introduction

ELECTRONIC COMMERCE IN SAUDI ARABIA

Name: Malak Alsuimani

Instructor : Ceslav Ciobanu

Course: Research Methodology (590)

ABSTRACT

E-commerce is trading using online platform. Its incorporation in business has produced many impacts both negative and positive. This have been mostly witnessed over the last one and a half decades in Saudi Arabia. The country has the fast-growing internet usage, the fast-growing economy, and higher purchasing power (Thakur 2016). However, the rate of growth of e-commerce is slow. That is there is mismatch in the growth of economy and e-commerce adoption and implementation. Previous studies have shown the factors that encourage or inhibit e-commerce adoption and implementation in Saudi Arabia. Our study will review and reexamine the factors reported in the previous studies and investigate their impacts of e-commerce to consumers businesses and government of Saudi Arabia We have used qualitative research method in gathering useful information from 700 respondents from different places in Saudi Arabia. Then we identify the components which are mostly affected by e-commerce; consumers, business. we also discuss the emerging issues in e-commerce which include; introduction of teleconferencing, use of Skype in communication, change of management models, information technology planning and design -among others. The impacts of of-commerce were previously studied and concur with our research. The implications of uses of social media will also be studied.

INTRODUCTION

E-commerce adoption and implementation in developing and developed countries have been well investigated and have focused on consumer behaviors and business issues. Recent studies ((Alghamdi et.al 2014) have indicated factors that facilitate or inhabit e-commerce in Saudi Arabia projecting on either businesses or consumers. This paper will review and examine facilitators and inhibitors found in previous studies and will investigate impacts e-commerce which was not indicated earlier in Saudi Arabia economy. The paper will further focus on consumers and retailers and government relating to adoption and implementation of e-commerce. Its only firms that adopt e-commerce survive in a globally competitive market and hence an important economic growth factor. An online option for trade is increasing rapidly in developing countries. Despite the fast-growing economy in Saudi Arabia, the use of e-commerce has not risen. Various studies have implicated slow evolution of e-commerce in Saudi Arabia (Alghamdi et, al 2013). Internet usage in Saudi Arabia has increased dramatically in the past decade by 400%Khalidi et al. (2014). Computers and internet access for Saudi Arabians went up to 65.8% of the population (SachaOrloff, 2012).The universality of mobile devices makes it possible for mobile online trade and advertising. Use of social media has also grown significantly in Saudi Arabia. Saudi Arabia have been positioned number one globally regarding internet access. (Schoonder woerd, 2013).

There have been a few research concerning current issues in e-commerce in Saudi Arabia and lack of concrete statistical reports create an avenue for further research (Ahmad et.al, 2012).Previously some researchers reported common factors which may be digressing nowadays. For instance, most young people are gaining awareness and readiness of e-commerce; changes in consumer behaviour and culture; Information communication technology infrastructure growth. Additionally, some factors such as social media and mobile-commerce need further enquire and can result in more reliable findings (Orlff, 2012.)

In this research we review motivators and inhibitors of e-commerce acceptance and implementation in Saudi Arabia (Thakur 2016).we find issues affecting consumers and small businesses to see facilitators and inhibitors that affect e-commerce. We will then investigate the effects of e-commerce in Saudi Arabia. We will also determine the extent to which they influence compared to other research. Additionally, we are enquiring new factors, for example, social media impacts retail credits and gift cards, mobile commerce, and cellular usage potentials to determine the extent of the effectiveness of implementation and acceptance of e-commerce in Saudi Arabia. We developed a comprehensive online qualitative research to gather perspective of consumers on e-commerce. The survey was then distributed by use of social media, and preliminary result was presented earlier. (Makki and Chang, 2014) to ascertain that questionnaire is capturing the intended information among a smaller subset of target respondents. We offer a more concrete data analysis using a broader set of target respondents.

LITERATURE REVIEW

E-commerce has been broadly studied in both developing and already developed countries. In our case, we provide a brief review of factors encouraging and inhibiting adoption and implementation of e-commerce. Some studies focused on social issues such as altitude .in this case the decision to enter e-commerce by relatives, friends, peer groups religious differences. Then we will state the objectives of our study and the questions to be answered-commerce in Saudi Arabia have not fully been implemented mainly because of customer trust. However, a new law that seeks to regulate online shoppers is being introduced. It requires owners of online firms to display terms and conditions including special license in their operation in their websites. This will increase customers’ confidence and trust towards online shopping.

There have been broad e-commerce studies in developing countries ranging from the general perspective of social issues (.some e-commerce adoption factors implementation pitfalls besides demographic of internet uses Saudi Arabia reported (Ahmad et.al 2014).These paper provides a brief overview of those studies and summarizes factors affecting e-commerce in Saudi Arabia. We hence state the purpose of our study and the questions to be answered for consumers in the country.

· E-Commerce in Saudi Arabia has been widely studied. Some focused on perspectives like government role.

· , payments system.

· delivery methods.

· ICT infrastructure.

· Business system integration.

· User readiness and awareness.

· Bank and credit cards issuances.

· Security and privacy.

The government must train its citizens to acquire relevant skills needed in embracing e-commerce. The risk of cybercrimes who collude to access website and customers personal information are on the rise, and so the government should protect its businesspeople from potential hackers. This concurs with our research and findings

Some e-commerce does not have a better method of payments of sales or purchases. This suggest that there should be clear methods of payments which are simple and precise. A method that is easy to use even by potential semi-illiterate customers.

There have been complications in delivering the purchased goods to customers. This have deterred many of them from engaging in online businesses. It suggests the need to have a clear procedure for delivering the products to where customers are situated. This will go hand in hand with increasing customers confidence with e-commerce ICT infrastructure is the path through which the e-commerce operates. There is need to maintain the hardware and software’s involved in the infrastructure as far as e-commerce is concerned. Otherwise unwise change in software’s and hardware might shift consumers' decision to buy the products. There is also need for ICT design and planning to concur with your requirements. It also assists in making decisions on which technology to adopt maintain and sunset that is deciding the best technological path for an e-commerce organization. Information technology management process helps to manage the day to day activities.

OBJECTIVES:

This paper seeks to answer the following questions to determine the effects of e-commerce

What are the impacts of e-commerce on the businesses?

What are the impacts of e-commerce on customers?

What are the effects of e-commerce on the government?

EMERGING ISSUES

ICT DEPLOYMENT AND MANAGEMENT

Making changes in software’s and hardware can be a risky process. However, ICT deployment management process can make desired impacts. This is because it controls the incoming hardware and software’s changes in the operating environment. These processes can be used to guide production and environment tests. Consequently, this minimizes businesses and customer impacts.

TECHNOLOGICAL TRAINING VIA INTERNET BASED PLATFORM

With the growing telecommunication and video conferencing employees can attend training through internet-based devices like tablets, mobile phones, and personal computers. Therefore, employees get training at their convenience and much lower costs

Other researchers focused on general perspective like the social issue. Decision to purchase is influenced by people who have immense impacts. they include; relatives, friends and peer groups. They change the altitude of the buyer in a big way. This partially relates to our research.

ICT DESIGN AND PLANNING

It's always advisable to have the right ICT enterprise architecture where the right tools are needed to satisfy e-commerce requirements now and in future. It’s essential for e-commerce to adopt ICT design and planning process.

The process assists in deciding which technology to adopt and maintain or sunset e-commerce. It’s also easy to determine the best technological path for online business. For example, ICT architecture team may choose to disregard tablets support and might adopt mobile phones. The team will sunset tablets use and announce a specific date and time to switch to mobile phones. The team will then use ICT deployment process to ascertain that mobile phones are available in time. It’s Always advisable to adopt capacity management tool because its challenging to choose the best method to plan and design ICT architecture. After that, you can ascertain if technology concurs with business requirements and value.

INTRODUCTION OF NEW METHODS OF COMMUNICATION BETWEEN STAFFS MANAGEMENT

Within induction of technology in business, staffs can now have direct contacts with the management anytime they want. Employees can suggest a method of improving the production of goods and safer means of delivery. There are varieties of methods of communication for companies which have embraced technology in their business ranging from telephone, email and skypes. Staffs of organization which has embraced e-commerce use of skype call to communicate with the administration and therefore the manager will get clear information concerning the issue on the table since it's a video call.

INFORMATION TECHNOLOGY TECHNICAL SUPPORT

Better technical support assists e-commerce to solve current and future problems in information communication technology. That's why this is the final component of information communication technology. It essentially serves as support to other ICT infrastructure in e-commerce. Each online firm is required to have a wise technical support to solve e-commerce issues as they arise. Technical support serves the following purpose; creating and maintaining technical library and knowledge concerning online firms, provide capacity planning software to technical team in an organization which is used to test drive different hardware and operating software’s. This helps the online organization to ascertain benefits before investing cash and time on the preliminary tests.

There is the change in the methods of communications with staffs, customers, and management. Workers can communicate with the management regarding improving the worker's welfare via Skype, and it's effective since it's a video call. Customers can use the same method to specify the description of the products they require.

E-COMMERCE IN SAUDI ARABIA

The emergence of e-commerce in developing countries dates back in the 1990s.The increasing growth in e-commerce transactions in developing countries has been on the rise in the past one and half decade (Alghamdi et al., 2012a).

This has been a factor of economic progression in developing countries, especially in Saudi Arabia. The global spending increased significantly from$ 0.2 trillion in2002 to $10trillion. Consequently, the global per capita income have also risen suggesting good standard of living in Saudi Arabia

Some statistical findings imply that the internet usage have grown significantly besides mobile and social media usage in Saudi Arabia a (Khalidi et al., 2014). Some of these reports focused on either business perspective (Ahmad and Agrawal, 2012; Alghamdi and Drew, 2012; Alghamdi et al., 2012b) or the consumer perspective Saudi Arabia have experienced growth of its economy, but the rate of e-commerce adoption is worrying. That is it is inconsistent with the growth of economy with the online trade.

IMPACTS OF E-COMMERCE TO CONSUMERS

With the inclusion of e-commerce in the business customers can get varieties of goods without the need to travel to the stores. They just need to access online market via their phones, computers or tablets. Additionally, business compete to offer the best products via the online platform, and this makes consumer to enjoy quality products.

E-commerce businesses have introduced convenient methods of communication with customers. Communicating with skype enables customers to effectively convince the seller the specifications of the products they require since it makes video calls.

E-Commerce saves time for the consumers since the customers do not need to show up in the shops .in this case they only need to get the information of the products they require from online shops. Besides e-commerce is accessible to mentally and physically challenged, unlike physical stores where they may experience complication while accessing them. Such customers only require smartphones or tablets to access the online market.e-commerce Provides greater control to customers giving easy ways for ordering goods regarding personal specifications

customers who choose to work extra time can do so and still shop in online shops while still in the office. Many online firms operate all the time, and so customers can order for the goods all the time unlike in physical stores which operates for a time.

Furthermore, customers have ready information relating to products that are important in deciding on the purchase of the products.

The most demanded goods such as computer games are always unavailable in the market. Online firms provide a platform where a customer can pre-order goods and acquire them later which is not possible with physical fixed stores.

However online firms have also negative impacts on customers; such firms may inconvenience buyers in case the good ordered are required urgently. For example, birthday or graduation gifts

Furthermore, the cases of cybercrimes are on the rise where a hacker collude to access customers information, and this is instilling fear to customers as far as online markets are concerned. This deters customers from engaging in online markets.

People in remote areas might not be able to access the online markets because of network problems. There are no clear ways of handling returned purchases in case they were defective, poor quality or wrong descriptions from the one ordered. There EXIST NO defined methods of dealing with complaints from customers. This makes the customer to have a bad picture concerning the firms. Sometimes advertising may exaggerate the characteristics products, and so customers can get a different product from which he/she ordered. This further reduces customers urge to engage in online business. Some online payments methods are not secure and not even a single customer who will be willing to put this cash to uncertainties customers. There is only one trusted method of payments using PayPal. Also, goods bought in online firms in foreign countries might be expensive since import duty, and delivery costs have to be incorporated into the final price of the product. Furthermore customers do not have a chance of direct contact with the products and so he might or the wrong thing altogether.

IMPACTS OF E-COMMERCE ON BUSINESS

E-commerce enhances business to factor in teleconferencing. It is a platform where employees can be trained through a computer while still in their offices (Makki, et.al 2013). Its time and resource saving to the business since the workers do not need to travel to where the training is taking place.

E-Commerce enhances change in management models of the business because its operations are online based. Additionally, business which has embraced e-commerce can reach varieties of customers than a fixed store.

This is because it just requires a website to display its products where a customer can have a chance to view them. There are no theoretical, geographical limitations for e-commerce firms, unlike stores which might be situated very far from the customers minimizing the chances of access. (Makki, et.al 2013). Additionally, customers might use a lot of time trying to locate the stores and end up not finding them because of location complications

A business which embraces e-commerce directly causes unemployment in Saudi Arabia. This is because an online firm only requires few workers to oversee its operation. This makes even those employed view that business an insecure.

Business which installs online marketing operates at lower production costs. Business does not require to employ advertisers and marketers since goods can be viewed conveniently by customers in the website. this reduces the expenses and increases business returns.

In case the potential customers are in the foreign land then the cost of customs duties and delivery is added to the price of the products. This makes the products expensive minimizing demands of the same. Furthermore, there might be complications in delivering the products due to weather conditions, and customers might not receive purchases in time. And this will negatively affect the trust.

E-COMMERCE HAS LEAD TO LOW OPERATIONAL COSTS IN THE BUSINESS

Managerial, advertising and marketing costs are cut down by e-commerce platform. Online business does not need to employ so many personnel in the business since few can be able to handle its operations.

The business does not require to pay for costs of advertising since all the products are displayed on the website, and all the customers can view them when the need be. Such a business does not to pay for marketers to market its products. Online business does not need to rent many stores and offices since most of its operation is online based. All this reduction in expense goes hand in hand with reducing expense and increasing profit margin for the business. Additionally, the online platform makes it easy to start since it only requires few permits.

Most of the online business operates all the time, and this increases business turnover besides profit margin. Additionally, incise the consumer need to return the products by defective or having the wrong description many online platforms have offices in different areas globally then they can do so to the convenient office normally situated near them. Here they can exchange the products or wait for few days for the delivery of products according to his specifications.

However, the cases of the rise of cybercrimes are on the rise in Saudi Arabia. These hackers can hack and access the information concerning the online business. This instils fear to many businesspeople and customers. Some firms have lost cash and assets of huge amounts to hackers.

There might be the complication in the case of returning purchases because some online business does not have a clear way of dealing with such issues. Therefore, the customers might lose trust in such business.

The issue of payments method is very sensitive. There are many international methods of payments, but the credited like PayPal and card payments which are complicated to many customers’. This method should be simple and precise.

The cost of customs duties and delivering to doorsteps of customers might make the product expensive if the company is situated in the foreign land. This makes the product expensive and hence less demand consequently reducing the turnover.

When there are technical difficulties customers may not be able to access the information of the products, and this might prove the business to be partially unreliable. Additionally, the transportation of ordered products may derail by unfavourable weather conditions, and it might inconvenience the customer if the products were urgently required.

Access to online firms is expensive to some customers who don’t have a smartphone, computer or a tablet or cannot be able to purchase the data bundles. This deny such a customer a chance to access the products information and description.

E-commerce has caused structural unemployment. Firms end up laying off many of its workers after embracing. This increases social crimes in endeavour to maintain their previous social status in the country.

IMPACTS OF E-COMMERCE TO GOVERNMENT

The government requires all the company wishing to be given a tender to embrace e-commerce. The governments pay for the workers of its traders in foreign countries where e-commerce have been fully embraced. This is done to ensure they get relevant skills required in e-commerce.

The government also uses a lot of cash trying to curb the issue of cybercrimes which are on the rise. Additionally, crimes are on the peak as result of structural unemployment brought by e-commerce. People are moving from rural to urban areas seeking employment and further causing social crimes. The government uses a lot of money in curbing those social crimes.

REVIEW SUMMARY:

Previous research have indicated facilitators and inhibitors of e-commerce in Saudi Arabia.

The following are the impacts of e-commerce in Saudi Arabia.

· Business impacts

· Consumer impacts

· Government impacts

Business has embraced new management models which are convenient beside better methods of communication through Skype calls.

Online businesses have access to varieties of customers besides reducing managerial costs and these increases returns and profit.

E-commerce enhances competition in business which makes and hence the firm must choose from producing a high-quality product or exit.

However, business that embraces e-commerce cause structural unemployment

With e-commerce in the business, consumers overcome barriers of geographical location

A consumer can access business website while at home.

E-Commerce makes trade convenient to consumers since they use only a few minutes to order the goods.

The most business which embraces e-commerce operates throughout the day, and so consumers can view the products at the time of their choice.

Customers can also get the feedback regarding the products they require using the shortest time

However there no clear procedures for returning purchases incise there are defective, and this minimises the confidence, and trust customers have to online businesses.

Government benefit by collecting taxes from online businesses and so its source of income. The same government uses a lot of training traders on emerging issues and curbing employ mint related problems.

The negative impacts of e-commerce can be resolved to produce the desired effects to e-commerce.

METHODOLOGY

Qualitative method

This is a method of inquiry that tends to interpret the naturalistic setting of an environment to be studied. Its a general way of thinking (Bach, 2016). This method expounds on implicitly or explicitly. The aim of qualitative research and the method of analysing data in this case the method is used to investigate the impacts of e-commerce on consumers, businesses and the government. The survey was distributed to the different part of the country using social media, the total number of replies were 700.

Demographic studies complied with previous research that shows that most Saudi respondents are young people,74%agedbetween 20-35years, and 60% are males. Research did previously imply that majority of consumers have highs school knowledge or less and unemployed,54% have bachelor’s degree and 56% are working while 405 are unemployed. This is like recent research ln Saudi Arabia.

RESULTS AND FINDINGS:

The results have indicated that they are very many positive impacts of e-commerce, business consumers, and government. Furthermore, if the government regulate the online business then customers’ confidence will be boosted (Bach, 2016). Additionally, the issue of cybercrime is on the rise, and the government should work to reduce such incidences.

RESULTS AND DISCUSSION

People spend less time in online shopping due to unsecured methods of payments, shipping expenses and physical inspections. However, they would like to spend more time for the convenience of ordering and receiving goods. The cash payments are mostly used many customers with a rate of 78% followed by cards with 15.5% and lastly PayPal with 4.5%.

Mobile shopping has significantly increased from 2013to 2015 with the primary impetus being personal tablets. Few people spend less time online because of; the need to save delivery time, items delivered unexpectedly or dividing their expenses to online business and physical stores, e-commerce effects payment methods. People who use cash for delivery are 74% while 7% of online shoppers use PayPal to pay their transactions. Smartphones shoppers comprise 3%.

People in Saudi Arabia spend 5.6hours per day using their mobile phones to 3.5hours and 3.0hours using personal computers and tablets respectively. This implies that potential customers prefer using their mobile phones and personal computers. Therefore, online businesses should be responsive to the need of potential customers when the need be. Firms which have adopted online platform should have information technology design and planning besides technical supports because there is need to offer customers convenient methods to shop. These results concur with previous results that also show the rise in the use of mobile phones to shop in Saudi Arabia. However, some previous results differ with our data although within the significant percentage.

The rate of card issuance for payments should be further studied. The prevalent in the issue of cards does not imply that customers will always use the purchase the products. Consumers need more awareness of the use of the cards in online purchases.goverment should come in and regulate the use and issuance of cards. Such government will create trust and confidence in its citizens.

Conclusion

Business and customers are the mostly affected so much by e-commerce than the government also business that has embraced e-commerce has acquired better methods of management which produces desired effects. There should be technical workers responsible for enhancing smooth running of hardware, software, and information communication technology infrastructure for online business growth.

Work cited:

· Thakur, Kutub, et al. "Information security policy for e-commerce in Saudi Arabia." Big Data Security on Cloud (BigDataSecurity), IEEE International Conference on High Performance and Smart Computing (HPC), and IEEE International Conference on Intelligent Data and Security (IDS), 2016 IEEE 2nd International Conference on. IEEE, 2016.

· Makki, Eyad, and Lin-Ching Chang. "Understanding the Effects of Social Media and Mobile Usage on E-Commerce: An Exploratory Study in Saudi Arabia." International Management Review 11.2 (2015): 98. Makki, Eyad, and Lin-Ching Chang.

"Understanding the Effects of Social Media and Mobile Usage on E-Commerce: An Exploratory Study in Saudi Arabia." International Management Review 11.2 (2015): 98.

· Alotaibi, Aziz Obaid, and Christian Bach. "Consumer Awareness and Potential Market for e-Commerce in Saudi Arabia: Challenges and Solutions." ASEE 2014 Zone I Conference. 2014.

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· Alghamdi, Rayed, Ann Nguyen, and Vicki Jones. "A study of influential factors in the adoption and diffusion of B2C e-commerce." arXiv preprint arXiv:1302.0272 (2013).

· Makki, E., and L. C. Chang. "E-commerce in Saudi Arabia: Acceptance and implementation difficulties." Proceedings of the International Conference on e-Learning, e-Business, Enterprise Information Systems, and e-Government (EEE). The Steering Committee of The World Congress in Computer Science, Computer Engineering and Applied Computing (WorldComp), 2014.

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