ProjectProposal

Reasons behind the prevalence of “Taobao clothing” in online market on Hong Kong university students buying behaviour.

Cheung Ka Ki 12119762DChong Fuk Yu 12120845DLi Shuk Yi 12121035D

ContentsEXECUTIVE SUMMARY................................................................................2SCOPE AND PURPOSE................................................................................4

1. BACKGROUND.........................................................................................................41.1 EVOLUTION OF ONLINE SHOPPING – ‘TAOBAO’.................................................................4

2. Research Objective....................................................................................................62.1 ISSUES TO BE ADDRESSED...........................................................................................62.2 HYPOTHESIS.............................................................................................................63.1 EXPLORATORY APPROACH METHOD................................................................................73.2 DESCRIPTIVE APPROACH METHOD..................................................................................84.1 BUYERSHIP CLASSIFICATION (SPSS)..............................................................................84.2 COMPARATIVE ADVANTAGES OF ‘TAOBAO’ OTHER THAN TRADITION OFFLINE SHOPPING.............94.3 UNIVERSITY STUDENTS’ OPINIONS TOWARDS TAOBAO CLOTHING (THORY+FOCUS GP)............104.4 UNIVERSITY STUDENT PURCHASING BEHAVIOUR PATTERN..................................................104.5 IMPLICATIONS FOR FURTHER DEVELOPMENT FOR THE OTHER CLOTHING SELLERS...................115.1 DATE COLLECTION...................................................................................................125.2 DATA ANALYSIS........................................................................................................125.3 WRITING THE PROJECT..............................................................................................135.4 BARRIERS..............................................................................................................13

Table of Content

Executive Summary

The project proposal has a brief introduction of the chosen topic of the project. The topic related to the online shopping market - ‘Taobao’ towards university students. In the first chapter, basic information and background of online retail industry will be emphasized and follow by the trends of online shopping.

The second chapter states the research objectives in this project. The main focus will be the reason of the popularity of online retail market - ‘Taobao’ specifically in clothing category among Hong Kong university students. The research result can be used for making recommendations on the present Hong Kong online clothing shops’ sellers on future direction of online selling and ways to boost their sales under the target group of Hong Kong university students.

The third chapter elaborates the methodology of the project. A twofold research methodology will be used to investigate the reasons of Taobao clothing popular among Hong Kong university students in purchase as the objectives of the project. The first one is exploratory approach method that includes the questionnaire survey and focus group for collecting both primary and secondary data. Questions will be asked on Hong Kong university students towards their purchase behavior by online questionnaire. For example, some of questions will be asked as followed. “What are the criteria for selecting clothes in ‘Taobao’?” “Why do you prefer online shopping of clothes instead of offline shopping?”. Further data would be collect by secondary sources like Internet, journals and articles. Besides exploratory approach method, descriptive approach method will be used for frequency and statistical analysis for exploring the relationship between Taobao clothing and students’ online shopping pattern.

The fourth chapter presents the result bases on the analysis we made and reach to the conclusions and implication in six sections: (1) Buyership classification, (2) Comparative advantages of ‘Taobao’ other than tradition offline shopping, (3) University students opinions towards Taobao clothing, (4) University student purchasing behaviour pattern, (5) Implication for further development for the other clothing sellers.

The last chapter describes the major activities with the detailed timeline by using the Gantt Chart for reference.

Scope and Purpose

This project started from November 2015 to March 2016. The main focus of the project will be the reason of the popularity of online retail market - ‘Taobao’ specifically in clothing category among Hong Kong university students. According to Alibaba spokesman, Hong Kong is a major expansion target for the giant e-commerce portal. That’s why online shopping becomes popular in Hong Kong. The project will discuss the reasons for prevalence of Taobao online shopping to university students in Hong Kong, learn about the buying behaviour of Hong Kong university students on Taobao clothing and to make recommendations towards online shopping sellers for future development in order to improve their sales performance.

1. BACKGROUND

With the advancement of technology and emergence of online shopping platforms, online shopping has not been the same as before in Hong Kong. Although Hong Kong is known as the “Shopping Paradise “, online shopping becomes an usual phenomenon and there are many shopping online websites such as Taobao, Gmarket, Ebay, Amazon, Zalora. Taobao is one of the most popular online shopping platforms in Hong Kong. According to Alibaba spokesman, Hong Kong is a major expansion target for the giant e-commerce portal. That’s why online shopping becomes popular in Hong Kong.

Nowadays, teenagers in Hong Kong love shopping online because of the convenience and choices. It is more obvious to see that most of the university students even do online shopping during class, Alex Tham Koy Siong, assistant dean at City University’s department of marketing, said that sometimes he had to interrupt the lectures because of the students were only focusing on online shopping. Online shopping phenomenon is very common among university students.

1.1 Evolution of online shopping – ‘Taobao’

According to Peterson (1997), The Internet is one of the extremely efficient mediums for organizing, accessing, and communicating information among people.  Hoffman and Novak (1996) suggested that the emergence of WWW- World Wide Web (Internet service for organizing information by using hypermedia) have significant and essential potential for marketing and business development. As online platform is used for business and marketing development, it becomes a source of selling channel of products and service. Therefore, more and more online users tend to turn their purchase on online and lead to the trends of online shopping.

Taobao is one of the successful examples that we are going to explore. ‘Taobao’ is an online shopping website that based in China and founded by Alibaba Group in 2003. And it became the largest Asian online shopping site, an e-market review shown that there were 500 millions membership and more than 60 millions visitors per day in 2013 (KPMG, 2014). Besides, ‘Taobao’ had also opened the official Hong Kong website in 2013 because of the high demand for over 1.4 million registered Hong Kong Taobao users.

Based on Alexa.com database, ‘Taobao’ is ranked at seven of the Hong Kong Internet users’ most-visited website and also the most visited online auction site. According to Daphne Lee, the director of international business of ‘Taobao’, Taiwan and Hong Kong are the two countries for the initial steps of ‘Taobao’ to reach the oversea market.

The Hong Kong version website was customized for Hong Kong citizens as website’s design is much more neater than the China website as Hong Kong shoppers are used to brow graphic-heavy websites but China users are more familiar with text. Products in Hong Kong website’s home pages also featured what Hong Kong citizens are most likely to buy. ‘Taobao’ has been exploring the Hong Kong market very rapidly over the past few years in order to drive more Hong Kong people to shop online so they put effort to improve users’ online shopping experience by simplifying logistics and providing more payment methods. For example, Taobao users in Hong Kong can pick up their goods from convenience stores and pay the payment using octopus card, PPS. Therefore, it shows how ‘Taobao’, this online shopping channel popular is in Hong Kong.

Hong Kong version of ‘Taobao’

2. Research ObjectiveWith the technological advancement, online shopping seems to become a phenomenon among the university students. ‘Taobao’ is one of the Chinese websites especially for (customer-to-customer) C2C online retail shopping and become so popular in Hong Kong especially for university students as a shopping channel. Therefore, it is worthy for further studies on the Hong Kong university students. Under the study, the important objectives will be achieved as follow:

Explore the reasons for the prevalence of ‘Taobao’ online shopping to university students in Hong Kong

To learn about the buying behaviour of Hong Kong university students on Taobao clothing

To make recommendations towards online clothing seller for future development to improve sales

2.1 Issues to be addressed

In order to achieve the above objectives, specific question will be asked. Some questions are:

What are the advantages of choosing ‘Taobao’ online shopping other than traditional shopping? What are the differences between online shopping and offline shopping?

What product category will university students choose from ‘Taobao’?

When will university students have online shopping?

How often will university students have purchase from ‘Taobao’?

The answers collected from the above questions will help form the basic structure of the project and gather information from survey. On the other hand, more literature review and reports on previous researchers will also help in forming assumptions and comparisons.

2.2 Hypothesis

The following hypothesis are proposed:

Hypothesis: Differences in online and offline shopping have significant influence on prevalence of ‘Taobao’ on local university students.

H1: Difference between online and offline shopping have a significant influence on university students’ purchase pattern

H2: Changing of university students’ purchase pattern has significant effects on prevalence of ‘Taobao’

H2H1 Prevalence of

'Taobao'Buying

behaviour Different

characteristics in

3. MethodologyThe study will adopt a twofold research methodology to achieve the above objectives: exploratory approach method and descriptive approach method.

3.1 Exploratory approach method

An exploratory research method is used for exploring the data in our project about the purchasing habit of university students towards ‘Taobao’. Both primary data and secondary data will be collected for further analysis. Primary data are drawn from the below two ways:

3.1.1 Questionnaire surveysSurvey is generally accepted to be a research methodology for collecting data from specific population and use a questionnaire, focus group as the survey instrument. (Robson, 1993) Researchers in marketing field use surveys to investigate consumer preference and shopping pattern (Leary, 1995). We would use both online survey and outdoor survey in university area to collect information. For example, some questions will be asked as follow.

“What are the criteria for selecting clothes in ‘Taobao’?”“Why do you prefer online shopping of clothes instead of offline shopping?”

The survey will distinguish buyers of Taobao clothing from buyers buying Taobao other categories items. More essential information will be collected from the buyers of Taobao clothing for exploring the reason and effects brought to them towards purchasing habit.

3.1.2 Focus groupFocus group is usually used as the tool of collecting primary data from random group of people. The duration will usually be longer and open to a group of university students to share their viewpoints towards a designated topic. And the topic should be related to Taobao shopping habit.

Secondary data will also be drawn by the Internet, articles, journals and statistics information related to both online shopping in Taobao and university students purchasing behaviour for enriching the research results.

3.2 Descriptive approach method

Based on the result from the exploratory study, descriptive method such as statistical analysis and frequency analysis are used to examine the relationship between the university students buying from online Taobao clothing and the effects on their purchasing behaviour. By using the descriptive analysis, the comparative advantage of Taobao clothings online shopping can be examined. Frequency of the purchasing behaviour can also be explored and descripted.

4. Statistical AnalysisResearch is collected from more than 300 online questionnaires for basic and further in-depth analysis. The survey result, secondary data and statistical analysis will be further investigated and analyzed to draw the conclusions in the following six sections. The correlation between these six sections can make some implications for future development of online clothing sellers.

4.1 Buyership classification (SPSS)

In this section, online shoppers and offline shoppers will be identified.  Their frequencies of online shopping and offline shopping can be identified within certain period.

From the results above, nearly 85% of respondents have online shopping experience before and 80% of those respondents have used Taobao as their online shopping method. It shown the advancement of technology and emergence of online shopping platforms, online shopping has not been the same as before in Hong Kong. Data shows that most of the respondents have the habit of online shopping and majority of them choose Taobao as the online shopping sites for online purchase method. It can be concluded that Taobao is popular among Hong Kong university students as well as one of the most popular online shopping platforms in Hong Kong. Hong Kong university students accept to use Taobao as their daily shopping method.

4.2 Comparative advantages of ‘Taobao’ other than tradition offline shopping

In this section, online shoppers will be the main focus. The reasons behind university students choosing ‘Taobao’ as their online shopping channel will be stated and the comparative advantages compared with offline shopping will be listed out such as the popularity, convenience, payment method, etc. Besides, there are some data from offline shoppers to show their reasons for choosing offline shopping so as to show the contrast between these two.

Over 90% of respondents choose convenience as an advantage of using Taobao and nearly 70% of them prefer discounts and offers that Taobao provided. Also, nearly 60% of respondents think that various choices and selections in Taobao is an advantage of using it for online shopping. Minority of respondents think Taobao has fast product delivery services and products in Taobao are high quality. Therefore, it shows that respondents mostly think that Taobao is a convenience online shopping site with lots of discounts. Nowadays, teenagers in Hong Kong love shopping online because of the convenience. It is more obvious to see that most of the university students even do online shopping during class, Alex Tham Koy Siong, assistant dean at City University’s department of marketing, said that sometimes he had to interrupt the lectures because of the students were only focusing on online shopping. Online shopping phenomenon is very common among university students. Therefore, we could know why respondents mainly thought 'Taobao’ was convenience.

However, less than 20% of respondents may not choose online shopping in Taobao because they would think that there are others advantages among offline shopping compared with online shopping. For example, nearly 80% of respondents think that they can have product trial in offline shopping such as clothing, shoes, and trousers, over 70% of respondents think that products could be seen in offline shopping which cannot be performed on online shopping. Also, half of respondents need instant product and usage so they did not choose Taobao because they cannot receive the products immediately. Nearly 40% of respondents consider that offline shopping provide authentic product assurance and give them confident which Taobao cannot provide to them. Therefore, there are few shortcomings in Taobao that can be improved in the future.

4.3 University students’ opinions towards Taobao clothing (thory+focus gp)

Under this section, students are asked to identify their favourite items to buy in Taobao during the survey. And the reasons behind university students buying clothing in Taobao instead of other

categories’ items will be explored such as peer influence, cultural adaptation, product flexibility, etc.

Based on the respondents’ selection, more than 90% of them will choose clothing as their product purchase categories, 70% of them will select footwear and bags items and nearly 40% purchased digital products in Taobao. The minority chosen products categories are home life products, mother and baby care products and beauty items. The data shows that university students mostly will buy clothing, footwear and bags in Taobao which consistent with our research topics.

There is another section for respondents to rank the importance of six major factors between the scale from 1 to 5 when considering to buy clothes in Taobao. And the results show that cheaper pricing (scale 4-5) is the most important factor in their minds. Follow by flexible sizing, clothing trends such as Korean and Japanese culture and information availability on the Taobao shopping sites such as the after-sales comments, modal photos description (scale 4). The respondents concern less on the product materials and limited product availability (scale 2-3). It can be concluded that nearly all the university students choose Taobao because the prices of clothing are cheaper than buying from offline shops.

4.4 Influence of characteristics on university students’ buying behavior (SPSS)

4.5 University students’ buying behaviour

In this section, buying behaviour of the university students are identified by the survey result and secondary data analysis, for example, they will buy more during public holidays and day off. Besides, they may increase their spending on Taobao clothings when seasonal change.

Based on the data, over 90% respondents will have online shopping in Taobao during the special offer period. Apart from special offer period, around 70 % of the university students will shop more in Taobao during public holidays and day off. Nearly 45% of the students will have online shopping in Taobao because online shopping becomes their hobby and habit. On the other hand, the students will buy from Taobao when seasonal change accounts for nearly 30 % and for necessary condition accounts for less than 20%. Data briefly shows that discounts or special offer period on Taobao was one of the most attractive points for students to have purchase. For example, the “ Taobao 11.11 crazy shopping discount “, “ New year crazy sales “ attracts lots of shoppers choose to go online shopping in Taobao. This is one of the reasons why most of the students will buy Taobao during special promotion.

4.6 Implications for further development for the other clothing sellers

This section of the report is to provide implication for other sellers on how to improve their sales performance and further increase the numbers of consumers especially Hong Kong university students. With reference to the success of Taobao online clothings, others sellers maybe can establish an online shopping platform, increase the choices of clothings, ways to raise popularity, flexible payment methods, etc.

Some respondents did not use Taobao for online shopping and they use other online shopping websites: eBay, Amazon, G-Market, Yahoo Auction, ASOS and Zalora. From the results above, it shows that over 68% of respondents usually use Yahoo Auction for online shopping and over 62% of respondents usually use eBay as their online shopping platform. Also, over 41% of respondents

prefer use Amazon and nearly 30% of respondents choose G-Market. The remaining respondents usually use ASOS and Zalora for their online shopping.

Respondents have commented on those online shopping websites and the reasons why they did not choose Taobao as their online shopping sites. Yahoo Auction is a Hong Kong based online shopping website and products are more localized than products in Taobao. The other reason is that Yahoo Auction provided face trade so buyers can get their products immediately and easily. They assume that eBay, Amazon and other foreign shopping sites provide higher quality products compared with Taobao. Some respondents think that Taobao is an online shopping site for low cost, low quality products and the probability of selling counterfeits. Therefore, we would make use of the above comments to further explore some recommendations to online clothing seller for boosting their sales.

5. Time ScheduleThere are different tasks to be performed in this project. The sequence and anticipated length of time required for the project’s completion is stated below:

5.1 Date Collection

Conduct questionnaire survey in Hong Kong universities’ campus and hold a focus group to collect data in this project. Not only the primary and quantitative data will be gathered by questionnaires, some opinions, views and perceptions from the respondents will also be collected. Therefore, the survey will be conducted by face-to-face communication. It is important to hold the survey before examination because many students will stay at school and we are more easily to find our target interviewees.  In order to gain more insights about university students’ buying pattern on Taobao clothing and add support to the study, a focus group will be held after the survey when students finished their examination. Interviewees will have more time and the focus group can arrange more easily. Besides, secondary data like Internet sources, articles, journals will also be collected for further investigation and analysis.

5.2 Data analysis

The raw data will be prepared by Excel document and the data analysis process can be started. Distribution, central tendency and subgroup comparison can be used in the quantitative data analysis. Frequency distribution is also another method to summarize the data for individual variables because it could be seen how many of the interviewees select a particular choice for one or another question. According to Polonsky and Waller (2011), frequency distribution counts of the number of response to a interview question or to be occurrence of a issue of interest. It is only

useful if the raw data is turned into information of this project so it is planned to take three weeks to process and analysis the data.

5.3 Writing the project

It is decided to use a month to write the project and it divided into three sections. In the first week will mainly write the theory and methodology. Data analysis and survey result will start to write in the second week. In the third week, new ideas and insights from focus group are also used for write the conclusion and recommendation. In the last writing week, it is planned to check the typo or grammar mistakes.

5.4 Barriers

The major concern of the project is about the time management. As mentioned before, a face-to-face interview will be adopted for data collection. It consumes more time than just send out questionnaires by email. However, an explicit target may motivate interviewers’ to finish the questionnaire more effectively. For example, one interviewer must complete 10 questionnaires per day. Some problems have been raised during the whole project that need to be concerned, mostly was about the data collection and analysis problem. For the data collection, we have first chosen the face-to-face questionnaire interview in university campus for conducting the study. However, during to public holiday period, it was hard to undergo the study by face-to-face method. Therefore, we have changed to conduct online questionnaires instead of face-to-face for high efficiency of data collection. Besides, using online questionnaire can facilitate better data analysis by better accuracy of data for transferring into SPSS data analyze. For data analysis, as there are quite large amount of questionnaire received, we should analysis the questions clearly in short period of time. Therefore, we chose to use graphic to present the large amount of data distribution for better illustration.

The following chart is highlighting the sequence of different activities:

(2215 words)

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