Consumer Preference Analysis of using Shopee Application with

Conjoint Method

Mutia Ryantika, and Rahmat Hidayat

Department of Business Management, Politeknik Negeri Batam, Jl.Ahmad Yani, Batam, Indonesia

Keywords: Consumer Preferences, Conjoint Analysis, E-commerce.

Abstract: This study examines the Analysis of Consumer Preferences in Using Shopee Applications with Conjoint

Method. The population in this study are Shopee application users as an online shopping platform in Batam

city in particular, with a total sample of 300 respondents. The sampling technique in this study uses the

purposive sampling method with a formula that refers to the theory of sample size from Hair et al (2010). In

this study data were collected through a questionnaire distributed online to respondents. Analysis of the data

used is conjoint analysis. The results of this study are the highest level of consumer preference for the concept

of using Shopee application with conjoint method in general is the attribute of product features with the

delivery charge subsidy feature as the highest preference and ShopeePayLater feature as the lowest preference.

Product quality attribute occupies the second level with products at affordable prices as the highest preference

and safety in transactions as the lowest preference. Product design attribute occupies the last level with easy-

to-use application as the highest preference and attractive visual design as the lowest preference.

1 INTRODUCTION

Kotler & Armstrong (2012) explains that e-commerce

is a set of technologies, applications, and business

processes are dynamic linking businesses, consumers

and the public through electronic transactions and the

exchange of goods, services, and electronic

information. E-commerce (Electronic Commerce)

also known as electronic commerce or trade via the

Internet, refers to the buying and selling of goods or

services using the Internet, and transfer money and

data for this transaction. The advent of e-commerce

platforms is a significant form of retail therapy and

online shopping has emerged as a different trend.

Customer shopping preferences is driven by

convenience and range of products offered by the

business operator of e-commerce. Large segments of

customers prefer shopping through e-commerce

portals because the scope is wider and can be

accessed anytime and anywhere as long as they have

a supported internet network. Katawetawaraks &

Wang (2013) explained that the ease of marketing

communication provided by the online market or e-

commerce greatly affected consumers' decisions in

choosing to shop online.

There are several considerations when consumers

decide to buy a product. A product attribute has a role

in shaping consumer preferences and will have an

impact on consumers' decisions to buy a product. This

matter supported by research conducted by Zamhir

(2014) which states that product attributes have a

positive and significant effect on consumer

preferences. Kotler and Armstrong (2012) explains

that there are three important elements in product

attributes, namely: the quality of the product (product

quality), product features (product features) and

product design (product design).

Based on data from eMarketer, the number of e-

commerce transactions in Indonesia continues to

increase every year, starting from 2014, as can be

seen in Figure 1.2 below. In 2014, Indonesia's e-

commerce transactions hit a figure of Rp. 25.1

trillion. And increased in 2016 to Rp 69.8 trillion,

with the rupiah exchange rate of Rp 13,200 per US

dollar. Until 2018, the number of Indonesian e-

commerce transactions have reached more than Rp

140 trillion.

Below are the Ten Countries with the Fastest

Growth in E-commerce released by Databoks in

2019:

Ryantika, M. and Hidayat, R.

Consumer Preference Analysis of using Shopee Application with Conjoint Method.

DOI: 10.5220/0010354100290035

In Proceedings of the 2nd International Conference on Applied Economics and Social Science (ICAESS 2020) - Shaping a Better Future Through Sustainable Technology, pages 29-35

ISBN: 978-989-758-517-3

Figure 1: Ten countries with the fastest growth in e-

commerce.

Shopee is an electronic commerce platform

headquartered in Singapore and under the SEA Group

which was founded in 2009 by Forrest Li. Shopee was

first launched in Singapore in 2015, then expanded its

reach to Malaysia, Thailand, Taiwan, Indonesia,

Vietnam and the Philippines. Shopee was first started

as a market for customers (C2C) but has switched to

the C2C and Business for Customers (B2B) hybrid

models since the launch of Shopee Mall which is an

online shop platform for distribution of well-known

store brands.

In 2017, Shopee recorded 80 million app

downloads. Even in Malaysia, Shopee became the

third (3) most visited e-commerce portal in the 4th

quarter of 2017. Based on a survey conducted by

TheAsianParent I, Shopee is the most visited platform

in Indonesia with a percentage of 73%. Along with

the intense competition in the marketplace in

Indonesia, Shopee was able to rank in the top 5 in

Indonesia

According to a report by iPrice, Shopee has taken

the first position of most visited e-commerce platform

in Southeast Asia. Shopee defeated Lazada in the

second place and Tokopedia in the third place, with

an average total of 184.4 million visits. Based on a

research the was hell by App Annie and iPrice Group,

Shopee has experienced an increase in total visits of

5%, mainly driven by increased visits in Thailand and

Indonesia. This is as a proof that Shopee was able to

maintain its growth momentum from the previous

quarter even though Q1 2019 was considered a non-

peak period.

Based on above description, the researcher were

interested in knowing how consumer preferences are

in using Shopee application as a platform of online

shopping by using the theory of product attributes by

Kotler and Armstrong (2012) , namely the product

quality, product features and product designs by

conducting a research which is entitled "Analysis of

Consumer Preferences in Using Shopee Application

with Conjoint Method".

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2 LITERATURE REVIEW

2.1 Theoretical Review

Kotler and Keller (2016) explained that consumer

behaviour is the study of how individuals, groups and

organizations choose, buy, use, and dispose of goods,

services, ideas or experiences to meet their needs and

desires. Consumers are faced with a myriad of

marketing and other external stimuli every day where

marketers must consider the characteristics of

consumers and consumer psychology to successfully

position a product or service. Consumer

characteristics include; cultural, social and personal

factors and consumer psychology including

motivation, perception, learning and memory.

According to Kotler (2009) the consumer

purchasing decision process is a systematic stage to

see how consumers make the decision to buy a

product or service. The consumer purchasing decision

process intervenes between marketing strategies and

results. That is, the outcome of an organization's

marketing strategy is determined by its interaction

with the consumer decision making process.

According to Kotler and Armstrong (2014)

product attributes can be defined as something that is

able to provide benefits offered by products and can

add value to customers. Developing a product

involves determining the benefits that the product will

offer. Consumers can evaluate these attributes in

terms of their own values, beliefs, and past

experiences.

Indarto (2011) defines consumer preferences as

the subjective tastes of individual consumers,

measured by their satisfaction with these items after

they buy them. This satisfaction is often referred to as

utility. Whereas Frank (2011) assumes that consumer

references enable consumers to rank various bundles

of goods according to the level of utility, or total

satisfaction from consuming goods or services.

ICAESS 2020 - The International Conference on Applied Economics and Social Science

2.2 Research Accomplished

Research from Wibisono and Indrawati, Ph.D. (2019)

under the title “Analysis of Consumer Preferences in

Using Flight Ticket Provider Applications & Online

Hotel Booking” and the result of this research is

product quality in the form of ease of use is the

preference which holds the highest position for

consumers, while speed in transactions is the quality

of products that are the lowest preference for

consumers. Product features in the form of airplane

ticket and hotel booking are the highest preferences

for consumers, while e-ticket is the product feature

that is the lowest preference for consumers. Product

style and design in the form of user-friendly

appearance is the highest preference for consumers,

while attractive appearance is the style and product

design that is the lowest preference for consumers.

Research from Anugraheni and Kusdiartini

(2018) under the title “Consumer Preference for

Social Media in Finding and Buying Products

Online”. The result of this research is that the security

attribute is the attribute that has the highest

preference, followed by the ease attribute as the

second preference, then the feature attribute as the

third preference, and the follower attribute is the

attribute with the lowest preference.

Research from Liu et al (2018) under the title “A

study on Chinese consumer preferences for food

traceability information using best-worst scaling” and

the result of this research is this study call for direct

involvement of the Chinese government in the food

safety information sharing system as follows. First,

with diverse consumer preferences, various types of

information that can be tracked must be recorded into

an information sharing platform depending on the

type of food. Second, the government can promote

the gradual development of the platform based on

priority consumer preferences. Third, new

technology must be applied to ensure the reliability of

traceable information. Finally, local preferences in

terms of how consumers receive and understand

information must be considered.

Research from Batavio, Amani, and Tripiawan,

(2017) under the title “Consumer Preferences in

Using Bukalapak Website Services Using the

Conjoint Method” and the result of this research is

consumer preferences in the use of Bukalapak site

services in the city of Bandung Bukalapak site are

ranked from the highest importance level, namely:

 Payment method

 Display Website

 Product

 Features

Research from Ghassani and Wardhana (2016)

under the title “Analysis of the Factors Forming Go-

Jek Consumer Preference in the City of Jakarta” and

the result of this research is There are six initial

factors that become consumers' preferences in using

Go-Jek services in Jakarta, including: practicality,

tariffs, speed, security, trustworthiness, comfort and

also formed a new factor called Go-Jek's competitive

advantage factor and the most dominant factor. The

consumer's preference for using Go-Jek services is

comfort factor.

Research from Sinaga, Safitri, and Rusgiyono

(2015) under the title Analysis of Consumer

Preferences of Airline Service Users for the

Semarang-Jakarta Route with Choice-Based Conjoint

Method (Full Profile). The result of this research is

that the price attribute is the highest preference which

is very influential in the decisions of airline service

consumers. Then followed by airport tax, as the

second preference, class attribute occupied the third

preference and facility attribute as the fourth or

lowest preference.

Research from Chang et al (2012), under the title

“Consumer Preferences for Service Recovery

Options After Delivery Delay When Shopping

Online” and the result of this research is the greatest

importance is in the compensation attribute. Then

followed by the second response speed response

attribute. Attributes Apology occupies the position of

third importance and is followed by contact attribute

as the last attribute interest.

2.3 Conceptual Framework

Figure 2: Conceptual framework.

This study used product attributes as variables that

would later determine consumer preferences. Where

in the product attributes there are 3 indicators:

product quality, product features, and product design.

Product attributes have a role in shaping consumer

preferences. Where in the purchasing decision stage,

Consumer Preference Analysis of using Shopee Application with Conjoint Method

preferences are at the evaluation stage and will have

an impact on consumers' decisions to buy a product.

3 RESEARCH METHOD

3.1 Research Design

This study used quantitative analysis methods.

According to Sugiyono (2011), quantitative research

studies are used to measure problems by producing

numerical data or data that can be converted into

statistics that can be used. This research is descriptive

research. According to Sugiyono (2015) descriptive

research is research used to describe the

characteristics of a population or phenomenon that is

being studied. In this study, researchers wanted to

find out how consumer preferences in using the

Shopee application in particular in the city of Batam.

3.2 Population and Sample

Shopee application users in the city of Batam are the

population in this study with 300 respondents. The

sampling method used in this study is nonprobability

sampling. Then the sampling technique used was

purposive sampling. According to Sugiyono (2017)

purposive sampling is a technique for determining

research samples with certain considerations aimed at

making the data obtained later more representative.

3.3 Data Collection Techniques

This study uses a questionnaire as a tool or data

collection technique. In general, the technique in

scoring used in the research questionnaire is a Likert

scale technique. According to Sugiyono (2013) Likert

scale is used to measure the attitudes, opinions and

perceptions of a person or group of people about

social phenomena. Sugiyono (2013) also suggested

that the measurement scale can be: nominal scale,

ordinal scale, interval scale, and ratio scale, from the

measurement scale, nominal, ordinal, interval, and

ratio data will be obtained.

3.4 Operational Variables

This study is using product attributes as the

operational variables and using the elements of

product attributes by Kotler and Armstrong (2012) as

indicators of product. Because the product attribute

theory by Kotler and Armstrong (2012) is considered

too general for this study, the levels of each product

attribute indicator will be developed according to the

object under study which is Shopee, by referring to

the most advanced research and development of the

Shopee application itself, namely:

Table 1: Operational variables.

Attribute Level

Product Quality Security in transactions

Complete product information

Ease of transaction

Products at affordable prices

Product Features Delivery charge subsidy feature

ShopeePay feature

ShopeePayLater feature

Easy Payment Methods

Product Design Easy-to-use applications

Simple application interface

An attractive visual application design

3.5 Data Analysis Methods

Conjoint analysis is a technique specifically used to

understand how consumers' desires or preferences for

a product or service by measuring the level of

usefulness and the relative importance of various

attributes of a product. This analysis is very useful to

help design new product characteristics, create new

product concepts, help determine price levels and

predict sales levels. This analysis is a multivariate

analysis used specifically to understand how

respondents build preferences for a product or

service.

4 RESULT AND DISCUSSION

4.1 Model Description

The discrete model shows that the level of factors is

categorical and no assumptions are made for the

relationship between factors and values or ranking.

Following are the number of levels and relationships

of each attribute studied:

ICAESS 2020 - The International Conference on Applied Economics and Social Science

Table 2: Model description.

4.2 The Result of Overall Utility Value

Analysis of All Attributes

The utility value explains explaining the respondents'

choices of the attribute levels used in this study,

namely product quality, product features, and product

design. A utility value that is positive states that the

respondent chooses the level of an attribute, while a

utility value that is negative states that the respondent

does not choose or reject the level of an attribute. If

the value of the attribute is zero, then at the level of

the attribute each other is neutral or it can be said that

the level of the attribute does not affect the

respondent. The overall utility value of attributes

could be seen in Table 3. below:

Table 3: The result of overall utility value analysis of all

attributes.

From Table 3. it can be seen that in general

respondents choose the level of products at affordable

prices on product quality attributes, delivery charge

subsidy features on product feature attributes, and

easy-to-use application on product design attributes

as the level of attributes preferred or chosen by

respondents where these level attributes determine

consumer preferences in using the Shopee application

as an online shopping platform.

Then, in the following order are the levels of

attributes that are preferred or chosen by the

respondent as a whole from the highest utility values

as the most liked levels to the lowest utility values as

the most disliked levels:

Table 4: Ranking attributes level based on overall utility

value.

4.3 the Result of Overall Importance

Value Analysis of All Attributes

Table 5: The result of overall importance value analysis of

all attributes.

Consumer Preference Analysis of using Shopee Application with Conjoint Method

Overall, product feature attributes have the highest

importance in determining consumer preferences

with importance value 46,878. Furthermore, product

quality attributes have the second order of importance

with an importance value of 30,781. while product

design attributes occupy the last importance level

position with importance value 22,341.

4.4 Ideal Alternative Profile

The ideal alternative profile for consumers in using

the Shopee application of each product attribute based

on their level of importance and attention to its utility

value can be seen in Table 6. below:

Table 6: Ideal alternative profile.

From Table 8. above it can be seen that the

product feature attribute occupies the first position

with an important value of 46,878 and delivery charge

subsidy feature as the most preferred level with a

utility value of 0.205. The product quality attribute

ranks second with an importance value of 30,78 and

products at affordable prices as the most preferred

level with a utility value of 0.011. And product design

attributes occupy the last position with an importance

value of 22,341 and easy-to-use as the most preferred

level with an importance value of 0.034.

4.5 Prediction Accuracy Test

Measurement of correlation both Pearson and the

predictive accuracy test for conjoint results is a

testing process to find out whether the prediction that

has been made has a high accuracy. In this prediction

accuracy test, Pearson and Kendall will measure

output correlation. The measurement will reveal how

strong the relationship between estimates and actual

is or how high the predictive accuracy is (Sari et al.,

2010). Measurement of correlation both Pearson and

Kendall produce relatively strong numbers that are

above 0.5. This proves the existence of a strong

relationship between the actual value, or there is a

high predictive accuracy of the conjoint process. This

can be seen from the correlation values in the table

below:

Table 7: Correlation value.

From Table 7. above it can be seen that the correlation

value on Pearson and Kendall for 300 respondents

each has a correlation value of 0.984 for Pearson and

0.891 for Kendall. The guidelines used for

significance tests with nth respondents, with n

constitute respondents 1 to 300 are:

Ho: There is no strong correlation between the

estimation variable and nth respondent

H1: There is a strong correlation between the

estimation variable and nth respondent

If the probability (significance)> 0.05 then Ho is

accepted. If the probability (significance) <0.05 then

Ho is rejected. Based on Pearson and Kendall's

calculations, both of them significantly below 0.05

(0,000 and 0,000), so Ho is rejected. This shows that

there is a strong correlation between the results of the

conjoint with the opinions of respondents. That way

it can be concluded in general that respondents really

want a product with an affordable price, delivery

charge subsidy features and application that is easy to

use in using the Shopee application to shop online.

5 CONCLUSIONS

Based on the results of research on the analysis of

consumer preferences in using the Shopee application

ICAESS 2020 - The International Conference on Applied Economics and Social Science

with the conjoint method, the conclusion is product

feature attribute is the highest level with the delivery

charge subsidy feature as the highest preference and

the ShopeePayLater feature which is the lowest

preference. Product quality attribute occupies the

second level with products with affordable prices as

the highest preference and security in transactions as

the lowest preference. Product design attribute

occupies the third or lowest level with easy-to-use

applications as the highest preference and attractive

visual design as the lowest preference.

Based on the characteristics of respondents in

general, there is no difference in the structure of

consumer preferences for product attributes in terms

of importance or importance. Where the product

feature attribute is an attribute that is the main

concern of respondents in using the Shopee

application followed by product quality attributes in

the second position, and product design attributes in

the last position.

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Consumer Preference Analysis of using Shopee Application with Conjoint Method