Online shopping

…..……....... CHAPTER 2: METHODOLOGY ……………………………………………..………………... 2.1. Research design…………………………………………………….………………….……...... 2.2. Subjects of the research ……………………………………………………………………....... 2.3. Research questions ………………………………………………………………..…….…....... 2.4. Method of collecting data ……………………………………………………….…………...... CHAPTER 3: FINDINGS AND ANALYSIS………………………………………..…………... 3.1 Findings ……………………………………………………………............................................ 3.2 Analysis ………………………………………………………………….…………………....... CHAPTER 4: CONCLUSION AND RECOMMENDATION………………………………… 4.1. Conclusion …………………………………………………………………………………... 4.2. Recommendation……………………………………………………………………………... BIBLIOGRAPHY……………………………………………………………………..…………... APPENDICES……………………………………………………………………………………... Page 1 2 3 4 4 5 6 6 8 8 9 9 11 13 13 23 29 29 30 31 32 ACKNOWLEDGEMENT In the process of writing this research, we have incurred many debts of gratitude. We would like to thank all the survey participants for their support in answering the interviews, surveys and free short talks. Without them, we could not collect the useful data, reach and understand profoundly this topic. A lot of thanks are also sent to our instructor, Ms Tran Thi Thu Trang, the lecturer of Faculty of Foreign Languages, National Economics University, for her beautiful lectures, advices and enthusiastic supports. She inspires us the love with English and writing as well as helps us improve skills in report writing – one of the most important skills for the jobs in future. The last thanks are for my dear friends who share with us many interesting ideas and suggestion and for all the readers who spend their precious time to read and give comments to this research. A great love for all, Dao Trong Truong. ABTRACT To ensure the success in online business, it is important for retail businesses to understand their target customers. The previous studies about online business stated that customers will have different attitudes and different behaviors to online sales. This research has two main objectives. First, this research is considered the importance of customer attitudes toward online shopping. Second is also considered two main trends of online shopping that are buying common goods and special ones. Based on previous researches and based on a survey group of 137 students working and living in Hanoi, who were randomly selected. All studies have found significant results in terms of the attitude of customers toward online shopping as well as the differences between customers in the two trends in terms of time, convenience, and customer service and price factors toward online shopping. CHAPTER 1 INTRODUCTION Background of the research Nowadays, the rapid development of science and technology, especially the booming of information technology and the Internet in recent years has helped people remove the barriers of time, distance. For a business, Internet is an indispensable means in each of their business plan, marketing plan, it is also an effective means in dealing with customers in the global market. According ACNielsen, there are more than 627 million people in the worldwide online shopping (ACNielsen, 2007). The studies of Rester (2008) are also predicted that by 2010, the total sales of electronic commerce will reach $ 316 billion, account for 13% of the total retail sales. A study of GSO Vietnam (General Statistic of Vietnam) indicated that the future of online shopping in Vietnam looks promising and bright. Vietnam is in the transition of the application of information technology and Internet in all areas. According to statistics of the GSO Vietnam, in 2008, 23% of the Vietnamese population using the Internet and this number is increasing rapidly. This development created a huge opportunity for Vietnam retailers to develop business based on online shopping. According to GSO Vietnam, the number of Internet users purchase online via the Internet only approximately 8.2%. Of these, the majority of people shopping online are relatively young, high educated or high social status. Moreover, a study of online shopping website (www.ttvnol.vn) states that shopping online is quite popular in Vietnam, in which 37% of online shoppers buy clothes, shoes and other personal items; 22% buy the DVD, CD or films; 21 % interest in mobile phones, computers; 20% remaining interest in the other items (Report from www. ttvnol.vn, 2008). However, considering shopping online in Vietnam, it is still in development stage. This research was established to study on customer attitudes toward online shopping. The fact, the attitude of customers to affects strongly to the sales of online retailers. Through the motivation and perception, the attitudes of customers will be formed to make a purchase decision. Thus, the attitude of the customer impacts strongly to their purchase decisions. Besides, the consideration to trends of customers in shopping online also helped retail businesses consolidate their business strategies. There are many online shopping trends, however, this study just reviewed two trends of retail shopping, based on the products that customers typically purchase. From that, I divide the two types of customers which are: the normal-product customers that purchase normal goods and the special-product customers that purchases special goods. Based on the division of two shopping trends, the research will analyzes additional factors such as time, price, and convenience, etc. to clarify the distinction between two types of customers.  Definitions of terms Electronic commerce (E-commercial): According to www.wikipedia.com, E-commercial shall be interpreted in many different definitions. However, considering the scope of research, electronic commerce in the strict sense is understood that the purchase of goods and services through electronic means, especially through Internet and other networks. According to the World Trade Organization, WTO, "Electronic commerce includes the production, advertising, sales and distribution of products sold and the payment on the Internet, but assigned to receive a tangible way, both products as well as delivery of digital information via the Internet.” Web shops: The term 'web shop' has a number of meanings. An online retailer may be called a 'web shop'. Web development, hosting and other web-related activities can be called 'web shops.' Buying online grew because, over time, transportation costs went up and telecom costs went down and access to the Internet became commonplace. Online shopping offers a larger selection of goods and services and thus greater choice at optimal prices. The problems with online shopping are that you cannot smell, touch, taste or try what you are buying. Normal goods: In the economic sense, normal goods are realized when demand increases income increases, all other things being equal. However, as considered within the scope of the research, normal goods usually refers to goods and items needed in the daily life such as personal items, electronic products necessary for the life and work. Special goods: In the scope of the research, special goods are the products that are unique or hard to find in the outside market. For example: the ancient watch or camera, some hand-made products, etc. Scope of the research The location of the research is concentrated in Hanoi. Hanoi is the capital and the center of economics, politics, and culture of Vietnam. With the population of more than 11 million people (2009), Hanoi is considered a huge market of diversified class of customers and the destination for a lot of manufacturers and distributors. People here can access from tiny wet markets to splendor commercial centers, along with approaching various types of marketing and advertisement everywhere and every day. In addition, the GDP of more than US$1500/capita in Hanoi make this market advantageous to test the shopping behavior. This research is conducted in the nearest 3 years from 2007-2010 – the booming period of online shopping in Vietnam. Also, data were also obtained from the survey results as done on a group of randomly chosen students from many universities in Hanoi. Thus, the results of this research are objective and applicable. Literature review In terms of consumers’ online buying behavior: Some researchers have conducted their researches in their efforts to consider the online buying behavior of consumers. For example, Bellman et al (1999) investigated different ways to predict whether an individual will purchase online. The authors concluded that demographic variables such as income, education and age, have a modest impact on the decision of buying online, while other important determinants of purchase previous online shopping behavior, as previous online purchase. This is consistent with Forrester Research that has demonstrated the demographic factors do not have a high impact on technology as consumers’ attitude (Modahl, 2000). Kotler and Armstrong (2000) pointed out that the buying choice influence more by four important psychological factors: motivation, perception, learning and beliefs and attitudes. Steinfield and Whitten (1999) suggested that the combination of the Internet combined with physical presence, providing more opportunities to capture more business than online presence only, since they can provide better before purchase and after sales services to reduce transaction costs and building consumer trust in online stores. However, it is worth mentioning that beliefs and attitudes that are found in the stage prior to the adoption of e-commerce are different to those in the “post-adoption” stage (Gefen et al, 2003; Venkatesh and Brown, 2001; Yu et al, 2005). In terms of the factors affect to customer’s purchase decision Concerning factors that affect online shopping, Ernst and Young (2000) reports that Internet users bought online by choosing a good product, competitive price, and easy to use, but was concerned about transportation costs, lack of opportunity to test before the product, as well as, the confidentiality of credit card and personal information. Know and Lee (2003) to explore that consumers’ concerns about the payment security and its relationship to online shopping attitudes and actual purchase. They observed a relationship between negative attitudes to online shopping and concerns about online payment security. Consumers with a positive attitude seemed less concerned about payment security. Similarly, popular literature cited the shopping comparison such as low price, timely delivery, convenience, saving time, lower shipping costs, customer service improved, tax-exempt status e-mail and respond quickly, as the primary reasons for the increase in online shopping (Lorek, 2003; Magee, 2003; Maloy, 2003; Retail Merchandiser, 2003). In additions, Karayanni (2003) observed that online shopping tends to avoid the availability of shopping on the basis of 24 hours and time efficient. A study conducted by Monsuwe et al (2004) provide the general reviews of all relevant literature on the factors driving consumers to shop online. Furthermore, this research also includes the reviews of literature on the advantages, difficulties and expectations of consumers shopping online, and considers the perceptions of adopters of online shopping compared to Internet users who prefer the traditional way of shopping. CHAPTER 2 METHODOLOGY Research design The original purpose of this research is to assess the attitudes of customers toward the shopping online way. Also, it is to identify the main purchasing trends of customers involved in online shopping. Therefore, the following six hypotheses are reviewed and examined through the entire process of the research to find out what hypotheses can be accepted or rejected. By definitions, the qualitative research approach fits the most with descriptive studies in order to quantify data that are immeasurable, such as feelings, beliefs, and thoughts. A qualitative research includes examining and reflecting on perceptions in order to gain an understanding of social and human psychological behavior. This study employs qualitative research method, since its aim is to find and build theories that can explain the relationship among different variables through qualitative elements. They do not have standard measurements; instead, they are behaviors, attitudes, opinions, and beliefs. Thus, the goals of qualitative research are primarily to advance new theories, to interpret individual events’ significance and to give voice to particular groups. In addition, the quantitative research method is also compatible with the study because it allows researchers to conduct the research problem in specific and set terms. Besides, quantitative research method also distinctively specifies both the independent and the dependent variables under the investigation. This study applies experimental research design. The above literature part mentions some previous researches whose topic is as nearly as our topic. After many years, those previous results may not be accurate and appropriate for every day - changing economy. Therefore, we set up hypotheses based on previous researches and conduct the survey to retest those hypotheses. Subjects of the research Data In Vietnam, online shopping is a very new field, and in particular, it is often applied to the target customers that are young, highly educated and easy to access to the Internet. Therefore, this research is intended to focus on students in several universities in Hanoi such as National Economics University, Hanoi University of Technology or Vietnam National University, etc. This method makes the collected data more accurate and useful. Classification of Students The university students are the main subjects of this research. Their typical features are financial dependence on family and limited spending budgets. Sometimes, their items are bought by their parents or relatives. It is thus difficult to accurately determine trends and attitudes shopping with online sales if we do not narrow down the research scope. Thus, to make data more accurate, this research is focused on the student having income or allowance from over 1 million per month and they themselves go shopping to buy goods without receiving additional benefits from their parents, relatives or someone else (assumption). These students are called “student online shoppers”. I expected to collect data on over 120 students that qualify assumptions. Although the number researched is small, but it is enough to avoid unnecessary errors. Research Questions Customers' attitudes toward online shopping: How do customers think about the substitution of online shopping methods to the traditional shopping methods? How do the customers think about the retailer trademark in shopping online? Online Shopping Trends: Which type of customers in the two types is affected more by the time factors? Which type of customers in the two types is affected more by the convenience factors? Which type of customers in the two types is affected more by the price factors? Which type of customers in the two types is affected more by the customer service factors? The following table shows the variables measured in specific hypotheses along with their data types. These hypotheses correspond to the above research questions: Hypotheses Variable Measured Measurement Scales Sample Question Number H1 Customers tend to substitute the online shopping method to the traditional shopping method. Multiple Choice From Q3 to Q7 H1 The retailer trademark is not important in shopping online field. Multiple Choice Free response H3 The normal-product customers are affected more by the time factor than the special-product customers. Multiple Choice Ranking Free response From Q 7 to Q13 H4 The normal-product customers are affected more by the convenience factor than the special-product customers. Multiple Choice Ranking Free response H5 The normal-product customers are affected more by the price factor than the special-product customers. Multiple Choice Ranking Free response H6 The normal-product customers are affected more by the customer service factor than the special-product customers. Multiple Choice Ranking Free response The questions were categorized to prove the hypotheses taken up for the research. Following measurement scales were used in making the survey. This survey with 13 questions has 2 main parts which are the individual information part (2 questions) and the investigated issues part (11 main questions). The survey is attached in the appendix. Multiple choice—single & multiple responses Ranking Scale Free Response Method of collecting data In this method of data collection, it is the responsibility of the researchers to question the subjects and record the respondents’ response by personal or impersonal means so that the data could be used as a basis for testing the hypothesis by using various statistical tools. In this research, I use two main sources of data including: primary source and secondary source. In the primary sources, there are two methods of collecting data: online survey and interview.  The sample size of the primary source for online surveys is expected 120 students that have the budget over 1 million per month. Primary sources Online surveys Create online questionnaire on the Internet is a simple way that can collect the necessary information at low cost. Besides, this method also helps researchers save time for the same time; the survey can be completed by more people (compared with the data collection methods such as interviews ....). This kind of collecting data is known as online surveys and nowadays, it’s becoming more and more popular all over the world. Due to those purposes, the online survey was created at the following link  . Through this survey, more than 120 responses of students in different universities in Hanoi were sent back and allow researchers creating a large amount of data for analysis to serve researching purposes. Interview Through this way of collecting data, researchers can have the more accurate information. The direct interaction between the interviewer and interviewee will make all the questions and problems easier to understand. Moreover, the sensitive questions in this field will also be addressed through the interview. The process of choosing interviewees is carried out randomly by personal approach. I have interviewed about 20 students from University of National Economy as those who are potential customers. I also interviewed three directors of the companies and online shopping website host specializing in online business which are Vietapps Company, ttvnol.vn website and enbac.vn website. Secondary sources: Literature review Internet The Internet is a useful tool for finding information related to online shopping. Examples are: the General Statistic Office (GSO) of Vietnam provides detailed information on the using rate of e-commerce in Vietnam in the retail business field in recent years.  CHAPTER 3 FINDING AND ANALYSIS Findings After the survey was delivered to the shoppers, we collected 137 responses. The questionnaire is shown in the appendices. Customers' attitudes toward online shopping: H1 - Customers tend to substitute the online shopping method to the traditional shopping method. To test this hypothesis, the shoppers are asked 2 questions which are Q4 and Q5. The questions were designed to figure out whether the traditional trading way can be substituted by the online shopping way. Q4: Do you think that the shopping online can be substituted the traditional trading? More than 70% of the students asked believes that shopping online can substitute the most the traditional trading (it can substitute 30-60% the traditional trading method). The number of students launches the extreme points of view with total yes or no covers small percentages of over 8% and 4%. There is over 15% of student’s state that online shopping just substitute a part of the traditional trading method. The remaining account for over 2% is the “not sure” ones. Q5: How often do you joining online shopping? There is over 43% of student respondents stated they regularly use online shopping method (50-89% of the shopping time is done online.) In contrast, only 3% of students never go shopping online. There is more than 15% of students use only the online shopping method. This figure is greater than the number that roughly 13% said they rarely shop online. H2 - The retailer trademark is not important in shopping online field. Q6: What do you think about the brand issues in shopping online? The largest part, over 30% of student respondents stated that brand is sometimes necessary, sometimes not. Besides, there are more than 26% and 16% of the students point out that the brand is important and extremely important in the online business. In contrast, approximately 19% of students stated the brand is not really necessary and over 8% said that they do not care about brand issues when shopping online. Through these figures, we can see that customers expressed an open way toward online selling. This is a new method; it has many advantages compared to traditional sales methods. These figures show that university students tend to replace the traditional way by online purchasing methods; they spend lots of time for shopping in this way. Moreover, within the scope of the research, brand here is only evaluated by the credibility of the online business, not considering the products brand. Moreover, the results are quite similar to the survey results of the traditional shopping methods. However, in comparison with the traditional sales methods, the retail business or the new company has more opportunities in the field of online business. I can see that customers expressed very positive attitudes to the online shopping. Although there is a part of customers incompletely support this way of selling or just consider it an alternative of the traditional sales methods, the number of customers account for only a small portion of total customers. Furthermore, it is also found that the opportunities for retail businesses and new companies in the field of online business are quite a lot Online Shopping Trends: Q7: What are the main reasons that let you join in shopping online? (5 is the most important, 1 is the least important) In column 5 points, over 60% of student respondents said that they join online selling because they find like the product. In column 4 points, more than 43% of students stated that saving time is a 2nd important factor after the product criterion. In column 3 points, more than 43% of students said that the convenience factor is 3nd important. The two remaining factors of price and customer service in turn ranked at No. 4 and No. 5. Q8: What kinds of products you want to buy online? There is over 78% of students join online selling to buy normal products. The rest involved in online selling to purchase these unique products For the normal goods: Up to 88% of students choose the items such as clothing and personal items, also, 67% choose the computer products and electronics items. There are 43% and 37% of students who chosen normal good select cosmetics and toys. Q9: What do you think about the quality of the product sold online? For the normal-product customers For the special-product customers We can see the average evaluation of normal consumer for the quality of the online product is better than special-product customers’. More than 38% of normal-product customers evaluate the product’s quality on “good” while only 28% of special-product customers evaluate “good “ on the product’s quality. Similarly, 15% of normal-product customers access product’s quality at the highest level, while just only 10% of special-product customers evaluate "very good" for quality of online products. Through these figures, we can easily identify two main trends of customers when they engage in online shopping. First is the trend of buying normal goods, second is the trends of buying the special goods. The two types of customers have the different views about the quality of the products. While the normal-product customers seem to evaluate the online products’ quality better than the special-product customers. H3 - The normal-product customers are affected more by the time factor than the special-product customers. Q14 and Q18: How long can you wait for the product after the purchase? We can see the different opinions in terms of time factor between the two types of customers. While normal-product customers tend to wait shorter for the products they buy. Approximately 81% of normal-product customers are willing to wait 1 to 2 days for their product, 12% of normal-product customers expect to receive their goods immediately, while no one wants to wait more than a week for their products. In contrast, over 60% of customers are willing to wait for special products they purchase in a week and more than 21% is willing to wait for more than a week. This shows that with the normal products, customers are easy to access to shops and take the items, which are because online shopping can be replaced by traditional shopping. However, for the special products, these products are often very difficult to buy outside. Thus, special-product customers buying these products online tend to be willing to wait longer (they can wait for more than one week to receive their products) H4 - The normal-product customers are affected more by the convenience factor than the special-product customers. Q12 and Q16: Can you rank the factors of convenience? (1 for the most important, 3 for the least important) You can list information about the products that you need Shipping methods do you find it favorite? We can see for the normal-product customers, 42% and 44% of them stated that the distance and shopping method are two criteria in the convenience factors they are interested in. In contrast, 42% of special-product customers want to know about the detail information of the products, 33% of them care about the distance and just 15% of them are interested in shipping methods. For the shipping methods, we can see more clearly as the following: Obviously, there are differences of opinion between the two types of customers. While 63% of special-product customers want to take place at the shop to check before buying a product, 72% of normal-product customers want to get their products in hand. This can be explained by the differences in characteristics of the two types of products. These special products are not easy to be able to buy at the store by the traditional way. Because it is rare and it is not easily to buy, the customers tend to want to test themselves this item carefully and check the product as well as its quality. In addition, special-product customers are willing to go further to buy the products they need than the normal-product customers. H.5.Tthe normal-product customers are affected more by the price factor than the special-product customers. Q10 and Q14: Do you think the prices of the products purchased online are appropriate? For the special-product customers For the normal-product customers There are the same opinions about the price of the product between the two types of customers. In which, 76% of the normal-product customers stated that prices of goods is not appropriate. This number for special – product customer is 68%. Just 2% of normal-product customers and 4% of the special-product customers agree that the prices of online products are suitable. H.6. The normal-product customers are affected more by the customer service factor than the special-product customers. Q11 and Q15: Are you interested in customer service before and after purchase of the retailer? There are more than 63% of normal-product customers are interested in customer services. In contrast, more than 71% of special-product customers do not care about the customer services. The number chosen “Neutral” one is 30% for normal-product customers and is 14% for special-product customers. Analysis H1, H2 H.1. Customers tend to substitute the online shopping method to the traditional shopping method. H.2. The retailer trademark is not important in shopping online field. The three questions from Q4 to Q6 asked to test the first two hypotheses. The results indicate that customers expressed an open attitude toward online shopping. They tend to move from traditional shopping to online shopping. Besides, another positive point is that customers often go shopping online rather than traditional shopping. First of all, more than 70% respondents are stated that online shopping could replace the most the traditional shopping (30-60% replacement for traditional shopping.) Moreover, there are more than 8% of students believe that online shopping method can completely replace the traditional shopping (100% replacement for the traditional shopping). Moreover, there are more than 73% of students asked regularly joining shopping online (from 30-90% of purchases are from shopping online). These figures show a positive attitude of customer toward shopping online. Besides, most students have asked about how often they use online shopping tend to switch entirely to this way of shopping. Moreover, some students have considered shopping online as part of your life (using 100% of the time online shopping). This finding was anticipated when the customers are students who have easily access to high technology and the Internet. In additions, this finding is also noted for the retail companies when they plan business development strategies or marketing campaigns. Thus, companies should focus on online shopping fields - A new ._.