through self-administered questionnaires (2004, p. 1-236). The findings from the analysis confirmed that the tendency of people to engage in purchasing health products through online depended on the experience that consumers have in using the internet. Moreover, the attitude and the perceived usefulness of these products influence their choice of the more specific method of buying through online shopping. Other attributes that held correlation between the online business and the individual consumers were the reputation of both the product as well as the products in analysis. Furthermore, good reputation of a product increases its attraction to customers and as such would be influential in decision making by consumers in using the internet as a method of purchasing (Zhou et al, 2007, p. 56; Limthongchai and Speece, nd, p. 1582). The TPB (theory of planned behavior) reveals that the attitude of a potential customer together with the subjective norm as perceived through the behavioral norms usually influence the customer’s eventual behavior as regards purchasing. Therefore, the theory is an applicable tool in determining the behaviors of a group of people towards buying; in this case the online shopping. Laohapensang carried out a study in exploration of the actual factors that influence the shopping practices by people through online methods in Thailand. The study relied on information gathered through questionnaires surveys that were designed to ask participants what played the major role in influencing their decisions regarding adopting the shopping practices through internet. The target groups used within the study were 400 students from public universities in the country. The analysis of the data as collected showed that the intention of using the internet for shopping is influenced largely by the difficulty perceived in utilizing the system. Attitude is equally seen to have a role to play in influencing the personal intentions to shop through the online methods (Laohapensang, 2009, p.501-510). When consumers perceive internet usage as tedious or problematic, then thetendency to use the method of commerce is lowered. The study found that the intention to use internet for purchasing consumer goods as well as services had much relation to the ease of use of the technology. Moreover, the attitude of individual consumers determines the intention to use internet as a way of shopping. Attitude is however, a resultant of many factors that influence the way an individual perceives things and therefore, when the wrong attitude towards online shopping is the case, then there is a likely hood of reduced engagement in use of the method of shopping. On the other hand, when the attitude to buying through the online method is positive, then the practice is widely used by the individuals. This therefore shows that personal attitudes directly determine the intention of use of online methods to shop which is a direct factor that is at play within the country influencing the choices by citizens to shop through internet. 2.5 Culture and online business Mobile telephony among other products hasreceived a high support in online purchasing practices all over the world (Stibo Systems, 2012, p. 2; Anon, 2012, p. 35).Companies that manufacture and distribute mobile phones have slowly adopted the wide market segment that is continuously being created by online internet users to market and improve their products. Mobile telephone has become basic in the era of technological revolution as experienced in communication sector. Moreover, mobile phones have become very instrumental in internet surfing which increases the implication of online businesses to the online businesses. However, various factors are directly responsible in influencing the mobile telephone purchasing either online or even through the physical methods of purchasing. Monthathip and team under took a research survey to compare Thailand and British purchases of mobile telephones.Moreover, the study investigated the role that culture plays in influencing the purchasing habits of phones (Monthathip et al 2009, p. 1-13; Laosethakul and Boulton, 2007, p. 1). The study therefore focused on implication of difference in national culture between the two countries; Thailand as well as British. The study followed an empirical framework that followed the concepts of the dimension of individualism byHofstede versus Schwartzs’ Collectivism and Power Distance among others. Data collected through questionnaires via sampling methods was statistically evaluated, and deductions of the implications by the outcomes made. A significant difference was noted between Thai and British consumption and purchase of mobile phones due to the variations in culture as noted concerning the Hofstede’s power distance theorems and the Schwartzs collectivism. The variations noted in the consumer behavior between the two countries regarding purchasing and using telephones had the sole interpretation of varying cultural orientations. Among the recommendations, mobile telephone manufacturing and selling firms cannot afford to ignore the influence of cultural backgrounds as regards to mobile phone services. 2.6 Intentions in online shopping In addition to norms, the attitudes of people as well as trust towards the services offered online are critical issues that influence and dictate the decisions that a particular segment of people takes regarding the internet shopping. In the study of ‘factors that influence online shopping behavior intention’, Thananuraksakul carried out a study on the Thai consumers. The Internet or online shopping is a relatively new phenomenonincommercechannel, which entails engaging in business (buying and selling of goods and services) through the internet. It therefore implies that there is no involvement of physical markets while the negotiations and sale takes place via the internet. In this particular study, the theory of planned behavior forms the framework upon which the study is based, while the framework of the study revolved around examining the intentions of the Thai people’s behavior and intentions in practicing online shopping. It was also instrumental to surveying the reasons that support the people of Thailand in using the internet for shopping of consumer goods and services. The research study focused on a target group of Thai adults aged twenty-five years and above and who were working as they were presumed to form the major bulk of internet users. The method, which was used to collect data, was through administered questionnaires. One way ANOVA (analysisi of variance) and the multiple regression methods of analysis were adopted for analyzing the collected data. The findings revealed that among other factors that influence the online shopping behavioral intentions, the positive attitude stands out. The study concluded that the rise in online shopping for consumer goods and services is because of the positive attitude as established. Nevertheless, the study encountered shortcomings, which included possible bias in data collection, as people would engage others as they filled in the questionnaires as well as time constraint (Thananuraksakul , 2005, p. 41-45). 2.7 Personal perceptions and online shopping Business on online sales has drastically taken shape in the global market; these new dimensions are characterizing the modern global commerce at the advent of technological advance as noted. Great pools of both consumers as well as suppliers have characteristically ventured into the business niche in the recent past and continue to have a mark even currently. There are however, basic factors that influence personal intentions and decisions to engage in shopping through online auction or websites. In 2011, Nanchaya carried out a study regarding the factors that are instrumental in shopping from the online auctions and websites. The study specifically targeted to understand the effect of quality of information systems as used, the availability of information and quality, the prices set and the overall quality of online services as received by the consumers in Thailand.Multiple regression analysis as well as PCC (Pearson’s Correlation Coefficient) analysiswasperformed on the data to test the hypothesis designed. Quality of online information was found to positively influence the intention of consumers to purchase through online auctions and websites. The quality as well as the price of the productson sale equally had a positive correlation to the intention of persons engaging in shopping through online means. The study thereforeconcluded that the overall perception by consumers about the quality of information available online, the quality of the products as well as the prices for the products actually influence the intentions of people to engage in shopping through online mechanisms in Thailand. However, the most significant factor as was seen to influence the online auction purchases in the price (2011, p. 1). Just as with the rational demand function, lower the prices attracts more customers to a product while high prices discourage potential customers from adopting the system of business. 2.8 Personal altruistic values and the environmental effect on online shopping Another aspect that has been experienced over time is the effect of word of mouth in influencing decisions made by customers. Over time, the (WOM) word of mouth has had great impact in influencing perceptions and intentions of persons to engage in shopping activities. The attitudes of people as attributed to influencing the shopping activities of the people are shown to be influenced by the word of mouth. However, little research studies have been done in the field of impacts of the WOM towards influencing personal intentions to participate in shopping form online outlets. Nevertheless, such a study was carried out by Chaiwongkachon(2008, p. 1-7)to ascertain the effect of online behavior by youths in Thailand as concerns the effect of word of mouth; the teens in Thailand characterize a growing population who are very active in online activities hence the choice as target group. The study set out to investigate both the intrinsic as well as the environmental factors at play in influencing the decisions by the teens to engage in online activities not limited to shopping consumer good as well as services. Altruistic motivational factorswere seen to be the main driving force for the teens to engage in discussions through WOM while seeking advice. However, the outcome of the study lacked any correlation between the effect of WOM and the attitudes and intention to engage in purchasing from online outlet. Intrinsic factors such as curiosity in exploration had many youths engage in online shopping activities while advertisements formed the environmental factors that influenced the attitude as well as the intention of the Thai youths to participate in online shopping. However, the study faced challenges such as the problem of generalization through using an age gap of six years. It would be argued that the attitudes of the youths were influenced by age factor and as such, generalization of such a big gap would be erroneous. On the other hand, biasness would be noted as data is collected through online surveys and as such would compromise the authority of the data as analyzed. However, the outcome of the study would have great implicationstowards the future trends in advertisementfavor online shopping targeting the youthsas well as other generational gaps. The external factors that affect the online shopping behaviors are the factors that affect the behavior and attitude of the consumers as regards the practices of shopping through internet (Li and Zang, 2002, p. 510). 2.9 Personal online shopping experience In a study by Jaturavith on the impact of the penetration and in diffusion internet use within the consumer dimension in relation to the influence to decision making by Thai people. The study was framed to better reveal the adoption of internet as a medium for purchasing consumer goods as well as services and the acceptance level of internet use within the new technology niche. The study affirmed that the duration of experience in internet use among the Thai persons had a direct relationship to the adoption and embrace of the technology in purchasing practices. The study therefore showed that the more that the persons were exposed to internet use; the more likely they were to appreciate the technology use for shopping on consumer goods or services. However, the perceived risks in the practice revealed a negative effect on the adoption of the practice of shopping through online means among the people of the country. Moreover, consumer characteristics and innovation proved to have direct relationship with the tendency of people to adopt and acknowledge online shopping practices. Nevertheless, as the study found out, the perception of people who had engaged in online shopping varied with majority reasoning that the procedures are quite complicated and hence had little to acknowledge on the usefulness of online shopping medium (2007, p. 5-6 of 24; Walters et al, 2005,p. 242). 3.0 Conclusion In sum, it is therefore clear that the subject of online shopping in Thai land has been studied in breadth, through experiments and through analysis of existing literature. However, there remains much more to be studied in the theme of factors that are influential to the decision-making by individual citizens of Thailand concerning engaging in shopping consumer goods and the services over the internet. Trust has been portrayed to play a central role in influencing the perceptions of Thai people about online shopping of consumer goods as well as services. Security and privacy have also been studied in the past and results showed to have a positive effect in influencing the attitudes of persons in matters of engaging in online transactions (Limthongchai and Speece, nd, p. 1582). Where security and privacy is ascertained, there is higher tendency of engaging on the online businesses. Cultural factors and attitudes within a society influence the spending and consumption practices of a people as revealed from the above studies. Disparities are noted in purchasing tendencies of different countries expressing different cultural affiliations as have been revealed by the study between Thailand and British and the UK- China study which also confirmed the influence of online business by perceived security, attitudes and experience among others (Zheng, 2006, p. 92-94). The quality of information available on online as well as the quality of purchased products influences the attitude and decisions made by consumers. 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