Challenges Encountered in B2c E-Commerce: Online Shopping

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CHAPTER 1

INTRODUCTION

1.1 - Overview

The internet was initiated 1960’s. Due to this progress of communiqué structure, it is now easy around the world to communicate which provides companies with countless business opportunities. Due to the increase of internet usage, online shopping has become a significant opportunity for trades to place their goods available with an advantage of zero price to bear a website. Convenience and Price were recognized as significant aspects which hint to firm purchasing activities in online shopping. Online shoppers will always seek information within limited clicks and influence to the most applicable material according to their requirements such as competitive brands, product specification and customer word-of-mouth.

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1.2 - Background

The remarkable growth in the number of internet usage has a probability of electronic commerce through the Internet which has fascinated firms to conduct trade virtual. Online shopping is a process of acquiring goods and facilities over the internet. Due to suitability and the forbearance of surfing while sitting at home, this medium is going popular and the trend is increasing by a fast pace. The internet users hesitate to buy online due to frauds and trust issues which the worried specialists are planning approaches to indorse this manner of corporate to alter customers’ attitude towards online shopping with orientation to mental state. The theme of the study is consumer’s attitude towards online shopping will determine the attractive factors that influence consumers to shop online and those factors will help marketers to formulate their strategies towards online marketing respectively

1.3 - Online Shopping in Pakistan

In Pakistan the size of E-commerce is small and uncertain at the moment. Yet in near future as in most developed countries, it is forecasted that with realization of full potential, this medium of business, it will gain a significant role in Pakistan as it as several potent advantages over the conventional mode of purchasing. The true reason for the popularity of e-shopping in Pakistan is that people find it quite beneficial and time saving. This gradual growth is leading towards the development of more websites and currently there are around 100 online shopping stores where product ranges from clothing, cell phones, jewels and all other electronics. For a country with population over 180 million, the usage of internet is quiet low as compared to other countries. Figures show that only 28% of the population has access to the internet which is due to the illiteracy rate. Another problem faced is the payment methods used for this mechanism i.e. PayPal, credit cards which are not really popular in Pakistan. Another important aspect of looking this topic is the traditionalist nature of Pakistani society. Majority of the people will take time to come around the idea that they can order goods online rather than going out. Moreover, the retail business is conducted through small local enterprises who are less educated and not ready to accept the idea of this new technology.

Trust plays a significant role in penetration of online shopping as most people are uncomfortable giving away their credit card and other personal information and research shows that even if these barriers are broken, many people don’t have access to credit cards or their own bank accounts. The popularity of e-commerce in Pakistan can be seen by huge foreign investments and interest drawn by the Pakistani ecommerce market

1.4 - Online Shopping in the world

Throughout the world online buying has grown exponentially. In Australia, the money spent on online shopping is projected to increase by about $10 billion within next 5 years. The consumers are still concerned about the security of online shopping but now a significant number of people have adopted this mode. Faster delivery, easier return policies, and many sites offering free shipping have also increased the desirability of online buying. Growth of online shopping has been characterized by strong consumer demands and the increasing number and type of goods available.

In Nigeria and other African countries, a growing generation of young people have adopted online shopping. The numbers of users are still far below the world average of around 30%, but increasing as people are becoming more aware of this phenomena. E-commerce activities have expanded in Nigeria, South Africa and Kenya both due to the availability of mobile phones and availability of faster internet networks.

In U.S, the figures show that $248.7 billion online sales are expected by 2014. A compounded growth of 10% is forecast for the next five years. With the passage of time, internet is going to become more popular as time goes on and the purchasers worldwide are becoming more comfortable about the security and trust. This is the one area of merchandising that continues to have a positive outlook far into the future.

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1.5 - Research Question and Significance of Study

What are the challenges encountered in B2C E-commerce or online shopping industry?

This study will be significant because in a country like Pakistan where the medium of online shopping is not really popular, it is essential to study and explore the field. Also, it will provide a comprehensive study for customer’s awareness of using this medium rather than the traditional way of shopping. Through the findings of this research, online retailers could better realize online consumers’ expectations and the determinants of consumers’ behavior. By understanding the key drivers that could impact on online consumers’ attitude towards shopping, online sellers would be able to articulate and device their e-business tactic efficiently and effectively and possess stronger competitive advantage.

1.6 - Theoretical Framework

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