Proceedings of 11th International Business and Social Science Research Conference 8 - 9 January, 2015, Crowne Plaza Hotel, Dubai, UAE. ISBN: 978-1-922069-70-2 Analysis of Demographic Factors, Internet Usage and Online Shopping for Social Media Users in Saudi Arabia Najmul Hoda1, Abdul-Rahim Ahmad1 and Amal Melibari2 The Internet usage across the world has increased manifold in the last decade. The trend is the same for the Arab world including the Kingdom of Saudi Arabia, a country with its own social and cultural inclinations and heritage. Recent statistics put the number of the Internet users in the kingdom at more than 18 million and the Internet penetration at more than 65% of the population in 2014. This study aims to identify the pattern of the Internet usage in the country. Based on a sample size of 990 respondents recruited through social media across the Kingdom of Saudi Arabia, the study explores the relationship between the Internet usage and various demographic, social, economic, and behavioral factors. The results indicate that the average daily use of the Internet by social media users is significantly correlated to gender, age, marital status, employment and income but no significant relationship is found with the education level of users. Further, it was also investigated if there is any significant relationship between the average daily use of the Internet and online buying behavior. The results confirm that there is a significant relationship between the Internet usage and the online shopping habit of the users. The findings on the usage of the Internet by social media users are of commercial importance to the firms which provide products through online medium. Indeed, the E-Commerce is expected to foster economic growth, productivity, and competitiveness of the firms in the country. Additionally, the research will contribute to the existing literature on E-commerce and attract the interest of researchers mainly in the disciplines of Marketing and Social Sciences. JEL: L81, M15, M31 1. Introduction The Internet is deemed as one of the most significant technological developments in the recent history. The Internet has significantly affected the personal and professional lives of people around the world, with both positive and negatives effects (Akman & Mishra, 2010a; Ali, 2014; Davey et al., 2015; Lai & Gwung, 2013). The exponential growth and proliferation of digital media technologies has revolutionized the global marketplace and engendered new business models and value propositions, including E-Commerce (EC) (Ahmad et al., 2015; Velasquez et al., 2009). Consequently, the recent dramatic growth in EC and the consequent innovative changes in commerce and marketing have also transformed, and is continuously transforming, the consumer behavior (Ahmad et al., 2015). This is true with the people in the Kingdom of Saudi Arabia (KSA), which is evident from not only the rapid expansion in EC but also the significant attention from media and policy-makers (DESA, 2014; Arab News, 2014a). Indeed, the Internet penetration has exceeded 65% of the population (Ibid.). Furthermore, the total worth of EC in KSA exceeded Saudi Riyals or SR 15 billion in 2013 (1 US $ = SR 3.75), indicating the importance of EC in KSA (Arab News, 2013). Conceivably, in KSA, the Internet and Web services have been a huge phenomenon. For instance, the Ministry of Labor in KSA targets providing almost all its services online (DESA, 2014; Arab News, 2014b). _________________________________________________ 1 College of Business, Umm Al-Qura University, Makkah Al-Mukarramah, Saudi Arabia, Email: najmulhoda19@hotmail.com, anahmad@uqu.edu.sa 2 British English Institute, Makkah Al-Mukarramah, Saudi Arabia, Email: amal.melibari@gmail.com Proceedings of 11th International Business and Social Science Research Conference 8 - 9 January, 2015, Crowne Plaza Hotel, Dubai, UAE. ISBN: 978-1-922069-70-2 Incidentally, the factors affecting the EC behavior of consumers in various cultures is well-studied in the literature. However, there is a relative dearth of studies focusing on the KSA context. Some studies reporting effect on EC by various non-demographic factors intrinsic to EC within the context of KSA can be found elsewhere (Ahmad et al., 2012, 2015). Nevertheless, various demographic factors extrinsic to EC are also deemed important determinants in EC. This paper reports the findings of a survey concerning the impact such social, demographic, economic, and behavioral factors as gender, age, income, marital status, education level, and employment status may have on the Internet usage of social media users in KSA. It is important to assess the extent of differences and their underlying causes because access to the Internet improves opportunities for education, employment and civil engagement (Akman & Mishra, 2010a; Ono & Zavodny, 2007). Various individualistic and demographic factors have been shown related to the Internet usage in various cultures and countries (Akman & Mishra, 2010a; Ali, 2014; Lai & Gwung, 2013; Li & Kirkup, 2007; Mark & Ganzach, 2014). Despite noteworthy attention to the Internet usage, empirical research focusing on it within the KSA context is still relatively sparse. Earlier e-commerce studies indicate that research done for given groups and cultures may not be applicable to other groups or cultures (Akman & Mishra, 2010a, 2010b). This may be a result of a variety of social, cultural and economic variances (Sanayei, 2008). Therefore, research on the e-commerce attitude of EC user groups in KSA may inform EC business strategies. This paper reports the findings of a study conducted to bridge this gap within the KSA context. As a high-income and high-literacy developing country with a large land area and relatively sparse population, KSA is a potentially large, dynamic, and emerging market economy strategically located between Asia, Africa, and Europe. A major change on the economic front is the acquisition of full member status of World Trade Organization (WTO) in 2005. More specifically, the study was conducted so as to investigate the predictive impact of selected socio-demographic (gender and income) and behavioral factors (computer experience and average daily use of the Internet) on EC attitude of social media user in KSA. The rest of the paper is organized as follows. The subsequent section provides a review of the relevant literature. This is followed by the research methodology, model, and hypotheses. The results of the analysis are then presented and discussed. The last section of the paper provides conclusion as well as some interesting future research directions. 2. Literature Review The Internet Usage, as measured by Average Daily Use of the Internet (ADU), has been shown to significantly affect EC (Zhang, 2005). Various personality and demographic factors have been shown to influence the Internet usage in various cultures and countries (Akman & Mishra, 2010a; Ali, 2014; Lai & Gwung, 2013; Li & Kirkup, 2007; Mark & Ganzach, 2014). The premise is that various demographic attributes influence actions by individuals before they engage in a specific behaviour (Ajzen & Fishbein, 1980) Proceedings of 11th International Business and Social Science Research Conference 8 - 9 January, 2015, Crowne Plaza Hotel, Dubai, UAE. ISBN: 978-1-922069-70-2 Gender (GEN) has frequently been identified as an important variable in the use of Information and Communications Technologies (ICT). Indeed, gender differences were shown to have a significant effect on ICT usage in various studies (e.g. Levy, 2002; Sayan et al., 2004). Studies have also demonstrated gender differences in the Internet usage (Coniglio , 2012; Helsper, 2010a; Zhang, 2005). Moreover, studies have demonstrated that the gender difference in the Internet usage differs in regional, national, and cultural contexts (Yang & Lester, 2005). Moreover, the association between GEN and ADU or EC has been explored in the literature (Ige, 2004; Jackson et al., 2008; Smith et al., 2008). Some research has indicated that gender has a significant effect on EC (Hwang et al., 2006; Koyuncu and Lien, 2003). The gender differences in ADU and EC may arise due to preferences for shopping styles or attitudes toward computers and the Internet (Yang & Lester, 2005). Conceivably, the Internet usage has always been one of the most important indicators for EC (Yang & Lester, 2005). Consequently, we deem association between gender and the Internet usage worth investigating in the KSA context. Age (AGE) is also shown to significantly affect access to ICT (Levy, 2002; Helsper, 2010; Zhang, 2005). However, some studies conducted in specific cultural contexts have indicated that there might not be an association between AGE and ADU (Akman, 2010b). Testing this association in the KSA context is interesting direction. Marital Status (MAT) has been hypothesized to have some influence on ADU (Helsper, 2010). However, studies do seem to show a correlation in various cultures (Taylor et al., 2003; Yi, 2008). We hypothesize that due cultural dispositions MAT may have some influence on ADU in KSA. Education Level (EDU) is also shown to significantly affect access to ICT (Levy, 2002). Furthermore, some studies have suggested that EDU may have some association with ADU (Simicevic, 2012). Employment Status (EMP) has been shown to correlate with the Internet usage as well as with the ICT usage (Helsper, 2010). It is often hypothesized that a better employment status would lead to higher ADU and EC due better financial conditions. However, testing this correlation within the KSA context is an interesting direction and tackled in this research. Income Level (INC) is also shown to significantly affect access to ICT (Levy, 2002; Shiu & Downson, 2002, UPAN, 2005). However, the literature is lacking evidence that clearly links INC with ADU (Akman, 2010a; Forsythe & Shi, 2003; Lowe, 2003; Wong, 2003). Nevertheless, the conventional logic suggests that people with a higher income would have higher ADU because of the time saving feature of the EC and the Internet (Akhter, 2003). However, the cultural context in KSA suggest that INC should not affect ADU and EC, as visiting shopping malls is a major recreational activity in the evenings. Due to these competing effects of various aspects of the conventional wisdom on the effect of INC on ADU, we considered including INC in our study as worthwhile. Frequency of Online Purchases (FREQ), as measured by number of times online purchases has been made during the past one year, is considered to be an important Proceedings of 11th International Business and Social Science Research Conference 8 - 9 January, 2015, Crowne Plaza Hotel, Dubai, UAE. ISBN: 978-1-922069-70-2 indicator of inclination towards EC by an individual (Helsper, 2010). Indeed, it is hypothesized that the higher ADU should result in a higher FREQ. However, testing this within the KSA context is a really interesting research question. Similarly, the pattern of shopping method also indicates the buying behavior (SPAT) of the social media users especially with respect to their internet usage. It is of significance to study the relationship between internet usage and the choice of online shopping. 3. Research Methodology The research design was basically exploratory that tries to study the online activity of the social media users and their tendency to shop online. A questionnaire was prepared to collect the responses regarding the demography, social and economic profile of the sampled respondents. Further the questionnaire included close-ended questions regarding the online activity and shopping pattern of the respondents. These included the amount of time spent on internet daily, method of shopping and number of online transaction in the last one year. The items in the questionnaire were validated using the opinions of a focus group comprising of researchers and professionals. The questions were written in both Arabic and English languages. The final questionnaire (designed in google spreadsheet) was posted on various social media namely Facebook, LinkedIn, Twitter and through emails to personal contacts. The sampling method was a type of Snowball where the respondents further refer to other respondents. As a result, a total of 1013 filled responses were received after one month of posting the questionnaire. The number of valid responses considered for further analysis was found to be 990. The data-set was analysed mainly for the associations between various factors. For this purpose, chi-square test was employed to test if significant association exists between two variables. SPSS Version 20.0 was used for carrying out the statistical operations. 4. Results In this research, we focused on associations between the demographic factors and the internet usage defined by the average daily use of internet (ADU). Further, the association with the average daily use and online shopping was also studied. The description of the data-set is summarized in Table 1. The sample comprised of 81% male respondents and 19% female respondents. The majority of respondents belonged to the age group 18-35 years. The percentage of students (44) was the highest among the respondents and 72% were single. The monthly income of the respondents was below SR 3000 for 56% of the respondents. Proceedings of 11th International Business and Social Science Research Conference 8 - 9 January, 2015, Crowne Plaza Hotel, Dubai, UAE. ISBN: 978-1-922069-70-2 Table 1 Descriptive Statistics Item Gender (GEN) Valid N = 990 % 805 185 81 19 Age (AGE) N = 985 % Below 18 18-25 26-35 36-45 46 & Above 92 508 310 65 10 9 52 31 7 1 N = 989 % 147 161 208 440 33 15 16 21 44 4 Male Female Employment (EMP) Unemployed Private jobs Government jobs Students Business 4.1 Item Marital Status (MAT) Single Married Education (EDU) Valid N = 981 % 704 277 72 28 N = 987 % 52 238 635 62 5 24 64 7 N = 989 % 235 318 133 105 85 50 63 24 32 13 11 9 5 6 Below Secondary Secondary Graduate Other Monthly Income (INC) No Income Below 3000 3001-6000 6001-9000 9001-12000 12001-15000 Above 15000 Relationship between Demographic Factors and Internet Usage It was hypothesized that the demographic factors may be related to the internet usage defined by the average daily use of the internet by social media users for this study. The chi-square values for each relationship are mentioned in Table 2. The acceptance level for the null hypothesis is 0.05 below which it is rejected implying that there is a relationship between the variables. The chi-square values for all the associations except between the variables EDU and ADU are found to be less than the acceptance value of 0.05. Therefore all the null hypotheses are rejected except the one regarding education and ADU. This implies that the alternative hypotheses that there are relationships between other demographic factors and ADU are accepted for the five demographic factors. Table 2 Summary of Associations Associations Pearson Chi-Square Value Demographic Factors and Internet Usage (1) GEN * ADU 9.449 (2) AGE * ADU 27.445 Likelihood Ratio df Asymt. Value Sig. (2-sided) 3 12 0.024 9.438 3 0.007 35.58 12 7 0.0001 31.13 3 8 0.168 12.74 9 (3) MAT * ADU 26.323 3 (4) EDU * ADU 12.882 9 df Asymt. Sig. (2sided) Linear-by-Linear Association Value 0.024 0.894 0.000 9.178 1 0.000 19.818 1 0.175 2.681 df Asymt. Sig. (2-sided) 1 1 0.344 0.002 1 0.0001 1 0.102 Proceedings of 11th International Business and Social Science Research Conference 8 - 9 January, 2015, Crowne Plaza Hotel, Dubai, UAE. ISBN: 978-1-922069-70-2 (5) EMP * ADU 50.099 12 (6) INC * ADU 53.343 18 (7) ADU * FREQ 57.639 12 (8) ADU and SPAT 71.016 6 0.0001 51.98 12 0.000 0.940 3 1 0.0001 54.52 18 0.000 23.223 6 1 1 0.332 1 0.0001 0.0001 50.57 12 0.000 16.937 5 1 0.0001 59.05 6 0.000 19.641 5 1 1 0.0001 1 0.0001 Internet Usage and Online Shopping α = 0.05 4.2 Relationship between Internet Usage and Online Buying Behavior This study also tried to explore the relationship between the internet usage and the shopping behavior of the social media users. The two hypotheses regarding these associations were also tested using Chi-square method. The acceptance level was again determined at 0.05 below which the null hypotheses would be rejected. The values for both associations were found to be less than 0.0001 (see Table 2) implying that the null hypotheses are rejected. Therefore, there are relationships between ADU and Online Shopping. 4.3 Modeling the Relationship Based on the above results, the researchers tried to develop a theoretical framework that may be of significance in predicting the online buying behavior of social media users. This framework provides a direction for future research in this area. For a greater generalizability and application to the E-Commerce in general, diverse segments within the population of internet users may be included. This study targeted the social media users only but applying the research to the broader population may help achieve more conclusive results. GENDER AGE MARITAL STATUS MONTHLY INCOME AVERAGE DAILY USE OF INTERNET FREQUENCY OF ONLINE SHOPPING CHOICE OF ONLINE SHOPPING EMPLOYMENT Demographic Factors Online Buying Behavior Figure 1: A Predictive Model of Online Buying based on the relationship between Demographic Factors and Internet Usage Proceedings of 11th International Business and Social Science Research Conference 8 - 9 January, 2015, Crowne Plaza Hotel, Dubai, UAE. ISBN: 978-1-922069-70-2 5. Discussions and Conclusions The digital economy is mainly marked by the existence of an active population of internet users. Saudi Arabia has been no exception in terms of internet penetration. As per the reports, the number of internet users rose to 18.3 million users in 2014. This research focused on the internet usage of social media users in Saudi Arabia and the subsequent effect on E-Commerce. Though the results of this study cannot be termed as final and conclusive, nonetheless, there are strong indications of the relationships existing between demographic factors, internet usage and online shopping. From demographic perspective, the average daily use of internet has direct relationship with gender, age, marital status, monthly income and employment. These findings support the earlier studies conducted in other countries. This research found that the internet usage and education level are not correlated which does not support the findings of other studies conducted in other countries. However on other dimensions, this study found similar results. The Pew Research (2014) (http://www.pewinternet.org/data-trend/internet-use/latest-stats/) that analyzes the internet usage for USA showed similar results regarding the demographic profile of the internet users as in KSA. Though the former study also reports a variation in the average daily Internet usage based on age, the two variables (age and average daily use of Internet) did not show any significant correlation for KSA. This finding provides a pertinent direction for future research. The education and internet usage relationship need to be tested on a cross-section of sample. E-commerce has emerged as a strong player in the economy of the country. The government support to E-commerce in the form of strong Information Communication Technology (ICT) infrastructure suggests that the growth of E-commerce will continue at a greater pace. Therefore, research on the various aspects of E-commerce is strongly required to address the overall needs of the stakeholders. This study analyzes the use of E-commerce by social media users in Saudi Arabia and this is a limitation. The companies need more details on the usage and needs of the population in Saudi Arabia. This study found that there are relationships between the internet usage and both the choice of shopping method as well as the frequency of online buying. The companies can strategize better for promoting online shopping to social media users. The future research may study the buying pattern for different categories of social media users. Further, the type of goods purchased through online mode is also an important area of research. 6. References Ahmad, A.R., Hoda, N., Melibary, A., Alhazmi, B., Althubiani, M., “Determinants of Online Shopping Behavior of Scoial Media Users in Saudi Arabia: An Exploratory Study”, 2015 Winter Global Business Conference, Tinges, France, Feb.02-06, 2015. Ahmad, A.R., Melibary, A., “A Survey of Factors Affecting Online Purchasing Behavior in Saudi Arabia”, Saudi Economy Conference (SEC-2012), Jeddah, Saudi Arabia, 2012. Proceedings of 11th International Business and Social Science Research Conference 8 - 9 January, 2015, Crowne Plaza Hotel, Dubai, UAE. 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