Analysis of e-shopping in Bangladesh
Content
Introduction commerce ce Onli On line ne sh shop oppi ping ng or on onli line ne ret etai aili ling ng is a fo forrm of electronic commer whereby consumers directly buy goods or services services from from a seller over the Internet without an intermediary service. An online shop, e-shop, e-store, Internet without web-store,, online store, or virtual store evokes internet inter net shop, web-shop, web-store the physical analogy of buying products products or or services at a bricks-and-mortar retailer or shopping centre retailer centre.. The process is called business-to-consumer (!"# online shopping. $hen a business buys from another business it is called cal led bus busine inessss-toto-bus busine iness ss (! (!# # onl online ine sho shoppi pping. ng. The lar larges gestt onl online ine retailing ret ailing corpora corporations tions are %ay %ay and Ama&on.com Ama&on.com,, both of which are 'based. erners-ee ee created the rst $orld $ide $eb server and In )* )** *+ Tim erners- browser. It opened for commercial use in )**). In )** other advances took place, such as online banking and the opening of an online pi&&a 0ut.. 1u 1uri ring ng tha thatt sa sam me ye year ar,, 2etscape 2etscape introduced introduced shop by /i&&a /i&&a 0ut encry enc rypti ption on of dat data a tra transf nsfer erre red d onl online ine,, whi which ch has bec becom ome e ess essent ential ial for secu se curre on onlin line e sh shop oppi ping ng.. Also Also in )* )** * the the 3e 3errma man n co comp mpan any y Intershop introduced its rst online shopping system. In )**4 Ama&on launched its online shopping site, and in )**5 eay appeared. this is rep epor ortt we wi will ll tr try y to e6p 6plo lorre cu currren entt ee-bu busi sine ness ss sc scen enar ario io in In th angladesh. Our research will be conducted in order to indentify various challenges and obstacles in the process of e-shopping. $e will also try to shed she d lig light ht on pr proba obable ble sol soluti utions ons to tho those se obs obstac tacles les and thu thus s see the prospect of e-shopping in angladesh.
Research Objectives: Ob7ectives of the report can be dened as follows8 • T To o analy&e overall curr current ent scenario of e-shopping section in
angladesh
• T To o analy&e the factors which are creating obstacles in the path of e-
shopping process. 9actors that have been considered in this aspect are8 o
/reference /refer ence for super store over online shopping
o
"onsumers: receptiveness over product ;uality
o
1i<culty in product delivery
o
ack of government nancial incentive
• T To o analy&e the factors which provide that basis for prospects and
opportunities for e-shopping sector in angladesh. 9ollowing factors have been considered in this regar regard. d. o
/erceived /er ceived convenience of e-shopping
o
ecurity concern
o
/roduct /rodu ct availability and diversity
o
%ntrepreneurs interest
o
/resent state of infrastructure
• T To o e6amine and analy&e various e-shopping models that e6ist in our
country in present circumstan circumstances. ces.
Signifcance As we have discussed earlier e-shopping is a way of conducting business over the Internet. Though it is a relatively new concept in angladesh, it has the pot potent ential ial to alt alter er the tra tradit dition ional al for form m of eco econom nomic ic act activi ivitie ties. s. Already Alr eady it has its e=ect e=ects s on some larg large e secto sectors rs such as communi communicatio cations, ns, nance and retail trade and it holds promis promises es in areas of education, health and government. The largest e=ects may be associated not with many of the impacts that command the most attention (i.e. customi&ed product,
elimin eli minati ation on of mid middle dleme men# n# but wit with h les less s vis visibl ible, e, but po poten tentia tially lly mo morre perv pe rvas asiv ive, e, e= e=ec ects ts on rou outi tine ne bu busi sine ness ss ac acti tivit vitie ies s (i (i.e .e.. or orde deri ring ng o< o<ce ce supplies, paying bills, estimating demand#.
Background Studies >arious kinds of researches have been conducted over the years on eshopping. ?any of those reports covered issues such as brief description of e-shopping, prospects and challenges of that particular business in both global and local perspective. ?ost of those reports however focused on online purchase of manufacturing products other than services. ?any of the reports that we searched have studied e-shopping from an overall or global view, however, we have taken only those issues in consideration that can have an implication in angladesh:s conte6t. This had to be done as there is a scarcity of reports focusing e6clus e6clusively ively on issues of prospects and challenges of e-shopping in angladesh. Online shopping is the process whereby consumers directly buy goods or services from a seller in real-time, without an intermediary service, over the Internet. It is a form of electronic commerce. An online shop, e-shop, e-store, internet shop, web-shop, web-store, online store, or virtual store evokes the physical analogy of buying products or services at a bricksand-mortar retailer or in a shopping center center.. The process is called usinessto-"onsumer (!"# online shopping. $hen a business buys from another business it is called usiness-to-us usiness-to-usiness iness (!# online shopping. 0istory of e-shopping points to one event of )**+ when Tim erners-ee cr crea eate ted d the the r rst st $or orld ld $ide ide $eb se serv rver er an and d br brow owse serr. It op open ened ed fo forr commer com mercia ciall use in )** )**). ). In )** )** oth other er adv advanc ances es too took k pla place, ce, such as online banking and the opening of an online pi&&a shop by /i&&a 0ut. 1uri 1u ring ng that that sa same me ye year ar,, 2e 2ets tsca cape pe intr introd oduc uced ed en encr cryp ypti tion on of da data ta transferred transferr ed online, which has become essential for secure online shopping. Also in )** the 3erman company Intershop introduced its rst online
shopping system. In )**4 Ama&on launched its online shopping site, and in )**5 eay appeared. 2ow let:s have a look at e-shopping in the conte6t of our country. In angladesh situation isn:t that much favorable for entrepreneurs due to high in@ation rate, interruption of regular power supply, inade;uacy of capital sourcing for startup entrepreneurs. 1espite all these barriers our entrepreneurs are taking initiatives to make progresses happen not only for themselves but also for the society and the country as a whole. As tech techno nolo logy gy is be beco comi ming ng an ev ever eryd yday ay ac acce cess ssor ory y an and d rate rate of In Inter terne nett penetration is increasing like wild re people tendency to on-line shopping is on rise. The most important reason behind a rise in on-line shopping trend is time scarcity of modern life style. $e are now living in an age of scarce time. hopping regularly for daily products is a lu6ury to this time scarce society. As the trends show in near future the rate and e6tend of on-lin online e sho shoppi pping ng wil willl be incr increas eased ed in ma manif nifold old.. Taki aking ng ind indica icator tors s lik like e incre inc reasi asing ng Int Inter ernet net pen penetr etrati ation, on, life life sty style le cha change nge,, tim time e sca scarc rcity ity int into o consideration it can be a safe prediction that online shopping will be a phenomenon in near future.
Scope The scope of the report is limited to the practical and theoretical aspect. /r /ract actica icall e6 e6per perien ience ce and dat data a col collec lectio tion n fr from om di= di=er erent ent com compan panies ies on online shopping in angladesh is considered in this process and analysing this data this report is furnished. The report also covered information from some books, maga&ines, articles and various websites of di=erent online shopping stores of the country and incorporation of this ideasknowledge in the report have been introduced as well. The report will cover following broad areas8 •
"urrent "urr ent scenario of e-shopping in angladesh
•
>arious obstacles in the path of e-business process
•
Opportunities and prospects of e-shopping
•
1i=erent e-shopping models
Methodology Data Collection: 1ata have collected both from primary and secondary sources Primary source: urvey, source: urvey, face-to-face interview interview.. Secondary source: source: Onlin Online e rep reports orts,, webs websites, ites, di=eren di=erentt book books, s, artic articles, les, 7ournals etc. Methods for Analysis: Begression Begr ession models, hypothesis and ;uestionnaire have been developed to carry out the research. 1etails of those have been presented in following segmen seg ments. ts. Ap Apart art fr from om tha thatt som some e the theor oreti etical cal an analy alysis sis hav have e als also o bee been n carried out to shed light on various aspects of the report.
Limitations 9ollowing can be considered as the limitations of the report8 9ocus can seem to be a bit narrow one, as we will be concentrating only on e-shopping rather than the whole e-business thing. Al Alth thou ough gh be bein ing g a relat elativ ivel ely y th theo eorret etic ical al rep epor ort, t, the the in info forrma mati tion on reg egar ardi ding ng
co com mpa parriso ison
be betw twee een n
the
on
groun und d
si sittua uattio ion n
in
angladesh and abroad is unavailable in the report. As the online shopping is still at its booming yet auspicious condition in angladesh, the true picture of the real situation is not so easy to identify.
Although there are numbers of studies have been done so far in this partic par ticular ular iss issue ue on for foreig eign n onl online ine sho shoppi pping, ng, ade ade;ua ;uate te num number ber of documents
is
yet
not
available
to
review
and
prepare
comprehensive report from angladesh perspective and it has been re@ected in the report prepared.
roblem Identifcation As we mentioned earlier the ob7ective of the report is assess the prospects and challenges of e-shopping in angladesh. To achieve this ob7ective we have considered various factors that can stimulate or hinder e-shopping operations in our country. The problems which we sought out to solve through our report are given below8 Core Problem /res esen entt stat state e an and d futu futurre of ee-sh shop oppi ping ng in a ang ngla lade desh sh in te terrms of prospects and challenges it faces. Research Problem
-
$hich factors can stimulate growth and enhance the prospect of eshopping.
-
$hic $h ich h fa fact ctor ors s can can po pose se sign signi ica cant nt hi hind ndra ranc nce e in the the pa path th of eshopping operations in our country.
!pproach to the roblem Theory Development To To assess the present and future condition of e-shopping rst we had to identify the factors involved in the sub7ect matter matter.. Our resear research ch pertaining
to report unearthed ;uite a few factors that have substantial role to play in the conte6t of e-shopping. Those factors have been further categori&ed depending on their respective role in the regression models that we have developed for our research. "ategori&ation of the factors is as follows8 Factors used to assess prospects
-
/erceived convenience /erceived ecurity concern /roduct /rod uct availability and diversity %ntrepreneurs: interest /resent state of infrastructure
Factors used to assess challenges
-
/reference for super store over online shopping "onsumers: suspicion over product ;uality 1i<culty in product delivery
-
ack of government nancial incentive
Model Development To To conduct statistical analysis we have developed two regr regression ession models. 9ollowing are the models used in the report Regression model to assess prospect: " # $%b% & $'b' ( $)b) ( $*b* ( $+b+ C D /ro /rospect spect of online shopping in 1 E) D /er /erceived ceived convenience E! D ecurity concern EF D /roduct availability and diversity E D %ntrepreneurs interest E4 D /resent state of infrastructure
Regression model to assess challenges: " # $%b% ( $'b' ( $)b) ( $*b* C D "hallenges of online sho shopping pping in 1 E) D /reference for super store over online shopping E! D "onsumers: suspicion over product ;uality EF D 1i<culty in product delivery E D ack of governmen governmentt nancial incentive Information Search Infor Inf orma matio tion n has bee been n sea searc rched hed thr throug ough h bot both h pri prima mary ry and sec second ondary ary sources. urvey ;uestionnaire has been e6tensively used to collect data fr from om pr prim imar ary y so sour urce ces. s. In othe otherr ca case ses s va vari riou ous s rep epor orts ts,, 7o 7our urna nals ls ha have ve studied to assess the situation and obtain information related to the report topic. Research Resear ch Question and Hypothesis Development In the earlier part of our research process, through e6ploratory research, we have identied some factors that has a role to play in the prospects and challenges of e-shopping. To measure the in@uence of these factors, we nee needed ded to con conduc ductt som some e re resea searc rch h ;ue ;uesti stions ons and hyp hypoth othesi esis. s. $e developed our ;uestionnaire in such a way that we could get ade;uate information on various factors and we established our hypothesis to check the validity of various factors involved. Research Resear ch Questions Two Two sets of ;uestionnaire have been developed two collect the data. One was to have feedback from consumers and the other was used to have feedback from owners. oth of the ;uestionnaires have been appended in the Appendi6 section of the report. Hypotheses
9ollowing hypotheses have been developed to carry out the resear research. ch. T Two wo cate ca tego gori ries es of hy hypo poth thes eses es we werre de deve velo lope ped d on one e gr grou oup p wa was s rel elat ated ed to prospects and the other was related to challenges. Hypotheses related to prospects In case of the /rospect model, the null hypotheses can be put as8 ). 0o8
/os osit itiv ive e
pr pro osp spec ectts
on
e-s e-sho hopp ppin ing g
doe oes s
no nott
dep epen end d
on
convenience. 0)8 /ositive prospects on e-shopping depends on convenience. !. 0o8 /osit /ositive ive pros prospec pects ts on e-s e-shop hoppin ping g doe does s not depe depend nd on sec secur urity ity concerns. 0)8 /ositive prospects on e-shopping depends on security concerns. F. 0o8 / /ositi ositive ve pros prospects pects on e-s e-shoppi hopping ng does not dep depend end on availab availability ility G diversity. 0)8 /ositive prospects on e-shopping does depend on availability G diversity. . 0o8
/os osit itiv ive e
pr pro osp spec ectts
on
e-s e-sho hopp ppin ing g
doe oes s
no nott
dep epen end d
on
entrepreneurs interest aka incentives. 0)8 /ositive prospects on e-shopping does depend on entrepreneurs interest aka incentives. 4. 0o8
/os osit itiv ive e
pr pro osp spec ectts
on
e-s e-sho hopp ppin ing g
doe oes s
no nott
dep epen end d
on
infrastructure. 0)8 /ositive prospects on e-shopping does depend on infrastructure.
In case of the "hallenges model, the null hypotheses can be put as8 ). 0o 0o88 "h "hal alle leng nges es in ee-sh shop oppi ping ng is no nott mo moti tiva vate ted d by "u "ust stom omer er receptiveness.
0)8
"hallenges
in
e-shopping
is
moti tiv vated
by
"ustomer
receptiveness. !. 0o 0o88 "h "hal alle leng nges es in e-sh e-shop oppi ping ng is no nott mo moti tiva vate ted d by "o "ons nsum umer er:s :s suspicion over product ;uality. 0)8 "hallenges in e-shopping is motivated by "onsumer:s suspicion over product ;uality. F. 0o 0o88 "h "hal alle leng nges es in ee-sh shop oppi ping ng is no nott mo moti tiva vate ted d by 1i 1i< <cu cult lty y in product deliver delivery y. 0)8 "hal "hallenge lenges s in e-sho e-shopping pping is moti motivated vated by 1i<c 1i<culty ulty in pro product duct delivery. . 0o8
"hallenges
in e-shoppin ing g
is
not
motivated
by
ack of
government governm ent nancial incentives. 0)8 "hall "hallenges enges in e-sho e-shopping pping is moti motivate vated d by ack of governm government ent nancial incentives. Research Resear ch Design To To nd out the triggering factors, we have conducted the resear research ch in the H%6ploratory Besearch 1esign format. There has been an Approach developed for further resear research ch and done to nd and 6 its com compon ponent ents s lik likee- HOb7 Ob7ect ective iveTh Theor eoreti etical cal 9oun oundat dation ions, s, Analytical ?odel, Besearch Juestions, 0ypotheses and pecication of the Information Informatio n needed. 2ow 2o w we wi will ll sh shif iftt to a Ju Juan anti tita tati tive ve ap appr proa oach ch kn know own n as H"o "onc nclu lusi sive ve Besearch 1esign. ecause its will be more e<cient, structured and formal design process. 1ata analy&ing are more reliable in this approach. o now we will conduct the H1escriptive and the "ausal Besearch to meet the proper accuracy on our marketing research process. Questionnaire Design
9or the the pu purp rpos ose e of th the e st stud udy y tw two o se sets ts of ;ues ;uesti tion onna nair ires es ha have ve be been en developed, one is to take feedback from consum consumers ers and another is to take feedback from owners. ased on e6ploratory research we have developed !+ ;uestioners altogether. This research included ;uestions considering ve factors to assess prospects and four factors to assess challenges. A ikert scale was used to ;uestion the respondents on the ve point scale. The respondents were asked to rate on the scale between trongly Agree and trongly 1isagree. This resear research ch aims to study prosp prospects ects and challenges involved in eshopping in angladesh. This pro7ect primarily uses ;uantitative tools with help from ;ualitative information. 9or ;uantitative results, the research desi de sign gn invo involv lves es de desc scri ript ptiv ive e res esea earrch us usin ing g su surv rvey ey me meth thod od.. Th Thus us a structured ;uestionnaire has been used to elicit the specic information. The sample si&e used for the pro7ect is F+ respondents for consumers and )! respondents for owners.
,urrent Scenario o- e.shopping in Bangladesh efore going into prospects and challenges let:s rst discuss a bit about the current scenario of e-shopping in angladesh as found from various reports and websites. Of all the operating e-shopping businesses three broad segments can be classied, one group serves as an e-shopping hub connec con nectin ting g buy buyer ers s and sel seller lersK sK ano anothe therr group group sel sells ls the their ir own pr produ oducts cts through their websitesK and the other group uses social networking sites to con conduc ductt e-s e-shop hoppin ping g bu busin siness ess.. el elow ow ar are e som some e bri brief ef des descri cripti ptions ons of these groups. Companies that or! as a shopping hu" et:s rst look at some of the companies that work as a shopping hub. !khoni/com
Akhoni.com is Akhoni.com is an online marketplace featuring discount deals with popular businesses. It pr prov ovid ides es disc discou ount nt de deal als s wi with th lar large nu num mbe berr of bu busi sine ness sses es li lik kerestaurants, restaurant s, hotels, theaters, fashion houses, Internet services, transports, beauty parlors and saloons, theme parks, gymnasiums, furniture shops, sports and recreation centers, etc. "ustomers can sign up in the website to get regular deal alert on their email at free of cost. They can receive the deal voucher instantly on their web browser and through email by making payment instantly using >IA, ?aster"ard ?aster"ar d or 1 2e6us card or can also choose to book the deal online and pay cash when the coupon is delivered to their home. Then, the customer will show the voucher at the merchant location to en7oy the deal. Attraction of the website is o=ering huge discounts to the customers, 4+ to *+ per cent discounts are alluring people to log on to the website instead of going out for buying the products. /rice hike is one of the ma7or concer ern ns
of mass people
so o=ering discount
opens
up lots
of
opportunities for the company mentioned above. ,lickbd/com "l "lic ick k1. 1.co com m st star arte ted d its its op oper erat atio ions ns in Ap Apri rill ) ),, !+ !++4 +4,, ac acco corrdi ding ng to "lickbd.com, as the rst e-commerce portal in angladesh. "lick1 is an online marketplace where anyone can sell or buy almost anything. The site has a strong and and growing comm community unity of users who trade in a wide rang ra nge e
of it item em ca cate tego gori ries es
incl includ udin ing g
%lec %lectr tron onic ics, s,
"a "am mer eras as,,
/h /hon ones es,,
"omputers, "1s, ?obiles, 9ashion Accessories, ?usic, and Travel. Through a world-class technology infrastructur infrastructure e "lick1 enables G sim simpl pli ies es community.
e-co e-com mmer erce ce
for for
an ang glade ladesh sh::s
ev ever er
e6p 6pan and din ing g
on onli line ne
,ellba0ar/com Originally designed as a classroom pro7ect at ?IT, "ella&aar is one of the most successful online and mobile shopping platforms. "ella&aar service (http8w (htt p8www ww.cellb .cellba&aar a&aar.com .com## allow allows s peop people le to buy and sell over mob mobile ile phones or computers. Anyone with a computer and internet, as well as 3rameenphone users through their mobile phones are taking advantages of this service. 'sers can buy agricultural products, such as rice, sh, chicken, as well as large scale items like car, motorcycle, T>, fridge, apartment, land, etc. /eople can ca n al also so o= o=er er se serv rvic ices es su such ch as lang langua uage ge tuto tutori ring ng (v (ver ery y rel elev evan antt fo forr migrants going abroad#. The service is customer focused, who post items for sale, delete items after they are sold, and even ad7ust their own prices if they fail to get a buyer. 9or the rst time, the producers of agricultural products can directly negotiate price with buyers and agro-processors. The technology works on four four synchro synchroni&ed ni&ed platforms L ? (send ? to FMFM to buy and sell#, $A/ (easy, graphic interface#, $% (viewable by global audience#, and I>B (call FMFM to hear latest items#. 1utba0ar/com 0utba&ar.com, a sister concern of Bight IT "orporation, pioneered online comparison shopping and today is one of the fastest growing shopping destin des tinati ations ons for a com compr prehe ehensi nsive ve set of pr produ oducts cts fr from om tho thousa usands nds of trusted stores from across the $eb. $ith a singular focus on shopping, 0utba&ar.com o=ers shoppers easy-touse search tools, engaging content and time saving navigation. There are also other sites such as "loudbd.com and dhaat.com who are successfully running similar business ventures.
Companies that sell their products through their e"sites 2ow let:s turn our focus on the companies who sell or are in the process to sell their own products thro through ugh their websites. Bashundhara Star ,ineple2 ashundhara tar "ineple6 is the pioneer in the 1olby-1igital surround movie theater e6perience in our country. Their infrastructure is the most advanced one and world standard met facility in angladesh. At present they haven:t yet gone live as far as their ticketing system is concerned but they are in the process of reali&ing it soon. According to their website the will soon be developing their web-portal with capabilities of online booking and purchasing of movie tickets. They are also going to provide superior online choice of seats to their prime members. !madergaan/com Amadergaan.com is the biggest online portal for music in angladesh. They are not 7ust a site where you can discuss and analy&e and get previews of upcoming and bu&&ing music of the country but one can also purrch pu chas ase e al albu bums ms or so solo los s on onli line ne.. Th They ey pr prom omot ote e an antiti-pi pira racy cy,, he henc nce e developing authentic music sales and e-shopping. They don:t e6ist only virtually but time to time their forum organi&es events where musicians and an d mu musi sic c love lovers rs ca can n sh shar are e th the e sa sam me pl plat atfo forrm fo forr in inte tera ract ctio ion n an and d e6pl e6 plor orat atio ion. n. Th Their eir te tech chni nica call infr infras astr truc uctu turre fo forr mo mone neta tary ry tran transa sact ctio ion n maintains high standard to prevent any fraudulent activities. Companies that use social netor!ing sites Becently, there has been a new form of online marketing through the sociall netw socia networkin orking g sites (esp (especiall ecially y 9aceboo acebook# k# by entr entrepr epreneur eneurs. s. eller ellers s have their detailed portfolio displayed through these sites as business pages. These pages get displayed through ads, through Nshare: of users. A massive number people using social networking sites for entire online communication need, some business person believe that this is a more
e=ective form of marketing. The payment system is similar to that of eshopping sites, only the environment is more cordial, site being based on soci so cial al ne netw twor orki king ng.. Th The e ow owne ners rs cr crea eate te a pe pers rson onal al li link nk thr throu ough gh ac acti tive ve approach towards towards customers and get a direct feedback through Nlikes: and Nshares:. ome of the ventures as such are listed below8
-
hadamon, the e6clusive fashion store
-
Achillies, contemporary fashion house
9ollowing are some of the factors that are considered to be crucial by various authors with respect to e-shopping. As we have mentioned earlier authors have focused on these issues from a global perspective and we have considered those points only which can be applied in angladesh:s cont co nte6 e6t. t. Th Thus us th the e be belo low w me ment ntio ione ned d fa fact ctor ors s pl play ay an im impo port rtan antt rol ole e determining the prospects and challenges of e-shopping in angladesh. Customers In recent years, online shopping has become popularK however, it still caters to the middle and upper class as in order to shop online, one must be able to have access to a computer and internet. hopping has evolved with the growth of technology technology.. %lectronic shopping e6ists as for customers it is not only because of the high level of convenience, but also because of the th e
br broa oade derr
se sele lect ctio ionK nK co com mpe peti titi tive ve pr pric icin ing g an and d
gr grea eate terr
ac acce cess ss to
information. o the volume of middle and upper level customers having an access to internet and computer play a pivotal role in the e-shopping industry. Information load 1esigners of online shops should consider the e=ects of information load. ?ehrabian and Bussel introduced introduced the concept of information rate (load# as the comple6 spatial and temporal arrangements of stimuli within a setting.
The notion of information load is directly related to concerns about whether consumers can be given too much information in virtual shopping environm envir onments. ents. "om "ompar pared ed with conve convention ntional al ret retail ail shop shopping, ping, com computer puter shoppi sho pping ng enr enrich iches es the inf infor ormat mation ion env envir ironm onment ent of vir virtua tuall sh shopp opping ing by providing additional product information, such as comparative products and se and serv rvic ices es,, as we well ll as va vari riou ous s alte alterrna nati tive ves s an and d attr attrib ibut utes es of ea each ch alternative, etc.
ros and ,ons o- e.shopping in Bangladesh3s ,onte2t /r /rosp ospect ects s and cha challe llenge nges s of e-s e-shop hoppin ping g in an angla glades desh h ste stem m fr from om its advantages and disadvantages. /rincipal advantage of e-shopping is that the the pr proc oces ess s en enab able les s bu buye yers rs an and d se sell ller ers s to do bu busi sine ness ss wi with thou outt an any y physical physic al int intera eracti ction. on. Thi This s alo alone ne is a gr great eat adv advant antage age con consid sideri ering ng the hassle one has to go through to go to shop to pick up his or needed merchandise. Online marketplace thus can save great amount of time for cons co nsum umer ers s mak akin ing g th thei eirr life life a lot lot ea easi sier er.. 9ol ollo lowi wing ng is so some me br brie ief f advantages and disadvantages of e-shopping that can be applied from angladesh:s perspective. #dvantages Convenience Onli On line ne st stor ores es ar are e us usua uall lly y av avai aila labl ble e ! ho hour urs s a day an and d a vi visi sitt to a conven con ventio tional nal retai retaill st stor ore e re re;ui ;uirres tra travel vel and giv given en the cur curre rent nt tra< tra<c c situation in 1 the whole process eats up considerable amount of peoples: precious time. Thus /eople:s need to save some of their valuable time can be e6ploited by the e-shopping industry. Information and revies Online Onl ine sto store res s mu must st des descri cribe be pr produ oducts cts for sal sale e wit with h te te6t, 6t, pho photos tos,, and multimedia les, whereas in a physical retail store, the actual product and the manufacturers packaging will be available for direct inspection. ome
online stores provide or link to supplemental product information, such as inst instru ruct ctio ions ns,,
sa safe fety ty
pr proc oced edur ures es,,
de demo mons nstr trat atio ions ns,,
or
ma manu nufa fact ctur urer er
specications. ome provide background information, advice, or how-to guides designed to help consumers decide which product to buy. ome stores even allow customers to comment or rate their items. There are also dedicated review sites that host user reviews for di=erent products products.. In a co conv nven entio tiona nall ret etail ail stor store, e, cl cler erks ks are are ge gene nera rall lly y av avail ailab able le to an answ swer er ;uestions. ome online stores have real-time chat features, but most rely on e-mail or phone calls to handle customer ;uestions. Price and selection One advantage of shopping online is being able to ;uickly seek out deals for items or services with many di=erent vendors. earch engines, online price comparison services and discovery shopping engines can be used to look look up se sell ller ers s of a pa part rtic icula ularr pr prod oduc uctt or se serv rvic ice. e. h hip ippi ping ng co cost sts s (i (if f applicable# reduce the price advantage of online merchandise. Another ma7or advantage for retailers is the ability to rapidly switch suppliers and vendors vendo rs witho without ut disr disruptin upting g user users s shop shopping ping e6p e6perien erience. ce. om ome e ret retailers ailers (especially those selling small, high-value items like electronics# o=er free shipping on su<ciently large orders. Another ma7or advantage for retailers is the ability to rapidly switch suppliers and vendors without disrupting users shopping e6perience. Disadvantages $raud and security concerns 3ive 3i ven n th the e la lack ck of ab abil ilit ity y to insp inspec ectt me merrch chan andi dise se be befo forre pu purrch chas ase, e, consumers are at higher risk of fraud on the part of the merchant than in a physical store. ?erchants also risk fraudulent purchases using stolen credit cards or fraudulent repudiation of the online purchase. "omputer security has thus become a ma7or concern for merchants and e-commerce service providers, who deploy counterm countermeasures easures such as rewalls and antivirus vir us sof softwa tware re to pr prote otect ct the their ir net networ works. ks. "om "omput puter er sec securi urity ty has thu thus s
beco be com me a ma7or a7or co conc ncer ern n for for me merrch chan ants ts an and d ee-co comm mmer erce ce se serv rvic ice e providers, who deploy countermeasures such as rewalls and anti-virus softwa sof tware re to pr prote otect ct the their ir net netwo works rks.. /hi /hishi shing ng is anothe anotherr dan danger ger,, whe where re consum con sumers ers ar are e foo fooled led int into o thi thinki nking ng the they y are are dea dealin ling g wit with h a re reput putabl able e retailer, when they have actually been manipulated into feeding private information to a system operated by a malicious party. Juality seals can be placed on the hop web page if it has undergone an indepe ind epende ndent nt ass assess essmen mentt and mee meets ts all re;u e;uir ireme ements nts of the com compan pany y issuing the seal. The purpose of these seals is to increase the condence of the online shoppersK the e6istence of many di=erent seals, or seals unfamiliar to consumers, may foil this e=ort to a certain e6tent. %ac! of full cost disclosure The lack of full disclosure with regards to the total cost of purchase is one of the concerns of online shopping. $hile it may be easy to compare the base price of an item online, it may not be easy to see the total cost up front as additional fees such as shipping are often not be visible until the nal step in the checkout process. The problem is especially evident with cross-border purchases, where the cost indicated at the nal checkout screen may not include additional fees that must be paid upon delivery such as duties and brokerage.
Privacy /rivacy of personal information is a signicant issue for some consumers. 1i=er 1i= erent ent leg legal al 7ur 7urisd isdict iction ions s hav have e di= di=er erent ent law laws s con concer cernin ning g con consum sumer er privac pri vacy, y, and di= di=er erent ent lev levels els of enf enfor orcem cement ent.. ?an ?any y con consum sumers ers wis wish h to avoid spam and tele-marketing which could result from supplying contact information to an online merchant. In response, many merchants promise nott to us no use e co cons nsum umer er info inforrmatio ation n for for th thes ese e pu purp rpos oses es,, or pr prov ovid ide e a mechanism to opt-out of such contacts. Product suita"ility
2ot all products are e;ually suitable for e-shopping rather products that are less suitable for e-commerce include products that have a low valueto-weight ratio, products that have a smell, taste, or touch component, produ products cts that that nee need d tr trial ial tt tting ings, s, mo most st not notabl ably y clo clothi thing, ng, and pr produ oducts cts where color integrity appears important. #ccessi"ility In a ang ngla lade desh sh:s :s co cont nte e6t ac acce cess ss to inter interne nett is a ma ma7o 7orr co conc ncer ern n fo forr eshopping businesses as a large portion of the country:s population is still out of the reach of internet service. This event signicantly hampers eshopping operations as it considerably minimi&es target market.
4arious e.shopping Models In or orde derr to co cope pe wi with th th the e pr pres esen entt wo worl rld, d, alm almos ostt al alll of th the e na nanc ncia iall or organ gani&a i&atio tions ns and int inter ernat nation ional al bus busine inesse sses s in a angl nglade adesh sh ent enter er in the information highway through hosting website. anks and other nancial organi&ations have started online transactions like fund transfer, payment etc. >ar ario ious us mo mode dels ls of ee-sh shop oppi ping ng ca can n be ca cate tego gori ri&e &ed d in into to fo four ur di di=e =erren entt groups8
-
usiness to "onsumer (!"#
-
"onsumer to consumer ("!"#
-
usiness to usiness (!#
-
"onsumer to usiness ("!#
2ow let:s have a comparative analysis of those models and to assess the situation in angladesh.
&usiness to Consumer '&(C) !" can also be refer referred red as retail and it is termed as the sale of goods and services from businesses to the end-user. ?any of the organi&ation we invest inv estiga igated ted wil willl fal falll und under er thi this s cat catego egory ry.. ei eing ng bus busine iness ss or organ gani&a i&atio tion n these institute can a=ord to have slightly greater advantage over "!" category in some areas such as nance, communication network. Consumer to consumer 'C(C) "ons "o nsum umer er-t -to-c o-con onsu sume merr
(" ("!" !"##
electr onic c electroni
commer com merce ce
in invo volv lves es
the
electronically facilitated transactions between consumers through some third party. A common e6ample is the online auction auction,, in which a consumer posts an item for sale and other consumers bid to purchase itK the third fee e or commission commission.. Th The e si site tes s are are on only ly part pa rty y ge gene nera rall lly y ch char arge ges s a @at @at fe intermediaries, 7ust there to match consumers. They do not have to check ;uality of the products being o=ered. This model of e-shopping is probably most commonly found in angladesh. "lick1.com, cellba&aar etc. will fall under this category. They have few advantages in business operations such as they don:t d on:t accept responsibility for faulty products etc. &usiness to &usiness '&(&) and Consumer to &usiness 'C(&) usinessusi ness-to-bus to-business iness (! (!## desc describes ribes comm commerc erce e tran transacti sactions ons betwe between en busi bu sin nes esse ses, s, su such ch as be betw twee een n a manufacturer manufacturer and a wholesaler wholesaler,, or between a wholesaler and a retailer. "ontrasting terms are business-tobusiness-to-government nment ((!3 !3#. #. consumer (!" (!"## and business-to-gover business ess mode modell in On the other hand con consum sumer er-to-to-bus busine iness ss ("! ("!# # is a busin which consumers create value, and rms consume this value. These two types of e-shopping models are yet not that much prevalent in angladesh yet. There might some problem related to infrastructure or may be businesses are yet not ready to accept considerable amount of product or services via these two particulars models.
!nalysis art o far we have talked about various theoretical aspects of our research. 2ow 2o w le let: t:s s ha have ve a look look at th the e an anal alys ysis is that that we ha have ve ac acco comp mplis lishe hed d to achieve the stated ob7ectives of the report. In the rst segment we have analy&ed the demographics, preference of produ product ct ar array ray and gen gener eral al per percep ceptio tion n of the resp espond ondent ents. s. 9oll ollowi owing ng is presented the detailed part of the relevant analysis. Demographics Income level: Income of individuals Cumulative Frequency Valid
< 5000
Valid Percent
Percent
5
16.1
16.7
16.7
5000 - 10000
11
35.5
36.7
53.3
10000 - 25000
7
22.6
23.3
76.7
25000+
7
22.6
23.3
100.0
30
!6."
100.0
1
3.2
31
100.0
Ttal #i$$in%
Percent
&y$tem
Ttal
Income Level o- ,onsumers R 4+++ !FQ !F Q
)PQ )PQ
4+++ - )++++ )++++ - !4+++
!FQ
FPQ FP Q
!4+++S
This information is ;uite important for this resear research ch on e-shopping e- shopping becau bec ause se pot potent ential ial inv involv olveme ement nt in e-sh e-shopp opping ing ma may y dep depend end on inc incom ome e
structure. 0ere we see people of income level )+,+++ Tk and onwards are mostly involved in e-shopping. 0owever, students alone, having income level 4,+++ )+,+++ Tk constitute a vast portion of e-shopping consumer base. Age Distribution: Age range of customers Cumulative Freq Freque uenc ncy y Valid
#i$$in%
Perc Percen entt
Vali lid d Perc Percen entt
Percent
1"-25
10
32.3
33.3
33.3
26-35
!
2!.0
30.0
63.3
36-'5
"
25."
26.7
!0.0
'6+
3
!.7
10.0
100.0
Ttal
30
!6."
100.0
1
3.2
31
100.0
&y$tem
Ttal
!ge 5istribution by 6 F4 F+ !4
!+ )4 )+ 4 +
)M-!4
!5-F4
F5-.4
.5S
As the graph shows ma7ority of the respondents are from )M-!4 years of age. ag e. o as the the sa samp mple le su sugg gges ests ts th the e ma ma7o 7ori rity ty of the the bu buye yers rs of on onlin line e shopping will fall under that particular category of age. Profession:
Profession of Consumer Cumulative Freq Freque uenc ncy y Valid
&tudent
Vali lid d Perc Percen entt
Percent
10
32.3
33.3
33.3
&ervice Per$n
7
22.6
23.3
56.7
(u$ine$$ Pr)e$$inal
!
2!.0
30.0
"6.7
*ter$
'
12.!
13.3
100.0
30
!6."
100.0
1
3.2
31
100.0
Ttal #i$$in%
Perc Percen entt
&y$tem
Ttal
ro-ession 5istributio 5 istribution n )FQ )FQ
FFQ
F+Q !F !FQ Q
As we see, the professional segmentation reveals that, mass number of eshopping consumers is students. An insight reveals that these are college going students with net savvy lifestyle l ifestyle and a steady pocket money sour source. ce. usiness and service people also consume signicantly signicantly.. Other occupations may include medical professionals, freelancers etc. Preference of Product #rray* Types of products:
roduct !rray "lothes )FQ )F Q
!FQ Q !F
!FQ !F Q .+Q .+ Q
3adgets (ervice products Others
As we see, ma7ority of online customers consume electronic gadgets. The demand for clothes is also remark remarkable. able. eneral perception about obstacle in e!shopping prospects:
,ommon percetion about obstacle ,ost o- delivery7 delivery7 %96 Online transaction insecurity7 ')6connectivity7 '86 Irregularnet hysical judgement impossibility imp ossibility77 *86
/hysical 7udgment impossibility has been given considerable importance as an obstacle by many of the respondent respondents. s. o, based on this sample data we ca can n stat state e th that at pe peop oples les:: per perce cept ptio ion n reg egar ardi ding ng ph phys ysic ical al 7u 7udg dgme ment nt impossibility is a signicant obstacle in the path e-shopping growth in angladesh. Sample Selection To To select the sample we have used non-probabilistic samplin sampling g method and which is convenient sample. A sample si&e of F+ was used to conduct the re resea searrch on the con consum sumer er seg segmen ment. t. Als Also, o, a sam sample ple of )! e-shop e-shoppin ping g
service providers was also taken into account to analy&e the commercial perspective. Measurement o- 4ariables 9or dependent variable we have ! items in ! models. And for independent variable, we had *. Beliabil variable, eliability ity and inter internal nal consiste consistency ncy of the multi item scales for each of the constructs were measured using "oe<cient Alpha. And nally we use B! value to determine how much our independent variable can e6plain the dependent variable. Reliability Coefficients(Overall) N of Cases = Alpha =
30.0
N of Items = 15
.5381
9irst, we will analy&e reliability of the variables in the /ro /rospect spect model 1imension "onvenience (independent#
2umber of Items )
Alpha >alues .F!!
ecurity "oncern (independent# Availability and 1iversity (independent# %ntrepreneurs interestincentives (independent# Infrastructure (Independent#
)
.!!*
!
.)44
)
.!F+
)
.!M)
/rospects (1ependent#
)
.!+P
Interpretation Interpretation The reliability test of dependent variable for all the variables has been e6tra e6 tracte cted d fr from om the re relia liabil bility ity ana analys lysis. is. 9ro rom m the previ previous ous e6 e6plo plorat rator ory y res esea earrch the alph alpha a st stan and ds to be .4F 4FM) M),, wh whic ich h mea ean ns th that at al alll th the e independent variables had an internal consistency of 4F.M)Q among each other.. Again individually from the column alpha if item deleted we can see other
that that al alll the the in inde depe pend nden entt va vari riab able les s ar are e be belo low w +. +.4 4 an and d so ther there e wi will ll be drastic signicant change if any of the independent variables are deleted. 2ow, for the "hallenge model 1imension "ustomer receptiveness/reference over others (independent# /roduct Juality (independent#
2umber of Items )
/roduct delivery /roduct (independent# ack of legislation and incentives (independent# "hallenges (1ependent#
Alpha >alues .!!)
)
.!+P
)
.)44
!
.FP*
)
.F+!
Interpretation Again individually individually from the column alpha if item delete deleted d we can see that all the indep independ endent ent varia variable bles s ar are e belo below w +.4 and so the there re will be dr drast astic ic signicant changes if any of the independent variables are deleted.
5ata !nalysais Result ;indings #nalysais Techni+ues Techni+ues Once the reliability analysis was done, we calculated the mean value of dependent variables and independent variables. 9 9inally, inally, we completed the analysis part through regr regression ession analysis. Hypothesis Testing In this section, we will test the corresponding hypotheses of respective regression models. In case of the /rospect model, the null hypotheses can be put as8
% 0o8
/os osit itiv ive e
pr pro osp spec ectts
on
e-s e-shop oppi pin ng
do does es
no nott
de dep pen end d
on
convenience. 0)8 /ositive prospects on e-shopping depends on convenience. ' 0o8 /ositive /ositive pro prospect spects s on e-sh e-shoppin opping g does not depen depend d on secu security rity concerns. 0)8 /ositive prospects on e-shopping depends on security concerns. ) 0o8 /ositive prospects prospects on e-shopping does not depend on availability G diversity. 0)8 /ositive prospects on e-shopping does depend on availability G diversity. * 0o8
/os osit itiv ive e
pr pro osp spec ectts
on
ee-s sho hopp ppin ing g
doe oes s
no nott
dep epen end d
on
entrepreneurs interest aka incentives. 0)8 /ositive prospects on e-shopping does depend on entrepreneurs interest aka incentives. + 0o8
/os osit itiv ive e
pr pro osp spec ectts
on
ee-s sho hopp ppin ing g
doe oes s
no nott
dep epen end d
on
infrastructure. 0)8 /ositive prospects on e-shopping does depend on infrastructure. The ndings from from multiple rregression egression analy analysis sis are listed as follows8
Inde Indepe pend nden entt >ariab ariable les s
t tan anda dard rdi& i&ed ed t value Begression "oe<cient
/
(β# "onvenience .F!M ecurity concern .!FM /r /roduct oduct avail availabili ability ty G .)M*
).5+F ).)!+ .*)M
/8%' /8'9 /8*<
diversity %ntrepreneurs %ntrepr eneurs interest .++)
.+!+
/%)+
and incentives Infrastructure
.4F5
/8)%
.))+
The observed table shows that all the variables have signicant β values indicating ma7or implications of these factors on e-shopping prospects. And as we can see that only / value of %ntrepr %ntrepreneurs eneurs interest G incentives (.)F4# is larger than +.+4 and we know a p.value less than 8/8+ =ould result
in
the
rejection
o-
the
null
hypothesis
at
the
+6
>signifcan >signi fcance? ce? level level.. o this is ca case se 1o nu null ll hy hypo poth thes esis is is no nott o, in th rejected which is posit rejected positive ive prospec prospects ts of e-sho e-shopping pping does not depen depend d on entrepreneurs entrepr eneurs interest and incentives. Other fact such as convenience, security concerns etc. have signicant in@uence on the prospect of e-shopping in angladesh. o clearly in order to improve the situation people concerned need to take other factors into consideration and modify them so that prospect of the sector is enhanced. In case of the "hallenges model, the null hypotheses can be put as8 % 0o 0o88 "h "hal alle leng nges es in ee-sh shop oppi ping ng is no nott mo moti tiva vate ted d by "u "ust stom omer er receptiveness. 0)8
"hallenges
in
e-shopping
is
moti tiv vated
by
"ustomer
receptiveness. ' 0o8 "h "hall alleng enges es in e-s e-shop hoppin ping g is not mo motiv tivate ated d by "on "onsum sumer: er:s s suspicion over product ;uality. 0)8 "hallenges in e-shopping is motivated by "onsumer:s suspicion over product ;uality. ) 0o 0o88 "h "hal alle leng nges es in ee-sh shop oppi ping ng is no nott mo moti tiva vate ted d by 1i 1i<c <cult ulty y in product deliver delivery y. 0)8 "hal "hallenge lenges s in e-sho e-shopping pping is moti motivated vated by 1i<c 1i<culty ulty in pro product duct delivery. * 0o8 "halle alleng nges es in ee-sh sho opp ppin ing g
is not moti tiva vatted by
ac ack k of
government governm ent nancial incentives. 0)8 "hall "hallenges enges in e-sho e-shopping pping is moti motivate vated d by ack of governm government ent nancial incentives.
The ndings from from multiple rregression egression analy analysis sis are listed as follows8 Independent >ariables
tandardi&ed Begression "oe<cient (β#
t value
/
"ustomer
.F!P
).PM*
/889@
uspicion over product ;uality
.)M+
.MPM
/8)<@
1i<culty in product p roduct delivery
.!44
).!MF
/8'*
ack of government nancial incentives
.)PP
.*4M
/8@A+
receptiveness
The observed table shows that all the variables have signicant β values indicating ma7or implications of these factors on e-shopping prospects. And An d as we ca can n se see e th that at on only ly / va valu lue e of a ack ck of go gove verrnm nmen entt n nan anci cial al incentives (.+M*4# is larger than +.+4 and we know a p.value less than 8/8+ =ould result in the rejection o- the null hypothesis at the +6 >signifcan >signi fcance? ce? level level.. o this is ca case se 1o nu null ll hy hypo poth thes esis is is no nott o, in th rejected whi rejected which ch is cha challen llenge ges s of e-s e-shop hoppin ping g is no nott in@ in@uen uenced ced by lac lack k of government governm ent incentives. 0owever, all other variables do have substantial impact on the challenges faced by e-shopping in our country. o to mitigate challenges factors such as suspicion over product ;uality, di<culty in product delivery etc. have to give prime importance. They need to be minimi&ed as much as possible to ensure smooth business operation of e-shopping.
Regression #nalysis Model "ummary #Prospects$
Model
R
R Square
Adjusted R Square
Std. Error of the Estimate
1
.66
.!"#
.61
.!
9rom the regression analysis, we have found that the >alue of B ;uare is (.M!#. That means independent variables have M!.Q impact over the dependent variable. In other words, the dependent variable (/rospects in ee-sh shop oppi ping ng## ca can n be in@ in@ue uenc nced ed M! M!. .Q Q by th the e in inde depe pend nden entt va vari riab able le (Conv Convenien enience% ce% "ecur "ecurity ity%% Avail Availabilit ability y & Dive Diversity rsity%% 'ntr 'ntrepre epreneurs neurs inter interest est and Infrastructure#. Infrastructure#. o, it means we can 7udge the impact of dependent variables on the independent variable with up to M!.Q accuracy. The rate of accuracy is ;uite good and it would help us to how prospect of e-shopping will be a=ected for a certain change in any of the signicant factors such as, perrcei pe ceive ved d co conv nven enie ienc nce, e, pr prod oduc uctt av avail ailab abil ilit ity y an and d di dive vers rsit ity, y, se secu curi rity ty concerns etc. To enhance prospects of e-shopping the model can be used to determine how much change in the stated factors is needed to enhance the prospect to some considerable degree. Model "ummary #Challenges$ Model
R
R Square
Adjusted R Square
Std. Error of the Estimate
1
.#$"
.!#"
.1%
.#1
9rom the regression analysis, we have found that the >alue of B ;uare is (.M!#. That means independent variables have M.!Q impact over the dependent variable. In other words, the dependent variable ("hallenges in ee-sh shop oppi ping ng## ca can n be in@ in@ue uenc nced ed M M.! .!Q Q by th the e in inde depe pend nden entt va vari riab able le (Cus Custom tomer er rec recept eptive ivenes ness% s% "us "uspic picion ion ove overr pr produ oduct ct (ua (ualit lity y% Di) Di)cul culty ty in product delivery% delivery% *ac+ of government ,nancial incentive incentive#. #. Thus the gure suggests that we assess the impact of a change of independent variable on the dependent variable with about MQ accuracy accuracy..
o, this model can be used to determine the change in the level of challenges faced by e-shopping given that any of the stated factors are changed. In this way the model can be used to mitigate challenges in an e=ective and e<cient way.
Recommendations o far we have gone through various analyses regarding the prospects and an d ch chal alle leng nges es of e-sh e-shop oppi ping ng.. a ase sed d on ou ourr an anal alys yses es we ha have ve so some me recommendation recomm endation to make which we believe will enhance the over scenario of e-shopping sector in angladesh.
-
/erceived /er ceived convenience of e-shopping has to be enhanced.
-
ecurity issues have to minimi&ed as much as possible to ensure smooth and continuous business transaction.
-
/roduct /rod uct diversity and availability have to be increased.
-
Infr nfrastructural
develo elopment
is
needed
such
as,
inter ern net
connectivity, access to banking services etc.
-
"ustomers: suspicion regarding product ;uality has to be mitigated as much as possible.
-
Overall customer receptiveness has to be increased if e-shopping is to @ourish in our country country.. This can be done through various e=ective marketing mark eting campaign and substantial advertisement.
,onclusion 1espite all of the disadvantages and challenges it has been found from various papers and also from our analyses that e-shopping is a growing
sector in angladesh and has lots of potential. /eople:s interest to have a hassle free shopping is the prime driving force of its prospects. ots of infrastructural development is needed to be done to make e-shopping a routine activity for many of the country:s citi&ens as advised by some of the authors. oth government and private sector initiatives are needed to make sure sustainable growth in this sector.
