CHAPTER 2

REVIEW OF THE RELATED LITERATURE AND STUDY

This chapter presents the related literature and studies that aided the researcher in

summarizing and formulating the conceptual model of this study. The salient features of the

gathered information were realized through internet surfing.

Related Literatures

Covid-19 pandemic brought an increasing rate on the number of youth who are both internet

users and online shoppers. In the Philippines, local individuals ages 18 to 30 years old spends an

average of 4 hours and 15 minutes a day online, browsing on different application and websites

such as social medias and e-commerce platforms ( Katrina B. and Benedict L.,2021). As of year

2018, there is only 26% of online buyers who belonged to the age group of 18 to 24 years old

and about 52% are in the age group of 25 to 34 years old (Statista Research Department 2021).

However, in the beginning of the said health crisis, Filipino youth drive up online media usage

and e-commerce at a compound growth rate (CAGR) of 27% and 58% from 2019 to 2022

( Department of Trade and Industry, 2022). Covid-19 pandemic has further accelerated this

trend and it is expected that the rising of internet penetration will lead Philippines’ e-commerce

at 17% CAGR in the year 2025 (GlobalData, 2021).

According to Baclig (2021), an increase on the number of broadband subscribers was

shown on the reports of the Philippines’ biggest telecommunication companies. Year 2021,

Globe Telecom made an announcement telling that it’s total home broadband subscribers

reached over four million—81 percent higher than year 2020. PLDT also declared that it has 3.9

subscribers. Converge ICT Solutions Inc. also said that it’s residential subscribers doubled on
year 2020. The number of Converge users reached 1,038,000 million by December 2020 from

530,000 subscribers in 2019. Opensignal, an independent mobile analytics company, found that

more Filipinos spent more time on Wi-Fi networks last year amidst the Luzon enhanced

community quarantine. Additionally, Filipino pays an average of $53.71, or Php 2,582.25

monthly to connect on the internet, lower than the global average cost of $78.14 in 211 countries.

However, the UK-based technology website noted that the $53.71 average monthly cost for the

Philippines in 2020 is higher than it’s 2019 average of $39.29. Among Asean countries,

Philippines along with Laos had the most expensive fees per month next to Brunei.

According to Mahagis and Santus (2021), the enforcement of indoor directives on March

2020 in an attempt to restrain the Covid-19 transmission in the country resulted in the increase

on Filipino’s reliance on internet connection in search for information. A result from the

National Information and Communications Technology (ICT) Household Survey performed by

the Philippine Statistical Research and Training Institute (PSRTI) and the Philippine Statistics

Authority (PSA) found that in October 2020, about 17.7% of all residences in the country have

internet access.

Furthermore, iPrice group, an e-commerce firm stated that online shopping in the

Philippines has rapidly migrated from desktop computers to smartphones. The Malaysian firms

recent report entitled “ The State of Online Shoppers in SouthEast Asia 2021-2022,” found that

mobile purchases in the country are now more than two times higher than those on desktops. It

interpreted that five years ago, consumers were much more likely to buy online via their desktop

computers than using their mobile devices—times have change, and so the consumer’s

preferences. iPrice Group also pointed out about “hybrid browsing and buying patterns” where

online shoppers would look for products using their phones during their daily commute,
research more thoroughly on the products using their desktops at work and make the purchase

via their tablets at home. Additionally, the group also said that the rapid roll-out of mobile

broadband, and a wider and more affordable range of internet enabled devices have made it

easier for consumers to browse and buy online ( Cuyco, 2022; Cerezo, 2022 ).

According to Shivani Gupta (2021), Banking and Payments Senior Analyst at Global Data,

a strong growth was seen in online purchases of retail goods such as electronics and groceries

while sectors such as travel accomodation were affected due to lockdown and travel restrictions.

GlobalData’s Financial Services Consumer Survey for Online Purchase (2021) stated that

as Filipino consumers continue to embrace online shopping, it will also support the growth of

electronic payments. In the Philippines, alternative payment solution such as Gcash, PayMaya,

and Paypal are the most preferred e-payment method, collectively accounting 30.6% of total e-

commerce payments, followed by cash which has 29.8% share, while payment cards account

23.5%.

In addition, Dan Wolbert, Visa Country Manager for the Philippines and Guam said that

the Covid-19 pandemic has transformed how Filipinos shop and pay based on the Annual Visa

Consumer Study. It showed that more Filipinos are using digital commerce platforms and

accelerates the usage of digital payments in the country, wherein contactless payments had 66%

increase in usage amongst current e-commerce platform users due to the pandemic, and 88% of

Filipinos who had not used electronic payments stated interest in using this kind of payment

method in the future. Dam Wolbert also added that contactless payment will continue to grow as

Filipino appreciate its benefit which pertains to perceiving this method to be more hygienic due

to the absence of physical interaction (VISA 2021).

 In a statistics published by Statista (2021), as of May 2020, aside from contactless

payments, there are other reasons why people continue to purchase online during and after the

pandemic in the Philippines.

57% of Filipinos reason out that “ It is more convenient than going to physical store,”

49% for “ I had an overall positive experience with using the e-commerce sites and online

shopping”, 48% for “ I am still wary of contracting Covid-19 even if movement restrictions were

lifted, and want to limit my time outside the home”, 18% for “ It is much easier to find better

deals online than in pysical stores”, 11% for “ I foresee not having much time after the

restrictions are lifted due to work commitments , and 2% for others.

Philippines’ top e-commerce platforms are Shopee, Lazada, Zalora and BeautyMNL.

Products from Asia-Pacific markets with free trade agreements with the Philippines are sold on

these platforms ( International Trade Administration, 2022).

These online store platforms are examples of business-to-consumer e-commerce platform.

Business-to-consumer or B2C refers to commerce between a business and an individual

consumer. In recent year since the beginning of pandemic, the growth of B2C online sales has

created significant challenges for traditional “brick-and-mortar” businesses and services that are

using in-person sales to online competitors. As a result, brick-and-mortar business are

establishing their own online presence to stay competitive and it has created more opportunities

for consumers to order online (https://www.shopify.com.ph/encyclopedia/business -to-

consumerb2c).

According to a survey conducted by Rakuten Insight in the Philippines, 66 % of the

respondents purchased food and and grocery items online (including non-alcoholic beverages),
51% in personal hygiene products (including toilet paper, hand sanitizer, and masks), 34% on the

household cleaning products, 25% on clothing apparel and fashion accesories, 19% on

medications, 18% on cosmetics and beauty, 17% on consumer technology and electronics, 12%

on pet food and related supplies, another 12% on movies, music, and televison entertainment,

11% on toys, games and puzzles, 9% percent on furniture and household items and another 9%

on the hobby and arts and craft supplies, and 10% on other category of products from e-

commerce sites during the Covid-19 pandemic (Statista Research Department, 2021).

In line with this product being purchased, large number of Filipinos prefer online home

delivery of these items likely due to lockdowns or movement restriction order in the country

during the pandemic. 9 out of 10 Filipinos used home delivery and 67% of them increased their

use of pick-up delivery service in amidst of the health crisis (VISA 2021).

According to Brewster (2022), because of the changes of the consumer’s behavior, e-

commerce has continued to grow and there is an increasing growth of product online. When the

pandemic begin, many online shops almost have the same strategy to remain competitive. This

strategy is the offering of discounts on the product that are being offered on the internet.

Merriam Webster Dictionary (1828) defined discount as a deduction of price from the

usual cost of something. Discounts includes sales and vouchers. Sales is the period in which a

retailer sells goods at reduced prices (https://languages.oup.com/google-dictionary-en/) and

vouchers or “discount code” is the combination of numbers and letters, which usually describe

the offer of an online shop on a certain product (The Online Shopping Expert, 2022).

Discounts makes a customer to buy more (emu coupon, 2021). In a psychology behind

bulk buying, discounts are benefits that attracts customers in bulk purchasing. When buying
goods in bulk from wholesalers, customers have to pay an amount that is reduced after applying

vouchers. The more they buy, the larger discounts they will get (Sha, 2022).

A customer will most likely to buy a product if they see that the price has been discounted.

Normally, the customer is not concerned whether the discounted price tag is actually less than

the value of the product. The mere feeling that they are buying something at a bargain price is

enough to persuade them to place an order. This explains why an overwhelming majority of

consumers pay attention to discount (Spillane, 2016).

People are also deeply concerned about Covid-19 pandemic both from a health and

economic perspective. People are responding in a variety of ways and have differing attitudes,

behaviors and purchasing habits. Fear is running high as individuals contemplate what the crisis

means for them, but more significantly, what it means for their families and friends and societies

at large. Some feel anxious and worried fueling panic buying. E-commerce boost as new

consumers migrate to online buying—a rise that is likely to be sustained post-outbreak. The need

for the basic necessities of life takes precedence. 64% of individuals says that personal health is

their top priority followed by the health of friends and family. Food and medical security and

personal safety were other leading priorities (accenture, 2020).

Related Studies

LOCAL

According to Acuna et al. (2022) study on the impact of pandemic to the buying behavior

among the Filipino youth, it is found that many of the respondents prioritized buying necessities

over wants. It is also found on this study that because money was tight due to the lockdowns,

which caused the majority of Filipino to lose their jobs or stop working, they were careful with

their expenditures throughout the pandemic.

Acuna et al. (2022) study has a resemblance on the present study in terms of investigating

the impact of Covid-19 pandemic on the buying behavior of Filipino youth. However they are

different in a way that the previous study focus on the “ buying behavior” which means that the

previous study centralized the research on the buying behavior of youth on physical stores rather

than buying behavior towards online platforms, while the present study focus on “ online buying

behavior” which mainly focus on the use of internet in buying products rather than pysical stores.

Another difference is that Acuna et al. (2022) study used a youth participants ages 18-25 years

old who lives in Metro Manila, while the present study focused on youth ages 15-30 years old

who lives in Barangay Agojo, San Andres, Catanduanes. Lastly the previous study is qualitative

in nature while the present one is quantitative.

FOREIGN

According to Mina and Campos Jr. (2018) study on the consumers buying behavior, it is

found that the decision making of an individual mainly depends on what type of product he or

she wants to buy. This make the concepts of buying decisions connected to a persons choice of

purchase. Buying behavior states that people buy products and services not only because of their
main function but also for their perceived value for the situation that might solve the individual’s

problem.

Mina and Campos Jr. (2018) study has a resemblance to the present study as it both

investigates the buying behavior of individuals. In contrary, they are disimillar in a way that the

previous study mainly focus on the “buying behavior” only with no context of the pandemic and

the use of internet in purchasing a product.

According to Boutsouki (2019) study on the impulse behavior in economic crisis, it is

found that the planned and unplanned purchase behavior depends on the consumers’ financial

situation and consumers adopt unplanned or impulse purchase decisions when they go through

stressful situations. Hence, situations are associated with consumers’ well-being. People adopt

new purchasing practices because of the feeling of anxiety and fear about future changes in

consumption patterns which might affect their lives. Consumers who are not financially stable

and who have low income prefer to buy cheap products and only likely to buy necessary

products.

Boutsouki (2019) study has a resemblance to the present study in terms of investigating the

impact of Covid-19 pandemic on the online buying behavior. However they are disimillar in a

way that the previous study focuses on future changes in consumption while the present study

also focus on the future intent of individuals about online buying.

Acrding to Aggarwal and Kapoor (2020) study on the influence of Covid-19 pandemic on

the customer’s online buying behavior, it is found that another driver of online buying is that

shoppers do not want to go out to purchase things and waste their time. E-commerce retailers
provide the services of delivery of products and customers would likely to prefer buying online

in the coming years rather than buying on physical stores.

According to Adebayo, Osayinlusi, and Adekeye (2017) study on the impact of e-payment

system on buying behavior found that E-payment or the electronic payment system plays an

important role in buying behavior of retail outlet consumers as it helps to enhance customer

satisfaction by allowing greater facilities of global trade and commerce transaction.

Hossain et al (2018) study on the key factors influencing consumers intention, satisfaction

and loyalty towards online purchases appears to be similar to Adebayo, Osiyinlusi, and Adekey

(2017) study. It is found also that the most crucial element for customer’s online buying behavior

are security, trust, payment method and privacy. Customers are still worried about the security of

their data and information in this situation, especially their credit and debit card which are also at

risk of theft, so customers still prefer cash on delivery payments for safety.

Synthesis of the Related Literatures and Studies

 The following related literatures and study are linked together and are concisely

summarize. The concepts and ideas are break down into its important points so that the

researchers can draw useful conclusion about the problem of the present study being conducted.

Covid-19 health crisis leads youth ages 18 to 30 years old to spend a great amount of time

browsing on the internet (Katrina B. and Benedict L., 2021). On year 2018, there is only a small

percentage of online buyers who belonged to the age bracket of youth (Statista Research

Department, 2021). However, when Covid-19 pandemic begins, Filipino youth increase the

online media and e-commerce usage at a high percentage of compound growth rate (Department

of Trade and Industry, 2022) and it is expected to increase in the year 2025 ( GlobalData,2021).

A report from the country’s biggest telecommunications company such as Globe, PLDT,

Converge ICT Solutions Inc. and Opensignal shows an increase on the number of their

broadband subscribers in which it is found that more Filipinos spent more time on WiFi

networks on year 2021 because of the implemented quarantine. Additionally, Filipinos payed a

higher average monthly cost to connect on the internet on year 2020 higher than year 2019

( Baclig, 2021).

Seven months after the enforcement of indoor directives to prevent the spread of the

Covid-19 virus, an increase on the percentage of Filipino’s reliance on the internet in search for

information has been seen (Mahagis and Santus, 2021). Furthermore, migration from desktop to

smartphone use in online buying has also been noticed in the Philippines compared to five (5)

years ago before the pandemic. “ Hybrid browsing and buying patterns” is also pointed out

wherein it refers to the use of different devices in processing a product to be ordered.

Additionally, the rapid revolution of mobile broadband and range of internet devices that can
meet the expenses have made it much easy for customers to do online buying (Cuyco, 2022;

Cerezo, 2022).

As Filipino continue to take into account online buying, it will also help the increase of

percentage of electronic payments which is already higher than cash and payment cards

(GlobalData’s Financial Services Consumer Survey for Online Purchase (2021). In addition, Dan

Wilbert, Visa Country Manager for the Philippines and Guam said that contactless payment will

continue to grow since Filipinos are appreciating it’s benefits—pertaining to this method as

more hygienic due to the absence of physical contacts and Filipinos who had not use this kind of

payment before stated that they are interested to use this method in the future (VISA, 2021). E-

payment system helps satisfy a customer (Adebayo, Osayinlusi, and Adekeye, 2017) however,

security, trust, and privacy are the most crucial element in this kind of payment method. Thus,

there are still customers who still prefer to pay cash in time of delivery (Hossain et al. (2018).

Results from the survey conducted by Statista, that aside from contactless, 57% of

Filipinos reasoned out that online shopping is more convenient than going to physical store and

11% reasoned out that they prefer online shopping because they foresee not having much time

buying products in stores after the restrictions are lifted due to work commitments (Statista,

2021).

Top e-commerce platforms in the Philippines are Shoppee, Lazada, Zalora and

BeautyMNL ( International Trade and Administration, 2022). These are business-to-consumer e-

commerce platforms (https://www.shopify.com.ph/encyclopedia/business-to-consumerb2c).

A survey conducted by Rakuten Insight showed that 66% of the respondents purchased

food and grocery items online including non-alcoholic beverages while only 9% accounts on the
arts and craft supplies (Statista Research Department, 2021). Shivani Gupta (2021) stated that

while sectors such as travel accommodation were affected due to lockdowns, a strong growth

was also seen in online purchase of electronic products. A person’s choice of the product/s he/or

she wants to buy depends on it’s type, function, and perceived value that might solve his/her

problem (Mina and Campus Jr., 2018).

With this kind of product being purchased online, home delivery is being preferred by

Filipinos due to lockdown and movement restrictions (VISA, 2021).

The changes on costumer’s behavior leads to online shops offering discounts on the

products (Brewster, 2022), thus this make online buyers to purchase more (emu coupon, 2021).

In a psychology of bulk buying, customer perceive discounts as benefits and the more they buy

the larger discounts they will get (Sha, 2022). Spillaine (2016) stated that discounted price is

enough to persuade a customer to place an order. However, Boutsouki (2019) study findings,

showed that financial situation played a role in the planned and unplanned purchase behavior of

an individual. People who have low income prefer to buy product in low price and only likely to

purchase items necessary for the situation being faced.. People are careful with what they spend

because it is hard to get money—they do not have jobs due to lockdowns implemented by the

government ( Acuna et al.,2022).

From a health and economic perspective, people are also concern on how they will

formulate a variety of way in responding to their purchasing habits in times of the crisis.

Individuals says that their top priority is their personal health and safety, and medical security

followed by the health of their family (accenture, 2020).

Gap of the Related Literature Review and Study

In this section, the problem or question that has not been answered by any of the existing

literatures and studies is presented.

There are many published literatures that relates to the present research, and there are

many information given that connects to the study being conducted. And for the past years since

the beginning of the Covid-19 pandemic, there are a lot of defended studies in which tackles the

impact of the Corona virus health crisis on the online buying behavior. However, among these

studies, most of it mainly focuses on the general respondents rather than only using people

within a specific age group. Disimillar to the present study in which the center of the research are
the “youth” and it is pointed out that these individuals belong to the age bracket of 15-30 years

old.

The second gap of the present study to the previous ones is that all the previous studies

that have been published gathered by the researchers in which it has also been analyzed and

examined only investigates the impact of the Covid-19 pandemic (“during”) on the online buying

behavior. Wherein the present study considers investigating the prolonged effect of the patterns

acquired by the youth as they express their future intent towards online buying “after” the Covid-

19 pandemic.

Conceptual Framework

The conceptual model shown in Figure 1 looked at the independent and dependent

variables on the study entitled “ The Impact of Covid-19 Pandemic on the Online Buying

Behavior of The Youth in Barangay Agojo, San Andres, Catanduanes”. The independent

variable includes the “ The Impact of Covid-19 Pandemic on the Online Buying Behavior of the

Youth in Barangay Agojo, San Andres, Catanduanes” in terms: product, financial situation,

government restrictions, delivery method, payment method and lastly the future intent of the

youth towards online buying after the pandemic. On the other hand, the dependent variable refers
to “The Impact of Covid-19 Pandemic on the Online Buying Behavior of the Youth in Barangay

Agojo San Andres, Catanduanes”.

INDEPENDENT VARIABLE DEPENDENT VARIABLE

Impact of Covid-19 Pandemic on

the Online Buying Behavior of
the Youth in terms of:

a.) Internet connection Impact of Covid-19 Pandemic on

b.) Product
the Online Buying Behavior of
c.) Financial situation
d.) Government restrictions the Youth in terms of:
e.) Delivery method
f.) Payment method
g.) Discount
h.) Fear
i.) Future intent of the youth
towards online buying

Figure 1. Conceptual Paradigm