Online Shopping Behavior in Taiwan and Indonesia. Goh Yi-Sheng, Nicky Priambodo, Shieh Meng-Dar. National Cheng Kung University, Taiwan

Transcription

1 Online Shopping Behavior in Taiwan and Indonesia Goh Yi-Sheng, Nicky Priambodo, Shieh Meng-Dar 0069 National Cheng Kung University, Taiwan The Asian Conference on Media and Mass Communication Abstracts The purpose of this paper is to examine first, how are patterns of internet usage across different cultures such as Taiwan and Indonesia, second, how is online shopping behavior across those countries. This study is basically exploratory in nature. The finding revealed Yahoo is far and away the most common site to buy online for Taiwanese. By the contrast, Indonesian prefers Facebook as their media to shopping online. Online surveys are conducted among younger buyers which range age from years old both in Taiwan and Indonesia. Results indicate that there are similarities and differences related internet usage and actual online shopping behavior between Taiwan and Indonesia. Convenient sampling technique is main limitations of this paper. The broad overviews of literature provide insights into potential area for further research. Several suggestions toward this are provided in the paper. More detailed understanding of the phenomena will hopefully lead to improved decision making for both e-retailers in Taiwan & Indonesia and eventually will help e-retailers to respond changing demand from consumers recently years with innovation. Keywords: Internet usage, Online shopping, Taiwan, Indonesia iafor The International Academic Forum 97

2 1. BACKGROUND The global nature of the Internet, combined with the nature of the communications that it can convey, makes it a perfect vehicle for international interactive marketing. International consumer research in a cross-cultural context is needed for a better understanding of global online consumer behavior (Park & Jun, 2003). In order to keep attuned to internet shopping behavior and constantly communicate with consumer base for online retailer, more observation of customer behaviors is necessary. Cross-cultural comparison of consumer behavior is a contemporary research issue in the field of intercultural communication (Yi, 2011). Recently, due to the emergence of electronic commerce in the global market, some researchers have focused on comparing consumers' on-line shopping preferences and on-line shopping behaviors in different cultures. Park and Jun (2003) compared internet buying behavior between South Korea and United Sated of America. Lightner, Yenisey, Ozok, and Salvendy (2002) compared college students' on-line shopping preferences in Turkey and the United States. Indonesia hasn t been studied in these previous studies and a few studies compared between developing countries such as Taiwan and Indonesia. Thus, this study aims to close this gap and bring additional insights about cultural similarities and differences in internet shopping behaviors between Taiwan and Indonesia. Taiwan and Indonesia are chosen for comparison because of the bilateral relations between Indonesia and Taiwan, which began in the late 1960s, flourished rapidly. Taiwan is Indonesia's third largest trading partner behind Japan and China. Taiwan's investments in Indonesia are mainly in furniture, textile, shoes, non-iron ore, metal products, trade service, agriculture and the forest farming industry (Anthoni, 2012). Based on data released by the Center for Political Studies (P2P) LIPI and Taipei-based Chung-Hua Institution for Economic Research on 2011, Indonesia was Taiwan`s 11th largest trading partner as of 2010 and Taiwan`s 13th largest export market (US$4.47 billion) and 11th largest supplier of imports (US$6.02 billion). Internet access is very prevalent in Taiwan (Yi, 2011). The number of Internet users in Indonesia is growing at a lightning speed; nonetheless, internet business in Indonesia is still in its infancy. By 2014, the number of Internet users in Indonesia is projected to reach 150 million. The number of local websites and contents are still very limited compared to the number of Internet users. Undoubtedly, Indonesia presents many opportunities in the Internet business (Rustandi, 2010). To provide a theoretical background for this study, the next section of this article contains a literature review of e-commerce in Taiwan, e-commerce in Indonesia, internet shopping behavior, internet usage. 2. LITERATURE REVIEW 2.1 E-commerce in Taiwan According to the Internet World Statistic, internet growth has been phenomenal in Taiwan. The proportion of the population who are internet users has exceeded 70.1 percent 1. Taiwan online retail sales and e-commerce have boomed as more people get high-speed internet connections. Taiwan s online shopping market has seen growth since 2000 (Liu, Blake, & Neuendorf, 2003). Taiwan government is aiming to achieve the e-commerce revenue goal of NT$1trillion (US$ billion) in 2015, and will spend a total of NT$450 million (US$15 million) to help develop the nation`s e-commerce industry under a five-year program spanning from

3 Taiwan e-commerce has experienced an annual growth of 20 percent in recent years and generated business value of NT$461.9 billion (US$ 15.4 billion) in The internet in Taiwan differs from most other parts of the world in terms of search engine market share with Yahoo having a greater percentage at percent and Google controlling only percent 3. It is expected that more people will participate in internet shopping as high speed internet access becomes more available and the number of cybermalls continues to increase. 2.2 E-commerce in Indonesia Indonesia is a nation of more than 200 million people; 50 million of Indonesia population are on the Internet already and this number continues to grow, at least triple by some estimates. By 2014, the number of Internet users in Indonesia is projected to reach 150 million. Yet retail e-commerce transactions still only make up only 0.7 percent of total retail transactions in Indonesia. This percentage is growing. Investors internationally already see this obviously, since foreign investments in Indonesian e-commerce products and services continue to grow 4. A study shows only 50% of Indonesian Internet users do online shopping. Recently, Indonesians are more eager to spend their money online (Yulisman, 2012). Another survey conducted in March 2010 by Nielsen Indonesia found that 68% of Indonesia s online population had shopped on the Internet at least once. Books are the most popular online purchase among Indonesians, with 38% saying they would buy a book online at some time during the next six months. An additional 33% said they intended to buy clothing, while 29% said airline tickets and 27% electronics. Undoubtedly, these data above presents many opportunities in Taiwan and Indonesia related internet business. Therefore, to gain and attract more consumers, it is a must for online retailers both countries to know its online shopping behavior. 2.3 Internet Shopping Behavior Electronic commerce has become one of the essential characteristics in the internet era. According to UCLA Center for Communication Policy (2001), online shopping has become the third most popular internet activity, immediately following using or instant messaging and web browsing. It is even more popular than seeking out entertainment information and news, two commonly thought of activities when considering what internet users do when online. Various studies have tried to gain an improved insight into understanding the consumer behavior in cyberspace (Rofiq, Mula, & Scott, 2011; Sulaiman, Ng, & Mohezar, 2008; Utomo, 2012). Consumer purchases decision is influenced strongly by demographic, economic, social, situational and technological factors. Four relevant demographic factors; age, gender, education and income are found to be significant with the consumers attitude towards online shopping (Burke, 2002; Wu, 2003). According to Sulaiman et al (2008) the increasing use of the Internet by women, their growing economic power and their dominant influence on household shopping behaviors have made them a market segment to be targeted in the future. Burke (2002) revealed that education is found to affect the adoption behavior of online purchasing. Previous studies have found online shopping effect consumers perceptions in terms of its usefulness(venkatesh, 2000), perceived risk and trust (Wee & Ramachandra, 2000), and e- commerce- market- only usd- 0-9b- of- total- retail- sales- dailysocial- report/ 99

4 convenience (Kare-Silver, 2001). Venkatesh (2000) linked the usefulness with ease of use to determine consumers attitude towards online shopping. According to them, usefulness is influenced by ease of use because the easier a technology is to use, the more useful it can be (Venkatesh, 2000). Convenience is at the heart of what fundamentally drives demand for the Internet (Kare-Silver, 2001). Similarly, Wolfinbarger and Gilly (2001) found that the most important attributes of online shopping to consumers are convenience and accessibility. The consumers have a greater intention to shop online because it saves time and effort (Wolfinbarger & Gilly, 2001). While flexibility, convenience, efficiency, and enjoyment are some examples of positive feelings customers may have about shopping online, the concerns about the possible risks of online transactions and lack of control are hard to ignore. Wee and Ramachandra (2000) found that surfers who did not purchase online expressed concerns about security, privacy and trustworthiness. The difficulties of physically checking the quality of products or monitoring the safety and security of sending sensitive personal and financial information while shopping on the Internet adds to the perceived risk (Wee & Ramachandra, 2000) 2.4 Internet Usage This research attempts to examine the difference in internet usage between Taiwan and Indonesia. There are numerous studies showing factors to explain internet usage (Fah & Choo, 2010; Lohse, Bellman, & Johnson, 2000; Park & Jun, 2003). Loshe et al. (2000) found that the longer the amount of time spent online, the greater the chance of making a purchase online. Number of months online as well as length of time spent online is an important predictor of online buying behavior. Goldsmith et al. (2002), Choi & Lee (2003), Fah & Choo (2010), they used several variable to explain patterns of using internet. The variables include: place of internet access, number of months on the Internet, hours online per day. Internet usage is said to have three dimensions: frequency of Internet usage, amount of daily Internet usage and diversity of Internet usage (Igbaria, Schiffman, & Wieckowski, 1994). After reviewing previous literature about cross-cultural online shopping, specific research questions are proposed: 1. How are the patterns of internet usages in the two cultures? 2. How is the actual online shopping behavior in the two cultures? The results of these objectives hope can design strategies about media messages & channel selections to reach them in a cost effective manner and bring additional insights on consumers online shopping behaviors field in international context. 3. RESEARCH METHOD Through the use of online survey questionnaire which investigates consumer s work related internet usage and internet shopping behavior, this study surveyed 59 respondents in Indonesia and 52 respondents in Taiwan. 100

5 Young and educated generation who is familiar with computer-mediated communication (CMC) and have more on-line shopping experiences(chan & Fang, 2007; Liu et al., 2003) were chosen as respondents of this study. Liu et al (2003) also mentioned education of less than college predicted less online shopping. Although not representative of all consumers, these younger buyers are important because they are facilitate an understanding of the future of e-commerce (Goldsmith & Goldsmith, 2002). According to the survey 9 th GVU s user survey, most online users are years of age and likely to live in metropolitan areas (Choi & Lee, 2003). In both countries, 60 questionnaires were distributed to respondents. The researcher personally sent questionnaire by or send message to respondents by media social to collect data in September, 24-26, Fifty nine (98.3% response rate) Indonesian, of which 78 percent were female, completed and returned the survey. The Taiwan data was collected in September, 27-29, Similar to data collection in Indonesia, the researcher personally sent or message by media social to Taiwanese. Fifty two (86% response rate) Taiwan respondents completed and returned the survey. Female made up 71 percent of the 52 people in the Taiwanese respondents. Above 80% respondents from both countries were years old. For current status, majority of respondents both Taiwan and Indonesia were single. In the research finding, Taiwan respondents were holding master and undergraduate level of education, which are 66 percent and 33 percent, respectively. The totals of 96 percent of Indonesian were holding undergraduate level of education. This profile actually reflects the profile of both Taiwanese and Indonesia s internet users. Convenience sampling technique was used in this study. 3.1 Research Instrument A self-administered online survey questionnaire was used on this study. The questionnaire originally was designed in English. The researcher translated the English version to Indonesia. Backward translation is needed for effective cross cultural studies (Brislin, 1970). The Indonesia version of the questionnaire was back translated into English by a business professional that is fluent in both English and Indonesia. The researcher compared the original English version and the back translated version. After minor adjustments, the meaning of two questionnaires matched Brislin s (1970) rules for back translation. Since Bahasa Indonesia is the official language in Indonesia, the Indonesia version was distributed to the Indonesia respondents. Similar with Indonesia version, for use in Taiwan the English questionnaire was translated into Mandarin Chinese. For validity and reliability reasons, two back-translations were done; the Chinese version of the questionnaire was revised until it mirrored the English version. The Questionnaire had two parts consist of: demographic information and questions related patterns of internet usage and internet shopping behavior. The first part of the questionnaire measured respondents demographic information asking for the participants sex, age, current status, education degree, monthly income, and nationality. The second part of the questionnaire had questions related patterns of using internet and actual internet shopping behavior, also looked in detail at where consumers search for information and inspiration before they buy. Most survey questions were derived from significant results in previous studies. The researcher adopted these questions from Ronald (2002), Jayoung (2003), Yin-Fah (2010), and Milard (2012) studies with minor modifications. 101

6 4. RESULT AND DISCUSSION Guided by two research questions, this study focused on finding out the patterns of internet usage and internet buying behavior between developing countries such as Taiwan and Indonesia. The following sections of this article summarize the results and discuss the implication of these results. 4.1 Patterns of Internet Usages The first research question asks how the patterns internet usages between Taiwanese and Indonesia respondents are. Access to the internet In Taiwan, 85 percent of the respondents had access to the internet both at home and school. Of the Indonesia respondents, 66 percent had access to the internet at home, while 25 percent had access to the internet through mobile phone. Looking at the patterns of internet usage, nearly 100 percent of the Taiwan respondents revealed that they have more than 6 years experience in net serving. While only 70 percent of the Indonesia respondents reported that they have more than 6 years experience in internet. When being asked hours a day use internet, 40 percent of Taiwan respondents have used internet more than 6 hours in a day and 29 percent used internet around 5-6 hours in a day. Of the Indonesia respondents, 36 percent of Indonesians have used internet more than 6 hours in a day, 32 percent used internet around 3-4 hours in a day. 4.2 Online Shopping Behavior The second research question asks how actual internet shopping behavior in Taiwan and Indonesia is. Nearly 5 percent of Taiwan respondents reported that they had never purchased any product through internet. In order to determine barriers of shopping online, those respondents who have never shopped online were asked to indicate reason for not doing so. The reasons for not shopping through internet are because difficulties of physically checking the quality of products and do not believe online retailer. While nearly 95 percent of the Taiwan respondents reported that they had purchased product through internet. More than 10 percent of Indonesia respondents revealed that they had never purchased any product through internet. The reasons are because of a lot of fraud because e-shopping is to new, not sure if the product will meet the expectation or not, and need to touch & see the product. With nearly 90 percent of the Indonesia respondents had purchased product through internet. Looking at internet purchasing experience, 33 percent of Taiwan respondents have 4 to 5 years experience in online purchase and 29 percent of Taiwanese were 2 to 3 years in online purchase. Of the Indonesia respondents, 40 percent have 2 to 3 years online purchase experience; more than 30 percent have 6 months to 1 years online purchase experience. The period in experience of internet shopping in the Taiwan respondent was longer than that of Indonesia respondent. With respect to experience with product purchasing over the internet, more than 20 percent of Taiwan respondent reported had purchased products once a month, while 25 percent of Taiwanese had purchased products less than once a month. Moreover, 15 percent of Indonesia respondent reported had purchased products less than once a month, while nearly 30 percent of Indonesia respondents had purchased product more than once a month. The reason behind this phenomenon could be due to the fact that Indonesia respondent had higher income than that of in Taiwan. Since after graduated from college, Indonesian people tend to looking for job rather than 102

7 continue study to master degree. Unlike Taiwanese, majority of Taiwan student will continue study on postgraduate level of education. The number of amount they typically spent from internet almost similar. Mostly, both Indonesia and Taiwan respondents spent less than 1.500NT$/month which are 86 percent and 52 percent of the respondents, respectively. This finding depict almost the same as found by Utomo (2012) on spending money by online shopper. In addition, more than 50 percent of Taiwan respondents revealed that they definitely will buy online in the coming year, however only 33 percent of Indonesia respondents revealed they definitely will buy product through internet in the coming year. Types of online purchased products A comparison of product types purchased by Taiwan and Indonesia consumers through the internet is described in Table 1. The most frequent purchase by Taiwanese was clothes, followed by book, fashion accessories, then computer. For Indonesians, the largest product category purchased was clothes, followed by fashion accessories, cosmetics, and then rank number four has 2 types of product which are computer and toys. Interestingly, 40 percent of both Taiwanese and Indonesians consumer ever purchased clothes through internet. Clothing, fashion accessories, and computer seem to be popular product category in both cultures. However, books are more popular in Taiwan. Cosmetics and toys are more popular in the Indonesia. This finding is consistent with the earlier study by Liu et al (2003). The results of this study show not only do more consumers shop online but more consumers shop for apparel products through internet. Variable Category Taiwan Indonesia Frequency Rank Frequency Rank Types of product Clothes Book Fashion accessories Computer Unique product Cosmetics Toys and handicrafts CD Stationeries Plane ticket Consumer electronics Cellphones voucher Note: Respondents could report more than one item Table 1. Types of products purchased by consumers through the internet Types of site most typically purchase The results from table 2 showed that there are significant in types of site most typically purchase between Taiwan and Indonesia. Taiwan consumers see Yahoo as sites where they can seek out a wide variety of product with reasonable price, more reliable, and easy to order, use & access. Interestingly, for Taiwan respondents, yahoo was ranked first in the types of site most typically purchase list but was not reported at all by Indonesia respondents. As a result, Books ( 博 客 來 ) was ranked second, followed by Ruten, PC Home, Lativ, 7-Net, Taobao, and Amazon. This result 103

8 is consistent with earlier study by Mvf Global. This study reported that Yahoo having a greater percentage of market share at percent. For Indonesia consumer, Facebook was the most popular site. The reason they preferred Facebook as their media to buying online because majority of the seller is her or his friends, so they trust the seller. Besides that they revealed that Facebook is easy to access & use and provide product that can t find in the shopping area nearby. Kaskus, a domestic online vendor, was ranked second by Indonesia consumer followed by Blackberry messenger, Toko Bagus, Multiply, then Disdus. This result consistent with the earlier study mentioned that most retail industries in Indonesia use Facebook social network as one of their tool to conduct online marketing (Handayani & Lisdianingrum, 2011). Variable Taiwan Indonesia Name Frequency Rank Name Frequency Rank Types of site Yahoo 30 1 Facebook 28 1 Books ( 博 客 來 ) 18 2 Kaskus 18 2 Ruten 16 3 Blackberry messenger 6 3 PC Home 6 4 Toko Bagus 5 4 Lativ 3 5 Multiply Net 2 6 Disdus 2 6 Taobao ( 淘 寶 網 ) 2 6 Amazon 1 7 Note: Respondents could report more than one item Table 2. Types of sites most typically purchased by consumers Purchase influencer This survey question has purpose to determine activities which consumer do before making a purchase decision. Consumers rely on two kinds of input when deciding what to buy, which are information and inspiration influencer or can be called as purchase influencer (Milard, 2012). For Taiwan respondents the most important activities that influence them to buying product through internet were visited a market place, read product reviews online, and advice from family & friend, respectively. On the other hand, Indonesia respondents reported that read product reviews online, price comparison, read shopping policies were the most important activities to help them buying through internet. It is interesting to note that both regions rated read product review online of being of most importance. Side persuader This purpose is to get information which factors are considered important when consumer decide to buy. Price was an important factor in determining where to buy both of Taiwan and Indonesia respondent. However, the second and third factors were totally different from both cultures. Taiwanese reported ratings & reviews and convenient delivery were the other important factors. Similar with previous study reported that the main concerns of the online shoppers in Taiwan are price and convenient delivery (Liu et al., 2003). For Indonesian, the second important factor was delivery products match the description followed by Trustworthiness of retailer. Both Taiwan and Indonesia respondents mentioned that what they are looking for in online shopping is cheaper price than brick and mortar stores, thus lowest price as attractiveness to consumer buying online. 104

9 Actual and preference types of payment This study also compares actual and preference payments in the online shopping process in these two cultures. There are significant results according to actual and preference payments between Taiwan and Indonesia. Taiwanese respondents reported that they usually make a payment through convenience stores such as: 7-11 or family mart, after he or she receives the product. Many e-stores have established cooperative relationships with convenience stores. There are convenience stores which open 24 hours a day, 7 days a week, everywhere in Taiwan. E-stores can ship their products to a convenient store near a consumer's home based on the consumer's choice. The Taiwanese consumer then pays at the convenience store when they pick up the product. The second rank was transferring money to the e-retailer from an ATM machine from his/her banking account, after placing an order. Transnet and credit card online were ranked third and fourth, respectively, in their types of payment. Unlike Taiwanese consumers, the majority of Indonesia consumers make a payment by transferring money from an ATM machine. The second rank type of payment was Down Payment after placing an order. Paying by credit card online was ranked third. This finding result was found to be contradicting with previous study (Utomo, 2012), which found that credit card is the most popular mode of payment on the internet. The reason behind this phenomenon could be due to the fact that their respondents are adult who are professional & has stable income. After comparing actual payments in the online shopping process, the research compares preference payments in the online shopping process between Taiwan and Indonesia. Similar with the results of actual types of payment, Taiwan respondents still preferred to pay through convenience store after receives the product and Indonesia respondents still preferred transfer money from ATM machine after placing an order. Indonesia consumers still paid by transfer money through ATM machine after placing an order, although they have high perceived risk of pay money in advance before get the product. Discussion This study examines various aspect of consumers online shopping behavior. Probably the most interesting findings are related to popular online shopping product categories, the most popular site, purchase influencer, factors important when decided purchase and online actual payments in these two cultures. Clothing, fashion accessories, and computer are popular product category in both cultures. However, books are more popular in Taiwan. Cosmetics and toys are more popular in the Indonesia. The primary differences between Taiwan in Indonesia are related to popular site to buying online and actual payment. Similar with previous study revealed that yahoo is the most popular site for Taiwanese respondents and has the highest market share in Taiwan in terms of search engine site. On the contrary, the popular website of Indonesia respondent to buying online is Facebook, followed by Kaskus, domestic online vendor. Furthermore, Yahoo was the most popular site for Taiwanese, while there was none in the Indonesia list. There was discrepancy in the actual payments between Taiwan and Indonesia. Taiwan respondent make a payment through convenience stores, whilst Indonesia respondent prefer to transferring money by ATM machine in terms of actual payment. Read product reviews online is activity conducted by both Taiwan and Indonesia to help make an online purchase. The most important factor both for Taiwan and Indonesia when decided to buy online is lowest price. These important factors and activities need to be concern by e-marketers who want to enter or expand their market internationally especially to Taiwan and Indonesia. 105

10 Based on the result of this study, the theoretical implication of this study is discussed in the next section. 5. CONCLUSIONS The study found that there were differences in actual online shopping behavior, but more similarities in internet usage between Taiwan internet users and Indonesia internet users. Even when the same information technology is introduced, its adoption and application depends on unique traits of the society. Therefore, though Internet marketing has some merit in targeting global customers, it should consider cultural differences when adopting and applying e-commerce. Based on the results of this study, specific suggestions can be made to on-line vendors who are interested in the electronic commerce market in Taiwan and Indonesia. First, online vendors who are interested in both markets should emphasize better price. Consumers from both countries are highly price sensitive. Second, online vendors who are interested in the Taiwan market have to make sure the delivery is convenient otherwise it will hinder shopper from buying online. Furthermore a site has to be reputable, because Taiwan respondents reported that rating and review is important predictor of reputable online retailer. Finally, online shoppers who are interested in the Indonesia market may work on providing detailed and accurate information to customers. Indonesia respondents worried the most about delivery products didn t match the description. Provide detail and accurate information can reduce their worries. Limitations and Implications for Future Studies This study serves as an exploratory study which observes young consumers' related patterns of internet usage and on-line shopping behaviors in Taiwan and Indonesia. However, this study only surveys young consumers in these two cultures because previous studies (e.g. Wu, 2011) suggested that young consumers are active Internet users and online shoppers. Furthermore, convenience sampling weakens research objectivity. The researcher does not intend to over generalize the results to the whole consumer population in these two cultures. Future studies may try to increase the number of samples that can give a better accuracy of the research, to make the results of the research closing to the real conditions and could give additional information that can enrich the studies. REFERENCES Anthoni, M. (2012). Indonesia, Taiwan to optimize opportunities in the rise of China Retrieved October 02, 2012, from Brislin, R. W. (1970). Back-Translation for Cross-Cultural Research. Journal of Cross-Cultural Psychology 1(3), Burke, R. R. (2002). Technology and the customer interface: what consumer want in the physical and virtual store. Journal of the Academy of Marketing Science, 30(4), Chan, K., & Fang, W. (2007). Use of the internet and traditional media among young people. Young Consumers: Insight and Ideas for Responsible Marketers, 8(4), Choi, J., & Lee, K.-H. (2003). Risk perception and e-shopping: a cross-cultural study. Journal of Fashion Marketing and Management, 7(1),

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