Factors that affect e-commerce consumer behaviours in the Kingdom of Saudi Arabia

124 Pages·2016·2.03 MB·English

by  Abdulmohsin Sades

Factors that affect e-commerce consumer behaviours in
the Kingdom of Saudi Arabia
A study submitted in partial fulfilment
of the requirements for the degree of
Your Degree Title
at
THE UNIVERSITY OF SHEFFIELD
by
Abdulmohsin Mohammed Saleh Sades
September 2016
ii | P a ge
Abstract
Recently, e-commerce has become a common gate of shopping and high competition
with traditional commerce. Since electronic commerce was published, it has faced significant
challenges worldwide. This situation has seen additional challenges in the kingdom of Saudi
Arabia. However, according to news reports, electronic commerce has seen steady growth in
the KSA since 2014. Several previous researches have discussed the challenges that faced e-
commerce around the world, especially in the KSA. This study focuses on investigating the
influence of the factors of payment, logistic infrastructure, government attention, information
and communication technology, culture and education and shopper concerns toward e-
commerce growth in KSA. These factors affect consumers’ behaviours toward e-commerce.
Some of the circumstances of Online commerce in KSA are experienced worldwide;
however, some of them involve cultural differences, i.e. the nature of the country and
community. This study will investigate the factors that impact e-commerce consumers’
behaviours in the KSA through a deductive approach using a quantitative method. In general,
e-commerce has created a new culture and concept of commerce in the KSA, as in other
countries; thus, more time is needed to control and achieve consumer satisfaction.

iii | P a ge
نافرعو ركش
ميحرلا نمحرلا الله مسب
لا نم ىلإ ،ملاسو ريخب الله نم لضفب ريتسجاملا ةنس تضقناو مايلأا ترم دق اهو ،تاحلاصلا متت هتمعنب يذلا للهدمحلا
ىلإ .ضرلأاب يت نجو يسأر جاتو يتايح بصَ ع ي دلاو ،ينع امهاضرو امهئاعدب لاإ ىلاعتو هناحبس الله دعب نم يل قيفوت
بلق ىلإ .تازيزعلا يتاوخأ امهنود نم يتايحب رونو معط لا نم ىلإ .ةبيبحلا يتلاخ يرغصِ ذُ نم ابلاقو ابلق ينتدناس نم
يتوزعو يداضعأ يبايغ يف يخومش ىلع اوظفاح نم ىلإ .ءابحلأا يتلئاع دارفأ ىلإ .ةيلاغلا يتدج ضبانلا ةلئاعلا
ينومهلأ نم ىلإ ."يلاوعلا بابش" رغَ صِّ لا ذُ نم يبرد ءاقفر ىلإ ."ليعامسإو يراشمو دمحأ" يمأ مهدلت مل نيذلا يناوخأو
،ىسوم يلع معلا ،يدماغلا ميهاربإ معلا ،ينارهزلا يلع معلا يلبقتسملو يل رٌ يخ هيف امل ينوهجوو ةملظم اقرط يل اورانأو
يتسارد ءاقفر ىلإ .نوتسيبب دنسلا يل اوناك نم ىلإ ."دئار" ضيبلأا بلقلا بحاص لولأا ةبرغلا قيفر ىلإ .وريخ نزام .د
ىلإ .يلاحرتو يلح يف ىسنت لا ةمصب يلخادب اوكرتو مايلأا مهب ينتعمج نم لكُ ىلإ .دليفشو رتسيلو ماهجنتون يف ءازعلأا
ينانتما صلاخ يبلق قامعأ نم مكل .يندعاسو ينملع نم لك ىلإ .بيغ رهظ نع وأ يهجو يف ةوعدب ينركذت نم لكُ
.اهنم ينمرحي لاأ هلأسأو اهيلع هركشأ ام امئاد الله نم ةمعنو ةايحلا يف يئارث متنأف ،يريدقتو

iv | P a ge
Acknowledgement
I would like to thank my supervisor Dr. Andrew Madden for his assistance, patience,
unlimited support, and the valuable advice. Your constant guidance is appreciated. Thanks
and gratitude is extended to my parents who have supported and encouraged me always, with
their sincere supplications.
v | P a ge
ءادهإ

..الله دعب ةحلاصلا امهتاوعدب باعصلا يل لالذ نم ىلإ
..هيلإ تلصو ام لكل لضفلا امهل ناكو يبناجب افقو نم ىلإ
..امهاضرو امهرب ينقزريو امهيرمعب دَّ مي نأ الله لاسا نم يَّ دلاو ىلإ
..ةيدوعسلا ةيبرعلا ةكلمملا يلاغلا ينطو ملع تلاو ملعلا ةصرف ينحنم نم ىلإ
..الله امهمحر يتدجو يدج يراوجب دعت ملو اهل تقتشا حاورأ ىلإ
..يترسأ دارفأو ،يتاوخأ ،يتلاخ نوعلا دي يل دم نم لك ىلإ
..يتسارد ءانثأو يتايحب يتقفرب ناك نمو يئاقدصأو يناوخأ لك ىلإ
..يل هتدعاسمب ينمركأو ادهج يل لذب نمو ،ينملع نم لك ىلإ
.عضاوتملا يدهجُ يدهأ اعيمج مكيلإ

vi | P a ge
1 Table of Contents
Abstract .................................................................................................................................... iii
Acknowledgement ..................................................................................................................... v
List of figures ............................................................................................................................. x
List of tables .............................................................................................................................. xi
1 Chapter 1: Introduction and context ................................................................................... 1
1.1 Research aim and objectives ....................................................................................... 4
1.1.1 Aim ...................................................................................................................... 4
1.1.2 Research Objectives ............................................................................................. 4
2 Chapter 2: Literature review ............................................................................................... 6
2.1 Worldwide e-commerce .............................................................................................. 6
2.1.1 Key challenge elements ....................................................................................... 8
2.1.2 Key success elements ......................................................................................... 10
2.2 E-commerce in the Middle East and North Africa (MENA) .................................... 12
2.2.1 Shopper concern................................................................................................. 14
2.3 E-commerce in the Kingdom of Saudi Arabia (KSA) .............................................. 15
2.3.1 Background of the KSA ..................................................................................... 15
2.3.2 Key challenge elements ..................................................................................... 17
2.3.3 Key success elements ......................................................................................... 23
3 Chapter 3: Methodology and implementation .................................................................. 25
3.1 Research approach..................................................................................................... 25
vii | P a ge
3.2 Research method (Data collection) ........................................................................... 26
3.2.1 Questionnaire design .......................................................................................... 26
3.2.2 Questionnaire samples ....................................................................................... 31
3.3 Data analysis ............................................................................................................. 31
3.4 Descriptive statistics .................................................................................................. 32
3.5 Ethical aspects ........................................................................................................... 33
4 Chapter 4: Findings .......................................................................................................... 34
4.1 Part (I): Entrant profile tables.................................................................................... 34
4.1.1 Gender ................................................................................................................ 34
4.1.2 Consumers’ frequency on e-commerce a month ............................................... 35
4.1.3 Consumers' frequency on e-commerce by gender ............................................. 36
4.1.4 Consumers' frequency on e-commerce based on age ........................................ 38
4.1.5 Consumers’ frequency on e-commerce based on monthly income in SAR ...... 39
4.1.6 Educational level by age .................................................................................... 40
4.1.7 Current place of residence ................................................................................. 41
4.1.8 Residential region in Saudi Arabia .................................................................... 42
4.1.9 Goods and services consumers bought based on gender ................................... 43
4.1.10 Participant satisfaction toward electronic commerce in the KSA ..................... 45
4.2 Part (II): Factor analysis ............................................................................................ 47
4.2.1 Factor 1: Payment .............................................................................................. 47
4.2.2 Factor 2: Logistic infrastructure......................................................................... 51
viii | P a ge
4.3 Study Factors in the Likert Scale Style ..................................................................... 56
4.3.1 Reliability of the study factors. .......................................................................... 56
4.3.2 Statement rankings of each factor ...................................................................... 57
5 Chapter 5: Discussion ....................................................................................................... 75
6 Chapter 6: Conclusion ...................................................................................................... 84
6.1 Limitations ................................................................................................................ 85
6.2 Recommendations for further research work ............................................................ 86
7 References ........................................................................................................................ 87
8 Appendix A: Questionnaire .............................................................................................. 96
9 Appendix B: Ethical Approval Application ................................................................... 103
10 Appendix C: Ethical Approval letter .......................................................................... 108
11 Appendix D: Consent letter ........................................................................................ 109
12 Appendix E: Access to Dissertation ........................................................................... 112
13 Appendix F: Confirmation of Address after Completion Form ................................. 114

ix | P a ge
List of figures
Figure 1: Internet world penetration rates by geographic region ............................................... 6
Figure 2: Internet users in the world by geographic region – 2015 ........................................... 7
Figure 3 : Rates of Internet users in the Arab world (Payfort, 2014) ...................................... 12
Figure 4: National online transactions (Payfort, 2014) ............................................................ 13
Figure 5: Arab shopper concerns (Payfort, 2016) .................................................................... 14
Figure 6: Percentage of e-commerce and e-service customer transactions by domains in the
KSA (Payfort, 2014) ................................................................................................................ 17
Figure 7: Top ten languages used in the web – June 30, 2016 (INTERNET WORLD USERS
BY LANGUAGE) ................................................................................................................... 22
Figure 8: Popular sites in the Arabic world (Payfort, 2016) .................................................... 23
Figure 9: Online transaction ratios of Saudis (Payfort, 2014) ................................................. 35
Figure 10: Consumers' frequency on e-commerce a by Gender (Sample consist of 476 out of
the total 478) ............................................................................................................................ 36
Figure 11: Consumers’ frequency on e-commerce based on age (sample consists of 478) .... 38
Figure 12: Consumers' frequency on e-commerce based on Monthly income (Sample consist
of 469 out of the total 478) ...................................................................................................... 39
Figure 13: Distribution of participants based on residential region in Saudi Arabia (sample
consists of 475 out of 478) ....................................................................................................... 42
Figure 14: Distribution of goods and services consumers bought based on gender (sample
consists of 448 ‘Male= 317, Female= 128’ out of 478) ........................................................... 43
Figure 15: Percentage of consumers’ preferred method of shipment (samples consists of 477
out of 478) ................................................................................................................................ 51

x | P a ge
List of tables
Table 1: European online retail growth (CRR, 2016) ................................................................ 7
Table 2: KSA regions, administrative area and population ..................................................... 15
Table 3: The Benefits and Services of Maroof to the seller and the buyer (Maroof.com, 2016)
.................................................................................................................................................. 19
Table 4: Distribution of participants based on the frequency on e-commerce a month (sample
consists of 478) ........................................................................................................................ 35
Table 5: Consumers' frequency on e-commerce by gender (sample consists of 476 out of 478)
.................................................................................................................................................. 37
Table 6: Test statistics of consumers' frequency on commerce by gender (sample consists of
476 out of 478) ......................................................................................................................... 37
Table 7: Distribution of participants based on educational level and age (sample consists of
478) .......................................................................................................................................... 41
Table 8: Distribution of participants based on current place of residence (sample consists of
478) .......................................................................................................................................... 42
Table 9: Ranks of people’s satisfaction toward electronic commerce in the KSA (sample
consists of 476 out of 478) ....................................................................................................... 45
Table 10: Test statistics of people’s satisfaction toward electronic commerce in the KSA
(sample consists of 476 out of 478) ......................................................................................... 45
Table 11: Percentage of consumers’ preferred method of payment (sample consists of 478) 47
Table 12: Ratios of factor influence on consumers’ payment choice (sample consists of 478)
.................................................................................................................................................. 48
Table 13: Customers’ extent toward trust as the main factor in payment means (sample
consists of 478) ........................................................................................................................ 49
xi | P a ge