EMBRACING E-COMMERCE: A GLIMPSE INTO THE FUTURE
OF ON-LINE SHOPPING IN SAUDI ARABIA
Khalid Al-Diri, Dave Hobbs
Informatics school, Bradford University, Bradford, UK
Rami Qahwaji
Informatics school, Bradford University, Bradford, UK
Keywords: E-Commerce, E-Vendor, Internet, Online Shopping, Saudi Arabia.
Abstract: The growing use of the Internet in Saudi Arabia provides a developing prospect for E-shopping. Despite the
overwhelming potential of online shopping in this country, there remains a lack of knowledge and potential
impact on consumers regarding this matter. This paper, part of a larger study of 144 Saudi Internet Users
aims to establish a preliminary evaluation and understanding of the characteristics of online shopping. It
explores their information seeking patterns as well as their motivations and concerns for this rapidly
evolving technology. Consumers still lack a trust in the vendor’s websites through concerns related to
security, privacy when dealing with online vendors, the Saudi Internet Network and the dominant English
language as a medium of interaction. Whilst motivating factors for the Saudi public to utilise online
shopping have shown to be convenience, unavailability of offline products/services and price, we present
and discuss a range of findings and recommend changes that will represent a paradigm shift that is required
to achieve a broader acceptance and diffusion of online shopping in Saudi Arabia.
1 INTRODUCTION
The emergence of e-commerce has brought
incredible benefits, such as the diffusion of
information, the development of new technologies,
the promotion and sales of products and services.
However, as it has grown and become an important
tool for those living in highly developed countries,
developing countries have yet to participate fully.
The progress of information and communication
technologies (ICT), the evolution of the tools
available for the development of e-commerce and
the overall growth of internet usage are of great
concern in Saudi Arabia.
Most of the research concerning e-commerce has
been carried out in the west, mainly in the US.
Despite its growing importance, academic research
in this area is particularly negligible in Saudi Arabia.
In view of the high demand for IT and the
introduction of online businesses in Saudi Arabia,
there is an inherent need to investigate the nature of
consumers’ attitude towards Internet extent, and
online purchasing since no studies have examined
the profiles of these shoppers in Saudi Arabia in the
knowledge of the researcher. Only through this
understanding will marketers be able to develop
strategies and tactics to attract and maintain these
customers. Considering that online shopping in the
context of Saudi Arabia is still at the early stage of
development, little is known about consumer
attitudes toward adopting this new shopping channel
and factors that influence their attitude towards it.
Therefore, this study, part of a larger study of Saudi
Internet users, aims to examine the current users of
online shopping in Saudi Arabia with the intention
of establishing a preliminary assessment, evaluation
and understanding of the characteristics of online
shoppers in Saudi Arabia.
Towards this end, this study was carried out with
the following questions: What is the extent of the
use of Internet technology by Saudi people. What
are the motivation factors for using online shopping.
What are the barriers that prevent Saudi users from
using Internet technology for their shopping. What
307
Al-Diri K., Hobbs D. and Qahwaji R. (2007).
EMBRACING E-COMMERCE: A GLIMPSE INTO THE FUTURE OF ON-LINE SHOPPING IN SAUDI ARABIA.
In Proceedings of the Second International Conference on e-Business, pages 307-314
DOI: 10.5220/0002108503070314
Copyright
c
SciTePress
are the most trusted online shopping sites, is it the
Arabic or the Foreign.
2 LITERATURE REVIEW
The Internet brings a new era, in which individuals,
companies, organizations and governmental sectors
actively participate in a variety of exchanges. The
growth of the World Wide Web (WWW) and its
acceptance among consumers have paved the way to
the rise of electronic commerce (EC), since the
Internet is the prime source for conducting e-
commerce. EC allows regional businesses and
economies to be less local and more global in
keeping with long-term trends toward market
liberalisation and reduced trade barriers.
Nevertheless demographics and lifestyle
characteristics play an important role in customer
buying habits and in on-line shopping behaviour and
one must reckon with the influence of cultural
variables, as exemplified by the tremendous
differences between the on-line shopping behaviour
of customers in developed countries and developing
countries.
2.1 Reasons for Online Shopping
2.1.1 Convenience
Consumers can save time and find shopping more
convenient as online merchants serve their needs
personally. The issue of convenience and speed
seems to be the most obvious reason why shoppers
prefer online shopping in contrast to traditional
bricks-and-mortar shopping (Rohm & Swaminathan,
2004). Consumers have been described as time
savers; thus they go online shopping (Parsons,
2002). The 24-hour, 7 days per week availability,
location and purchasing process through the Internet
are much more superior to other traditional shopping
methods (Alreck and Settle, 2002). There are many
types of convenience such as time saving, time
flexibility, physical effort saving etc. Many studies
cite convenience, as the key reason for the increase
in online shopping (Lorek, 2003).
2.1.2 Prices
The second dominant factor that influences
consumers to shop online refers to the competitive
prices and the deals offered by online vendors
(Starkov & Price, 2003). Online retailers are able to
offer cheaper prices because of the shrinking cost of
information processing, lower operating cost and
global reach provided by the Internet (Rowley,
2000). Another main reason for the competitive
price in online is the competitive pressure, especially
from new online retailers. New online retailers use
price as a main competitive tactic to attract
customers (Hanson, 1999), also Internet allows for
efficient price search and comparison by employing
Internet tools such as recommendation agents,
allowing consumers to screen alternatives online and
an in depth comparison among selected alternatives
(Haubl and Trifts, 2000).
2.1.3 Good Selection and Wider Availability
of Product Choices
Another factor that motivates online consumers to
use online shopping over the Internet is the good
selection and wider availability of product-service
choices offered by online vendors (Rohm &
Swaminathan, 2004). Online vendors are able to
provide wide range assortments of products as there
is no storage limitation compared to traditional
shopping. There are many examples, like e-bay,
Yahoo.com, Amazon.com, who are able to offer
their customers millions of products and services on
their websites. Furthermore, the number of shopping
sites that consumers are able to visit online far
exceeds that of physical stores, thus providing them
with a wider selection and choices.
2.1.4 Ease of Search in Gathering Product
Information
Gathering product-service information using the
easiest way is one of the factors that motivate
consumers to shop online. In online shopping,
searching for product information is much more
effective and efficient as compared to traditional
channels. This is achieved by employing browser
and intelligent search agents that make the searching
process on the Internet much simpler for the
consumers (Magee, 2003; Maloy, 2003).
2.1.5 Privacy and Freedom
In online shopping, the primary relationship is
between the buyer and the mediated environment.
Interestingly, the ability to find what a buyer needs
to complete a transaction without having to go
through a human being is associated with online
buyers having increased freedom and control. An
additional benefit of people being online is that
some online buyers visit sites where they might be
embarrassed to shop offline and occasionally
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308
extends to the unwanted presence of a spouse or
children as well while shopping. Spouses interfere
either by purchasing too much during a shopping
trip, or by pressuring their mates to finish their
shopping more quickly. Thus, considering a
transaction online results in shoppers feeling that
they do not necessarily have to buy; again, the
decision to make or not make a transaction is under
their control, and this control is an advantage of
online shopping.
2.2 Reasons Impeding Online Shopping
2.2.1 Risk
In spite of the multi motivators of Internet shopping,
consumers are still wary of shopping online. Trust in
online shopping is still representing a significant
barrier for Internet users and crippling the e-
commerce environment (Li, 2005). Trust should be
even more important in e-commerce than in
traditional commerce because of the paucity of rules
and customs in regulating e-commerce, since online
services and products typically are not immediately
verifiable (David Gefen & Straub, 2004).
Furthermore, online transactions lack the assurance
provided in traditional settings through formal
proceedings and receipts (D. Gefen, 2000). In the
traditional brick-and-mortar world, consumers
would examine a merchant’s size and reputation in
assessing the degree to which they could trust the
vendor. In Asia, as mentioned by the Wee and
Ramachandra (2000) study, the reasons cited for not
buying online were similar – lack of security, lack of
physical contact, uncertainty about product quality
and distrust of retailer. It is therefore obvious that
establishing consumer trust or feeling of security is
an integral part for successful online marketing. On
the other hand, privacy has been of great concern for
Internet shoppers (Grabner-Krauter & Kaluscha,
2003). Another type of risk in online shopping
according to Bhatnagar et al. (2000) is thecustomer
inability to touch or feel something before buying it,
including the problems when returning products that
fail to meet expectations.
2.2.2 Communication Network
From the technological perspective, the traditional
network with narrow band width cannot transmit
detailed information, not to mention the rapid
transmission of video, audio and literal information.
It can only transmit autonomous advertisements with
poor effect and slow searching speed. Users cannot
enjoy online interactivity. Its narrow bandwidth
discourages further online shopping. Many of them
cannot receive interactive & humanistic online
advertisements due to the limitation of bandwidth.
Besides, online advertisements take up a big
bandwidth, which often leads to the jam of internet.
Even if they can receive it, they will be fed up with
its slow speed.
2.2.3 English Language
It was estimated that by the year 2003 there would at
least be 30% of web users who would prefer to do
their on-line activities in a language other than
English, and that by 2005 only one-third of Internet
businesses would use English for on-line
communication (www.saudinic.net.sa). One of the
obstacles facing the growth of this penetration is the
English language barrier (www.saudinic.net.sa) since
few web users will possess the linguistic skills to
cope with information in all these languages. The
English-speaking world does dominate the Web. But
according to (internetworldstats.com) non-English
speakers are joining the Web faster than English
speakers; the usage growth from 2000-2007 is
240.7% and they have grown to represent a 35.6 %
of the world usage in 2007. This begs the question
whether English language has been the obstacle to
Saudis’ Internet use in this English-dominated.
3 METHODOLOGY
3.1 Research Design
A descriptive design was used in this study. A
survey was used to collect the data for this study. In
view of time and cost constraints as well as the large
population of Internet users in the country,
convenience sampling was used to collect data from
the current Internet users in Riyadh, the capital of
Saudi Arabia, which has the highest concentration of
Internet users. Also, it has a high concentration of
urbanised Saudi’s with internet connections and has
the oldest and best-developed Internet infrastructure
in Saudi Arabia. The research focused on IT training
institutes which were chosen because of the good
mix of major groups and levels of education and
income distribution which could affect the attitude
towards Internet usage and online purchasing. The
sampling frame targeted an equal distribution of the
sexes.
EMBRACING E-COMMERCE : A GLIMPSE INTO THE FUTURE OF ON-LINE SHOPPING IN SAUDI ARABIA
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4 RESULTS AND DISCUSSION
The Statistical Analysis System (SPSS) computer
package was used to analyze the participants'
responses. A variety of statistical methods was used
to analyze the data collected in this study.
The total number of participants was 144 of
which 50% (72) were males and the remaining 50%
(72) were females, see Table 1. The data presented
in Table 2, 3 show the ages and the educational
levels of participants.
Table 1: Participants Gender.
Table 2: Participants Age.
Table 3: Participants Educational levels.
4.1 General Attitudes toward Internet
Usage
The first research question was designed to provide
information on the current status of the Internet use
among the Saudi people.
The results revealed that the 144 (100%)
respondents indicated that they have access to the
Internet technology, 116 (80.6%) use the internet
usually, while only 28 (19.4%) use it sometimes.
Regarding the time spent on Internet, the data
presented in Table 4 show that 41.7% spend 1-5hrs
per week on the Internet, 27.8% spend 6-10hrs,
14.6% spend between11-20hrs, 11.8% takes more
than 31hrs from their time, and 4.2% spends 21-
30hrs on the Internet.
Table 4: Time spent on the Internet.
All participants were asked to rank several
objectives of using the Internet in terms of its
importance to them with a five-point likert scale
from mostly agree to mostly disagree. The results
presented in Table 5 show that electronic mail (e-
mail) was used as the first Internet feature by a mean
4.49 of responding participants. Searching for
information was the second rank by a mean of 4.44
of the responding subjects. Online banking was the
third rank by a mean of 3.56 of respondents, while
online shopping was the fourth rank by a mean of
2.95 of participants. Chatting and forums and online
games were used by a mean of 2.33 and 2.75
respectively with a slight difference between male
and female in the rank of their usage. When
analyzing the differences in responses to the
objectives of using the Internet among participants
gender, age, educational levels, Friedman two-way
ANOVA indicates that the differences were
significant at the .05 level of significance.
It is clear that the majority of participants,
regardless of their gender or age or educational
levels, tended to make approximately a very high
usage of the Internet for activities such as e-mail,
and information gathering. Using the Internet for
more advanced applications such as online banking
is growing up at a good stage among participants
since it tends to be high usage, while for the online
shopping the results indicated a moderate usage. In
general, the respondents’ usage for online games,
and chatting and forums were low.
Frequency Percent %
Male 72 50
Female 72 50
Total 144 100
Frequency Percent %
<18 3 4.2
18-25 20 27.8
26-35 33 45.8
Male
36-50 16 22.2
<18 1 1.4
18-25 42 58.3
26-35 24 33.3
Female
36-50 5 6.9
Frequency Percent %
high school 16 22.2
diploma 6 8.3
bachelor 28 38.9
master 21 29.2
Male
PhD 1 1.4
high school 1 1.4
diploma 37 51.4
Female
bachelor 34 47.2
Frequency Percent %
Male 1-5 hr 34 47.2
6-10hr 13 18.1
11-20 hr 10 13.9
21-30 hr 6 8.3
>31hr 9 12.5
Female 1-5 hr 26 36.1
6-10hr 27 37.5
11-20 hr 11 15.3
>31hr 8 11.1
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Table 5: Internet Usage According to Gender.
Generally, the results show that the use of the
Internet among Saudi people seems to have grown
rapidly in the recent years and it is likely to expand
much more quickly in the near future. The results
show that 80.6% of responding participants have had
their Internet access usually, while only 19.4% have
had their access for sometime. Additionally, 41.7%
indicated that they use the Internet between 1-5 hrs
per week while 27.8% spend 6-10hrs on the Net. E-
mail and searching for information were the most
frequently accessed applications, while online
games, chatting and forums were less frequently
used.
4.2 General Attitudes toward Factors
Encouraging Online Shopping
All participants were asked to rank several reasons
for using online shopping in terms of their
importance to them with one being most important
and five being least important.
As shown in Table 6, the main reason given for
using online shopping was convenience since
(50.7%) of participants ranked it as first while
34.0% also indicated that product/service not
available offline was the second main reason that
motivates them for getting the full benefit from the
online shopping. Better price came as the third main
reason for doing online shopping by (75.7%), then
the privacy for certain products by (33.3%).
Curiosity was the last important reason for making
online shopping from the perspective of participants.
This finding is consistent with the findings of
previous studies (Grunert and Ramus, 2005), where
convenience was the most cited reason for internet
shopping. But in contrast to other studies (Starkov &
Price, 2003, Lorek, 2003; Magee, 2003) regarding
the second motivating reason for online shopping,
our study found Product/service not available
offline as the second reason which can be due to the
fact that Saudi Arabia is a developing country, its
markets are limited and can not be compared to the
most developed countries like US, or UK either in
quality or in quantity, and some of the
Internationally famous brands may not exist in Saudi
Arabia, resulting in people going to online to
overcome this gap. One interesting finding is that
females have ranked the item ‘More privacy for a
certain product’ as the fourth motivation factor by a
high percentage of 65.7% compared to males who
ranked it by 2% only, which support the earlier
discussion on this reason in the previous section.
With respect to price, it came in the third level
because Saudi Arabia has a strong economy where
the GDP is relatively higher than that of Middle East
countries and as a result the shopper can pay for the
better quality product.
Table 6: Why shopping online.
Reason of online shopping Rank
Convenience 1
Product/service not available offline
2
Better price 3
More privacy for certain product 4
Curiosity 5
When analyzing the differences in responses for
online shopping among participants’ gender, age,
educational levels, and time spent on Internet,
Friedman two-way ANOVA indicates that the
differences were significant at the .05 level of
significance. This finding is consistent with other
studies (Swinyard and Smith, 2003) where online
shoppers were younger, wealthier, better educated,
more computer literate, more likely to spend time on
the computer and more likely to find online
shopping to be easy.
4.3 General Attitudes toward Factors
Impeding Online Shopping
The mean scores analysis was utilised to ascertain
consumer attitudes toward factors
impeding/hindering online purchasing. The degree
of barrier effect was measured on a five-point Likert
scale.
Mean
Male
Search for Information
4.58
Online shopping
2.94
Online banking
3.92
E-mail
4.83
Chatting and forums
2.89
Online games
2.61
Female
Search for Information
4.29
Online shopping
2.99
Online banking
3.19
E-mail
4.15
Chatting and forums
1.76
Online games
2.89
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311
Table 7: Potential Barrier of Online Shopping.
Table 7 shows highlights of the factors hindering
the online purchase. The table indicates items with
overall mean responses that exceeded the 3-point,
implying factors, which respondents slightly agreed/
agreed/strongly agreed with. Overall, the
respondents are concerned about the lack of trust of
vendors website, which includes: the security
concerns of online purchasing, the privacy concerns,
complexity of the web sites, the complexity of
instructions, applications forms and Information
overload problems.
This finding is consistent with a lot of researches
e.g. (Wang, et al., 2006) that emphasises the great
importance of trust. A high mean score with regard
to not feeling secure and privacy concerns when
buying online are in line with the findings of many
studies e.g. (Magee, 2003; Grabner-Kraeuter, 2003)
who found that many of their respondents also had
concerns about the security and privacy of online
buying transactions.
The findings also reveal respondents’ concern on
Saudi Internet network and communication
problems (See Table again). Since the dial-up access
is still one of the major ways of citizen’s access to
Internet in Saudi Arabia many of them can not
receive interactive & humanistic online shopping
advertisements due to the limitation of bandwidth
and the slow speed connection with the result all
users feel frustration and then they return to
something else. Many studies reveal that the quality
of Internet service providers (ISPs) has a significant
effect on one’s Internet shopping experience (Chen,
Chang, 2003).
Statement “English language problem” also
showed a high level of agreement (mean = 3.71).
Intuitively, this makes a lot of sense – user language
is highly focused on signalling aspects that often
involve cultural senses. This finding supports what
has been explained in the previous section,
indicating a disposition that the English language
may represent an obstacle for the Internet and its
applications.
One of the interesting findings in this study was
the high agreement on item “The charge of the
internet service is expensive” (with means of 3.65)
showing that it is an important factor in the online
buying process among the Saudis.
4.4 General Attitudes toward the most
Trusted Online Shopping Sites
One of the research questions was designed to
provide information on the current status of the most
trusted websites in the Internet among the
participants. The data presented in Table 8 reveal
that 38 male respondents (52.8%) indicated that they
trusted Foreign websites, while 34 (47.2%) of them
indicated that they trust Arabic website. In contrast
the data in the Table reveal that 40 female
respondents (55.6%) indicated that they trusted
Foreign websites, while 32(44.4%) of them
indicated that they trust Arabic websites. This
finding can be interpreted as follows: Since e-
commerce has been created and developed in
developed countries, specifically in the US, these
countries have put all the rules that control this kind
of applications either legal rules or financial. Most
of the online shopping firms are in these countries,
and therefore it is fair to be trusted compared to
Arabic shopping sites that are in their early stage and
developing countries are just starting to look after
this new technology.
Table 8: Most Trusted Websites.
Website Frequency Percent %
Foreign 38 52.8 Male
Arabic 34 47.2
Foreign 40 55.6 Female
Arabic 32 44.4
Potential Barrier Mean Ranking
Lack of trust of vendors 3.31 6
Lack of trust of vendors website,
which includes :
3.77 1
1-Security concerns (Hacking
problems)
4.09 1
2-Privacy concerns 4.06 2
3-Complexity of the web sites 3.76 3
4-Complexity of instructions
and applications forms
3.65 4
5-Information overload
problems
3.31 5
No familiarity 3.30 7
Saudi Internet network and
communication problems
3.76 2
The charge of the internet
service is expensive
3.65 4
English language problem 3.71 3
High postal charges for online
shopping
3.19 10
No credit card 3.01 11
Debt concern when using credit
card
3.20 9
Prefer shopping offline 3.48 5
Difficult to evaluate products
and services online
3.28 8
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5 CONCLUSION
Despite the potential growth of e-commerce and its
applications like online shopping in Saudi Arabia,
there is still a lack of understanding concerning the
characteristics of online shoppers in this country and
its potential impact on consumer marketing. This is
mainly attributed to the fact that online shopping in
Saudi Arabia is still at the infancy stage and the
volume of internet buying leaves much to be desired
for online shopping in Saudi Arabia to sustain a
profitable growth in the long run. In this study,
empirical research on online shopping was analyzed.
Many important variables had been investigated. In
profiling the characteristics of online shopping users
in Saudi Arabia, the study also reveals that online
shoppers are younger, better educated, and spend
more time on their computer, and on the Internet.
One objective of the study is to establish online
shopping users’ preference in choosing online
shopping. The findings of the study also imply that
consumers are looking for convenience when they
shop online, searching for products/services that are
not available offline, are cheaper, and have more
privacy for certain products specially for female
consumers; these are the dominant factors that
motivate online consumers in Saudi Arabia to shop
online. Based on our survey data, these motivation
factors for online shopping are clearly similar to
those for globally surveyed online shoppers. The
next objective of the study is to identify and examine
the major areas of concern and issues currently faced
by users of online shopping, since barriers are
different in different countries. In line with many
researches concerning the factors that impede
consumers for online purchasing, this paper found
that lack of trust of vendors’ website, Saudi Internet
network and communication problems, English
language problem and the charge of the internet
service which is expensive are the four dominant
factors which impede consumers in their online
purchasing. Saudi Arabia online buyers had different
perceptions of these four factors. The lack of trust in
vendors’ website concerns had the highest rating
score, followed by Saudi Internet network and
communication problems. English language problem
ranked third, and the lowest was the charge of the
internet service which is expensive. The findings of
the study imply that the lack of trust in vendors’
website concerns was the biggest barrier to online
shopping, which includes: the security concerns of
online purchasing, the privacy concerns, complexity
of the web sites, the complexity of instructions,
application forms and Information overload
problems. This study also tested whether Arabic
websites will engender higher levels of trust, for
Web users than a foreign site. One interesting
finding is that the majority of respondents trusted the
foreign website more than the Arabic website. This
study does have some limitations that would need to
be addressed in future studies, like for example the
sampling method, and the small sample size.
6 IMPLICATION
Understanding consumers’ motivations and
limitations to shop online is of major importance in
e-business for making adequate strategic,
technological, and marketing decisions to increase
customer satisfaction, as well as improving the web
site design of virtual stores. Next to this, consumer
characteristics also affect their attitude and intention
toward online shopping, which implicates that e-
business should not treat all consumers alike. The
findings of this study can be contributed to the cross-
national consumer research by distinguishing the
similarities and differences in perceptions of
consumers across nations. The new emerging
concept of online shopping has captured the interest
of businesses, telecommunication service providers,
government and even consumers, by virtue of its
unique characteristics. The implications that can be
derived from the findings of the study can be related
to three main sections: for the online vendors, Saudi
Arabia Telecommunication Company (STC) as the
main telecommunication and Internet service
provider, and the Government.
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