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TABLE OF CONTENTS
Page
Contents
TABLE OF CONTENTS……………………………………………………………......................
1
ACKNOWLEDGEMENT……………………………………………………………..................... 2
ABSTRACT……………………………………………………………............................................ 3
CHAPTER 1: INTRODUCTION ………………………………………………………………...
4
1.1. Background and rationale ……………………………………………………………….….......
4
1.2. Definitions of terms…………………………………………………………………….…….....
5
1.3. Scope of the study ………………………………………………………………….……….......
6
1.4. Literature review ……………………………………………………………………..…….......
6
CHAPTER 2: METHODOLOGY ……………………………………………..………………...
8
2.1. Research design…………………………………………………….………………….……......
8
2.2. Subjects of the research …………………………………………………………………….......
9
2.3. Research questions ………………………………………………………………..…….….......
9
2.4. Method of collecting data ……………………………………………………….…………......
11
CHAPTER 3: FINDINGS AND ANALYSIS………………………………………..…………...
13
3.1 Findings ……………………………………………………………............................................
13
3.2 Analysis ………………………………………………………………….………………….......
23
CHAPTER 4: CONCLUSION AND RECOMMENDATION…………………………………
29
4.1. Conclusion …………………………………………………………………………………...
29
4.2. Recommendation……………………………………………………………………………...
30
BIBLIOGRAPHY……………………………………………………………………..…………...
31
APPENDICES……………………………………………………………………………………...
32
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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.
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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.
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CHAPTER 1
INTRODUCTION
1.1.
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).
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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.
1.2.
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
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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.
1.3.
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.
1.4.
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.
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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.
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CHAPTER 2
METHODOLOGY
2.1.
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.
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2.2.
Subjects of the research
2.2.1.
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.
2.2.2.
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.
2.3.
Research Questions
Customers' attitudes toward online shopping:
How do customers think about the substitution of online shopping methods to the
1.
traditional shopping methods?
How do the customers think about the retailer trademark in shopping online?
2.
Online Shopping Trends:
3.
Which type of customers in the two types is affected more by the time factors?
4.
Which type of customers in the two types is affected more by the convenience
factors?
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5.
Which type of customers in the two types is affected more by the price factors?
6.
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:
Hypoth
Variable Measured
eses
H1
Customers tend to substitute
Measurement
Scales
Sample
Question Number
Multiple Choice
the online shopping method to the
From Q3 to Q7
traditional shopping method.
H1
The retailer trademark is not
important in shopping online field.
H3
The normal-product
customers are affected more by the
Multiple Choice
Free response
Multiple Choice
Ranking
time factor than the specialproduct customers.
H4
The normal-product
customers are affected more by the
Free response
Multiple Choice
Ranking
convenience factor than the
special-product customers.
H5
The normal-product
customers are affected more by the
Free response
Multiple Choice
Ranking
From Q 7 to
Q13
price factor than the specialproduct customers.
H6
The normal-product
customers are affected more by the
Free response
Multiple Choice
Ranking
customer service factor than the
special-product customers.
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
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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
2.4.
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.
2.4.1.
Primary sources
2.4.1.1.
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
http://freeonlinesurveys.com/rendersurvey.asp?sid=8i94hwyt9eak0fm763686 . 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.
2.4.1.2.
Interview
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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.
2.4.2.
Secondary sources:
2.4.2.1.
Literature review
2.4.2.2.
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.
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CHAPTER 3
FINDING AND ANALYSIS
3.1.
Findings
After the survey was delivered to the shoppers, we collected 137 responses. The questionnaire is
shown in the appendices.
3.1.1. 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?
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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 (5089% 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.
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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
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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
3.1.2. 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
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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:
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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.
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H3 - The normal-product customers are affected more by the time factor than the specialproduct 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
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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)
a. You can list information about the products that you need
b. 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.
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