The Online Shopping In Malaysia Marketing Essay

Whether we like it or not, the Internet and World Wide Web are increasingly becoming important in Malaysian life. Online shopping may be a novel trend in Malaysia but it is fast catching up among Internet users due to rising Internet penetration. Besides, online shopping avoids with the crowd and it’s easier to compare prices of comparable products online, which translates into better savings (Leong and Lee 2009).

As for the Internet penetration in Malaysia, 356.8 % growth is seen for the period of 2000-2009. Thereby, for instance, in 2000 it was accounted 3,700,000 subscribes, or just 15% of the population. In 2005 the amount of subscribers doubled and reached 26,500,699, 37.9 %. Currently, over 60% of Malaysians can use Internet connection actively, with almost 17 million subscribers accounted. (eCommerce Journal 2009).

According to the Nielsen Company 2007 research, online travel is a favourite e-commerce activity for Malaysians, with 55% of Internet users buying airline tickets or made flight reservations online, while 41% said they had made hotel or tour reservations online and 22% computer hardware. 21% purchased book and 18% tickets to concerts and events. (eCommerce Journal 2009).

A significant part of purchasing has moved to the Internet. But Malaysia is still in the infancy stage when it comes to online retail, which makes e-commerce still relatively weak in Malaysia. According to comScore (2009), the online retail (or dubbed as total online spending in the retail industry) in Malaysia is lowest compared to many other countries. The list (in Asia) goes: 1) Japan, 2) South Korea, 3) Australia, 4) Taiwan, 5) Singapore, 6) New Zealand, 7) Hong Kong, 8) China, 9) Vietnam, 10) Philippines, 11) India, 12) Indonesia, and 13) MALAYSIA.

Next, the growth of Internet usage in Malaysia has been steadily growing but a far smaller percentage has actually made purchases online. According to comScore (2009), Entertainment is most popular category in Asia Pacific (includes Music, Movie, TV, Multimedia, Entertainment News, and Humor) and Email is still very important to Internet user. Therefore, visiting to retail sites is weak in Malaysia.

Besides, Malaysian online retailers face the challenges with Internet users who still like to see and hold products before buying, and who have the same concerns about security issues as well as after-sales service. Is it the impact of factors attributed to large Internet users but not many shop online. Therefore this research study will contribute meaningfully to this area of research.

(b) Rational of Study

The Internet is no longer a niche technology. It is mass media and an utterly integral part of modern life. A major appeal for setting up online businesses is that it’s convenient, easy to do and cheaper (no rental fee, to state the obvious). (Leong and Lee 2009).

The economic downturn has turned up the pressure on Malaysian companies, it is imperative to find new customers for their products and services for declining sales and financial constraints. Extending their marketing and advertising reach by venturing into e-commerce is a logical move. (Laalitha 2009).

E-commerce in retailing has enormous potential. An organization can reach such a large number of consumers via e-commerce; it is possible to develop the business that could be profitable. The continued success for online retailers will depend for the willingness of consumer to make purchase online in the view of online shopping is still relatively weak among Malaysian.

Therefore this study is clear identifying consumer attitudes toward online shopping in order to help sales and marketing department to identify the potentiality of online shopping and evaluate the future growth of e-commerce that useful for the local companies in Malaysia to have a good understanding of the dynamic online markets before to venture into online retailing.

Although research predict growing internet users in Malaysia and online shopping has many distinct opportunities and advantages, but the question lingers: Why do internet users avoid online shopping? Therefore this research study will contribute meaningfully to this area of research.

(c) Objective of the Study

Objectives

The objective of this study is to examine the online shopping in Malaysia. For this purpose, three specific scopes will be examined, that is:

To identify the characteristics of online shopping in Malaysia

To identify Malaysian Internet users’ attitudes towards online shopping

To identify why Internet users do not shop online.

Hypotheses:

Hypotheses developed for this study are:

H1: There is no relationship between internet usage and buying via internet.

H2: There is no relationship between online shopping and demographic variables.

H3: There is no relationship between online shopping and the traditional shopping.

H4: There is no significant correlation between future online purchase variables and current issues and areas of concern variables.

Research Questions:

This research has aimed to explore the following questions:

Why do internet users avoid online shopping?

(d) Research Methodology

A self-administered questionnaire will be used to collect the necessary research questions and objectives pertaining to online shopping in Malaysia. The questions are mostly present in close-ended style with well-structured questions. The survey questionnaire consists of seven distinct sections, each of which contains questions pertaining to different parts of the study.

Due to time and cost constraints and also large population of Internet users in Malaysia, therefore it is more appropriate to conduct the research by using a convenience sampling method will be used to collect data mainly from the current Internet users at Klang Valley which is indicated highest penetration of Internet users. Indeed, sampling method has limitations in terms of generalisation if compared to other method of sampling, but it is assumed that the sample represent the whole population of Internet users in Malaysia.

The survey will be conducted through the combination method: face to face interviews, email and postage questionnaires. Each of the method has its uses and none is superior in all situations due to email and postage questionnaires save both time and cost and can cover a wide geographical area which supplemented by personal interviews will yield more reliable results than either method alone.

Once the primary data collected, several of statistical techniques will be used in the data analysis. Frequency Distribution Analysis will be used to determine a demographic profile of the survey respondents and the current internet users of online shopping. Besides, the frequency distribution analysis will also be used to determine method of payment, level of satisfaction and dissatisfaction, issue and area of concerns, reasons for shop and do not shop online. (Adeline et al. 2006).

Chi-square Test in Cross-tab will be used to determine the relationship between online shopping and other conventional methods of shopping such as shopping via physical stores. The Independent Samples t-test will be adopted to compare mean differences between online shoppers and non-online shoppers. Finally Pearson Correlation Coefficient Matrix will be employed to determine the degree of correlation between future online purchases and issue of concern for current Internet users. (Adeline et al. 2006).

(e) Expected Contribution from the study

This study is clear realizing consumer attitudes toward online shopping in order to help management, the industry and government to predict the online shopping trend and evaluate the future growth of online commerce.

Besides, online retail has enormous potential. Thus, this study is important for the small and medium enterprise (SEMs) in Malaysia to have a good understanding of the Internet as a new business strategy for driving business growth as well as to understanding what Malaysian Internet users really desire and why they are not shopping online. (Laalitha 2009).

(f) Sample Questionnaire

The questionnaire is adapted from Adeline (2006) with some modification to suit the context of this study. The questionnaire consists of eight sections as shown in Appendix.

Section 1 is to request the respondents to complete information related to demographic profile. Section 2 is to request the respondents to provide the information related to internet usage whereas Section 3 is about the information of Internet users experience on online shopping.

Section 4 is to request the respondent to provide information about the factor influencing their shopping decision. Factors include: product price and quality, more options and wider selections, ease of research, customer review availability, after-sales service, entertaining/fun, convenient, good customer service, promotion, fast delivery time, website providing sufficient product information and explanation, an item no available elsewhere.

Section 5 is to request the respondent to provide information about the current purchase pattern in terms of types of goods and services, spending amount, purchasing frequency, payment method and spending time.

Section 6 is to request the respondent to rate the satisfaction level and areas of dissatisfaction for their shopping experience with 1 is the lowest and 5 is the highest. Section 7 also request the respondent to rate to the future online purchase pattern (purchasing in the same retailers, types of good and services, spending amount, purchasing frequency and is important for the retailers nowadays have an online shopping facility) with 1 is the lowest and 5 is the highest.

Last section is to request the respondent to provide information about the issues and areas of concerns toward online shopping, which include disclosure of personal information, security of credit card transaction, do not physically seen and touch a product, trust on online retailers and adequacy of consumer protection laws and regulations.

References

Adeline Chua Phaik Harn, Ali.Khatibi and Hishamuddin bin Ismail. 2006. E-Commerce: A Study on Online Shopping in Malaysia. J. Soc. Sci., 13(3): 231-242 (2006). http://www.krepublishers.com. (accessed January 31, 2011)

comScore. 2009. State of the Internet with a focus on Asia Pacific. http://www.comscore.com/Press_Events/Presentations_Whitepapers/2009/State_of_the_Internet_with_a_focus_on_Asia_Pacific. (accessed January 17, 2011)

eCommerce Journal. 2009. Internet and e-commerce industry in Malaysia. http://www.ecommerce-journal.com/articles/18271_Internet_and_e_commerce_industry_in_malaysia. (accessed January 18, 2011)

IDC. 2007. IDC Reports 70% Growth in Malaysia eCommerce Spending in 2006. http://www.idc.com.my/PressFiles/IDC%20Malaysia%20-%20eCommerce.asp. (accessed January 10, 2011)

Internet World Stats. 2009. Malaysia Internet Usage Stats and Marketing Report. http://www.Internetworldstats.com/asia/my.htm. (accessed January 10, 2011)

Laalitha Hunt. 2009. SMEs Eager to Tap E-commerce. The Star online. December 12. http://biz.thestar.com.my/news/story.asp?file=/2009/12/12/business/5281516&sec=business. (accessed January 10, 2011)

Leong H. Y. and Lee L. S. 2009. Buying via Internet. The Star online. April 11. http://biz.thestar.com.my/news/story.asp?file=/2009/4/11/business/3620542. (accessed January 10, 2011)

Malaysia Crunch. 2009. Malaysia’s E-Commerce Statistics. http://malaysiacrunch.blogspot.com/2009/09/malaysias-e-commerce-statistics.html. (accessed January 15, 2011)

Nielsen. 2008. Over 875 Million Consumers Have Shopped Online – The Number of Internet Shoppers Up 40% in Two Years. http://my.nielsen.com/site/20080414.shtml. (accessed January 25, 2011)