Turkish Consumer Participation in E-Commerce

Turkish Consumer Participation in E-Commerce

Tekin Kose (TED University, Turkey) and Sebnem Arslan (TED University, Turkey)
Copyright: © 2020 |Pages: 21
DOI: 10.4018/JECO.2020100102
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Abstract

This study investigates socio-economic factors affecting participation by Turkish individuals in electronic commerce. By exploiting a nationally representative household survey data from Turkey, non-linear probability models are employed to quantify the factors influencing participation decision of consumers in e-commerce. Empirical findings indicate that income level, education level, being employed, variety of internet use, technology skills and trust in internet have positive relationships with both use of e-commerce and amount of online expenditures. While relatively younger and older individuals are less likely to engage in e-commerce activities, middle-aged individuals are more likely to participate. Although females are more likely to participate in e-commerce, they tend to spend less in their e-commerce activities compared to males. Research findings imply that policies to encourage use of technology and online marketing strategies of businesses should employ different approaches which specially target sub-groups of society with respect socio-demographics.
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1. Introduction

Advances in technology lead to new lifestyles over time and corroborate the idea of cultural homogenization in an integrated world. The internet is indisputably a significant medium which forms these global connections. By interconnecting computers and quasi devices, the internet generates broader as well as special networks and it changes ideas and perceptions of people. By offering new tools within conventional systems, the internet may alter certain systematized daily procedures and habits in both business life and daily activities of people. Thus, the internet tools are frequently employed for saving resources and easing both living and working conditions. Worldwide internet usage is increasing gradually in the last decades. According to International Telecommunication Union (ICT, 2017), the total number of internet users was 414 million in 2000 whereas the number of users in 2016 was 3.5 billion in the world.

As internet usage extends, business models are also complying with technology and brand-new business approaches are set in the system to catch up with rapidly changing market environments. One of business models acquired by the internet is the setup of online transactions for goods and services, which is called e-commerce (WTO, 2013, p. 1). Use of online tools helps consumers directly and easily obtain information about products, services and businesses. The share of e-commerce in total gross domestic product (GDP) of the world was 3.11% in 2015 (EF, 2017). According to Ecommerce Foundation (EF, 2017), 2.52 billion people (over the age of 15) used the internet and 1.436 billion were e-shoppers during 2015. The total amount spent by the world via e-commerce was 2.272 trillion and the average spending per e-shopper corresponded to $1,582 in 2015 (EF, 2017). Use of e-commerce by Turkish consumers is also widening over time. According to Turkish Statistical Institute (TSI, 2017), the proportion of adult internet users (aged between 16 and 74) increased from 61.2% to 66.8% between 2016 and 2017 in Turkey. 24.9% of adult population in Turkey used online shopping tools at least once in 2016 (TSI, 2017). According to Turkish Informatics Industry Association (TUBISAD, 2016), e-commerce market size of Turkey reached level of 24.7 million Turkish liras in 2015. This corresponds to a yearly growth rate of 31%. Recently, Amazon.com Inc. launched Amazon Turkey in September 2018 and offered wide range of products for Turkish customers. Thus, as a developing economy, Turkey has potential to be integrated with international e-commerce systems with variety of opportunities for businesses and customers.

Emergence of e-commerce not only affects consumer behavior but also provides opportunities for different economic agents. Hence, exploration of factors influencing e-commerce activities would have vital repercussions for management of both individual level and economy-wide decision-making processes. As adoption of e-commerce expands by businesses and consumers, retailing and labor market activities are immediately affected. Extension of e-commerce may lead to creation new jobs and increasing employment rates. For instance, small and medium-sized enterprises (SMEs) benefit from adopting e-commerce strategies. SMEs are significantly influenced by opportunities provided by e-commerce measures as its availability enables SMEs to globalize and scale up their productivity and profit levels (WTO, 2013). SMEs constitute a considerable portion of businesses in Turkey. SMEs correspond to 99.6% of all businesses in the country (Ozbek, 2008) and they have indisputable reflections on economic activity in Turkey. SMEs build up 43% of total employment and 19% of total value added in Turkey (Ozbek, 2008). Policies and regulations of Turkish government on e-commerce and marketing strategies of businesses adopting in e-commerce would have a substantial effect on employment and economic activity in Turkey and global markets.

E-commerce adoptions of consumers and businesses vary across different regions and cultures around the world (Nielsen, 2014; Mohammed & Tejay, 2017). Located between Europe and the Middle East, Turkey provides variety of cultural, social and business environments for its residents. Being an emerging market economy with increasing levels of technology adoption, Turkey shows great potential for providing e-business opportunities for both local and international investors. Thus, investigation of e-commerce use in Turkey would provide crucial insights for robustness and external validity of earlier findings and convey substantial policy messages for both governments and international businesses.

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