Influencing Consumer Purchase Decisions: A Comprehensive Study of Live Streaming

and Sales Promotion among Z Generation Users on the Shopee App in Jakarta
Rezki Kiki Fatimah 1 Dwiki Setiawan 2

ABSTRACT
The rapid growth of online shopping, particularly among Generation Z consumers in
Indonesia, has been accompanied by the emergence of live streaming commerce. This study
explores the influence of live streaming and sales promotion on the purchasing decisions of
Generation Z in Jakarta, focusing on Shopee, a prominent e-commerce platform. Utilizing a
quantitative research approach through a survey, the study aims to fill gaps in existing
literature, specifically addressing the distinct purchasing behavior of Generation Z.
Methodology of this research employs a quantitative approach, using logistic regression
to analyze primary data gathered through a survey of Generation Z individuals in Jakarta.
The findings indicate that live streaming does not have a significant impact on purchase
decisions on Shopee, while sales promotion significantly influences these decisions.
However, when considered together, live streaming and sales promotion collectively exhibit
a significant effect on purchase decisions. The insights derived from this study offer valuable
implications for e-commerce practitioners seeking to enhance their platforms and optimize
sales promotion strategies for the Generation Z consumer segment.
Keywords : Live streaming, sales, e-commerce, shopee, purchase decision
1. INTRODUCTION
According to the Populix survey, up to 54% of Indonesians opted to shop online, with
Gen Z making up the majority of these consumers. Social media is a tool that Generation Z
uses to connect with their favorite brands, research products, and find inspiration. However,
with the rapid development of technology live streaming is the method to connect with their
favorite brands The streamer in live streaming shows various details of his or her products to
consumers by means of strategic explanations, such as try-ons. When watching live
streaming, consumers can interact with the streamer, sales promotion, and grab cash .

The use of live streaming for online shopping has increased with the advancement of
mobile communication technology, giving rise to a new type of social commerce called live-
streaming commerce. Shopee received 158 million visits in Q1 2023 and 167 million visits in
Q2 2023, according to data compiled by SimilarWeb. In the meantime, 107.2 million users
visited Tokopedia in Q2 2023 after 117 million users in Q1 of 2023.According to the
findings of the Opinion Poll (JakPat) survey, 83.7% of Indonesians have used the online
shopping feature that allows for live broadcasting, also known as "live shopping." With
83.4% of all users on Shopee, live shoppers are the most numerous in Indonesia. TikTok,
with a percentage of 42.2%, comes in second. Next, 34.1% of participants claimed to have
done live shopping on Instagram.

Katadata.com , 2022

Some academics describe consumer behavioral responses in live-streaming commerce

using the term engagement. Few studies have examined on impact of live streaming and sales
promotion on Z generation. Moreover, purchasing behavior of millennials and Gen Z are
distinct. To fill these gaps, we concern at the influence of live streaming and sales
promotions on purchases by Gen Z in Jakarta.
2. LITERATURE REVIEW AND DEVELOPMENT OF HYPOTHESES

2.1 E-commerce

E-commerce, short for Electronic Commerce, refers to transactions

encompassing diverse business activities conducted via internet-based network
media. It encompasses the distribution, sales, purchasing, marketing, and service of
products within an electronic system on the internet or through other computer
network forms (Sari, 2022). An alternative description of e-commerce is a vibrant
combination of economic aspects, applications, and business procedures that link
consumers, companies, and communities in specific manners through electronic
transactions. It involves the electronic trading of goods, services, and information
(Riswandi, 2019). E-commerce, within this legal framework, can be defined as the
conduct of purchasing and selling goods or services utilizing internet facilities
(Khristianto et al., 2015). The evolution of E-commerce in the digital realm has
transformed it into a platform where individuals engage in economic and business
endeavors. According to Geng et al., (2020), individuals aged 18 to 25, commonly
known as Generation Z, are anticipated to be the primary contributors to the
percentage of E-commerce transactions in the year 2022.

The utilization of E-commerce is anticipated to yield advantages in

navigating the competitive landscape of today's global business environment. The
adoption of E-commerce represents an application of technological advancements for
marketing products across various locations and segments, encompassing both
physical and digital formats (Warnadi, 2019).

2.2. Live Shopping Shopee

Live streaming pertains to the real-time transmission of audio and video content
over the internet. This technology enables users to broadcast events, activities, or
performances as they unfold, providing viewers with the opportunity to observe and
engage with the content in the moment. Live streaming encompasses a wide range of
subjects, including gaming, entertainment, news, educational sessions, product
demonstrations, or live events like concerts and sports matches (Li et al., 2022).
Through features like live chat or comments, this platform facilitates immediate
interaction between content creators or hosts and their audience, creating a more
dynamic and participatory experience in comparison to pre-recorded content. Live
streaming is also the real-time transmission of audio and video content over the
internet, providing viewers with the sensation of directly participating in the event. It
serves as a crucial promotional and conversion tool, influencing purchasing decisions
and enhancing customer interaction by creating immersive experiences (Kurniawan
& Sartika, 2023).
Shopee's live streaming feature is utilized by sellers or brands to showcase their
products or services directly to the audience, primarily aimed at boosting sales. In the
contemporary landscape, numerous e-commerce and social media platforms have
embraced the "shop live streaming" feature, enabling viewers to observe products,
inquire directly about product details from broadcasters, and make immediate
 purchases during live broadcasts. The decision-making process in Shopee live
streaming is shaped by various factors, including live product demonstrations, direct
interactions, promotions, discounts, reviews, testimonials, product availability and
time constraints, product quality, and brand reputation (Prihatiningsih et al., 2023).
Shopee live streaming offers a distinctive interactive experience, allowing viewers to
engage directly with the showcased products or services. By establishing a platform
for viewers to pose questions, preview, and make direct purchases during live
broadcasts, this approach aims to enhance viewer engagement and directly impact
purchasing choices. Live streaming frequently provides viewers with a real-time
experience, influencing purchasing decisions through immediate interactions and
more comprehensive product presentations (Karame et al., 2023).

2.3 Sales Promotion

Sales promotion stands as a distinct facet of marketing communication with the

objective of conveying the company's message to consumers, thereby cultivating their
interest in purchasing products and services (P. Kotler et al., 2021). Prior literature
characterizes promotion as a marketing program centered on action, wherein the
brand's primary objective is to sway consumers, encouraging them to make favorable
purchasing decisions or engage in product trials (Hanaysha, 2018). In an alternative
scholarly context, Hanaysha, (2018) elucidates that the central purpose of promotion
is to captivate consumer attention, furnish information about the company's products
or services, and exert an influence on their buying choices. Sales promotion is also
characterized as endeavors that offer supplementary advantages to customers,
motivating them to respond promptly, typically occurring within specified time
frames, at particular locations, or among specific customer segments (Liang et al.,
2017).
Sales promotion can be categorically classified into two primary types: consumer
sales promotions and trade sales promotions. In the context of consumer sales
promotion, incentives are directly extended to customers, aiming to stimulate their
product purchases (Dubey, 2014). This approach aligns with a pull strategy, enticing
customers to actively seek out selling points to acquire the promoted product.
Research findings indicate that a substantial proportion of company sales is
influenced by the implementation of sales promotions (Avila et al., 2021). There exist
five indicators of sales promotion, as delineated by Philip Kotler & Keller, (2016),
which are outlined below:
a. Promotion frequency represents the count of sales promotions executed by a
company within a specified period through sales promotion channels.
b. Promotion quality serves as a gauge of the effectiveness with which a sales
promotion is implemented.
c. Promotion quantity pertains to the value or quantity of sales promotions provided
to consumers.
d. Promotion time denotes the duration for which the promotion is conducted by the
company.
2.4. Purchasing Decision

Purchasing decisions encompass determining what to buy, whether to make a

purchase, the timing of the purchase, the choice of the purchase location, and the
preferred payment method (Kotler & Armstrong, 2018). Decision-making constitutes
a form of psychological construction, signifying that although the decision itself is
not directly observable, inferences can be drawn from observable behaviors, allowing
the deduction that a psychological "decision-making" event has transpired. This
involves attaching a meaningful commitment to action based on observable
behaviors, assuming that individuals have committed to taking a specific action. The
consumer's cognitive processes have been metaphorically described as a black box,
elucidating the interplay among stimuli, consumer traits, decision-making processes,
and consumer responses (Kotler & Armstrong, 2018). The assumptions of a perfectly
rational economist are frequently deemed unrealistic, as consumers are influenced by
emotional and non-rational considerations that render attempts at complete rationality
only partially successful.
Marketing scholars have formulated a "five-stage model" of the purchasing
decision process, consisting of Problem Definition, Information Search, Alternative
Evaluation, Purchase Decision, and Post-Purchase Behavior (Kotler & Keller, 2016).
These five stages serve as a framework for assessing the consumer purchasing
decision process. Although many consumers progress through these stages in a linear
sequence, certain stages, such as the evaluation of alternatives, may occur at various
points within the purchasing decision. The allocation of time and effort to each stage
is contingent upon factors such as perceived risk and consumer motivation.

2.5. Hypothesis Development

In developing a hypothesis for this research, it is necessary to take into account

several key factors that form the basis of the study. Firstly, the main focus of this
research lies in the need to understand the relationship between certain variables
considered to have a significant impact on the research results. Several previous
research findings indicate an interesting relationship between these variables, but
further research is still needed to test and confirm the sustainability and depth of this
relationship. Additionally, the research literature identifies knowledge gaps that need
to be filled, providing a solid foundation for formulating testable hypotheses to make
a valuable contribution.

1. Live Shopping Shopee and Purchase Decision

Live-streaming activities conducted by sellers on the Shopee platform can
influence consumer purchasing decisions, leading them to engage in buying
activities. The Purchase Decision is the intricate process of evaluating and
selecting from multiple available alternatives, ultimately culminating in the
decision to make a purchase or abstain from it. For consumers to make informed
decisions, a variety of choices must be accessible to them. The decision-making
process involved in making a purchase necessitates the acquisition and
assimilation of diverse information (Widyastuti et al., 2020). As per Kurniawan &
Sartika, (2023), live streaming videos exert a favorable influence on consumer
 purchasing decisions. This phenomenon occurs due to the inherent advantage in
live streaming video marketing, wherein marketers can directly elucidate intricate
details or provide comprehensive descriptions of their products.
H1: Live Streaming has positive influence towards purchase decision Gen Z
on Shopee App
2. Sales Promotion and Purchase Decision
Sales promotion holds a crucial position in contemporary business
marketing. It encompasses tactics designed to enhance sales within a limited
timeframe (Avila et al., 2021). Multiple studies corroborate the divergent
outcomes concerning the impact of sales promotion on purchasing decisions. For
instance, Gorji & Siami's (2020) research asserts that sales promotion
significantly affects consumer purchase decisions. Conversely, Hanaysha's (2018)
study contends that sales promotion lacks a positive influence on consumer
purchase decisions. Given the disparate findings from these various studies,
researchers express interest in reevaluating these variables.
H2: Sales Promotion has positive influence towards purchase decision Gen Z
on Shopee App

Framework of Research
Live Streaming (X1) H1

Purchasing
Decision (Y)
Sales Promotion (X2)

H2

3. RESEARCH METHOD

This type of research is quantitative, researching data in the form of facts about Live
streaming and sales to purchasing decisions obtained based on a survey with primary data in the
form of distributing questionnaires. The size of the sample in this study was determined by
purposive sampling technique where Z generation will be selected according to the
characteristics to be studied in this study. The criteria or requirements in determining the sample
are as follows:
1. Respondents are Z Generation because this study will focus on Z Generation behavior.
2. Z generations which were born in 1997 to 2012 or respondents are 11 to 27 years old and
living in Jakarta, Indonesia.

Due to the unknown population size, in determining the target sample using the Roscoe rule. for
which sample sizes larger than 30 and less than 500 are appropriate for most research.
N Variable Definition
Table 3.1:of Variable Definition of Indicator
Operational Variables Scale
O

1 Live Streaming Live-streaming activities Strongly agree : 5 Ordinal

(X1) conducted by sellers on the Shopee
platform can influence consumer Agree ; 4
purchasing decisions, leading them
to engage in buying activities Simply Agree : 3

Don't agree : 2

Strongly Disagree: 1

2 Sales Promotion Sales promotion holds a crucial Strongly agree : 5 Ordinal

(X2) position in contemporary business
marketing. It encompasses tactics Agree ; 4
designed to enhance sales within a
limited timeframe (Avila et al., Simply Agree : 3
2021).
Don't agree : 2

Strongly Disagree: 1

3 Purchasing Y=1 If choosing to purchase Nominal

Decision (Y) more than 3 times

Y=0 If choosing to purchase

This research uses logistic regression or logit model. The logistic regression model is a non-
linear regression model that produces an equation where the dependent variable is categorical.
The most basic categories of the model produce binary values such as the numbers 0 and 1. The
resulting numbers represent a certain category resulting from calculating the probability of the
occurrence of that category. The basic form of probability in the logit model can be explained in
the following table.
Logit Model Probability Table
Yi Probability
0 1-Pi
1 Pi
Total 1
Logit regression is the log of the odds ratio or likelihood ratio which is expressed by the
transformation of the logarithmic function. The general equation for the logit (L) model is as
follows:
In (Pi/(1-Pi)) = 0+ 1X1+ 1X2+...+ tXt
Where p represents an opportunity or probability of an event and (1-p) is the probability of not
happening. So in this study has a model, namely:
Y = In (Pi/(1-Pi)) = 0+ 1LS+ 1SP
Information :

Y : Choice of Purchasing Decision form

0 : Constant

LS : Live Streaming

SP : Sales Promotion

4. RESULT
4.2 Instrument Test
Validity Test
A validity test is a test carried out to measure the validity of a research tool or instrument
used to obtain data in a study. The level of validity can be determined by looking at the
correlation coefficient (r) between the item scores and the total score.
Covariance Analysis: Ordinary
Date: 01/23/24 Time: 22:41
Sample: 1 31
Included observations: 31

Correlation
Probability X1 X2 Y
X1 1.000000
-----

X2 0.555309 1.000000
0.0012 -----

Y 0.359290 0.482253 1.000000

0.0471 0.0060 -----

In the table it can be seen that all question indicators in variables X and Y are valid
because 0.047 is <0.05 and 0.0060 is <0.05.

4.3 Hypothesis test

a. Assessing the Feasibility of Regression Models

The feasibility of the regression model was assessed using Hosmer and
Lemeshow's Goodness of Fit Test. Hosmer and Lemeshow's Goodness of Fit Test tests
the null hypothesis that the empirical data fits or fits the model (there is no difference
between the model and the data so the model can be said to be fit).

Table 4.5 Hosmer and Lemeshow Test Results

 Prob Value. H-L. (Hosmer-Lemeshom) of 0.6456 (>0.05) then it can be
concluded that the model used is appropriate or the model is declared Fit

b. . Results of Logistic Regression Analysis (Simultaneous Test)

Hypothesis testing using a logistic regression model with the enter method with a
significance level (α) of 10%.

Table 4.6 Binary Logit Test Result

Dependent Variable: Y
Method: ML - Binary Logit (Newton-Raphson / Marquardt steps)
Date: 01/23/24 Time: 19:06
Sample: 1 31
Included observations: 31
Convergence achieved after 6 iterations
Coefficient covariance computed using observed Hessian

Variable Coefficient Std. Error z-Statistic Prob.

C -16.49017 8.994975 -1.833264 0.0668

X1 0.328660 0.459880 0.714665 0.4748
X2 0.705776 0.427495 1.650957 0.0987

McFadden R-squared 0.358572 Mean dependent var 0.870968

S.D. dependent var 0.340777 S.E. of regression 0.280008
Akaike info criterion 0.686861 Sum squared resid 2.195327
Schwarz criterion 0.825634 Log likelihood -7.646353
Hannan-Quinn criter. 0.732098 Deviance 15.29271
Restr. deviance 23.84166 Restr. log likelihood -11.92083
LR statistic 8.548956 Avg. log likelihood -0.246657
Prob(LR statistic) 0.013919

Obs with Dep=0 4 Total obs 31

Obs with Dep=1 27

Variable X1 has a Z-Statistic value of 0.714665 with a Prob value. (Significance)

is 0.4748 (>0.10), so it can be concluded that Variable X1 (Live Streaming) has no
significant effect on Variable Y (purchasing decision).
 Variable X2 has a Z-Statistic value of 1.650957 with a Prob value. (Significance)
is 0.0987 (>0.10) so it can be concluded that Variable X2 (Sales Promotion) has a
significant influence on variable Y (Purchasing Decision).

Probability (L.R statistic) score is 0.013919 (<0.10) so it can be drawn the conclusion that
variables X1 & X2 have a significant effect on variable Y simultaneously. The McFadden R-
Squared value is 0.358572, which means that the contribution of the influence of variables X1 &
X2 to Variable Y is 35.8%.

Logistic Regression Equation:

-16.49017 + 0.328660X1 + 0.75776X2

a. The constant value obtained is -16.49017 so it can be interpreted that if the independent
variable increases by one unit on average, then the dependent variable will also decrease
by -16.49017.
b. The Regression Coefficient value for Variable X1 has a positive (+) value of 0.328660,
then it can be interpreted that if variable X1 increases then Variable Y will increase by
0.328660, and vice versa.
c. The Regression Coefficient Value of Variable X2 has a positive (+) value of 0.75776,
then it can be interpreted that if variable X2 increases then Variable Y also increases by
0.75776, and vice versa
4.4 The Influence of Live Streaming on Purchasing Decisions

It can be inferred that Variable X1 (live streaming) has no discernible impact on Variable Y
(purchasing decision) based on its Z-Statistic value of 0.714665 and Prob value (significance) of
0.4748 (>0.10). However, given that the Probability (L.R statistic) score is 0.013919 (<0.10), it
is possible to conclude that Variables X1(Live Streaming) and X2(Sales Promotion) significantly
affect Variable Y simultaneously.The findings of the prevouse study demonstrated that live
streaming (X1), brand awareness (X2), web design (X3), and brand image (X4) all have a
positive simultaneous impact on purchasing decisions (Y) (Lestari,2021).

4.5 The Influence of Sales Promotion on Purchasing Decisions

Z-Statistic value 1.650957 and Prob value are associated with variable X2. Given that
(Significance) is 0.0987 (>0.10), it can be said that variable X2, or sales promotion,
significantly affects variable Y, or purchasing decision. Sales promotion is a tool used by
companies to increase the level of sales of a product and create increased purchases repeat or
create loyalty (Nelviluvita & Oktavianti (2019). Variable Sales Promotion has a Z-Statistic
value of 1.650957 with a Prob value. (Significance) is 0.0987 (<0.10) so it can be concluded
that Variable X2 (Sales Promotion) has a significant influence on variable Y (Purchasing
Decision). According to the results of the prevous studies, there is a positive influence
between word of mouth and sales promotion on purchasing decisions (Budiman &
Erdiansyah, 2021). The results of this study indicate that advertising, sales promotion, and
brand image have a positive effect on repurchase intention in Shopee (Shihab et al 2022), .
CONCLUSION

It can be concluded that Variable X1 (Live Streaming) has no significant effect on

Variable Y (purchasing decision).Variable X2, or sales promotion, significantly affects variable
Y, or purchasing decision.However, Variables X1(Live Streaming) and X2(Sales Promotion)
significantly affect Variable Y simultaneously. Since live streaming did not influence on the
decision to purchase Shopee e-commerce, e-commerce parties can be more successful in
enhancing the features already present on the Shopee application and increase Sales Promotion
effectively.

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