Structural Equation Modelling of the Factors Influencing the Adoption of E-Commerce in Saudi Arabia: Study on Online Shoppers

Structural Equation Modelling of the Factors Influencing the Adoption of E-Commerce in Saudi Arabia: Study on Online Shoppers

Abdullah Saleh Alqahtani (Deanship of Common First Year, Self-development Skills Department, King Saud University, Riyadh, Saudi Arabia), Robert Goodwin (School of Computer Science, Engineering and Mathematics, Flinders University, Adelaide, Australia) and Denise de Vries (Flinders University, Adelaide, Australia)
Copyright: © 2019 |Pages: 21
DOI: 10.4018/JECO.2019100105

Abstract

This article presents findings from a study examining the diffusion and adoption of e-commerce in Saudi Arabia. Although the country has the largest and fastest growing information and communication technologies (ICT) sector in the Arab region, growth in e-commerce activities has not progressed at a commensurate rate. In general, e-commerce online shopping has not kept pace with the global growth of online retailing. The authors have conducted research to identify and explore key issues that influence e-commerce in Saudi Arabia in deciding whether or not to adopt online channels. As part of a larger research project using mixed methods, this article focuses on a quantitative analysis of responses obtained from a survey of the online shopping users in Saudi Arabia.
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Introduction

The current era is often referred to as the Information Age, the Digital Revolution or the New Technological Revolution, depending on the commentator’s perspective. These descriptors share the common characteristic of being based on the widespread adoption of computing and computer networking. The arrival of the internet and its rapid development into a globally ubiquitous resource has not only accelerated earlier computer driven change in business and society, but has also introduced additional major changes, including the use of the internet to facilitate, execute, and process business transactions (Delone & McLean, 2004). E-commerce allows businesses to share information, undertake transactions across networks and computer platforms, and work together over geographic boundaries (Berners-Lee et al., 1994; Kalakota & Whinston, 1997). It encompasses business-to-consumer, business-to-business, commerce-to-administration, customer-to-customer, and consumer-to-business (Goel, 2007) activities.

Online shopping is a form of business-to-consumer e-commerce (Nosrati, 2011; Nemat, 2011). It is more limited and exclusively describes the activity of selling and purchasing goods and services online via an e-store (Islam, 2012; Sharma, 2013). Xu (2012) noted that online shopping describes a single aspect of e-commerce; whereas e-commerce can represent any and all business activity conducted using an electronic medium (Ren, 2009).

In 2014 global e-commerce sales increased at a rate greater than 20% per year, influenced by four key factors: internationalization; the renewed popularity of e-commerce IPOs internationally; the rise of the continuously connected consumer; and consumers’ ongoing desire to look, touch, and immerse themselves in brand experiences (ATKearney, 2015). Developed countries have already produced sophisticated online shopping malls and e-stores like Amazon and eBay, while the booming marketplace of China offers Ali-baba and Tencent. E-stores such as these are at the top of a list of global online sellers who are either already global brands or rapidly evolving in that direction.

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