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All rights reserved. No part of contents of this paper may be reproduced or transmitted in any form or by any means without the written permission of ORIC Publications, www.oricpub.com. Journal of Human and Social Science Research Vol. 1, No. 1 (2013), 9-18 Online available since 2013/Mar/30 at www.oricpub.com © (2013) Copyright ORIC Publications http://www.oricpub.com/hssr-journal ORICPublications Received: 12 Mar 2013 Accepted: 19 Mar 2013 Muhammad Sabbir Rahman Graduate School of Management; Multimedia University, Malaysia Persiaran Multimedia, 63100 Cyberjaya Selangor Darul Ehsan, Malaysia Abdul Highe Khan Graduate Research Student, Faculty of Economics and Management Sciences, International Islamic University Malaysia Nazrul Islam Faculty of Business Administration, Eastern University, Dhaka, Bangladesh Correspondence: Muhammad Sabbir Rahman Graduate School of Management; Multimedia University, Malaysia Persiaran Multimedia, 63100 Cyberjaya Selangor Darul Ehsan, Malaysia. AN EMPIRICAL STUDY ON REVEALING THE FACTORS INFLUENCING ONLINE SHOPPING INTENTION AMONG MALAYSIAN CONSUMERS’ Abstract The growth of online shopping is increasing at a rapid rate in Malaysia by replacing traditional store shopping habit of the substantial number of consumers. The purpose of the research is to investigate the factors that are influencing consumer’s online shopping intention in Malaysia. This research proposes a research framework on online shopping by refereeing various influential factors which are antecedents of online shopping in Malaysia. The framework of this study was based on the constructs generated from Technology Acceptance Model (TAM). In total 250 valid respondent’s response were gathered through self-administered survey. Exploratory factor analysis (EFA) and multiple regression analysis were employed to identify the factors that are influencing online shopping under Malaysian context. From the statistical results it was discovered that perceived usefulness (PU) and perceived ease of use (PEOU) have positive influenced on online shopping in Malaysia. It is expected that result from this study can help online vendors to draw the further strategy to attract more consumers through online shopping under Malaysian context. Keywords: Online Shopping, Perceived Usefulness (PU), Perceived Ease of Use (PEOU), Perceived Risk, Technology Acceptance Model (TAM), Malaysia. 1.INTRODUCTION Online shopping also called internet shopping or electronic shopping, defined as the shopping process where consumers purchase goods or services from any vendors through online (Mastercard Worldwide Insights, 2008). In addition online shopping also defined as observing, searching, and browsing internet for purchasing any product or service (Kim, 2004). Due to the technological advancement and increasing the number of internet users, Malaysian consumers’ are interested to do online shopping. It is estimated that, in 2014 Malaysia's online shopping market will be RM 5 billion where as it was only RM 1.8 billion in 2010. As a result in Malaysia more than 70% of the total online shopping spends by the middle income consumers and on average they spend more than RM 4,000. Out of the RM 1.8 billion, RM 825 million or more was spent on local websites, local merchants. However still there is significant research gap exist to identify the significant factors to stimulate online shopping behavior among Malaysian consumers. In Technology Acceptance Model (TAM) Davis (1989) explained perceived usefulness and perceived ease of use are influenced significantly to use any technology related business. In was also revealed that perceived usefulness and perceived ease of use influence consumers’ to perform online shopping. Beside that in previous research in different western countries under specific sample it was found that perceived risk is related with consumer trust on technology related transaction Bahmanziari et al. 2003; Ng, 2003; Pavlou, 2003. For this reason this research would like to test how perceived usefulness, perceived ease of use, and perceived risk affect online shopping behavior under Malaysian consumer’s perspective.

AN EMPIRICAL STUDY ON REVEALING THE FACTORS INFLUENCING ONLINE SHOPPING INTENTION AMONG MALAYSIAN CONSUMERS’

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The growth of online shopping is increasing at a rapid rate in Malaysia by replacing traditional store shopping habit of the substantial number of consumers. The purpose of the research is to investigate the factors that are influencing consumer’s online shopping intention in Malaysia. This research proposes a research framework on online shopping by refereeing various influential factors which are antecedents of online shopping in Malaysia. The framework of this study was based on the constructs generated from Technology Acceptance Model (TAM). In total 250 valid respondent’s response were gathered through self-administered survey. Exploratory factor analysis (EFA) and multiple regression analysis were employed to identify the factors that are influencing online shopping under Malaysian context. From the statistical results it was discovered that perceived usefulness (PU) and perceived ease of use (PEOU) have positive influenced on online shopping in Malaysia. It is expected that result from this study can help online vendors to draw the further strategy to attract more consumers through online shopping under Malaysian context.

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Page 1: AN EMPIRICAL STUDY ON REVEALING THE FACTORS INFLUENCING ONLINE SHOPPING INTENTION AMONG MALAYSIAN CONSUMERS’

All rights reserved. No part of contents of this paper may be reproduced or transmitted in any form or by any means without the written permission of ORICPublications, www.oricpub.com.

Journal of Human and Social Science ResearchVol. 1, No. 1 (2013), 9-18

Online available since 2013/Mar/30 at www.oricpub.com© (2013) Copyright ORIC Publications

http://www.oricpub.com/hssr-journalORICPublications

Received: 12 Mar 2013Accepted: 19 Mar 2013

Muhammad Sabbir RahmanGraduate School of Management;Multimedia University, MalaysiaPersiaran Multimedia, 63100CyberjayaSelangor Darul Ehsan, MalaysiaAbdul Highe KhanGraduate Research Student, Facultyof Economics and ManagementSciences,International Islamic UniversityMalaysiaNazrul IslamFaculty of Business Administration,Eastern University, Dhaka,Bangladesh

Correspondence:Muhammad Sabbir RahmanGraduate School of Management;Multimedia University, MalaysiaPersiaran Multimedia, 63100Cyberjaya Selangor Darul Ehsan,Malaysia.

AN EMPIRICAL STUDY ON REVEALING THE FACTORS INFLUENCINGONLINE SHOPPING INTENTION AMONG MALAYSIAN CONSUMERS’

AbstractThe growth of online shopping is increasing at a rapid rate in Malaysia by replacingtraditional store shopping habit of the substantial number of consumers. The purposeof the research is to investigate the factors that are influencing consumer’s onlineshopping intention in Malaysia. This research proposes a research framework on onlineshopping by refereeing various influential factors which are antecedents of onlineshopping in Malaysia. The framework of this study was based on the constructsgenerated from Technology Acceptance Model (TAM). In total 250 valid respondent’sresponse were gathered through self-administered survey. Exploratory factor analysis(EFA) and multiple regression analysis were employed to identify the factors that areinfluencing online shopping under Malaysian context. From the statistical results it wasdiscovered that perceived usefulness (PU) and perceived ease of use (PEOU) havepositive influenced on online shopping in Malaysia. It is expected that result from thisstudy can help online vendors to draw the further strategy to attract more consumersthrough online shopping under Malaysian context.

Keywords: Online Shopping, Perceived Usefulness (PU), Perceived Ease of Use(PEOU), Perceived Risk, Technology Acceptance Model (TAM), Malaysia.

1. INTRODUCTIONOnline shopping also called internet shopping or electronic shopping,

defined as the shopping process where consumers purchase goods orservices from any vendors through online (Mastercard WorldwideInsights, 2008). In addition online shopping also defined as observing,searching, and browsing internet for purchasing any product or service(Kim, 2004). Due to the technological advancement and increasing thenumber of internet users, Malaysian consumers’ are interested to do onlineshopping. It is estimated that, in 2014 Malaysia's online shopping marketwill be RM 5 billion where as it was only RM 1.8 billion in 2010. As aresult in Malaysia more than 70% of the total online shopping spends bythe middle income consumers and on average they spend more than RM4,000. Out of the RM 1.8 billion, RM 825 million or more was spent onlocal websites, local merchants. However still there is significant researchgap exist to identify the significant factors to stimulate online shoppingbehavior among Malaysian consumers. In Technology Acceptance Model(TAM) Davis (1989) explained perceived usefulness and perceived easeof use are influenced significantly to use any technology related business.In was also revealed that perceived usefulness and perceived ease of useinfluence consumers’ to perform online shopping. Beside that in previousresearch in different western countries under specific sample it was foundthat perceived risk is related with consumer trust on technology relatedtransaction Bahmanziari et al. 2003; Ng, 2003; Pavlou, 2003. For thisreason this research would like to test how perceived usefulness,perceived ease of use, and perceived risk affect online shopping behaviorunder Malaysian consumer’s perspective.

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It is fact that there are some other factors also that might be influenced consumer’s online shoppingbehavior, for instance subjective norm, consumer technology using experience, gender, race so on so forthwhich could be suggested for future research. As whole the proposed research try to answer what are thesignificant factors are influencing online shopping behavior among Malaysian consumers? As a result theobjective of this study is to empirically test the factors that are influencing consumer’s online shoppingintention under Malaysian consumer’s perspective.

2. LITERATURE REVIEW

Davis (1989) developed Technology Acceptance Model (TAM). This model has been widely employed byresearchers to explain user acceptance of technology in different types (Bahmanziari et al. 2003; Ng, 2003;Pavlou, 2003). Technology Acceptance Model (TAM) theorizes that Perceived Usefulness (PU) is asignificant factor-affecting acceptance of an information system (Davis et al., 1989).There are five parts in thismodel for instance Perceived Ease of Use (PEOU), Perceived Usefulness (PU), Attitude towards Using (ATU),Behavioral Intention to Use (BI), and Actual Usage (AU). Technology Acceptance Model (TAM) considerthat consumers do transaction through technology mainly for two reasons (1) Perceived Ease of Use (PEOU)and (2) Perceived Usefulness (PU). Consumers prefer online shopping then traditional store shopping forvarious reasons. In particular there is no time constraint of online shopping, consumers can order for anyproducts or services whenever they want. For this reason consumers get sufficient time to think and then givethe order (Morganosky and Cude 2000; Kim & Kim, 2004; McKinney, 2004; Harn et al., 2006; Delafrooz etal., 2009). Not only consumer can order from any place where they can use internet (home, office, café etc.)but also they can save their time. In fact in online shopping context there vendors can display thousands ofproducts on website and for this reason consumers can buy product from lots of choice and with less price thantraditional store shopping (Khatibi et al. 2006; Delafrooz &Paim, 2011). Thus, based on the above discussionfollowing hypothesis can be proposed:

H1. Perceived Usefulness is Positively Related with Online Shopping

Perceived Ease of Use (PEOU) is defined as the degree to which a person believes that using a particularsystem would be free of effort (Davis, 1989). Ease of use is also defined as any person’s perception that usingthe new technology will be free of effort (Davis, 1989, 1993). Perceived Ease of Use (PEOU) has a positiveand significant influence on consumers’ attitude on online shopping (Bisdee, 2007; Yulihasri & Daud,2011).The component of Perceived Ease of Use (PEOU) are the process, easy system, elastic and easy tobecome skillful. Selamat et al. (2009) mentioned that easier technology is always accepted by the consumersrather using complex technology for online shopping. Usually consumers do not like to use complextechnology for buying any product or service from online. Meanwhile website characteristics play animportant role in determining perceived ease of use in online shopping (Zeithaml et al., 2002; Beldona et al.2005). Thus, based on the above discussion following hypothesis can be proposed:

H2. Perceived Ease of Use is Positively Related with Online Shopping

Perceived risk is defined as the consumers’ subjective belief of suffering a loss in pursuit of a desiredoutcome. It has a stronger correlation with willingness to shop online than convenience (Zhou et al., 2007:Van Noort et al. 2007). Kim et. al. (2007) defines perceived risk as a consumer’s belief about potentialuncertain negative outcomes from anyelectronic transaction.Wang et al. (2006) indicated on their study thatpersonal privacy, safety, and product or service quality are the necessary concerns of the consumer who like todo on-line transaction. Liao and Shi (2009) stated that perceived risk has a significant and negative influenceon consumer attitude towards e-shopping, for instance e-retailing. Li & Zhang (2002) mentioned perceivedrisk is an important element of consumer attitude towards online shopping behavior. There are two elementsof perceived risk related to the process of online shopping: risk associated with the product or service and riskassociated with the context of online transaction. According to Liebermann & Stashevsky (2002) there are twoelements of perceived risk related to the process of online shopping: Internet credit card stealing andconfidentiality of consumer’s personal information. Consumer perceived risk cannot be eliminated becausethere is no physical interaction but it can be reduced by the association with transaction processes (Pavlou,

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2003; Koufaris and Hampton-Sosa, 2004) or consumer online trust (Culnan and Armstrong, 1999; Warrington,et al., 2000; Park and Jun, 2003; Koufaris and Hampton-Sosa, 2004; Gefen and Pavlou, 2006; Mukherjee andNath, 2007). Thus, based on the above discussion following hypothesis can be proposed:

H3. Perceived Risk is Positively Related with Online Shopping

3. MATERIALS AND METHODS

To collect the data this research used convenient sampling procedure on various places from Klang Valleyarea in Malaysia. In this study, primary data were collected through distribution of survey questionnaires.Self-structured questionnaire was developed to collect the required primary data. As self-structuredquestionnaire is convenient for the target respondents. In addition self-structured questionnaire also easy todistribute to the respondents. The form of self-structured questionnaire is shorter and easier to follow by theresearcher’s point of view.

The principal component analysis was comprised with 250 respondents. Apart from that demographicinformation, respondents were also asked to rate their opinion according to five point rating scale, with arating five being “Strongly Agree” and one being “Strongly Disagree”. Figure 1 below shows the conceptualmodel proposed for hypothesis testing.

Figure 1: Proposed Research and measurement models

3.1 Research SampleIn order to reach the actual online shoppers and test the hypothesized research model shown in Figure 1, a

self-completed questionnaire was employed. Questionnaires were distributed to 350 online shoppers. A totalof 250 effective responses were obtained which represents more than 71 percent response rate. The samplecharacteristics are provided in Table 1. The demographic information of the respondents was analyzedthrough frequency distribution. Among the respondents 54 percent were male and 46 percent were female.Largest number of participants 36 percent, ranged in age 25-34. Majority of online user are married whichaccounted for 56 percent. Among the participants Malays accounted for 44 percent followed by Chinese 32percent and Indians 24 percent. This is shown in table 1 below. Out of total respondents 38 percent of theparticipants had a college graduate degree. Last but not least, the monthly personal income of 38 percent of theparticipants was between RM 1000- RM 2999. For online product purchase behavior the results shows thatmajority of respondents buy air ticket from online and their percentage is 36 percent followed by 26 percentand 22 percent of the participants buy computer/electronics items and movie ticket respectively.

3.2 Data Analysis and Results

Cronbach’s Alpha was chosen to analyze the degree of consistency among the items in a construct. Thestudy by Hair et al., (2010) indicates that the cronbach alpha must be at least 0.70 for the results to be deemedas reliable. The value for each variable is above 0.70 and it indicates that the variables are reliable. The resultof reliability analysis is given below.

Perceived Usefulness

Perceived Ease of Use

Perceived Risk

Online Shopping

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Table 1: Demographic Information of the RespondentsDescriptions Frequency Percentage

Gender:Male 135 54%

Female 115 46%Age:24 and below 70 28%25-34 90 36%35-44 60 24%45 and above 30 12%Marital Status:Single 110 44%Married 140 56%Ethnic Group:Malay 110 44%Chinese 80 32%Indian 60 24%

Table 2: Demographic Information of the RespondentsDescriptions Frequency Percentage

Academic Qualification:Certificate/ Diploma 70 28%College Graduate (Bachelor) 95 38%Master’s Degree 65 26%Doctoral Degree 20 08%Profession:Student 75 30%

Job Holder 90 36%Business Owner 55 22%Academician 30 12%

Monthly Income:Below RM 1000 45 18%RM 1000-RM 2999 95 38%RM 3000-RM 4999 80 32%RM 5000 and Above 30 12%Online Product Purchase ExperienceAir ticket 90 36%Computer/Electronics items 65 26%Movie ticket 55 22%Book/DVD/CD 25 10%Others 15 06%

3.3 Exploratory Factor Analysis

Applying Statistical Package for the Social Sciences (SPSS) 16 version, the principal component analysis(PCA) was carried out to explore the underlying factors associated with the items. The construct validity wastested through Bartlett’s Test of Sphericity and The Kaiser-Mayer-Olkin Measure of sampling adequacy. TheKaiser-Mayer-Olkin measures of sampling adequacy (KMO) were first computed to determine the suitabilityof using factor analysis. The value of KMO varies from 0 to 1, and KMO overall should be 0.60 or higher. Infactor analysis, the KMO value is quite satisfactory which 0.865 is. The result shows five (3) significantcomponents in initial Eigen values. A first component is 7.333 and its variance is 28.203 and second

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component of total is 2.869 with 11.033 of variance. The cumulative percentage is 58.069. Exploratory factoranalysis also confirmed the construct validity of the scales. The factor loading for all items exceeding theminimum value of 0.50 were considered in this study.

Table 3: Reliability AnalysisVariables/ Dimensions Mean Standard Deviations Cronbach alpha

Perceived Usefulness 4.76 0.776 0.773

Perceived Ease of Use 4.57 0.798 0.834

Perceived Risk 4.35 0.922 0.888

Table 4: KMO and Bartlett’s TestParameters Value

Kaiser-Meyer-Olkin Measure of Sampling Adequacy .829Bartlett's Test of Sphericity: Approx. Chi-Square 1836.209

df 186Sig .000

3.4 Hypothesis testing

The results from the analysis reflected that association between perceived usefulness and online shoppingare positive. The multiple regression result also shows perceived usefulness has a beta of 0.106 and significantp value is .047. The finding of this research shows that perceive usefulness has positive relationship towardsonline shopping. The results from this research also reflected that the association between perceived ease ofuse and online shopping is positive. The multiple regression result shows perceived ease of use has a beta of0.154 and significant p value is 0.007. The significant value is smaller than alpha at 0.05 and hypothesis isaccepted. As supported by previous studies (Bisdee, 2007; Yulihasri & Daud, 2011). The result of this studyindicates that Standardized coefficient (Beta) of H3 is -0.356and significance p-value is 0.000. It indicates thatour proposed hypothesis is not supported. It means there is a negative relationship between perceived riskand online shopping. Studies also identified the negative relation between perceived risk and Online shopping(Liao & Cheung, 2001; Parks et al., 2004; Pires et al., 2004).

4. CONCLUSION AND MANAGERIAL IMPLICATIONS

Effectiveness of online shopping can be maintained by increasing Malaysian consumers’ perceivedusefulness. Previous studies identified perceived usefulness have an impact on attitude towards onlineshopping (Lu et al. 2005; Hassanein & Head, 2004). This research developed to create a deeper understandingof the Malaysian consumer perception of using online shopping by adopting Technology acceptance model(TAM). The result of this research indicates that almost all the hypothesized relationships in the model wereaccepted except relationship of perceived risk and online shopping.

It is necessary to recognize the limitations of this study. First of all, survey of this research was conductedmostly in Klang valley area which can impact the generalizability of the findings from this research onMalaysian consumers’ context. Secondly the sample size of the survey was comparatively lesser. It’s better tohave larger sample size to get better output. A more detailed empirical analysis can be done on consumersatisfaction on online shopping, by using gender, race, and educational level as a mediating role. Furtherresearch can be examine the causal relationships among the factors for instance: perceived ease of use,perceived usefulness, trust, perceived risk, online shopping. In terms of managerial implication, the findingsof this research do provide feedback for the online shopping vendors in drafting various managerial policieson to increase the shoppers online purchase intention. Vendors should plan to increase the perceivedusefulness of online shopping and make online shopping easy for all level of consumers (easy website surfing,provide necessary information of product or service). Another direction for vendors that they have tominimize online shopping perceived risk (enhancing privacy and protection of consumer data , increase truston online shopping for the purpose of increasing the likelihood of shopper online purchase intention.

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Table 5: Exploratory Factor AnalysisVariables Components

1 2 3

PEOU1 Easy to do online shopping .698

PEOU 2 Quick and easy transaction .546

PEOU 3 Easy to become skillful in using internet .708

PEOU 4 Interaction through web pages clear and understandable. .717

PEOU 5 Web based online transaction easy .730

PEOU 6 Comfortable in surfing websites to shop online .685

PU1 Broader selection of products and services .566

PU2 Save time in online shopping .687

PU3 Product price is cheaper in online .645

PU4 Order product from any part of the world .777

PU5 Order product from lots of options .670

PU6 Prefer online shopping for its convenience .516

PR1 I feel confident in my ability to shop online. .595

PR2 I have trust in online shopping .773

PR3 Credit card number is secured .685

PR4 Reliability of the internet vendors .661

PR5 Personal information will not be hampered .767

PR6 Confidence that orders will be delivered on time .603

PR7 Trust on digital signature .737

Table 6: Causal Relationship of the ConstructsHypothesis Hypothesis Variables Standardized

coefficient (Beta)Significance Remarks

( p value)H1 Perceived Usefulness has a positive

effect on Online Shopping0.106 .047 Supported

H2 Perceived Ease of Use has a positiveeffect on Online Shopping

0.154 0.007 Supported

H3 Perceived Risk has a positive effect onOnline Shopping

-0.356 0.000 Notsupported

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