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Online Shopping: Hypothesis and Research Design

Christopher Groomes

ITCC500

Professor Bowen

American Military University

September 21, 2014

Abstract

Online shopping has been triggered by the phenomenal growth in the Internet over the past few years. Many companies have continuously adopted online presence to complement their physical presence. This enables the companies to reach more diverse and wide target market. However, the adoption of online shopping is different in various parts of the world. This is due to the different characteristics of the different societies in the different parts of the world (Choi, 2004). These characteristics are the main research variables in this paper. Individualism and collectivism are one of the differentiating factors. Areas that have individualistic societies have been seen to utilize online shopping activities more than areas with collectivism societies. Other factors that have been seen to affect the use of online shopping include the difference in income levels of individuals, the GDP and the GNP, Internet infrastructure and economic conditions.

HYPOTHESIS (Research Questions )

From the InternetInternet usage that is increasing of late, it has been said that Internet has no boundary. The Internet has brought about many was through which business can be conducted online, Internet is capable of great outreach. However, the use of e-commerce activities has been seen to vary in different parts of the world. Does the argument that Internet has no boundaries true in e-commerce? This research will focus on determining how different culture affects the rate at which online shopping is carried out in different parts of the world.

The research aimed at determining the causal relationship that exists between the human society cultural aspects, uncertainty avoidance and other elements such as the income level of the individuals in a society. The cultural aspects to focus on and that will help us n formulating the hypothesis includes uncertainty avoidance, collectivism and individualism. This will help us measure disparities in the use of e-commerce activities in the modern world.

To enhance this research, the various research questions that exist in this case will be transformed into hypotheses taking into account factors such as lifestyles, cultural influences, habits and uncertainty avoidance factors. The first hypothesis states that the use of online shopping activities id high in the regions with low uncertainty avoidance levels. The opposite of this is also assumed to be correct. The factors that were used in developing this hypothesis is the trust factor whereby, generally a society whose individuals have a high uncertainty avoidance will be reluctant in taking part in the online activity due to their more structured environment.

The second hypothesis pertains to collectivism and individualism. It states that regions with more individualistic societies use the online shopping activity more than the regions with individuals with more collectivism societies. The hypothesis will measure the impact of the uncertainty avoidance levels on the habits of engaging in online activities and the lifestyles of different individuals in the Internet purchasing patterns.

To deduce definitive answers to the various questions, the second hypothesis will be divided into two. The third hypothesis which is extended from the second ne states that in regions with higher uncertainty avoidance levels, the aspect of individualism or collectivism has less impact on the online shopping habit. The fourth hypothesis also extended from the second one, states that regions with low uncertainty avoidance levels show higher rates of Internet shopping habits.

Hypothesis one: Online shopping habits are high in regions with low uncertainty avoidance levels.

Hypothesis two: Online shopping habits are higher in regions with individualist societies than in regions with collectivist societies.

Hypothesis three: For regions with high uncertainty avoidance levels, the impact of collectivism is little on online shopping habits .

Hypothesis four: For regions with high uncertainty avoidance levels, the impact of individualism is little on online shopping habits.

Hypothesis five: For regions with low uncertainty avoidance levels, individualist societies have a higher online shopping habit than the collectivist societies.

The formulated hypotheses will enable the researcher to find how the two cultural aspects of individualism and collectivism and the level of uncertainty avoidance affect the online shopping habit. Other factors that will be considered include level of education in the regions, unemployment rats, level of income and the per capita GDP. The research will aim at determining whether the stated hypotheses are true and the extent to which they are true.

This research will be useful for any company that wishes to engage in online business. It will also benefit the society in understanding the causes of the varied online shopping habits (Zhou, 2007). The paper should also determine the relationship that exists between the factors that have been mentioned. Other factors that will be considered to be of significance value to the research will also be included. Some of this includes the trust factors. The paper should help identify the various ways through which corporations can overcome the challenges that prevent them from diversifying into online business.

Therefore, the research will aim at encompassing the stated hypotheses and also explain other factors that can be considered to be of significance influence to the habit of online shopping and how corporation can be able to overcome the existing challenges preventing them from engaging in online business.

Research Design

Research problem

Internet shopping adoption is affected by several contextual factors that include educational level, national income and key cultural factors that include uncertainty avoidance and individualism-collectivism. Online purchases, Internet access infrastructure and other Internet services such as subscription are influenced by the national wealth (Lim etal., 2004).

The purpose of this research is to determine the causal relationship that exists between the rate of Internet shopping adoption and cultural aspects that include uncertainty avoidance, collectivism and individualism (Lim et.al, 2004). The research will involve the determination of the effect of the cultural dimensions on usage of Internet and the e-commerce based applications. It is the purpose of this research to measure the adoption rate disparities that are in existence in the world. The research will also address the problems and issues that are related to Internet shopping. It will aim at helping work around these problems and issues. It will therefore help in e-commerce activities regulation in an efficient and effective manner.

The research questions will enable us to develop the hypothesis of the research. The first question is how the level of uncertainty avoidance affects the rate of Internet adoption. The second question is how individualism and collectivism differ in affecting the rate of Internet shopping adoption.

Facilities and Resources:

The resources used in this research include the Global e-Commerce Report, Institute of statistics, United Nations, World Fact book and other resources that were found to be of significant value to this study.

The use of quantitative data will be considered over qualitative data. This is because it has been considered to be more appropriate for the research. Incase adjustments of the qualitative data needed in the research will be required this will be taken into consideration. However, less emphasis will be placed on this data.

The hypotheses that were stated in the research paper development will be considered throughout the research. Their validity will finally be tested and elaborated. The research will use a liner regression model to test the hypothesis validity taking different factors such as level of income, per capita GDP , economic growth, educational level and crime rate into consideration together with the cultural factors that include collectivism, individualism and uncertainty avoidance level.

The basis of the research will be the users of the Internet for commercial purposes and not the whole population. This is because this research is confined to users of the Internet in different parts of the world for commercial services. By focusing on this population, the research will be able to determine a causal relationship that exists between the variables more accurately (Sue & Ritter, 2012). The data for the online shopping habit is obtained from the global e-commerce report which includes surveys conducted in different countries surveying a significant number of online users.

Data Analysis

The data that is used in this research will enab le the researcher to conclude about the relationship that exists between variables taken into account that include collectivism, individualism and level of uncertainty avoidance. The research will use a sample of online users who may engage in online shopping habits. The sample will range from different regions in the world surveying a significant portion of the population. This will make sure that the diverse population is fairly represented (Bigne-Alcaniz, 2008). A correlation test is important on this data to measure its reliability.

The dependent variable that is under investigation is the online shopping habit by different regions. Online shopping habit is the likelihood of Internet users to buy goods or services over the Internet over a given period of time. The number of online users who bought the goods or services through the Internet is presented in the global e-commerce report reviewed by an independent report (Soopramanien, 2007). The two main independent variables used in this research include the uncertainty avoidance level index and the individualism-collectivism index. This information is obtained from Hofstede .

The control variables utilized in the research include education level, per capita GDP, individuals’ level of income, unemployment rate, crime rate and economic growth. This information will be obtained from relevant sources such as the United Nations repots, world fact book and global institutes of statistics. The data used should be valid and reliable. The researcher will be required to be objective in using the obtained data. The data obtained should be recent. Use of too old data will result to a conclusion based on ancient or historical data (Ashraf, 2014). This research aims at explaining the current trends in the online shopping habits and it should therefore be based on current data

Nature and Form of Results

The results that are concluded from the research proved the hypothesis were true. Regions that had individuals with higher income levels shoe a greater online shopping habit. However, it was conclude that considering the control variables such as education level, crime rate, economic growth rate, and per capita GDP and unemployment rate had no significant impact on the habit of online shopping.

Online shopping habit is impacted negatively by high levels of uncertainty avoidance and positively by the individualism-collectivism factors (Clemes, 2014). The uncertainty avoidance relationship with the online shopping habit did not emerge to be as strong as it was expected to be. It is therefore insignificant.

All the obtained results supported the stated hypotheses. National income was seen to affect the purchasing power of individuals and this affected the online shopping habit. People with higher incomes tended to engage more in online shopping. Offline shopping was also affected by the level of income.

Cultural aspects that include individualism and collectivism have been seen to impact the habit of online shopping. Individualistic societies are utilizing online shopping activities more that the areas with collectivists societies. Overall, many regions are not engaging in online shopping activities. The rate of online shopping is very low in numerous countries. The government can impact the online shopping habit by instituting laws that are favorable for online shopping transactions (Ho& Chen, 2014).

This research is essential to corporations that want to engage in online business. The results will enable them assess the different factors that may hinder their penetration into various markets. It will also provide them with the necessary information they can use and be able to overcome the existing challenges preventing them from engaging in online business.

References

Ashraf, A. R., Thongpapanl, N., & Auh, S. (2014). The Application of the Technology Acceptance Model Under Different Cultural Contexts: The Case of Online Shopping Adoption . Journal of International Marketing, 22(3), 68-93.

Bigne-Alcaniz, E., Ruiz-Mafé, C., Aldas-Manzano, J., & Sanz-Blas, S. (2008). Influence of online shopping information dependency and innovativeness on Internet shopping adoption. Online Information Review, 32(5), 648-667 .

Choi, J., & Geistfeld, L. V. (2004). A cross-cultural investigation of consumer e-shopping

adoption. Journal of Economic Psychology, 25(6), 821-838.

Clemes, M. D., Gan, C., & Zhang, J. (2014). An empirical analysis of online shopping adoption

in Beijing, China. Journal of Retailing and Consumer Services, 21(3), 364-375.

Ho, T. H. L., & Chen, Y. (2014). Vietnamese Consumers’ Intention to Use Online Shopping:

The Role of Trust. International Journal of Business and Management, 9(5), p145.

Lim, K. H., Leung, K., Sia, C. L., & Lee, M. K. (2004). Is eCommerce boundary-less? Effects of

individualism–collectivism and uncertainty avoidance on Internet shopping. Journal of

International Business Studies, 35(6), 545-559.

Soopramanien, D. G., & Robertson, A. (2007). Adoption and usage of online shopping: An

empirical analysis of the characteristics of “buyers”“browsers” and “non-Internet shoppers”.

Journal of Retailing and Consumer Services, 14(1), 73-82.

Sue, V. M., & Ritter, L. A. (2012). Conducting online surveys. Sage.

Turban, E., Lee, J. K., King, D., Liang, T. P., & Turban, D. (2009). Electronic commerce 2010.

Prentice Hall Press.

Zhou, L., Dai, L., & Zhang, D. (2007). Online shopping acceptance model-A critical survey of consumer factors in online shopping. Journal of Electronic Commerce Research, 8(1), 41-62.

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