CHAPTER-2

LITERATURE REVIEW

For better understanding the factors of internet and consumer shopping behaviours towards
internet shopping, this chapter would provide academic research reviews and relative ideas
expressed in the literature that associate with this subject. In the following chapter, some point of
view will be taken from literatures and needs careful review to achieve them as the basis of the
subsequent research investigation.

2.1 Karim (2013) conducted a study on ‘Customer Satisfaction in Online Shopping’ from the
‘IOSR Journal of Business and Management’. With the growing and diverse Internet population,
people having diverse tastes and purposes are now going to the Web for information and to buy
products and services. The objectives of the study were to explore the reasons why despite
increase in internet users, online shopping has not been increasing and to finally put forward
some recommendations to the e-retailers in order to improve the current situation. The nature of
the research was descriptive. A survey was conducted in Wrexham area to collect primary data
by using questionnaire which contained 23 relevant questions regarding online shopping. A
simple random process had been used to collect data for this research. A quantitative analysis
was used to analyse the research data. The data had been analysed by using SPSS 11.5 software.
It had been found out that nearly 90% respondents use internet daily to buy products. Nearly half
of the total respondent’s opinions were that they would only use the internet to buy products
when the need arise to do so. It had been observed that Internet shopping was considered by
almost everyone (90%) to be convenient and nearly 92.5% respondents agreed that online
shopping is helpful to old and disable people. 50% respondents considered that product ordering
online was easy. The study suggested that online vendors can assure their consumers for
transaction security and avoid long delays in completing online orders and the hassle of returning
goods for better online shopping experience.

2.2 Alam, Bakar, Ismail, Ahsan (2008) conducted a study on ‘Young consumers online
shopping: an empirical study’ from the ‘journal of Internet Business’. Online shopping holds a
great potential for youth marketers. Another study by Sorce et al.(2005) found that younger
consumers searched for more products online and they were more likely to agree that online
shopping was more convenient. The objective of this study was to identify the key factors
influencing young Malaysians’ online shopping behaviour. By using a sample of 214 online
shoppers, four key dimensions of online shopping namely websites information content, design,
security and privacy were analysed. They concluded that security and privacy will have greater
impact on the purchase intent of online buyers. The research model showed the relationship
between the dependent and independent variables. Online shopping is the dependent variable in
the research. Meanwhile, the independent variables in this research were website design,
reliability, customer service and trust. Data for this study was gathered by primary data
collection method through consumer survey. A total of 550 respondents were approached but
only 496 were found to be usable for data analysis. In general, the majority of the respondents
were female (53.8 percent), more than half (60.9percent) were between the age of 17 and 21.
Chinese group was the highest contributors of the total respondents (48.0 percent) and the second
highest group is represented by Malays with (37.7 percent). The data for the study was gathered
through a structured questionnaire. To test the hypotheses of this study, regression and ANOVA
were used. In this study, it was found that few consumers were buying through online regularly,
although 72.4 percent of the respondents browsed the Internet every day.

2.3 Wang, Liu and Cheng (2008) conducted a study on ‘The Influencing Factors of Online
Shopping’ from the Journal of Information Sciences. This paper hopes to help relevant
enterprises to develop Internet marketing, effective analysis of consumer behaviour and design
targeted marketing programmers. Among ranked the world's top 500 companies, 95 percent
companies established their own website and 30 percent companies conducted online
commercial activities through their website. According to the past China Internet Network
Information Centre (CNNIC) report, there were about 30 percent people who had the experience
of online shopping. Now a sudden increase of 10 percent points to 40.7 percent which meant the
users of online shopping was more than 6500 million people. Although there were many people
who had experience of online shopping, the frequency of shopping was small, 60 percent online
shopper had one or two online shopping experience in one year of china. In online shopping
condition, culture, social, personal, psychological etc factors still had influencing role. However,
online shopping features made the relevant factors show the characteristics different from the
past. First, since the opening of the network, online transactions between consumers and retailers
faced various risks. Second, preserving privacy of online shopping was other important factors.
Third, consumer cognition was another important factor. Last, consumer computer and the
Internet experience also influenced online shopping. The restrictive factors of online shopping in
China found were risk perception of consumer and comprehensive quality of Internet users.

2.4 Chowdhury and Ahmad (2011) conducted a study on ‘factors affecting consumer
participation in online shopping in Malaysia’. Since the inception of the World Wide Web
(www) and user’s response to this technology, businesses ranging from small to large
corporations, including financial institutions have opened up opportunities for consumers to
purchase products online. The objectives of the paper are to identify key variables that affect
perceptions of trust for student’s intent to engage in online business and to examine which
factors have stronger influence on ecommerce participation. It was observed that ability,
benevolence, integrity, and trust encourage student participation in ecommerce. Since university
students have been found to be frequent users of technology and likely to buy products online,
they were chosen as the target sample. They used non-probability sampling to select respondents
since they did not know how many students have access to the internet and are engaged in online
shopping. Questionnaire was distributed to 260 students who have access to Internet and were
voluntarily recruited. Responses were obtained from 140 students (response rate 54%). The
dependent variable is participation and independent variables are trust, ability, benevolence, and
integrity. The main instrument in this study is the questionnaire to capture the information
relating to research objectives. The major focus of the study was to describe the relationship
between independent variables and dependent variable using Pearson’s correlation method. The
limitation of this study was that it only used four variables (ability, benevolence, integrity, and
trust) in explaining the consumer participation but did not take other important variables into
account (e.g., cost switching vendors and the presence of third party. The study provides a useful
insight on the significant role of trust in students for online shopping.

2.5 Wan, Nakayama and Sutcliffe (2007) conducted a study on ‘The Impact of Age, Search and
Experience in Online Shopping’ from the journal ‘Information Systems and eBusiness
Management’. Conventional wisdom is that teens and young adults have advantages in online
shopping because they are quick in learning and adapting to the new online shopping
environment. But several recent surveys indicate that this may not be the case. In this study, it
was asked if the subject had purchased the product from the Web or Main Street. Thus the
frequency of purchases and the ratio of purchases between online and Main Street was found out.
They used similar survey-based questionnaires. To avoid reinventing the wheel, they conducted a
comprehensive review of previous literature to identify trends of online and offline shopping.
They conducted a pilot study with the students from two Midwest and Southwest universities. A
modest amount of Amazon.com gift certificate was used as an incentive for participation. Those
responses that were incomplete or invalid were removed. Altogether this study received 549
valid completed questionnaires, 52.4% were male, and 47.6% were female. Thus it was found
that PC and Book as search goods have less rating than experience goods such as cell phone and
cars. Hierarchical multiple regression analysis models had been tested to examine the impact of
general factors like age and Web shopping experience. Web shopping experience peaks at 40-49
years of age group and then it declines. We find that age and Web shopping experience, and in
some cases, their interaction, have significant influence on online shoppers’ perception.