Using the Interpretative Structural Modeling Approach for Understanding the Relationships of Drivers of Online Shopping: Evidence From a Developing Economy

Using the Interpretative Structural Modeling Approach for Understanding the Relationships of Drivers of Online Shopping: Evidence From a Developing Economy

Roy Jucip Tabañag Basar III (University of the Philippines, Cebu, Philippines), Honey Rose Borden (University of the Philippines, Cebu, Philippines), Manuel Lorenzo Busano III (University of the Philippines, Cebu, Philippines), Xelani Kaye Gonzales (University of the Philippines, Cebu, Philippines), Vanessa Grace Guerrero (University of the Philippines, Cebu, Philippines), Tiffany Adelaine Tan (University of the Philippines, Cebu, Philippines), Leahlizbeth Sia (University of the Philippines, Cebu, Philippines), Kafferine D. Yamagishi (Cebu Technological University, Philippines) and Lanndon Ocampo (Cebu Technological University, Philippines)
Copyright: © 2021 |Pages: 15
DOI: 10.4018/IJSKD.2021040106
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Abstract

The internet has paved the way for a revolution in the shopping industry via online platforms. As online shopping transactions become popular, it is increasingly important to understand the drivers that influence the consumers in availing such platforms. Furthermore, the differences between developed and developing economies are evident from socioeconomic, regulatory, and e-commerce disparities. Understanding such domain from a developing economies perspective is not well explored in the current literature. Thus, this study aims to identify the relationships among drivers of consumers in pursuing online shopping in a developing economy (i.e., the Philippines) using interpretative structural modeling. The study identified six drivers: “convenience/ease of use,” “competitive price,” “product availability,” “value of time,” “access to more information,” and “several payment options.” Results show that all drivers, except for “competitive price,” are closely interlinked to each other, such that initiatives must be simultaneously developed to address these drivers under resource constraints.
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1. Introduction

The Internet has become a global marketing and networking tool prominent towards the growth of e-commerce and online marketing where businesses can promote their product and services and improve its brand image through various online platforms (Lim et al., 2016; Katta & Patro, 2017c). The continuous growth of sales of e-commerce creates vast market potential, and the successes of global e-commerce platforms (e.g., Alibaba, Amazon, Tencent, E-bay) have become a benchmark in shifting business models from brick-and-mortar to brick-and-click (Lim et al., 2016). The Internet has dramatically improved business communications through e-commerce as the new medium of business operations extending through retail marketers (Lubis, 2018). Online shopping has been embraced in several developed countries (e.g., U.S.A, Canada, U.K, Germany, and France); however, in many developing countries (i.e., many Asian countries), it is still in its infancy stage (Saxena, 2019). For instance, there is a higher growth of consumers shifting towards online shopping in developed countries than the consumers in developing countries where most of them are inclined to shop in conventional stores (Saxena, 2019). Socio-economic and regulation, and the e-commerce facilities in developing countries are underdeveloped. Internet connectivity is limited, slow, and expensive in most developing countries (Kapurubandara, 2009; Lubis, 2018). However, Tandon and Kiran (2019) have reported that online shopping is becoming popular in developing countries as it provides prompt access to product information, convenience, avoid unnecessary delays, limited parking, and the offering of cash on delivery payment options.

The Philippines has a predominantly growing online market share. Statista (2019) reported that most Filipinos have a total online expenditure of US$ 4.7 billion in 2018, with US$3.5 billion spent on travel. Furthermore, in 2018 about 52% of the Philippines' online shoppers are between 25 to 34 years old, those belonging to the Millennials and Gen Z who are tech-savvy and prone to use social media (Katrina & Benedict, 2019). Their shopping mindset is shortlisting while browsing through the products, quickly making buying decisions based on reviews, brands, prices, and shopping platforms (Osorio, 2019). Visa eCommerce Consumer Monitor (2014) reported that most of the Filipino are satisfied with online shopping, describing it as easy (73.3%), convenient (71.9%), or fun (64.4%), and expressing higher likelihood to purchase in the next six months (79.2%). Thus, Filipinos are more likely to shop online for deals, price, and convenience. Visa eCommerce Consumer Monitor (2014) also revealed that those who prefer to do their shopping online spend an average of 6.2 hours daily (Torres, 2015). In the Philippines, the number of Internet users' growth projections is 93.7% by 2023, from 64.1% in 2017 (Sanchez, 2020). The emergence of more reliable payment methods (e.g., credit cards, prepaid card, e-cash or digital cash, and cash-on-delivery (COD) that are all mobile-enabled), as well as free shipping for returns or exchanges, has made online shopping a preferable option for consumers that value time and convenience offered by the online shopping experience (Halaweh, 2018).

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