CHAPTER II

RELATED LITERATURE

In this chapter, the researcher discusses the related literature and the studies that give insights in the
essential points of this study. This part deals with the previous related research findings and some
pertinent ideas:

Some literature have stated that it's easier than ever for young people to manage their money, stay
within a budget, and grow their money with smart investments. The explosion of online shopping
means that it's also become easier than ever to spend that money foolishly. This lively volume helps
teens to navigate the world of finances and shopping online with explanations about banking, credit,
mobile payment services, and how the comparison shop and check product reviews. Step-by-step
instructions, best practices, and advice on how to avoid scams and stay safe make this an invaluable
guide for teens in the fast-paced digital marketplace. (Managing Finances and Shopping Online
literature).

Online shopping is the process of purchasing goods directly from a seller without any intermediary, or
it can be referred to as the activity of buying and selling goods over the internet. Online shopping
deals provide the customer with a variety of products and services, wherein customers can compare
them with deals of other intermediaries also and choose one of the best deals for them (Sivanesan,
2017).

When people are about to purchase something, they would ask a question like this to themselves, “Is
the deal really better by buying online than buying from a physical store?” There is no correct or
wrong answer to that question. According to Cruz, Efren (2020), “One of the main benefits of buying a
product online is supposedly the lower prices brought on by transparent pricing among competitors
and in-depth product or service disclosures.” When buying a product online, most people do
something that is called “Price comparison.” Price comparison means comparing prices of the same
product from different sellers. But people can get overwhelmed by how much information they should
gather or have gathered, the different prices of the same product, and how expensive or cheap a
product can be, or how little information they have on the product. Fortunately for them, there are
ways for people to overcome the overwhelming feeling they have. According to Kim Jun Woo and Ha
Sung Ho (2014), “A good example is price comparison site (PCS), (also known as shopbots or
comparative shopping agents), providing online shoppers with opportunities to acquire a wide range
of information on various products.” With PCS, people can reduce the time and effort they need when
searching for products online. But every advantage has its disadvantage. As said by Kim Jun Woo
and Ha Sung Ho (2014), PCS sites are generally designed to focus mainly on the needs of “expert”
shoppers. Basically, it is not meant for everyone. Although there is a general search engine or bar to
search for any item but there are so many results that people would click each result shown to
reassure themselves and their money. That’s why they would just ask their close family and friends
for recommendations to avoid spending way too much time, effort, and money than they are
supposed to.
Online shopping has been prominent even before the CoVid-19 pandemic – it just was not used often
unlike today. But with the pandemic’s upsurge, some businesses were forced to shut down as they
were no longer making revenue. But other businesses improvised and innovated their marketing
strategies to continue running the business without having to come in contact with their customers
personally. Good examples are supermarkets and convenience stores, who created their own website
and/or used food delivery apps to continue delivering food items and various groceries to bring
satisfaction to their loyal and new customers and to continue making income in the midst of the
CoVid-19 pandemic. As said by Ali, Bayad Jamal (2020), the shift in buyer behavior has greatly
accelerated, prompting businesses to reach even their most loyal brick-and-mortar consumers in
digital space. Embracing the new technologies is not only advantageous for businesses to continue
being in contact with their customers, but also for people to keep up with the rising maturity of the
economy. According to Murphy, Chris B. (2021), the term brick-and-mortar refers to a traditional
street-side business that offers products and services to its customers face-to-face in an office or
store that the business owns or rents. Basically, it is a physical store where people have to visit
personally to browse and purchase items and/or services. But most brick-and-mortar businesses have
been at a great disadvantage even before the pandemic as they find it difficult to compete with web,
online, and mobile application-based businesses because the latter has lesser operating expenses,
greater flexibility, and a wide range of choices in products and services, and payment and delivery
methods. But they have been at a greater disadvantage at the first half of the beginning of the CoVid-
19 pandemic. Restrictive lockdown rules and social-distancing practices have severely disrupted
consumer behavior worldwide (Ali, 2020).

Focusing only on the Philippines, online shopping apps and food delivery apps, like Shopee and Food
Panda, have been immensely popular all over the country during the pandemic. Demands from
consumers increased greatly that some businesses run out of supply faster than they expected or
quicker than their past encounters. During the virtual launch of the Where You Shop Matters
partnership of Shopee Philippines with digital payments solution provider, Visa, back in 2020, Shopee
Philippines Associate Director, Martin Yu, “I wouldn’t say there was an outsized increase or imbalance
in increase in demand. Actually, it was nationwide that we saw an increased general usage of the
platform. And I think that’s (because) a lot of people (are) turning into the solution to find their basic
necessities and needs,” (Villanueva, 2020). Almost all things can now be bought just from a single tap
on the screen, even payments are now done through the screens of mobile phones. As Filipinos are
forced to stay at home because of the pandemic, they have increased their online activity. It was said
that the online shopping activity of Filipinos increased 57 percent (57%) in the first half of 2020,
compared to the first half of 2019. This was, by far, the biggest growth in Southeast Asia, according to
a report by an electronic commerce aggregator, surpassing the 51 percent (51%) online shopping
activity of Singapore (Nonato, 2020). The usage of Filipinos in online shopping apps on Android
phones alone garnered to a total number of sessions of 4.9 billion, by the second quarter of 2020.
According to iPrice Insights Map of E-Commerce in the Philippines, by the fourth quarter of 2021,
Shoppe has a number of seventy-seven million, nine hundred ten thousand (77,910,000) monthly web
visits, while Lazada has a number of forty-three million, seven hundred thirty-three thousand, three
hundred (43,733,300) monthly web visits. “It’s expected that e-Commerce players in countries that
underwent strict social distancing measures experienced growth in mobile app usage and/or
downloads, but it is still important to note the country’s hastened growth,” as said by iPrice. These
figures show that Philippines is now catching up to its Southeast Asian peers in terms of digital
adaptations, especially since e-Commerce and digital services were not as accessible in the country –
for iPrice that is. Since payments for online shopping are most of time contactless or not cash-on-
hand, cashless or digital payment usage and users increased.

According to Young, Julie (2021), the pros of cash-on-delivery are: 1.) The payment period is shorter
than with other payment methods, 2.) The method provides some protection from customers who
might fail to pay or pay late, 3.) Cash-on-delivery improves cash flow and budgeting, and, 4.)
Customers who do not have credit can buy products. Cash-on-delivery gives the consumers
additional time to fund the full payment. The cons of cash-on-delivery are 1.) Greater risk of delivery
refusal, 2.) Returning items can be costly for sellers who lack return infrastructure and support, 3.)
Buyers may find it difficult to return items that do not meet expectations.

According to Facebook’s Emerging Trends Research (2020), eight-seven percent (87%) of

respondents are willing to spend more for ease of access to products or services. About twelve
thousand five hundred (12,500) people across fourteen (14) countries were respondents of the
research for changes in consumer behavior in 2020. The Philippines was included in those countries.
Focusing only on Philippine-based respondents, ninety-three percent (93%) said they highly consider
convenience and price when deciding on what to purchase.

Online shopping – that glorious invention which allows people to buy things from the comfort of their
homes. No more travelling to multiple stores to find the right product; no more having to deal with
over-enthusiastic sales persons; no more standing in long lines at the checkout counter (Mittal; 2017).
Whether it would be groceries or just shopping in general, it is now made inside the close doors of the
house. But, like everything else, online shopping has its flaws. Despite all the efforts e-commerce
companies made to diminish those flaws, customers still face a few problems in shopping online.
Tarun Mittal of Your Story (2017) cited some of the few problems customers face when shopping
online. One (1) problem is digital payment failures (Mittal, 2017). Since people now have the options
to pay for their order before receiving them, or basically known as cashless payments, like credit or
debit cards, net-banking and/or mobile money transfer apps, there can be failures people face in
making online transaction. The first (1st) failure possible to happen, in the case of mobile apps, is
sudden maintenances or updates. For example, a customer transfers the money to pay for their total
order to the seller, then right after they press the transfer or proceed button, the app suddenly crashes
or stops working. The app notifies them that they are currently under maintenance to improve bugs or
add new updates. The customer panics, thinking that they lost their money and that they did not
successfully pay for their order. The customer then asks the seller if they received the money.

The seller tells the customer that they did not receive any payment. Despondency then shocks the
customer. Sudden app problems have made users disappointed, asking the developers or the app
company themselves to fix the problem as fast as they can. That is why some companies and
developers notify their users about scheduled maintenances, for their users to make transactions
before the scheduled date or wait until the maintenance ends before making a new or another
transaction. The second (2nd) problem can anger online shopping customers, and that is unclear
return and guarantee policies (Mittal, 2017). Since people do not have any idea of the product’s
quality or if the product they will receive is not the one they ordered, returning orders bought online
should be an option. If the customer bought the product from a well-known online shopping platform
or e-commerce website, then there should be a return-and-refund option. Unclear return and
guarantee policies can also affect a consumer’s final decision and put them in a dilemma. It can also
make them take the risk of spending money on something that has no guarantee of the product being
in tip-top shape. Most sites have vague return policies that can leave customers with a low-quality
product and no way to return it. The same applies for guarantees, as most sites do not clearly
mention what the policy is for a product and then refuse to carry out replacements if the customer
receives a damaged product (Mittal, 2017). The last problem Tarun Mittal (2017) cites if lack of
security. E-commerce sites and platforms records the important data of their customers like name,
email, phone number, address, and even bank details. If customers shop from any platform that does
not have a stringent security, their personal data is at risk, meaning their identity and their bank
details can be used by the wrong people to use it for their own benefit, or worse, to scam other people
and pin the person, whose identity was stolen, down as a “criminal”.

The crucial aspect for online merchants for building proper interaction with customers of both sexes
(men and women) is understanding HOW they make purchases online and WHAT do they prioritize in
their purchase (Monastyrskaya, 2019). There are differences in gadget usage between men and
women in shopping online. According to Dasha Monastryskaya (2019), forty-five percent (45%) of
men use smartphones or tablet for online shopping, while the percentage of smartphone or tablet
used for online shopping for women is only thirty-four (34%). On the other hand, the percentage gap
between men and women who uses laptops or PCs (personal computers) in shopping online is not
that wide – eight-two percent (82%) of women and eighty-five percent (85%) of men. Based on these
statistics, men prove to be more adapt to technology than women in online shopping. There are
always various things, whether positive or negative, that can affect one’s final decision in purchasing
online. In similar and different proportion, there are a list of things that matter to men and women,
equally and differently. For free shipping, it matters to both sexes equally by a percentage of sixty
percent (60%) (Monastyrskaya, 2019). Free shipping does save quite the amount of money people
spend on orders online, as most shipping fees differ, depending on the land distance between the
seller and the customer. Best bargain difference of both sexes is not that huge. Best bargain matters
to seventy-four percent (74%) of men and to seventy-seven (77%) percent of men (Monastyrskaya,
2019). Bargain, according to the Cambridge English Dictionary, is something on sale at a lower price
than its true value. A product of good quality with a reasonable or affordable price is called a bargain.
In applying for coupons or promo codes, women of thirty-four percent (34%) tend to care about it
more than twenty-six percent (26%) men. This is somewhat interlinked with free shipping as coupons
or promos codes (basically discounts) can save money as well. But there are some coupons and
promos codes that can only be used when the required minimum amount is reached. In studying
promotional emails, women are more curious so they open them more frequently. Fourteen percent
(14%) of women and only eight percent (8%) of men do this. Most promotional emails alert
subscribers or users when an upcoming event or sale is approaching, suggest subscribers of
products they might be interested in, and even give out special promo codes and coupons that only
the subscriber who received the email can use. Sending promotional emails is also a good marketing
strategy for businesses that can increase customers’ activity.

To wrap things up, online shopping is a great innovation that has helped people’s lives - like other
things and like humans, online shopping also has its flaws. E-commerce is growing every day and e-
commerce businesses are further innovating new ideas, fixing issues, and improving their business to
further give satisfaction and excellent shopping experience to their customers.
RELATED STUDY

This section is the compilation of studies which are related to the problem.

According to the study of Reyes (2016) online stores don’t just pose advantages for sellers. Their
main feature is being able to provide shoppers with a fun but convenient way to shop. Since they are
not bound by geography, they’re able to bring international brands and experiences within reach.

In the study of Tomlinson (2015) thee-commerce is becoming the ‘new normal’ in Southeast Asia, as
consumers in the region take to online shopping of the variety of goods and services available,
competitive pricing and improved delivery option make the whole process much easier.

According to Gomez (2016) similar to walking only a few steps to reach a sari-sari store, e-shopping
has given the Filipinos power to buy anything, from anywhere, at any time. While the nearest mall
may have already closed for the day, you can still browse through hundreds of items while lounging
on your sofa orbed.

According to Torres (2015) nearly nine out of 10 Filipino consumers do their shopping online, based
on a study commissioned by Visa International. The Visa eCommerce Consumer Monitor 2014 also
reveals that the top reasons for online shopping are convenience (58 percent), price (47percent), and
deals (46 percent).
A study of Zaper Kilic (2018) entitled “An Investigation of Online Shopping Habits of University
Students: Gaziantep Province Case”. After international and national studies on online shopping has
been examined, it has been seen that the large amount of studies has been conducted in terms of the
trust, satisfaction and loyalty of the customers with online shopping. When e-commerce studies in
the 15-34 age range in Turkey are examined, there is no detailed study based on payment,
gender, amounts of expenditure, focusing on the time and Internet shopping habits. In Turkey, the
number of Internet users reached 66 million and hence, the related potential for e-commerce, that is,
to shop from the online shopping web sites reveals the importance of this issue. The literacy
contribution of this study is to evaluate the purchasing behaviors of the customers whose age
range are between 15-34 and to reveal the Internet shopping habits of them.

Lester et al. (2005) have indicated that university students prefer online shopping because they are a
generation of technology enthusiasts from the moment they were born. As a result of the study, it was
reported that more than 95% of the university students used the Internet for shopping and
preferred purchasing via credit cards, mostly online shopping for banking services, concert tickets
and clothing.
Silku (2009) examined attitudes of communication faculty students towards Internet shopping. It
was found that the attitudes of students to shopping on the Internet are negative and this does not
depend on the departments, class, age, gender, monthly income, shopping frequency, Internet
usage situation.

Some studies have examined the use of online shopping in increasing the convenience, constant
access to products and promotions, and to enhanced customer service. Still, few studies have taken a
closer look at the role of money management in online shopping activities. As the online shopping has
grown into one of the latest methods of marketing in general, especially in purchasing something, it is
clearly linked to those that bring significant improvements to enhanced customer service. With the
capability to shop online in a hassle-free ways, it makes it easier for the people to get the most out of
money. That it's easier than ever for young people to manage their money, stay within a budget, and
grow their money with smart investments. The explosion of online shopping means that it's also
become easier than ever to spend that money foolishly. This lively volume helps teens to navigate the
world of finances and shopping online with explanations about banking, credit, mobile payment
services, and how the comparison shop and check product reviews. Step-by-step instructions, best
practices, and advice on how to avoid scams and stay safe make this an invaluable guide for teens in
the fast-paced digital marketplace. (Managing Finances and Shopping Online Case Study).

To promote online shoppers’ long-term interest, consumers need to have the knowledge and ability to
avoid problems with financial issues. Financial capability helps to put consumers on the path to a
sustainable financial future. However, previous studies only focused on financial capability in a
financial context. To handle personal finance systematically and successfully in an online setting, this
study extends an enhanced understanding of how financial capability on online consumers` behavior.
Moreover, the decision to purchase online is more prone for those individuals who manifest high
levels in digital banking usage, financial advice, prior bank experience and technology usage, and low
levels in attitude towards payment risk and attitude towards risk tolerance. This paper offers useful
insights concerning the determinants of online purchasing by combining individuals’ financial
capability, technology and social media usage along with its demographic characteristics. In term of
practical contribution, this study provides a useful model by incorporating for measuring and
managing consumers’ financial capability to enhance their involvement and to reduce their cognitive
dissonance in the online shopping context. This study also contributes to the accumulated knowledge
and encourages consumers to use digital banking and consult their financial issues when purchasing
online Cera et al. (2020).

On the other hand, Herna´ndez et al. (2011) reached at the end of their study, after become
experienced customers with online shopping have achieved similar results, regardless of their
age, gender and income level. Ayden and Demir (2011) pointed out that e-commerce consumers’
behaviors and preferences that those who are 26-35 years of age and have a Bachelor’s
Degree, whose income is 1500 Turkish Liras and above are more likely to prefer e-commerce.
In another study, they have conducted a research on the behavior of civil servants purchasing
products from the Internet. As a result of the research, it has been found out that customers who
have a high education level and have high income level are shopping more on the Internet.
The study also pointed out that the delay in the delivery of products and deceptive and
misleading advertisements were the major hindering factors for online buying. (Yayar &
Sadaklıoglu, 2012). Izgü and Sahin (2013) found out too, that consumers who prefer online
shopping were young adolescents and educated people. Also it has been reported that male
customers pay more importance to items such as plenty of options, comfort, convenience and price
advantage according to female ones. Armagan and Turan (2014) examined the effect of socio-
demographic factors on Internet shopping in their study. According to the research result, the
most important reasons not shopping online was stated as security concerns, the most frequently
purchased product is CD/DVD and the most used service is online banking. In another study
conducted by Aydogmuş et al. (2015), it has been seen that while the products bought on the
Internet are mainly composed of clothes, jewelry and home textiles for ladies, men are buying
computer, sporting goods, smart phones, flower and auto accessories and the age distributions
of the products bought are 20-21 age group, have concentrated attention on the draw. In addition, the
most preferred products are clothing, books, holidays and banking.

Researchers compared online transactions with their bricks-and-mortar equivalents and found the
typical household gained about $1,150 in terms of convenience and expanded choice by shopping
online in 2017, when the Internet accounted for about 8 percent of all consumer spending.(Dam,
2019)

Abrugar (2011) states that saving money wisely involves great virtues, such as patience, diligence,
self-control and even living in humility. To achieve money success, we should not only focus on the
figures and numbers, but also on the unseen things behind those numbers.
According to Vien (2015) that students do not receive much formal education on handling their
finances before college, the survey found. Only 17% said they learnedto budget in school, while 42%
learned to do so from their parents or other relatives, and37% taught themselves. Huary (2012) states
that it is important to curb your spending as you will need your money for more important things such
as school supplies, clothing andtext books. Rather than allowing your hard-earned money go to waste
on frivolous items, Watch your spending and use it on things that are essential to everyday living.

According to Kumok (2015) that you can’t budget without figuring out what you want to spend money
on. It’s easy to blow a week’s wages on going out to the movies and shopping at the mall. Instead of
doing that, make a list of things you want to buy. Next to each goal, write downhow much it will cost.
This will give you an idea of what your decisions really mean. Marquit (2017) states that the first step
to successful money management is understanding priorities. Practice determining the difference
between needs and wants. Before spending money on what you wish you had, you need to make
sure your necessities are covered. Kane (2014) states that the money you save today is money you
have to spend tomorrow, so make saving for the future a priority as soon as you can. That's because
no one is looking out for your money like you are. If you're lucky, your parents have kept an eye on
your money so far. But once you take control of it, you're the only one who always keeps your best
interest in mind. Cohen (2015) states that it is a great place to start building that work ethic and that
focus on money as something earned. Not something you're entitled to.

CONCEPTUAL FRAMEWORK

Figure 1 illustrate the conceptual artwork of the study. It shows that the independent variable is the
online shopping of the Grade 12 ABM students which is considered as the cause or predictor of the
study. The online shopping is connected to the dependent variable which is the money management
of the Grade 12 ABM students of New Society National School. The extraneous variable would be
confounded to take a look whether the age, gender, and academic strand of the students have
something to do with their online shopping and money management activities.

Dependent Variable Independent Variable

Money Management Online shopping

Extraneous

Age, gender, academic strand

HYPOTHESIS

The null hypothesis is tested at the 0.5 level of significance.

There is no significant difference between the online shopping and the money management on the
Grade 12-ABM Students of New Society National High School.
DEFINITION OF TERMS
Online shopping is defined as purchasing items from Internet retailers as opposed to a shop or
store. Online shopping is the online activity of the students where they purchase from the internet
from various platforms.

Money management refers on how you handle all of your financial matters.

Business may be an inclusive term but specifically designates the activities of those engaged in the
purchase or sale of commodities or in related financial transactions. Businesses specifically that are in
the online market where the students purchase, whether it would be from a website or a mobile app.

Online seller refers to a seller that is introducing/executing or selling her/his products via the internet.

Experience is a particular instance of personally encountering or undergoing something. It also refers

to the positive and negative experiences, and the satisfaction of the students who shop online.

Satisfaction refers to the fulfillment of one’s wishes, expectations, or needs, or the pleasure derived
from this. It also refers to the positive experiences of the respondents.