Consumer Electronic Commerce

2nd

INTERNATIONAL CONFERENCE ON BUSINESS AND ECONOMIC RESEARCH (2nd

ICBER 2011) PROCEEDING

562

PREDICTORS OF BUSINESS-TO-CONSUMER ELECTRONIC COMMERCE USAGE AMONG ONLINE

CONSUMERS IN MALAYSIA

Christine Tan Nya Ling 1, Gwee Kai Jing 2, Ng Tuan Hock 3, Lim Ying San 4

The importance of electronic commerce (EC) in boosting the development of the new economy based on electronic interfaces is indisputable. EC is observed by many as an emerging concept that can bring significant influence towards the development of the ‘digital economy’, as it can increase the efficiency of online business processes with the support of the Internet that operates 24/7. As the growth of EC increases, it is pertinent for business practitioners to possess the fundamental knowledge of consumers’ purchasing preferences to better promote their products and services. Since one of the most important forms is business-to-consumer (B2C), the EC expansion can assist dot-com companies to increase their online market share and consequently boost their revenue by attracting and at the same time influence consumers in making repeated online purchases. In order to succeed in B2C, businesses in Malaysia need to better understand the demands of online shoppers by fulfilling their needs and requirements. Therefore, this study provides an insight to dot-com companies to better identify and examine the various predictors and its associations: Trust; Price; Online Payment Security; Website Design; Website Quality; towards B2C EC usage among online shoppers in Malaysia. The result of this study will assist online companies to further understand the preferences and expectations of cyber-shoppers, which may in turn aid in fostering closer relationships. Besides, this study aim to provide a greater understanding to both new and existing companies to continuously remain competitive by reaping the benefits of B2C in improving their business performance, seeing that B2C EC is observed as the most innovative and modern approach of conducting businesses in the years to come. Keywords: EC; B2C, trust, price, online payment security, website design, website quality.

1 Christine Tan Nya Ling, Faculty of Business & Law, Multimedia University, Melaka,

Malaysia. Email: [email protected] 2 Gwee Kai Jing, Faculty of Business & Law, Multimedia University, Melaka, Malaysia.

Email: [email protected] 3 Ng Tuan Hock, Faculty of Business & Law, Multimedia University, Melaka, Malaysia.

Email: [email protected] 4 Lim Ying San, Faculty of Business & Law, Multimedia University, Melaka, Malaysia.

Email: [email protected]

mailto:[email protected]




2nd



563

1. Introduction In recent years, a growing number of organisations across all industries are exploiting the Internet in creating numerous business opportunities. This rising phenomenon is viable to enthusiastic businesses that are keen to hop on the ‘dot-com’ bandwagon of global and competitive market. With this, a new set of basic economic practices had emerged that is based on a relatively innovative ‘digital economy’ relaying heavily on electronic interfaces. Given that the Internet is able to expose businesses to both national and international markets through electronic connectivity, this vibrant worldwide system of computer networks has become a valuable tool that has one way or another affected the way companies conduct trading by means of shifting the fundamentals of business dynamics (Tan et al. 2010). Therefore, in hoping to tap into the vibrant and increasing virtual trend, many conventional brick and mortar retailers have chosen the online path to further redefine their businesses. To them, the Internet has become an essential technology in organising their business activities more rapidly. Currently, due to the strong emergence and growth of the Internet, especially in Malaysia, the development of electronic commerce (or more commonly known as ‘EC’) has eventually become an important trading element in changing the way businesses are conducted. Based on a study conducted by the International Telecommunication Union (UTC), it is reported that there were around 16.9 million Internet users in Malaysia as of the year 2010, which ultimately represents 64.6% of the 26,160,256 Malaysian population (InternetWorldStats n.d.). Also, as reported by Lincoln Lee, a research manager from International Data Corporation (IDC) Southeast Asia, EC spending in Malaysia is forecasted to continuously grow at a healthy rate from the year 2010 to 2014 (Lee & Rondon 2010), which had earlier showed a compounded yearly growth rate of more than 28% from the year 2006 till 2010. To most people, EC is often describe as the buying and selling of products and services conducted between organisations and customers using the Internet (Chaffey 2010). Due to the expansion of businesses across international boundaries via the Internet, EC has further allow the quick and easy search of potential customers, reliable suppliers and suitable business partners across the globe (Turban et al. 2009). At the same time, EC has benefit online shoppers’ by allowing them the flexibility of selecting from a variety of products and services coming from diverse online traders without even leaving the comfort of their homes, 24 hours a day, 7 days a week, by a just simple click of a mouse with the aid of the Internet (Turban et al. 2009). At present, the most commonly used EC is known as business-to-consumer (B2C), which focuses mainly on consumer shopping (Chaffey 2010). The result of this study would help to provide an insight to online businesses in fulfilling the desires and requests of online consumers by identifying and examining the predictors and its associations: Trust; Price; Online Payment Security; Website Design; Website Quality; towards B2C EC usage among online shoppers in Malaysia. The findings of the research will be useful to

2nd



564

existing online businesses, whereby this study recognises online shoppers’ preferences and expectations when it comes to B2C EC, eventually assisting organisations to have a closer relationship with customers. This will be important to companies intending to gain competitive advantage by expanding their online market presence. 2. B2C EC Usage in Malaysia Business-to-consumer (B2C) EC is immensely growing and has become widely known in Malaysia. B2C EC relates to the online purchasing of end consumers and termed by Turban, Lee, King, Liang, & Turban (2009) as a retail transaction that allows online shoppers the flexibility to choose multiple products or services via a website that permits keen buyers to make payments online. By definition, B2C EC is viewed as the “business operations where telecommunications networks are deployed for communication and product/service delivery between businesses and individual customers” (Tangpong, Islam & Lertpittayapoom 2009, p. 3), which focuses on the buying and selling activities between both buyers and sellers. As forecasted by IDC market research, the B2C EC in Malaysia, which includes online purchasing of goods (products or services) and bill payments had reached an astonishing figure of RM15.3 billion in the year 2009 (Yee & Seong 2009). According to a study carried out by IDC’s Skypad 2008, Malaysia is found to be having the highest percentage (82%) of online shoppers among the nine countries surveyed in the Asia Pacific who uses the Internet to purchase travel-related products or services, whereas a high percentage of consumers i.e. 69 percent had made purchases of books online. In a similar study conducted by the Nielsen Company, it discloses that among the items bought from B2C websites, airline tickets and reservations top the list at 55%, followed by tour or holiday reservations (41%), whereas 22% purchases computer hardware, while the rest of Malaysia’s Internet users’ made purchases of books (21%) and event tickets (18%) online (TheNielsenCompany 14 April 2008). Nevertheless, even though online shopping may still be quite new among consumers in Malaysia but nevertheless it is fast catching up. As a matter of fact, B2C had become popular as it provides consumers with the function of accessing information of the variety of goods on offer at relatively lower cost. For example, consumers can attain information such as price, design, packaging, and quality on essential products and services. Besides, online consumers are able to interact with other consumers in electronic communities and exchange ideas as well as experiences via the retailers’ websites, hence in the long run helps consumers in saving money, time and effort. Companies eager to adopt successful dot.com enterprises can look forward to the many potential gains offered by B2C EC, including lower transaction costs associated with sales, access to global markets i.e. to a larger group of potential customers, and opportunities for disintermediation leading to lower costs for customers (Beynon-Davies n.d.). Undeniably, B2C will attract not only the attention of business practitioners but at the same time online consumers in using B2C EC in Malaysia.

2nd



565

3. Research Objective This study aims to provide insights to businesses in fulfilling online consumers’ needs. The findings of the research will be useful to existing online businesses, whereby this research identifies online consumers’ preferences and expectations towards online purchasing. Hence, this research is intended to investigate the predictors and its association with B2C EC usage among online consumers in Malaysia. This objective is divided into five (5) specific objectives as below; from section 3.1 through 3.5. Null hypothesis is formulated for each objective and stated at the final part of each objective. 3.1 To Investigate the Association between Malaysia n

Consumer’s Trust and Their B2C EC Usage Trust is one of the most significant influential predictor when it comes to online business transaction via the use of B2C EC (Corritore, Kracher & Wiedenbeck 2003; Egger 2001; Farrell & Weiser 2003; McKnight & Chervany 2002; Winch & Joyce 2006), particularly in determining the success of B2C EC in cyberspace (Balasubramanian, Konana & Menon 2003; Chen & Barnes 2007; Farrell & Weiser 2003; Grabner-Krauter & Kaluscha 2003; Koufaris & Hampton-Sosa 2004; McKnight & Chervany 2002; Winch & Joyce 2006). Trust is termed as the willingness of an individual to behave in a manner that assumes that the other party will behave in accordance with expectations in a risky situation (Deutsch 1962; Winch & Joyce 2006). Since trust is inextricably associated with risk in an online environment (Winch & Joyce 2006), Merrilees & Fry (2003) stressed that trust needs to be assured, so that a generously proportioned fraction of online consumers would be willing to use B2C. For this reason, trust that exists among consumers would indeed stimulate their intent to purchase online. However, online purchasing is considered to be risky due to the lack of direct contact involved (Reichheld & Schetter 2000; Ribbink et al. 2004), more so if the site’s functionality should further include transactions processing (Winch & Joyce 2006). Therefore, if perceived risk is high, consumer’s trust must rise to an optimal level, where increase risk is manageable, acceptable and at the same time considered as practical, particularly in creating consumer’s loyalty (Anderson & Srinivasan 2003; Chen & Barnes 2007; Gefen, Karahanna & Straub 2003; Reichheld & Schetter 2000; Ribbink et al. 2004). In essence, since EC is believed to present numerous risks to consumers (Grabner-Krauter & Kaluscha 2003; Ribbink et al. 2004), trust therefore is crucial and necessary for creating consumers loyalty, particularly when perceived level of risk is at its maximum (Anderson & Srinivasan 2003; Ribbink et al. 2004). Among the elements of trust, ‘institution-based trust’ is considered to increase consumers’ motivation to corporate with another party through a reliable third party especially in an unfamiliar or uncontrollable online environment (McKnight & Chervany 2002; Salo & Karjaluoto 2007). On the whole, this will not only build the foundation and assurance of trust between two unfamiliar parties, but at the same time strengthens and increases the use of B2C EC.

2nd



566

H0: There is no significant relationship between consumer’s trust and B2C EC usage H1: There is a significant relationship between consumer’s trust and B2C EC usage 3.2 To Find Out the Correlation involving Price and Malaysian

Consumer’s B2C EC Usage Price is considered to be a key influencer when using B2C EC (Paynter & Lim 2001; Vazquez & Xu 2009; Wolfinbarger & Gilly 2003). As the numbers of online consumers are growing continuously, comparing prices of products or services with just a ‘click-away’; by having non-price advantages, including quality services are significantly attracting and retaining these enthusiastic buyers to make price savings (Jarvenpaa & Todd 1997; Jiang & Rosenbloom 2005; Liu & Arnett 2000; Vazquez & Xu 2009). In addition, price is considered to be the predictor that distinguishes B2C EC from other traditional sales channel. Lower prices are usually expected in view of the fact that B2C enables businesses to have the pleasure of decreasing their transaction costs by eliminating the need of intermediaries (or third parties), eventually causing online sellers to be able to offer lower prices to consumers (Karlsson et al. 2005; Verma & Varma 2003). The competitive price offered by online sellers offers numerous benefits, such as lower cost of information processing, lesser operating cost; in addition to succumb to the impressive global reach presented by the Internet (Harn, Khatibi & Ismail 2006; Rowley 2000). Besides, cheaper online prices offered by competitors due to competitive pressures, allows for a much greater share of online market presence. Pricing strategy need to be considered as one of the method used among online competitors (Hanson 1999; Harn, Khatibi & Ismail 2006). Hence forth, B2C EC are able to practice lower pricing as a key strategy to lure online buyers while at the same time gaining competitive advantage (Zo & Ramamurthy 2009). Online buyers are equally willing to purchase online to obtain the best affordable prices (Fenech & O'Cass 2001; Vazquez & Xu 2009). With this, competitive prices can further attract consumers in using B2C EC in making online purchases. H0: There is no significant relationship between price and consumer’s B2C EC usage H2: There is a significant relationship between price and consumer’s B2C EC usage 3.3 To Examine the Relationship among Online Paymen t

Security and Malaysian Consumer’s B2C EC Usage The level of security in online payment transactions is one of the most vital and pressing concerns faced by B2C EC (Swaminathan, White & Rao 1999; Zellweger 1997). Since online payment is part of an EC transaction that includes the online buying and selling of goods or services (Odlyzko 2003),

2nd



567

concerns on online payment security need to be seriously addressed due to its influence on consumer’s B2C EC usage. Swaminathan, et al. (1999) further expressed that even though online payment procedures offer convenience, there are certain limitations faced by customers that needs to be addressed by online businesses concerning the transmission of personal information via the Internet, which includes the exposure of credit card information (Lee, Park & Ahn 2001; Swaminathan, White & Rao 1999). At the same time, online purchasers claimed that they would frequently shop online if the safety of personal billing information is well safeguarded from unknown intruders or hackers (Paynter & Lim 2001). With this, consumer’s sense of confidence or trust on the security of the online payment transaction will increase if the transparency of the transaction process increases proportionately (Hoffman, Novak & Peralta 1999; Jarvenpaa & Todd 1997; Lee, Park & Ahn 2001; Swaminathan, White & Rao 1999). Therefore, online payment security is a crucial predictor that needs to be taken into consideration by businesses whenever there is a need for consumers to make purchases via B2C websites (Szymanski & Hise 2000). H0: There is no significant relationship between online payment security and consumer’s intention of using B2C H3: There is no significant relationship between online payment security and consumer’s intention of using B2C 3.4 To Identify the Association between Website Des ign and

Malaysian Consumer’s B2C EC Usage As more and more products and services are traded online, the key contact point for buyers when it comes to online purchasing is through the seller’s website interface (Palmer 2002; Zhang et al. 2008). Website design, according to numerous researchers has a profound influence on customers’ purchasing preferences (Egger 2001; Kim & Moon 1998; Kolsaker & Payne 2002 ; Luo et al. 2006; Roy, Dewit & Aubert 2001). From the very beginning, the Internet is considered to be one of the most revolutionary technologies in shifting conventional trading, therefore having an immense impact on the future of B2C EC (Wen, Chen & Hwang 2001). A website’s interface design is important for B2C due to the need of businesses to interact with consumers through its website. Therefore an appropriate website design is considered as a ‘main gateway’ in retaining existing and potential customers (Barnes & Vidgen 2003; Kuo, Hwang & Wang 2004). The design and content of a B2C website is an important medium that acts as an interface between customers and online retailers (Kuo, Hwang & Wang 2004). Attractive website design should include features such as excellent organisation, simple search functionality (Manes 1997; Szymanski & Hise 2000), attractiveness, ease in navigation (Kirakowski & Cierlik 1998); and fast download speed (Xia et al. 2003). From the points advocated, it shows that website design does indeed have an association with online consumers when it comes to using B2C EC. H0: There is no significant relationship between website design and consumer’s B2C EC usage

2nd



568

H4: There is a significant relationship between website design and consumer’s B2C EC usage 3.5 To Determine the Correlation between Website Qu ality

and Malaysian Consumer’s B2C EC Usage Numerous studies have found that website quality is a critical predictor in influencing consumers to use B2C EC (Devaraj et al, 2002; Jarvenpaa and Todd, 1996; Lai & Liang, 2000; Ramamurthy et al, 1992; Zhu & Kraemer, 2002; Zo & Ramamurthy, 2009). Hence, high quality website would increase the confidence and persuade consumers to shop online (Zo & Ramamurthy 2009). As widely identified by researchers and practitioners, website quality is viewed as customers’ evaluation of whether the features of a website is able to meet their needs; therefore reflecting the overall excellence of the website (Chang & Chen 2008), since improved website quality will further enhance a better online environment to foster the growth of B2C EC (Vrechopoulos & Atherinos 2009). When a consumer is new to B2C, the quality of the website is a significant determinant to the online shopper on whether to further utilise the site (Dai, Huang & Yi 2005). Hence it is appropriate to assess the quality factor that a B2C website must acquire in order to attract and retain potential customers (Cao, Zhang & Seydel 2005; Smith & Merchant 2001). This is true as several B2C websites may attract customers, but are not able retain them in the long run. So it is crucial to comprehend why some customers are attracted to a B2C site and why some are unsatisfied and never return (Dai, Huang & Yi 2005). The features of website quality include ‘information quality’ that measures the usefulness of its contents (Gounaris & Dimitriadis 2003); and ‘responsiveness’ that refers to the effective handling of problems through the website (Chiu et al. 2008; Parasuraman, Zeithaml & Malhotra 2005). Thus, the quality of a website will have an influence on consumers’ B2C EC usage. H0: There is no significant relationship between website quality and consumer’s B2C EC usage H5: There is a significant relationship between website quality and consumer’s B2C EC usage 4. Methodology 4.1 Research Framework From the literature review, a research framework is generated and diagrammatically demonstrated. There are five (5) independent variables: Trust; Price; Online Payment Security; Website Design; Website quality, while the one (1) dependent variable is B2C EC Usage.

2nd



569

4.2 Research Instrument The questionnaire was designed, tested and deployed to collect the data for this study. The questionnaire developed was divided into four (4) sections, which includes both nominal and ordinal scales to measure the respondents’ answers. Section A contains respondents’ demographic profile such as gender, age, nationality, ethnicity, occupation, education level and levels of income. In Section B, respondents were required to indicate their internet usage and B2C involvement related to online purchase. Section C and D measures the independent and dependent variables in the study. The questionnaire contains thirty-three (33) questions on the respondents’ use of B2C EC. A seven-point Likert scale (strongly disagree to strongly agree) was employed to determine the items involved in measuring each of the variables. A pilot study was used to determine the validity and reliability of the questionnaire. For this purpose, a few students and academic staffs from a local private university in Melaka were chosen to take part in this study. As a consequence, some modifications were made based on their suggestions and comments. 4.3 Sources of Research Data Primary and secondary data were considered as the most appropriate research method to be used. The questionnaires distributed cover the twelve (12) states in Malaysia. A total of 200 questionnaires were distributed. The respondents for this survey were the existing and potential online shoppers. Drop-off and e-mail surveys have been used to collect data. Drop-off

2nd



570

questionnaires were distributed to the respondents in places such as offices, colleges, universities, shopping malls, etc. As for the e-mail surveys, the softcopy of the questionnaires were sent to the respondents. Random sampling method was applied to ensure that every element in the population has a known and equal chance of being selected as a subject. The data gathered from the survey was coded and analysed using SPSS (Statistical Software Package for Social Science) software version 18 and was summarised using appropriate statistics. 5. Result and Discussion

In this study, a total of 200 responses were obtained. According to Table 1, majority of the respondents are females, 109 respondents (54.50%) and 91 males (45.50%). Among them, the highest group comes from the ages between 18 to 29 year old (57.00%), while the remaining age groups are between 30 to 39 years (34.50%) and 40 to 49 years (8.50%) respectively. In terms of race, the respondents comprised mainly of 145 Chinese (72.50%) followed by 32 Malays (16.00%) and 23 Indians (11.50%). With regards to occupation, majority of the respondents are self-employed (51.50%), followed by students with 42.00%. The lowest in the group are retirees (0.50%). The frequency analysis of educational level indicates that majority of them were found to be diploma holders that accounted for 69%. The lowest comes with bachelor degrees (1%). In terms of monthly income, majority of the respondents earned RM 2,001.00 to RM 3,000.00, which accounted for 29.5%. Only 1.9% of the respondents earn more than RM 6000.00. With regards to allowance for either the unemployed or retirees, it is found that 54.2% received a month allowance of RM 500.00 and below. The lowest come from 10 respondents (12.00%) receiving above RM 1000.00.

Table 1: Respondents’ Demographic Profile

Respondent’s Profile Frequency Percentage (%)

Gender

Male Female

91 109

45.50 54.50

Age 18-29 years old 30-39 years old 40-49 years old

114 69 17

57.00 34.50 8.50

Race Chinese Malay Indian

145 32 23

72.50 16.00 11.50

Occupation Self-employed Employed Student Retiree

12 103 84 1

6.00 51.50 42.00 0.50

Educational level SPM A-level/ STPM Diploma/Advanced Diploma Degree Master Degree

16 17 27

138 2 0

8.00 8.50

13.50 69.00 1.00 0.00

Monthly Income Below RM 1000 RM1001-RM2000 RM2001-RM3000

40 23 46

25.60 14.70 29.50

2nd



571

RM3001-RM4000 RM4001-RM5000 RM5001-RM6000 Above RM6000

19 14 11 3

12.20 9.00 7.1 1.9

Monthly Allowance (for the unemployed, students or retirees)

Below RM500 RM501-RM1000 RM1001-RM2000

45 28 10

54.20 33.70 12.00

Based on the below findings (Table 2), majority of the respondents surf the Internet daily (54.00%) and 1.00% of the respondents spend less than once a week online. The result also found that majority of the respondents used up between 1 to 4 hours surfing the Internet in a week (88%). The lowest come from the group spending between 16 to 20 hours a week (2.50%). With regards to making purchases of products or services via the Internet, 61.50% of the respondents ranked this as ‘seldom’ i.e. 1 to 3 times. Only 17% claimed that they had never made any online purchases before. The study found that the majority of respondents have between 1 to 2 years (60.50%) of experience in online purchasing. However, it is good to discern that a maximum of 50.50% of the respondents indicated their intentions of making online purchases in the near future. From the data collected, 35.90% of the respondents stated Lowyat.net – Malaysia’s Tech Enthusiast Resource Community as the most frequently used B2C website when it comes to online purchasing, followed by Amazon.com (26.10%).

Table 2: Respondents’ Internet Usage and Online Pur chase Involvement

Respondents’ Internet Usage and Online Purchase Involvement Frequency Percentage (%)

Number of times online per week Less than once a week About once a week 2 to 3 times a week 3 to 5 times a week Daily Several times each day

2 14 34 16 108 26

1.00 7.00

17.00 8.00

54.00 13.00

Hours spent online per week Less than 1 hour 1-4 hours 6-10 hours 11-15 hours 16-20 hours More than 20 hours

8 88 56 16 5 27

4.00 44.00 28.00 8.00 2.50

13.50 Frequency (Number of times) in performing online purchasing

Never Seldom (1-3 times) Quite Frequently (4-10 times) Frequently(more than 10 times)

17 123 43

17

8.50 61.50 21.50

8.50

Intentions of online purchasing No intentions Low Moderate High

4 56 101 39

2.00 28.00 50.50 19.50

Internet Service Provider (ISP) Celcom Broadband Streamyx Broadband P1 W1MAX Maxis Broadband Time Broadband Jaring Broadband Others

23 144 9 17 2 4 1

11.50 72.00 4.50 8.50 1.00 2.00 0.50

2nd



572

Years of experience in online purchasing Never 1-2 years 3-5 years 5-7 years 7-9 years

16 121 59 2 2

8.00 60.50 29.50 1.00 1.00

Most often used B2C website 1shoppe.net AirAsia.com Amazon.com Lowyat.NET MOL.com Lelong.com.my eBay Malaysia Maureenshop.com JBTALKS.CC Golden Screen Cinemas Online Siyufushi.com

6 15 48 66 22 7 4 1 10 1

2

3.30 8.20

26.10 35.90 12.00 3.80 2.20 0.50 5.40 0.50

1.10

6. Reliability Analysis

Reliability analyses were conducted on all the independent and dependent variables. As shown in Table 3, the variables i.e. Price and Website Quality have the highest Cronbach’s Alpha of 0.760. Price was measured through five (5) questions, whereas Website Quality was measured through six (6) questions. Reliability analysis conducted to the variables confirms the Cronbach Alpha (α) values ranging from 0.622 to 0.760. As acknowledged, the lower acceptance limit for Cronbach’s Alpha (reliability) is 0.70, nevertheless in certain cases it will decrease to 0.60 (Hair et al. 2009).

Table 3: Summary of Means, Standard Deviations, and Reliability Analysis of Predictors of B2C EC Usage

Predictors

No. Variables Mean Standard Deviation

α No. of item

1. Trust 5.448 0.595 0.622 6 2. Price 5.564 0.682 0.760 5 3. Online Payment Security 5.635 0.722 0.724 5 4. Website Design 5.386 0.679 0.751 6 5. Website Quality 5.568 0.618 0.760 6

B2C EC Usage 1. B2C EC Usage 5.680 0.605 0.748 5

Table 3 indicates the mean and standard deviation of the five (5) predictors i.e. Trust; Price; Online; Payment Security; Website Design; Website Quality; towards B2C EC usage among online consumers in Malaysia. Among all the variables tested in this study, the independent variable (Online Payment Security) that was measured through five (5) questions has the highest mean of 5.64 with the standard deviation of 0.72. This illustrates that online consumers views Online Payment Security as a major consideration when purchasing products or services via B2C websites (Szymanski & Hise 2000). Besides, the results exhibits that the overall mean and standard deviation score for B2C EC usage (Dependent Variable) is 5.68 and 0.61 respectively.

2nd



573

6.1 Hypothesis Testing

Table 4: Correlation Analysis Used to determine the Magnitude of Correlation between the Independent Variables and D ependent Variable

Hypothesis Independent Variables

(Predictors)

Dependent Variable

(Intention to Use B2C) H1 Trust Pearson correlation

Significant (2-tailed) N

0.507 0.000 200

H2 Price Pearson correlation Significant (2-tailed) N

0.568 0.000 200

H3 Online Payment Security

Pearson correlation Significant (2-tailed) N

0.472 0.007 200

H4 Website Design Pearson correlation Significant (2-tailed) N

0.579 0.000 200

H5 Website Quality Pearson correlation Significant (2-tailed) N

0.610 0.000 200

As shown on Table 4, there were five (5) hypotheses developed in this study using Pearson product-moment correlation. The estimated Pearson product-moment correlation is 0.507; 0.568; 0.472; 0.579; 0.610; implying a positive relationship between the five (5) independent variables i.e. Trust; Price; Online Payment Security; Website Design; Website Quality; and independent variable i.e. B2C EC Usage. In addition, to prove the correlate coefficient is significant, the p-value is less than 5% (p-value < 0.05). This implies that the statistical result can be correlate coefficient is substantiated at the 5% level. Hence, the null hypotheses for H1, H2, H3, H4, and H5 are rejected at the 5% level of significance.

Also, it is determined from the result that the predictor i.e. Website Quality has the strongest positive relationship with B2C EC Usage. This can be supported by the studies conducted by Vrechopoulos and Atherinos (2009) that states that Website Quality serves as the store atmosphere since effective retail environments are crucial for customers’ acquisition and retention (Chang & Chen 2008; Éthier et al. 2006). Moreover this reveals that a better quality website will further enhance and improve the vendor’s online environment to further foster its growth in B2C EC. This indicates that as the quality of a website increases, the willingness and interest of consumers to use B2C will increase as well. As this continues, the constant upgrade and maintenance of the website will undoubtedly boost not only its quality but also induce the interest of consumers to use B2C EC in the future. As iterated by Wen, et al. (2001), Website Design is an important element in the growth of B2C EC as businesses has to interact with customers via their website, consequently appropriate Website Design and features have become a central focus to retain consumers (Barnes & Vidgen 2003; Kuo, Hwang & Wang 2004). At the same time, Price positively correlates with B2C EC usage since the competitive prices offered by online businesses can be a great inducement to

2nd



574

the consumers especially when it comes to purchasing products or services via B2C sites (Zo & Ramamurthy 2009). Also, Trust has a positive correlation with B2C EC Usage, mainly because in an unpredictable B2C environment, Trust is a major predictor for customers to willingly buy products or services online (Deutsch 1962; Winch & Joyce 2006). If Trust should exist between consumers and businesses, it will further increase the use B2C EC among online consumers in Malaysia. Lastly, the predictor i.e. Online Payment Security has a moderate positive relationship with B2C EC Usage. As argued by Paynter and Lim (2001), online consumers would increase their tendency to shop online if they feel protected and safe in using the Online Payment Security system, especially when it comes to submitting personal billing information via the Internet.

7. Conclusion and Recommendation

The understanding of this study is a must as the global trend is walking towards buying and selling through cyberspace, and B2C EC market is one of the most important online trading methods. The reliability test shows the evidence that all the items of measurement are reliable. Also, the study has identified and examined the five (5) major predictors towards B2C EC usage among online consumers in Malaysia. All five (5) independent variables i.e. Trust; Price; Online Payment Security; Website Design; Website Quality; are positively correlated with the dependent variable i.e. B2C EC Usage. Both Website Quality and Website Design have the highest positive relationship with B2C EC Usage. The result proves that good design and high quality websites are key predictors towards B2C EC usage among online consumers in Malaysia. The substantiated result obtained from this research indicates to the relevant parties such as the government of Malaysia as well as online businesses to continuously hasten the penetration and growth of B2C EC in Malaysia. The government can take advantage from this study in promoting the usage and adoption of B2C EC in Malaysia. In addition, the Malaysia government can set up and increase the number of policies and strategies in raising the confidence of consumers in Malaysia towards B2C EC. Moreover, the relevant government authorities can consider issuing certificates to online entrepreneur that has proved their integrity in doing business, but must foremost have a strict pre-evaluation on the entrepreneur concerned, or else the certificate will lose its effect. The Malaysia government can also work together with legislation to set up a strict law against cyber criminals, and then precede the co-operation with banks in setting a better online payment security system, with the determination that the system must not only be user-friendly, but equally be powerful enough to defend the intrusion of hackers. Online entrepreneurs, at the same time can try their best to improve and enhance the quality and design of their website in attracting and retaining interested online consumers.

2nd



575

7.1 Limitations and Future Studies

In the study, a probability sampling was utilised i.e. random sampling design as it is imperative that each element in the population has an equal and independent chance of selection in the sample. Even though the targeted respondents consist of citizens in Malaysia, it does not however cover the entire population of Malaysia. As the data collected are from the respondents in West Malaysia only, it is hope that future studies are able to increase the level of accuracy to represent all the states in Malaysia especially in obtaining data from both the states of Sabah and Sarawak. Also, this study only managed to utilise 200 finalised samples for data analysis, thus the findings analysed may not be generalisable. With this, future research may consider the possibility of having a bigger sample to represent online buyers in Malaysia, which would have made the results more significant and to further increase the accuracies of the research. This study however, is more focused on the consumer-side perspective in terms of the use of B2C EC; hence the absence of the entrepreneur-side is a limitation to this study. Therefore, future studies should cover the insights of both consumers and entrepreneurs collectively. REFERENCES Anderson, R.E. & Srinivasan, S.S. 2003, 'E-satisfaction and e-loyalty: A

contingency framework', Psychology and Marketing, vol. 20, no. 2, pp. 123-38.

Balasubramanian, S., Konana, P. & Menon, N.M. 2003, 'Customer satisfaction

in virtual environments: A study of online investing', Management Science, vol. 49, no. 7, pp. 871-89.

Barnes, S.J. & Vidgen, R. 2003, 'Measuring Web site quality improvements:

A case study of the forum on strategic management knowledge exchange', Industrial Management & Data Systems, vol. 103, no. 5, pp. 297-309.

Beynon-Davies, P. n.d., Unit 4: B2C e-commerce, viewed July 25 2010,

<http://www.designersplus.co.uk/unit4/benefits_of_e_commerce/level3.html>.

Cao, M., Zhang, Q.Y. & Seydel, J. 2005, 'B2C e-commerce web site quality:

An empirical examination', Industrial Management & Data Systems, vol. 105, no. 5, pp. 645-61.

Chaffey, D. 2010, E-business and E-commerce management: Strategy,

implementation and practice, 4th edn, Prentice Hall. Chang, H.H. & Chen, S.W. 2008, 'The impact of online store environment

cues on purchase intention: Trust and perceived risk as a mediator', Online Information Review, vol. 32, no. 6, pp. 818-41.

2nd



576

Chen, Y.-H. & Barnes, S. 2007, 'Initial trust and online buyer behaviour',

Journal of Industrial Management & Data Systems, vol. 107, no. 1, pp. 21-36.

Chiu, C.-M., Chang, C.-C., Cheng, H.-L. & Fang, Y.-H. 2008, 'Determinants of

customer repurchase intention in online shopping', Journal of Online Information Review, vol. 33, no. 4, pp. 761-84.

Corritore, C.L., Kracher, B. & Wiedenbeck, S. 2003, 'On-line trust: Concepts,

evolving themes, a model ', International Journal of Human-Computer Studies, vol. 58, no. 6, pp. 737-58.

Dai, L., Huang, L. & Yi, Y. 2005, 'How B2C service quality influences website

continuance', Pacific Asia Conference on Information Systems, Bangkok, Thailand, pp. 1375-81.

Deutsch, M. 1962, 'Trust, trustworthiness, and the F Scale', Journal of

Abnormal and Social Psychology, vol. 61, pp. 138-40. Egger, F.N. 2001, 'Affective design of e-commerce user Interfaces: How to

maximise perceived trustworthiness', Proceedings of The International Conference on Affective Human Factors Design, eds M. Helander, H.M. Khalid & Tham, Singapore, pp. 317-24.

Éthier, J., Hadaya, P., Talbot, J. & Cadieux, J. 2006, 'B2C web site quality and

emotions during online shopping episodes: an empirical study', Information & Management, vol. 43, no. 5, pp. 627-39.

Farrell, J. & Weiser, P.J. 2003, 'Modularity, vertical integration, and open

access policies: Towards a convergence of antitrust and regulation in the internet age', Harvard Journal of Law and Technology, vol. 17, no. 1, pp. 86-134.

Fenech, T. & O'Cass, A. 2001, 'Internet users' adoption of web retailing: User

and product dimensions', Journal of Product & Brand Management, vol. 10, no. 6, pp. 361-81.

Gefen, D., Karahanna, E. & Straub, D.W. 2003, 'Inexperience and experience

with online stores: The importance of TAM and trust', IEEE Transactions on Engineering Management, vol. 50, no. 3, pp. 307-21.

Gounaris, S. & Dimitriadis, S. 2003, 'Assessing service quality on the web:

Evidence from business-to-consumer portals', Journal of Services Marketing, vol. 17, no. 5, pp. 529-48.

Grabner-Krauter, S. & Kaluscha, E.A. 2003, 'Empirical research in on-line

trust: a review and critical assessment', International Journal of Human-Computer Studies, vol. 58, no. 6, pp. 783-812.

2nd



577

Hair, J.F., Black, W.C., Babin, B.J. & Anderson, R.E. 2009, Multivariate data analysis 7th edn, Prentice Hall, Upper Saddle River, New Jersey.

Hanson, W. 1999, Principles of Internet Marketing, South-Western College

Publishing, Ohio. Harn, A.C.P., Khatibi, A. & Ismail, H. 2006, 'E-Commerce: A study on online

shopping in Malaysia', Journal of Social Sciences, vol. 15, no. 5, pp. 232-42.

Hoffman, D.L., Novak, T.P. & Peralta, M. 1999, 'Building consumer trust

online', Communications of the ACM, vol. 42, no. 4, pp. 80-5. InternetWorldStats n.d., Malaysia: Internet Usage Stats and Marketing Report,

viewed July 24 2010, <Malaysia Internet Usage and Telecommunication Reports: http://www.internetworldstats.com/asia/my.htm>.

Jarvenpaa, S.L. & Todd, P.A. 1997, 'Consumer reactions to electronic

shopping on the World Wide Web', International Journal of Electronic Commerce, vol. 1, no. 2, pp. 59-88.

Jiang, P. & Rosenbloom, B. 2005, 'Customer intention to return online: Price

perception, attribute-level performance, and satisfaction unfolding over time', European Journal of Marketing, vol. 39, no. 1/2, pp. 150 - 74.

Karlsson, T., Kuttainen, C., Pitt, L. & Spyropoulou, S. 2005, 'Price as a

variable in online consumer trade-offs', Marketing Intelligence & Planning, vol. 23, no. 4, pp. 350-8.

Kim, J. & Moon, J.Y. 1998, 'Designing towards emotional usability in customer

interfaces - trustworthiness of cyber-banking system interfaces ', Interacting with Computers, vol. 10, no. 1, pp. 1-29.

Kirakowski, J. & Cierlik, B. 1998, 'Measuring the usability of web sites',

Human Factors and Ergonomics Society Annual Meeting Proceedings, vol. 5, Human Factors and Ergonomics Society, Chicago, pp. 424-8.

Kolsaker, A. & Payne, C. 2002 'Engendering trust in e-commerce: A study of

gender-based concerns', Marketing Intelligence & Planning, vol. 20, no. 4, pp. 206-14.

Koufaris, M. & Hampton-Sosa, W. 2004, 'The development of initial trust in an

online company by new customers', Information & Management, vol. 41, no. 3, pp. 377-97.

Kuo, H.-M., Hwang, S.-L. & Wang, E.M.-Y. 2004, 'Evaluation research of

information and supporting interface in electronic commerce web sites', Journal of Industrial Management & Data Systems, vol. 104, no. 9, pp. 712-21.

http://www.internetworldstats.com/asia/my.htm

2nd



578

Lee, D., Park, J. & Ahn, J. 2001, 'On the explanation of factors affecting e-commerce adoption', Proceedings of the Twenty-Second International Conference on Information Systems, pp. 109-20.

Lee, L. & Rondon, K.V. 2010, 'Malaysia Internet and eCommerce 2010–2014

forecast and analysis ', Document at a Glance, 20 December, <http://www.idc.com/research/viewdocsynopsis.jsp?containerId=MY3053310S&sectionId=null&elementId=null&pageType=SYNOPSIS>.

Liu, C. & Arnett, K.P. 2000, 'Exploring the factors associated with web site

success in the context of electronic commerce', Information and Management, vol. 38, no. October, p. 2334.

Luo, J.T., McGoldrick, P., Beatty, S. & Keeling, K.A. 2006, 'On-screen

characters: Their design and influence on consumer trust', Journal of Services Marketing, vol. 20, no. 2, pp. 112-24.

Manes, S. 1997, 'Web sites: Slow by design?', Informationweek, p. 124. McKnight, D.H. & Chervany, N.L. 2002, 'What trust means in e-commerce

customer relationships: An interdisciplinary conceptual typology', International Journal of Electronic Commerce, vol. 6, no. 2, pp. 35-53.

Merrilees, B. & Fry, M.-L. 2003, 'E-trust: The influence of perceived

interactivity on e-retailing users', Journal of Marketing Intelligence & Planning, vol. 21, no. 2, pp. 123-8.

Odlyzko, A. 2003, 'The case against micropayments', in R.N. Wright (ed.),

Financial Cryptography: Seventh International Conference (FC 2003), vol. 2742, Lecture Notes in Computer Science, Guadeloupe, French West Indies, pp. 77-83.

Palmer, J.W. 2002, 'Web site usability, design, and performance metrics',

Information Systems Research, vol. 13, no. 2, pp. 151-67. Parasuraman, A., Zeithaml, V.A. & Malhotra, A. 2005, 'E-S-Qual: A multiple

item scale for measuring electronic service quality', Journal of Service Research, vol. 7, no. 3, pp. 213-33.

Paynter, J. & Lim, J. 2001, 'Drivers and impediments to e-commerce in

Malaysia', Malaysian Journal of LIbrary and Information Science, vol. 6, no. 2, pp. 1-19.

Reichheld, F.F. & Schetter, P. 2000, 'E-loyalty: Your secret weapon on the

web', Harvard Business Review, pp. 105-13. Ribbink, D., Van Riel, A.C.R., Liljander, V. & Streukens, S. 2004, 'Comfort

your online customer: Quality, trust and loyalty on the internet ', Managing Service Quality, vol. 14, no. 6, pp. 446-56.

2nd



579

Rowley, J. 2000, 'Product search in e-shopping: A review and research propositions', Journal of Consumer Marketing, vol. 17, no. 1, pp. 124-35.

Roy, M.C., Dewit, O. & Aubert, B.A. 2001, 'The impact of interface usability on

trust in web retailers', Internet Research: Electronic Networking Applications and Policy, vol. 11, no. 5, pp. 388-98.

Salo, J. & Karjaluoto, H. 2007, 'A conceptual model of trust in the online

environment', Online Information Review, vol. 31, no. 5, pp. 604-21. Smith, B.A. & Merchant, E.J. 2001, 'Designing an Attractive Web Site:

Variables of Importance', Proceedings of the 32nd Annual Conference of the Decision Sciences Institute, San Francisco, CA.

Swaminathan, V., White, E.L. & Rao, B.P. 1999, 'Browsers or buyers in

cyberspace? An investigation of factors influencing electronic exchange', pp. 1-23.

Szymanski, D.M. & Hise, R.T. 2000, 'E-satisfaction: An initial examination',

Journal of Retailing, vol. 76, no. 3, pp. 309-22. Tan, N.L., Yap, K.S., Lim, Y.S., Ng, T.H. & Tan, P.K. 2010, 'Online shopping:

Determinants of consumers purchase intention in Malaysia', International IT & Society Conference (IISC) 2010 Kota Kinabalu, Sabah, Malaysia.

Tangpong, C., Islam, M. & Lertpittayapoom, N. 2009, 'New niche formation

and creative destruction of business-to-consumer e-commerce: A multi-retail sector study', The 51st Annual Meeting of the Midwest Academy of Management (Strategy & Organization Theory Track), pp. 1-15.

TheNielsenCompany 14 April 2008, Over 875 million consumers have

shopped online - The number of internet shoppers up 40% in two years, viewed July 24 2010, <Nielson - Malaysia: http://my.nielsen.com/site/20080414.shtml>.

Turban, E., Lee, J.K., King, D., Liang, T.P. & Turban, D. 2009, Electronic

commerce 2010, 6th edn, Pearson Education. Vazquez, D. & Xu, X. 2009, 'Investigating linkages between online purchase

behaviour variables', International Journal of Retail & Distribution Management, vol. 37, no. 5, pp. 408-19.

Verma, D. & Varma, G. 2003, 'On-line pricing: concepts, methods, and current

practices', Journal of Services Research, vol. 3, no. 1, pp. 135-56.

http://my.nielsen.com/site/20080414.shtml

2nd



580

Vrechopoulos, A. & Atherinos, E. 2009, 'Web banking layout effects on consumer behavioural intentions', International Journal of Bank Marketing, vol. 27, no. 7, pp. 524-46.

Wen, H.J., Chen, H.-G. & Hwang, H.-G. 2001, 'E-commerce web site design:

Strategies and models', Information Management & Computer Security, vol. 9, no. 1, pp. 5-12.

Winch, G. & Joyce, P. 2006, 'Exploring the dynamics of building, and losing,

consumer trust in B2C eBusiness', International Journal of Retail & Distribution Management, vol. 34, no. 7, pp. 541 - 55.

Wolfinbarger, M. & Gilly, M.C. 2003, 'eTailQ: Dimensionalizing, measuring

and predicting etail quality', Journal of Retailing, vol. 79, no. 3, pp. 183-98.

Xia, Y., Ahmed, Z.U., Ghingold, M., Goh, S.B., Tham, S.M. & Lim, L.H. 2003,

'Consumer preferences for commercial web site design: An Asia-Pasific perspective', Journal of Consumer Marketing, vol. 20, no. 1, pp. 10-27.

Yee, L.H. & Seong, L.K. 2009, 'Buying via Internet', July 24, 2010,

<http://biz.thestar.com.my/news/story.asp?file=/2009/4/11/business/3620542&sec=business>.

Zellweger, P. 1997, 'Web-based sales: Defining the cognitive buyer ',

Electronic Markets, vol. 7, no. 3, pp. 10-6. Zhang, Y., Fang, Y., Wei, K.K., Ramsey, E., McCole, P. & Chen, H. 2008,

'Repurchase behavior in B2C ecommerce - A relationship quality perpestive', Proceedings of the Pacific-Asia Conference on Information Systems: Leveraging ICT for Resilient Organizations and Sustainable Growth in the Asia Pacific Region, Suzhou, People's Republic of China, pp. 1-12.

Zo, H. & Ramamurthy, K. 2009, 'Consumer selection of E-commerce websites

in a B2C environment: A discrete decision choice model', IEEE Transactions on Systems, Man, and Cybernetics, Part A: Systems and Humans, vol. 39, no. 4, pp. 819-39.

Documents

Consumer Electronic Commerce