BEHAVIOUR & INFORMATION TECHNOLOGY,
2002, VOL. 21,
NO.
4, 259±271
Attitudes toward online shopping and the
Internet
THOMPSON S. H. TEO
Department of Decision Sciences, School of Business, National University of Singapore, 1 Business Link,
Singapore 117592; e-mail: bizteosh@nus.edu.sg
Abstract. Since the explosion of the Web as a business
medium, one of its primary uses has been for marketing. Soon,
the Web will become a critical distribution channel for the
majority of successful enterprises. The mass media, consumer
marketers and advertising agencies seem to be in the midst of
Internet discovery and exploitation. Before a company can
envision what might sell online in the coming years, it must ®rst
understand the attitudes and behaviour of its potential
customers. Hence, this study examines attitudes toward various
aspects of online shopping and provides a better understanding
of the potential of electronic commerce for both researchers
and practitioners.
1. Introduction
Consumers and ®rms are conducting a substantial
and rapidly increasing amount of business on the
Internet. It is projected that the Web will generate
consumer and business-to-business sales in excess of
US$294 billion by 2002 (Deck 1998). According to
Forrester Research Inc., the total value of global
business-to-business transactions could grow to
US$327 billion by 2002, up from US$8 billion in 1997
(Santiago 1999). With the advent of e-commerce,
companies are now beginning to take a fresh look at
the way they do business, for loyal customers are now
wooed by online competitors, who may not even be
based locally.
The growth of interest in the Internet as a shopping
and purchasing medium is fascinating for practitioners
and researchers alike. Some researchers have proposed
that the consumer’s own characteristics play an important role in his or her propensity to engage in
Internet transactions (Sheth and Parvatiyar 1995,
Jarvenpaa and Traxtinsky 1999). Stein®eld and Whitten
(1999) suggested a greater chance for the combination of
Web plus physical presence to capture business than the
Web-only presence because it can provide better prepurchase and post-sales services to lower consumer
transaction costs and build trust in Web stores. Others
have speculated on the critical role of trust in stimulating consumer purchases over the Internet (HoVman et
al. 1999, Jarvenpaa and Traxtinsky 1999). Brynjolfsson
and Smith (2000) pointed out that branding and trust
remain important sources of heterogeneity among
Internet retailers.
As a new channel for marketing, the Web is capable
of accommodating many diVerent kinds of products and
services. However, people are browsing the Internet
more for information than for buying online. Johnson
(1999) pointed out three barriers to online shopping,
namely, purchase failures, security fears and service
frustrations. HoVman et al. (1999) also highlighted that
the reason more people have yet to shop online, or even
provide information to Web providers in exchange for
access to information, is the fact that today there is still
a fundamental lack of faith between most businesses and
consumers on the Web.
In the context of Singapore, transactions carried out
online are increasing. Sales generated from business-tobusiness e-commerce activities in Singapore increased
from S$40 billion in 1999 to S$92 billion in 2000 and will
reach S$109 billion in 2002. In contrast, business-toconsumer e-commerce activities increased from S$0.2
billion in 1999 to S$1.17 billion in 2000 and will reach
S$2.75 billion in 2002 (Chellam 2001).
To encourage companies to set up their regional ecommerce trading centres in Singapore, the Approved
Cyber Traders scheme was introduced, which entitled
qualifying ®rms to pay just 10% corporate tax instead of
the normal 26%. In addition, a highly developed
electronic payment infrastructure (Nets, Netrust, Set,
Cashcard, Giro and e-checks) and strong government
Behaviour & Information Technology
ISSN 0144-929X print/ISSN 1362-3001 online # 2002 Taylor & Francis Ltd
http://www.tandf.co.uk/journals
DOI: 10.1080/0144929021000018342
T. S. H. Teo
260
push for e-commerce in the civil service (all key
government services went online by the end of 2001)
mean that the time is now ripe for local companies to go
online. Further, the implementation of a nationwide
broadband network called Singapore ONE (One Network for Everyone) implies that consumers will have
fast and convenient access to the Internet for work and
play.
Despite the conducive environment for e-commerce,
only 14% of Internet users polled in a survey carried out
by Singapore Press Holdings (SPH) have bought something online. The SPH poll found the uninitiated
reluctant to buy online because it does not allow them
to gauge the quality of the product or service on oVer.
The respondents also felt uneasy about giving their
credit card details and other personal information over
the Internet (Andrianie 1999a, 1999c). Local shopping
patterns may also account for the relative unpopularity
of online shopping because Singaporeans like to have
the full shopping experience of touching and feeling a
product.
Another factor is that Singapore, unlike the USA,
lacks a history of mail-order shopping. Furthermore,
Monetary Authority of Singapore regulations make it
harder to get a credit card here than in some other
countries, thereby restricting the number of consumers
buying online. In addition, consumers also worry about
how hard it will be to return or exchange things they
have bought online but ®nd unsuitable (Andrianie
1999a).
Data about online consumer purchasing behaviour is
needed to help companies de®ne their online retail
strategies for website design, online advertising, market
segmentation, product variety and inventory holding
and distribution (Lohse et al. 1999). Hence, this research
focuses on the attitudes of Internet users toward online
shopping and the Internet. By understanding such
attitudes, businesses can better understand the factors
in¯uencing a consumer’s decision to buy online, thereby
enabling them to design more appropriate strategies to
promote e-commerce.
Speci®cally, this research examines:
(1)
(2)
(3)
(4)
(5)
(6)
(7)
(8)
(9)
(10)
(11)
Internet usage patterns;
external search eVorts for online shopping;
perceived bene®ts of search;
interest in e-commerce;
overall deal evaluation for online shopping;
perceived risk of online shopping;
willingness to buy online;
key concerns in Internet usage;
information source for online shopping;
reasons for or against online shopping; and
online shopping patterns.
2. Method
Rapid advances in technology are changing the very
nature of data collection and survey methods. Computers and interactive technology are revolutionizing the
way surveys are conducted (Aaker et al. 1998). The
Internet has received much attention in recent years as a
new survey data collection platform. There is no doubt
that usage of the Internet is increasing at a rapid rate.
This means that the population from which general
surveys may sample is increasingly large (Schmidt 1997).
Internet surveys are increasingly popular among researchers because it takes less time to complete a
research project, is often less expensive and can yield
large samples (Bauman et al. 1998).
From a methodological point of view, conducting
research via the Internet has a host of problems
including fundamental issues of access and representativeness of samples since Web demographics are likely to
be skewed. One of the limitations to online research is
that the results cannot be projected to the general
population because not everyone has access to a
computer, modem and online service (Aaker et al.
1998). We should, therefore, be aware of biases that
could aVect the validity of the research. However, as
more and more of the world’s population gains Internet
access, this potential problem will diminish gradually
(Schmidt 1997)Ðparticularly in the context of Singapore, which has one of the highest Internet penetration
rates in the world due to its excellent infrastructure and
the government’s active promotion of Singapore as an ecommerce hub.
The Internet is used as the data collection tool as our
topic of interestÐattitudes toward online shopping and
the InternetÐis of interest to general Internet users. To
stimulate response, 100 sets of S$2 Singapore phone
cards were given to respondents selected at random.
Recipients of the phone cards were contacted by e-mails
for their mailing addresses and the phone cards were
posted accordingly.
A preliminary survey was created using HyperText
Markup Language (HTML). The various measures used
in the survey were adapted from past research (e.g.
Dodds et al. 1991, Srinivasan and Ratchford 1999). To
ensure that respondents answered all questions, or at
least those that were absolutely necessary, JavaScript
programming was added to the electronic survey to
verify and perform all necessary checking of a user’s
input before the survey was submitted.
The survey was initially pre-tested on a working adult
(male) and an undergraduate (female). Modi®cations to
the survey were made based on feedback. The survey
was then pre-tested on six students and six working
adults. There were no adverse comments and the survey
Attitudes toward online shopping
was deemed ready for actual collection. The survey site
was located at a Homepage within the Faculty of
Business Administration server. Messages announcing
the survey were posted in various discussion newsgroups. Subsequently repeated postings of the advertisement message were made three times a week
initiallyÐgradually reducing to once a weekÐto encourage greater responses. The newsgroups were respectively:
sg.announce
sg.pacnet.announce
sg.singnet.marketplace
sg.general
sg.pacnet.help
sg.singnet.www
sg.consumers
sg.pacnet.web.announce
nus.announce
sg.marketplace
sg.research.general
nus.alumni.talk.announcements
sg.nic
sg.singnet.announce
soc.culture.singapore
sg.online-service
sg.singnet.help
These newsgroups were chosen because of their wide
reach and tolerance of such advertisement messages.
Personalized e-mails were also sent to Internet users who
had created their own personal Homepage to notify
them about the survey. These e-mail addresses were
individually solicited from the Singnet, Paci®c Internet,
Cyberway and NUS homepage. In addition, more than
1000 e-mails were extracted from NUS alumni. In total,
3606 e-mails were sent to invite Internet users and their
friends to participate in the online survey. However, 148
e-mails were returned due to expired e-mail addresses or
faults in the mail delivery system, resulting in eVectively
3458 e-mails sent.
3. Results
3.1. Demographic pro®le of respondents
A total of 1133 usable responses were collected. For
the personalized e-mail category, 3458 e-mails were sent
but only 887 of the sendees replied, thus yielding a
survey response rate of 25.7%. There were 246 responses
from newsgroups. Before the analysis, a source bias test
using the chi-square (w2) statistic was performed to
determine if there were any diVerences between respon-
261
dents from e-mail and those from newsgroups. The
results of the chi-square test on the demographic pro®le
of respondents indicate that there was no signi®cant
source bias in terms of gender (chi-square=0.416,
df=1, p=0.519), marital status (chi-square=0.392,
df=1, p=0.531), ethnic group (chi-square=7.027,
df=4, p=0.134), age (chi-square=1.409, df=6,
p=0.965) and education (chi-square=1.737, df=7,
p=0.973).
The demographic pro®le shown in table 1a indicates
that respondents were predominantly males (64.5%)
and single (90.5%). Ethnic Chinese made up the
majority (93.0%) of respondents. The respondents were
also relatively young, with 89.8% of them in the age
group of 15 ± 29 years and the majority in their early 20s.
Most of the respondents were highly educated with
78.7% of them attaining at least a diploma or other
higher quali®cations. Further, 67.8% of respondents
were currently pursuing their education. The demographic pro®le of our respondents was in line with
previous research on Internet adoption by Singapore
Press Holdings (SPH) (Andrianie 1999b) and research
Table 1a. Demographic pro®le of respondents.
Demographic pro®le
Gender
Male
Female
Marital status
Single
Married
Ethnic group
Chinese
Malay
Indian
Eurasian
Others
Age
Under 15
15 ± 19
20 ± 24
25 ± 29
30 ± 34
35 ± 39
40 ± 44
Missing (99)
Education
Primary
ITE certi®cate
Secondary/GCE `O’ Level
Pre-University/GCE `A’ Level
Polytechnic diploma
University degree
Postgraduate diploma
Masters degree
Our study SPH’s study
(%)
(%)
64.5
35.5
60
40
90.5
9.5
57
43
93.0
3.2
2.3
1.1
0.4
Data not
available
0.1
27.8
43.9
18.1
6.2
2.5
0.8
0.7
Data not
available
Sample
comprises
age 415
years
0.9
0.5
3.3
16.6
32.9
35.3
3.7
6.8
¼
¼
33.3
66.7
Note: n=1133 (our study) and n=1500 (SPH’s study).
T. S. H. Teo
262
by Teo et al. (1997) who reported that typical Singapore
Internet users are male, young and highly educated.
3.2. Internet usage patterns
Table 1b tracks the self-reported usage patterns of
respondents. The ®ndings show that respondents
primarily dialled in from home (69.2%) and secondarily
from their o ce or campus (29.8%). Generally, 49.7%
of the respondents had used the Internet for 2 ± 4 years,
thus indicating that respondents were generally experienced users of the Web. The table also illustrates that
almost half of the respondents (45.5%) accessed the
Internet more than twice a day. On the extent of Internet
usage, 51.8% of the respondents spent between 3 ±
10 hours on average per week in the Web with another
20.0% of the respondents spending more than 20 hours
per week online.
The Internet usage patterns are consistent with the
study on the e-commerce behaviour of Singaporeans by
Roy and See (1999) which reported that local Internet
Table 1b.
Our study
users (41%) had used the Internet for 1 ± 4 years and
about 35% of users logged in daily. In contrast, Teo et
al. (1997) reported that the majority of users (65.5%)
browsed the Internet daily.
The ®ndings are also similar to those of a survey
conducted by Singapore Press Holdings (SPH) research
and information department, through face-to-face interviews between November 1998 and January 1999. It
found that a typical user logged on from home about
four times a week for about 46 minutes a day e-mailing
and sur®ng websites for fun or information. The top
three activities were e-mail (87%), browsing (70%) and
searching through reference materials (55%) (Andrianie
1999b).
The statistics signal that more Singaporeans are using
the Internet every week and they are getting more savvy
in using it for various purposes. They are not only using
the Internet but are also using it regularly to such an
extent that it has become part of their lifestyles. In fact,
in terms of duration of Internet use, our study shows a
higher percentage of active users (as evident from the
duration of Internet use) than the SPH study.
Internet usage patterns.
SPH’s study
Frequency (%)
Internet access source
Home
Work
School
Internet cafeÂ
Length of Internet use
Less than 6 months
6 ± 12 months
1 ± 2 years
2 ± 3 years
3 ± 4 years
4 ± 5 years
More than 5 years
Frequency of Internet access
Once a month or less
More than twice a month
Once a week
More than twice a week
Once a day
Twice a day
More than twice a day
Duration of Internet use
30 min to 1 hr per week
1 ± 2 hrs per week
3 ± 4 hrs per week
5 ± 6 hrs per week
7 ± 10 hrs per week
11 ± 15 hrs per week
16 ± 20 hrs per week
More than 20 hrs per week
784
225
112
12
69.2
19.9
9.9
1.1
80% login from home and 40% login from o ce
46
28
149
287
276
132
215
4.1
2.5
13.2
25.3
24.4
11.7
19.0
Typically about 21 months
6
6
22
159
295
130
515
0.5
0.5
1.9
14.0
26.0
11.5
45.5
Typically about 4 times a week for about 46 minutes a day
About 30% use the Internet every week
42
89
157
196
233
104
85
227
3.7
7.9
13.9
17.3
20.6
9.2
7.5
20.0
9% spend 515 minutes online
450% spend 15 minutes to an hour a day online
22% spend an hour or two sur®ng
13% log on for more than 2 hours
Attitudes toward online shopping
3.3. Attitudes toward online shopping
The following sections examine various attitudes
towards online shopping.
3.3.1. External search eVort: On recognizing the need
to acquire certain products, consumers will generally
search for information about the various alternatives
available to satisfy the need. The consumer’s primary
motive for pre-purchase search is to enhance the quality
of the purchase outcome (Punj and Staelin 1983). They
will look for information either from external sources
such as the wide variety of media sources, from
memory or both to solve the problem (Lohse and
Spiller 1998).
In the context of the Internet, respondents generally
spent a reasonable amount of time or much time sur®ng
prior to online purchase (table 2a). Impulse buying
(where external search eVort is minimal) seemed to be
quite low. Basically, this shows that buyers were
generally cautious and were likely to search for
information (perhaps for comparison purposes) prior
to purchase.
3.3.2. Perceived bene®ts of search: Buyers generally
are uncertain which website to purchase from because of
variations in products oVered online. To reduce this
uncertainty, buyers must seek information. Willingness
to search for information is contingent on buyers’
trading oV perceived bene®ts (e.g. money saved) relative
to costs of the search (e.g. time, money, eVort spent in
conducting the search) (Marmorstein et al 1992). In a
similar vein, Anandarajan et al. (2000) emphasized that
Table 2a.
263
greater perceived usefulness (or bene®ts) is positively
associated with increased usage and impact of the
Internet.
The majority of respondents agreed that it pays to
surf around before purchasing online and that by
searching for more information, they are more certain
of making the best buy (table 2b). Interestingly, more
than 50% of respondents were neutral in terms of
whether sur®ng around enabled them to purchase at the
lowest price. Further, about 60% were neutral in terms
of whether they got exactly what they wanted by
searching enough prior to online purchase. Nearly
10% disagreed that they were able to get exactly what
they wanted by searching enough. One implication is
that customers will purchase online if they are able to
®nd value in their purchases. One aspect of value could
be low price; other aspects could be products that are
not available in Singapore or convenience and savings in
time. More importantly, such value must be perceived
by customers to be important in order for them to be
motivated to make an online purchase.
3.3.3. Interest in e-commerce: Here, we de®ne interest
in e-commerce as interest in knowing about various
products and brands available for purchase online.
Respondents tended to be neutral about their interest in
reading advertisements and visiting new websites (table
2c). However, nearly 50% of respondents liked to
browse through websites even when they did not plan
to purchase anything. This is consistent with previous
®ndings that the percentage of Internet users who buy
online is still rather low as most users tend to browse
rather than buy online (Wee and Ramesh 1999).
External search eVort.
Total amount of external search eVort
A little (%)
Reasonable (%)
Much (%)
6.2
9.7
11.7
44.7
48.9
47.1
49.1
41.3
41.2
Disagree (%)
Neutral (%)
Agree (%)
1.4
4.9
4.8
37.0
37.5
44.9
61.6
57.6
50.3
4.9
47.6
47.5
5.9
4.1
9.7
52.3
55.6
58.5
41.8
40.5
31.9
I spend a lot of time sur®ng before I decide upon online purchase
I made a lot of visits to sites before the purchase of products online
I spent a lot of time sur®ng the website for information about online products
Table 2b. Perceived bene®ts of search.
Perceived bene®ts of search
By searching for more information, I am certain of making the best buy
It pays to surf around before purchasing online
I learned which products are suitable for me by sur®ng around
There is too much to lose by being ignorant about products when I have to
purchase online
Sur®ng around various sites helped me to ®nd the lowest price when I
purchase online
By rushing into an online purchase, one is bound to miss a good deal
I got exactly what I wanted by searching enough before I purchase online
T. S. H. Teo
264
3.3.4. Deal evaluation: Deal evaluation refers to the
extent to which the users judge products on various
criteria (Moschis and Moore 1979). For example,
consumers evaluate the tradeoV between the bene®ts
such as product quality and the perceived monetary
sacri®ce. The cognitive trade-oV between perceptions of
quality and sacri®ce results in perceptions of value. This
trade-oV was observed by Scitovszky (1945) as a
paradoxical situation in which a commodity oVered at
a lower price than competing commodities would be
both more attractive to the consumer because it is
cheaper and less attractive because of its suspected
inferior quality. To compete successfully in a valueconscious environment, sellers must stress the value of
their oVerings. One value-based strategy involves
emphasizing the value of acquiring the product (Monroe
and Chapman 1987). Sellers can increase consumers’
overall evaluation of the deal by enhancing consumers’
perceptions of the product’s quality or bene®ts relative
to the selling price (Dodds et al. 1991).
The results showed that about 70 ± 80% of respondents were neutral regarding the advantages of purchasing online (table 2d). This indicates that many
consumers are not convinced of the bene®ts of online
Table 2c.
purchase. In particular, more respondents disagreed
(than agreed) that purchasing online is desirable
(17.9%), and that it would save them money (17.8%).
This could indicate that consumers may have perceived
that there is a lack of value in the online oVers since they
may easily get most items from physical stores. This
result also helps to explain why the percentage of online
shoppers is still rather low despite various eVorts to
promote online shopping.
3.3.5. Perceived risk: One factor that research has
identi®ed as a critical determinant of consumers’ willingness to buy online is the perceived risk associated
with the purchase. Individuals, both experts and nonexperts, diVer in their perceptions of risks depending on
the nature of the online product (Grobe et al. 1999).
Risk is personal and related to consumers’ perception of
what they consider to be risky (Grewal et al. 1994, Rice
1997).
About 40% of respondents were concerned about
®nancial losses from online purchase (table 2e). Further,
about 25% were concerned about the quality of product
and that the product might not perform satisfactorily.
Businesses need to do more to reassure and encourage
Interest in e-commerce.
Interest in e-commerce
I
I
I
I
like to browse through the websites even when I don’t plan to buy anything
surf various websites just to ®nd out more about the latest styles
rarely read advertisements that just seem to contain a lot of information
enjoy sampling diVerent websites of commonplace products for the sake of
comparison
I generally read even my junk mail just to know what it is about
I usually delete mail advertisements without reading them
I do not care to ®nd out what types or brand names of online products my
friends have purchased
I often read online advertisements just out of curiosity
A new website is not something I would be eager to ®nd out about
When I hear about a new website, I take advantage of the ®rst opportunity to
®nd out more about it
Disagree (%)
Neutral (%)
Agree (%)
11.7
14.5
14.1
40.1
39.4
53.3
48.2
46.0
32.7
18.2
27.5
19.7
52.9
52.1
60.1
28.9
20.4
20.2
23.2
22.0
23.5
57.7
60.4
59.3
19.1
17.7
17.2
17.7
69.5
12.8
Disagree (%)
Neutral (%)
Agree (%)
14.0
12.3
17.9
10.8
10.4
68.1
73.1
68.2
77.1
79.8
17.9
14.5
14.0
12.2
9.8
12.8
13.9
14.2
17.8
78.8
78.2
78.7
78.2
8.3
7.9
7.2
3.9
Table 2d. Deal evaluation.
Overall deal evaluation
My attitude about purchasing online is favourable
Considering everything, I think purchasing online is an excellent deal
Purchasing online is desirable
The Web’s product features are very attractive
Purchasing online is de®nitely worth the money
Considering the price, products purchased online are of excellent quality for
the price
The prices of products online are very acceptable
I am con®dent that buying online is a good decision
If I buy online, I will be saving a signi®cant amount of money
Attitudes toward online shopping
customers to purchase online. Possible measures include
accurate advertisement about product features, product
warranties, avenues for customers’ feedback/complaints,
and certi®cation of the website by Case. (The Case
scheme is described in section 5.)
3.3.6. Willingness to buy: Willingness to buy is de®ned
as the likelihood that the buyer intends to purchase the
product (Dodds et al. 1991). The majority of respondents were neutral in terms of whether they would
consider purchasing online (table 2f). However, more
respondents seemed to consider the probability of
purchasing online as being low compared to being high.
It appears that more needs to be done to encourage
online purchase.
3.4. Key concerns in Internet usage
Table 3a depicts the key concerns of respondents in
using the Internet. Respondents were allowed to select
more than one option. Hence, percentages may sum up
to more than 100%. Most respondents were concerned
with the cost of Internet access (64.7%) and the response
time (63.2%). The next major concern was the security
of ®nancial transactions (52.0%). Only 9.5% of the
respondents felt they had no major concerns with using
the Internet.
These ®ndings are quite similar to those of a survey of
19 000 Australian Internet users conducted in June 1998
265
by the Australian research ®rm www.consult, where
respondents expressed security concerns regarding online
shopping and concerns over the cost of Internet access
(Martyn 1998). These concerns need to be addressed
before online shopping can become more prevalent.
Information seeking is de®ned as an expressed need to
consult various sources of consumer information.
Respondents were asked to indicate the information
source they would rely most on for information and
advice before purchasing online (table 3b). The results
showed that websites appear to be the most popular
source of product information when users consider
purchasing online. This indicates the potential of the
Internet as an information source. The rest of the
information sources are shown in order of importance.
In comparison, the study on cyberbuying by Wee and
Ramesh (1999) reported that local online shoppers
preferred newspaper advertisements. The high ranking
of websites as an information source perhaps indicates
that an increasing number of people are turning to the
Web for current information, especially since updates of
local news are now available online even before printed
newspapers or magazines.
3.5. Online shopping patterns
Table 4a shows a breakdown of reasons cited for
respondents’ choice in whether or not to purchase
online. About 21% of respondents had bought some-
Table 2e. Perceived risk.
Perceived risk
As far as I am concerned, ®nancial loss would be important
Considering the amount I would have to pay for online purchase, purchasing
online would be risky
Given the potential ®nancial expenses associated with purchasing online, the
overall ®nancial risk associated with purchasing online is high
I think that the purchase of product online would lead to ®nancial loss for me
because of the possibility of such things as uncertainty in the quality of item
purchased
I am not con®dent that the product purchased online will perform the functions
as described
I have serious doubts that the product purchased online will work satisfactorily
I am not certain whether the product purchased online will perform the functions
that were described in the website
Disagree (%)
Neutral (%)
Agree (%)
3.9
55.6
40.5
8.8
55.2
36.0
10.0
63.0
27.1
8.0
65.4
26.5
11.4
17.2
63.6
60.7
25.1
22.0
14.6
64.3
21.1
Low (%)
Neutral (%)
High (%)
19.9
25.4
27.3
63.3
64.9
65.9
16.8
9.7
6.9
Table 2f. Willingness to buy.
Willingness to buy
The probability that I would consider buying online is
The likelihood that I would purchase online is
If I were going to buy a product, the probability of buying the product online is
T. S. H. Teo
266
Table 3a.
Major key concerns in Internet usage.
Key concerns
Frequency
%
733
716
589
497
400
338
234
174
108
38
64.7
63.2
52.0
43.9
35.3
29.8
20.7
15.4
9.5
3.4
Cost of Internet access
Response time
Security of ®nancial transactions
Privacy of individuals
Receiving junk mail
Obtaining value for money
Cost of upgrading PC and modem
Inappropriate/indecent material
I have no concerns with using the Internet
Something else
Table 3b. Information source.
Information source
Website
Magazines
Newspapers
Manufacturers’ brochures
Friends and family
Television
Sales Persons
Radio
Mean
S.D.
5.25
4.94
4.94
4.93
4.91
4.12
4.09
3.34
1.56
1.16
1.28
1.22
1.41
1.36
1.56
1.39
Scale: (1) Not at all (7) A lot
thing online with the majority purchasing products
online between 1 ± 4 times (17.5%). This ®gure is higher
than the 14% reported in the SPH Internet survey
(Andrianie 1999c) but is fairly consistent with the study
on cyberbuying by Wee and Ramesh (1999) in March
1999, which reported 24.9% of respondents buying
online.
An interesting point to note is that 31.1% of
respondents expressed their willingness to try out ecommerce. This indicates that e-commerce activities are
likely to increase further in future. If businesses can
successfully develop and carry out integrated marketing
strategies, while capitalizing on consumers’ readiness
and favourable market conditions, further growth in ecommerce is likely in the coming years.
The main reason cited for not purchasing online was
the preference to examine products. This ®nding is
consistent with the study conducted by Wee and
Ramesh (1999), which reported that the factors deterring online purchases are the lack of security, the lack of
opportunity to examine the merchandise before purchase, and trustworthiness of businesses in terms of
delivery, refund and merchandise quality. This ®nding is
also similar to that of the SPH survey (table 4c), which
found the uninitiated reluctant to buy online because it
does not allow consumers to gauge the quality of
products or services on oVer (Andrianie 1999a).
The next major reason was that respondents did not
possess a credit card. This may be because a large
percentage of them were students with an income of less
than S$1500 per month who did not have the luxury of
owning a supplementary credit card. Should they need
to purchase something online, they would need to do so
through a third party.
On the other hand, the main reason cited for choosing
to purchase online among e-commerce users was to buy
things that were not available in Singapore. Preferring
not to go to the store was the least important (0.4%).
This might be because Singapore is such an accessible
island and shoppers can easily make a personal visit to
stores. This is also in line with the main reason for not
purchasing online, because respondents prefer to examine products themselves.
In comparison, the study conducted by Wee and
Ramesh (1999) reported that users like to buy online
because of the convenience of delivery and ease of
purchase. Other reasons promoting online buying are
unique merchandise and impulsive buys. Similarly, in
the SPH study (table 4c), users bought online mainly
because of convenience and because they could get
products not available in Singapore.
Various products were purchased online as shown in
table 4b. The most popular item was books (7.4%).
Most users found their shopping sites using search
engines (11.6%). This is in line with the SPH study
(table 4c), which reported that the most popular
purchases among Internet shoppers included computer
hardware/software, books/magazines, airline tickets/
hotel reservations and CDs/tapes/videos.
The average amount spent per item in our survey
ranged between S$21 and S$300 (16.5%) while the total
amount spent ranged between S$51 and S$300 (11.2%).
This is perhaps expected as consumers are still wary
about the security of electronic transactions. The most
preferred payment option was through credit card/
charge card (17%).
4. Limitation
The main limitation of the study is that the use of an
online survey may result in some problems regarding
the generalizability of the results. It is possible that
certain types of respondents may be more likely to
participate in an online survey. This limitation is
common to many online surveys, for example, Teo et
al. (1997) and Tan and Teo (2000). We have tried to
mitigate this problem by publicizing the survey through
various newsgroups that are appropriate for postings
of this nature. In addition, we also sent e-mails to
solicit responses. Since the pro®le of responses from
Attitudes toward online shopping
Table 4a.
267
Reasons for and against online shopping.
Purchased products in the past year?
Yes, I’ve tried it once
Yes, I’ve done it 2 ± 4 times
Yes, I’ve done it 5 ± 9 times
Yes, I’ve done it more than 10 times
I’ve tried it but cancelled out before purchasing/it didn’t work
I haven’t tried it yet, but am willing to try it
I haven’t tried it yet and I’m not sure if I will try it
I haven’t tried it yet, and I probably won’t try it
I think online shopping is sheer madness
Missing
Reasons for not purchasing on-line (among non-buyers)
I prefer to be able to examine the product myself
I don’t have a credit card
I prefer to visit real shops
I don’t trust the Internet with my credit card
I prefer to research products online but then shop o‚ine
I’m unsure about how to return faulty products
I don’t want to give away private information
I don’t want to pay for shipping
I already told you, I have purchased something online in the past 12 months
Product delivery takes too long
I can’t buy the stuV I want online
I prefer to talk to a salesperson
The Internet’s already costing me too much
I don’t have the time
Reasons for purchasing online (among non-buyers)
To buy things that aren’t available in Singapore
Just to see if it would work
To get it faster
To save money
To shop at any time
To be on the leading edge of technology
To buy things that aren’t available in my neighbourhood
To get the latest stuV
I prefer not going to the store
To get better selection
newsgroups and e-mails did not diVer signi®cantly, it
perhaps indicates that the sample is generalizable to
some degree since diVerent methods of soliciting
responses yielded a similar pro®le. Future research
can improve generalizability by following the methodology described in Lewis (2001) of recruiting large
Internet survey panels meeting strict demographic
criteria.
5. Implications and conclusions
To induce sales, Internet access speeds have to be
improved to a level fast enough to meet or exceed
consumers’ expectations. As shown previously in table
3a, the cost of Internet access is the main concern among
respondents, followed by response time. In Singapore,
Internet access is free for anyone with a ®xed line
Frequency
%
88
110
28
10
41
352
355
129
14
6
7.8
9.7
2.5
0.9
3.6
31.1
31.3
11.4
1.2
0.5
469
416
339
317
290
260
251
231
194
168
159
135
92
72
52.6
46.7
38.0
35.6
32.5
29.2
28.1
25.9
21.8
18.9
17.8
15.2
10.3
8.1
95
36
29
29
22
12
11
6
4
4
40.3
15.3
12.3
12.3
9.3
5.1
4.7
2.5
1.7
1.7
telephone. There is no subscription charge and the user
needs to pay the normal telephone charges based on
time usage when he or she accesses the Internet.
Alternatively, users may choose to pay a ®xed fee every
month for a ®xed number of hours of toll-free access to
the Internet.
Companies intending to set up a Web presence should
realize that it is important that web pages take little time
to download. Users are unwilling to tolerate delays
associated with delivering audio, animation, graphics
and video. Web pages that are di cult to retrieve may
frustrate surfers to the point where they leave the
website.
The main deterrents to purchasing online have been
customers’ preference to examine products, the need to
possess a credit card and security concerns (refer to table
4a). Electronic retailers have to work on these areas
before more consumers will purchase online. Online
T. S. H. Teo
268
Table 4b.
Online shopping patterns.
Items purchased (among buyers)
Books
Hobby items
Music
Software
Magazine subscriptions
Computer hardware
Travel and travel information
Stock quotes
Games
Something else e.g. ¯owers, movie tickets, clothes
Getting to sites (among buyers)
Search engines
Retailer’s sites
Online stores
Follow online ads
Manufacturers’ sites
Online malls
Online community shopping guide
Average $ per item (among buyers)
$1 ± $20
$21 ± $50
$51 ± $100
$101 ± $300
$301 ± $600
$601 ± $1000
$1001 or more
Total $$ (among buyers)
$1 ± $20
$21 ± $50
$51 ± $100
$101 ± $300
$301 ± $600
$601 ± $1000
$1001 or more
Preferred payment options (among buyers)
Visa
Cheque
Mastercard
Diners club
retailing calls for a change in customers’ current
shopping habits. They cannot touch and feel before
they buy and need time to adjust to this change in
buying habits. Also, shoppers are unsure of a website’s
reputation and the quality of goods oVered (table 2d).
They need to know what they will be getting for the
money they have paid.
Hence, businesses should work on improving brand
equity as one way of reassuring their shoppers. Security
and trust issues are major deterrents to online purchasing. Online businesses should establish their stores’
names so that anything sold by them is perceived as
reliable. When they spell out their policy on the Internet,
consumers know what they are dealing with and they
will have the con®dence to buy. Coming under any
Frequency
%
84
63
48
46
46
43
36
28
24
64
35.6
26.7
20.3
19.5
19.5
18.2
15.3
11.9
10.2
27.1
131
76
68
59
56
24
14
55.5
32.2
28.8
25.0
23.7
10.2
5.9
20
81
72
34
4
8
17
8.5
34.3
30.5
14.4
1.7
3.4
7.2
13
29
42
85
30
21
19
5.5
12.3
17.8
36.0
12.7
8.9
8.1
153
57
36
3
64.8
24.2
15.3
1.3
Asian umbrella of branding or national schemes would
help to gain trust and acceptance among global
shoppers.
For example, the CaseTrust Scheme is a joint eVort of
the Consumers Association of Singapore (CASE), the
Retail Promotion Centre (RPC) and Commerce Net
Singapore Ltd. (CNSG) to boost consumer con®dence
in online shopping. ISO certi®cation can also help in
building con®dence in a company’s operation.
The concern over the need to possess a credit card
might change as the debit card becomes more popular
with people in Singapore. It works like a credit card
except that the sums are immediately deducted from the
card user’s bank account. No base income is set, so
those who do not qualify for a credit card under the
Attitudes toward online shopping
269
Table 4c. SPH study results.
%
Why I don’t shop on the Internet
It’s di cult to judge product’s/service’s quality
I don’t feel comfortable shopping online
I don’t feel secure giving credit card number through the Internet
I don’t trust that personal information will be kept con®dential
I ®nd impersonal to shop online
It’s tiresome to shop online as browsing through websites is time consuming
There are too many websites on the Internet
It’s too complicated to place an order for a product
I cannot ®nd the product I want on the Internet
I don’t know how to shop online
What would persuade me to shop online
Quality of products/services
Security of personal information
Price of products/services
Variety of products
Ease of placing orders
Refund guarantee
Payment options are available
Getting products/services on time
What I buy online
Computer hardware/software
Books/magazines
Airline tickets/hotel reservations
CDs/tapes/videos
Flowers/gifts/cards
Sporting goods/equipment
Clothing
Educational services
Beauty products
Groceries
Others
Why I shop online
It was convenient
I could not ®nd the product elsewhere
Price was attractive
I wanted to see what online shopping was like
I had no time to go shopping
Others
72
71
71
66
55
47
40
35
32
29
26
26
16
9
8
7
4
4
41
33
12
10
10
7
7
3
2
2
17
59
55
29
21
12
3
n=1500. Source: Research & Information Department, SPH, published in Sunday Times, 6 June 1999.
Monetary Authority of Singapore’s (MAS) income
regulations can apply.
To handle security concerns, businesses could oVer
cheque payments, payment on delivery terms, money
back guarantees, or buy-®rst-pay-later plans such as a
nominal deposit followed by monthly instalments or
follow-up lump sum payments. These suggestions would
help reduce the need to disclose credit card numbers and
the fear of inferior product quality. In addition,
encryption can be used to protect credit card numbers
and digital signatures for authentication. Secure electronic transaction (SET) is a technology that encrypts
purchase orders and allows users to check electronically
with an authorized bank to ensure that the retailer is
legitimate.
Further, if businesses were to provide some clear
exchange or refund policy to minimize the perceived
risk in purchasing, consumers would be enticed to try
online shopping. Competent sales support staV that
can handle customers’ enquiries and complaints
promptly will add credibility to online businesses.
Credibility is extremely important since people buy
from online businesses mainly on the basis of what is
stated on their websites. It is especially important for
businesses to build up a brand name in the initial
stage of the innovation period as this would help
protect market share later when more companies have
joined the e-commerce business.
Website designers can also design a frequently
asked questions (FAQ) section to provide rapid
270
T. S. H. Teo
answers to frequently asked questions, including
information about the security of consumers’ transactions, company return, payment and credit policies,
shipping and handling costs, guarantees and statements about product quality. In addition, online
businesses can increase consumers’ con®dence by
including telephone and fax numbers and email
addresses in their website so that consumers can
easily communicate with them.
Since search engines are the main source of information on websites (see table 4b), online businesses must
index their websites correctly as this will help customers
to ®nd them easily. Web designers can also manipulate
the content of their web pages to procure top placement
in the results of search engine queries. Besides using
search engines, online shoppers also seek information on
websites from publications (see table 3c). Hence, it
makes sense to supplement Web advertising with
traditional advertising.
The results also show that Internet usage in
Singapore is most prevalent among ages 20 ± 24 years.
Businesses should consider providing customized advertisements to target this potential group and organize
their marketing campaigns around the characteristics
of the desired target group. They could sell speci®c
products of interest to them, such as leisure products
like movies, compact discs and travel to best capture
their attention, arouse their interest, meet their needs
and, ultimately, close the sale.
Web designers should periodically gather feedback
via surveys on consumers’ satisfaction with products
and services so that revisions and improvements can be
made to the Internet channel. The key for Web
designers will be the continued willingness to innovate
while maintaining a clear focus on what delivers value
to customers. These implications could be important for
businesses intending to set up web pages on the
Internet.
Finally, businesses should note that despite the above
eVorts to encourage online shopping, the Internet is only
one of the possible channels for retailing and that not all
consumers are likely to embrace online shopping. The
managerial problem is to integrate the Internet into
overall channel management so that those consumers
who like the Internet can use it, while those who don’t
like the Internet can resort to other channels or just use
the Internet to gather information rather than for online
shopping.
Acknowledgements
The author would like to thank Yeong Yon Ding for
her assistance in data collection.
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