Attitudes toward online shopping and the Internet
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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 Web-only presence because it can provide better pre-
medium, one of its primary uses has been for marketing. Soon, purchase and post-sales services to lower consumer
the Web will become a critical distribution channel for the transaction costs and build trust in Web stores. Others
majority of successful enterprises. The mass media, consumer
marketers and advertising agencies seem to be in the midst of have speculated on the critical role of trust in stimulat-
Internet discovery and exploitation. Before a company can ing consumer purchases over the Internet (HoVman et
envision what might sell online in the coming years, it must ®rst al. 1999, Jarvenpaa and Traxtinsky 1999). Brynjolfsson
understand the attitudes and behaviour of its potential and Smith (2000) pointed out that branding and trust
customers. Hence, this study examines attitudes toward various remain important sources of heterogeneity among
aspects of online shopping and provides a better understanding
of the potential of electronic commerce for both researchers Internet retailers.
and practitioners. 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
1. Introduction more for information than for buying online. Johnson
(1999) pointed out three barriers to online shopping,
Consumers and ®rms are conducting a substantial namely, purchase failures, security fears and service
and rapidly increasing amount of business on the frustrations. HoVman et al. (1999) also highlighted that
Internet. It is projected that the Web will generate the reason more people have yet to shop online, or even
consumer and business-to-business sales in excess of provide information to Web providers in exchange for
US$294 billion by 2002 (Deck 1998). According to access to information, is the fact that today there is still
Forrester Research Inc., the total value of global a fundamental lack of faith between most businesses and
business-to-business transactions could grow to consumers on the Web.
US$327 billion by 2002, up from US$8 billion in 1997 In the context of Singapore, transactions carried out
(Santiago 1999). With the advent of e-commerce, online are increasing. Sales generated from business-to-
companies are now beginning to take a fresh look at business e-commerce activities in Singapore increased
the way they do business, for loyal customers are now from S$40 billion in 1999 to S$92 billion in 2000 and will
wooed by online competitors, who may not even be reach S$109 billion in 2002. In contrast, business-to-
based locally. consumer e-commerce activities increased from S$0.2
The growth of interest in the Internet as a shopping billion in 1999 to S$1.17 billion in 2000 and will reach
and purchasing medium is fascinating for practitioners S$2.75 billion in 2002 (Chellam 2001).
and researchers alike. Some researchers have proposed To encourage companies to set up their regional e-
that the consumer’s own characteristics play an im- commerce trading centres in Singapore, the Approved
portant role in his or her propensity to engage in Cyber Traders scheme was introduced, which entitled
Internet transactions (Sheth and Parvatiyar 1995, qualifying ®rms to pay just 10% corporate tax instead of
Jarvenpaa and Traxtinsky 1999). Stein®eld and Whitten the normal 26%. In addition, a highly developed
(1999) suggested a greater chance for the combination of electronic payment infrastructure (Nets, Netrust, Set,
Web plus physical presence to capture business than the 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: 10.1080/0144929021000018342260 T. S. H. Teo
push for e-commerce in the civil service (all key 2. Method
government services went online by the end of 2001)
mean that the time is now ripe for local companies to go Rapid advances in technology are changing the very
online. Further, the implementation of a nationwide nature of data collection and survey methods. Compu-
broadband network called Singapore ONE (One Net- ters and interactive technology are revolutionizing the
work for Everyone) implies that consumers will have way surveys are conducted (Aaker et al. 1998). The
fast and convenient access to the Internet for work and Internet has received much attention in recent years as a
play. new survey data collection platform. There is no doubt
Despite the conducive environment for e-commerce, that usage of the Internet is increasing at a rapid rate.
only 14% of Internet users polled in a survey carried out This means that the population from which general
by Singapore Press Holdings (SPH) have bought some- surveys may sample is increasingly large (Schmidt 1997).
thing online. The SPH poll found the uninitiated Internet surveys are increasingly popular among re-
reluctant to buy online because it does not allow them searchers because it takes less time to complete a
to gauge the quality of the product or service on oVer. research project, is often less expensive and can yield
The respondents also felt uneasy about giving their large samples (Bauman et al. 1998).
credit card details and other personal information over From a methodological point of view, conducting
the Internet (Andrianie 1999a, 1999c). Local shopping research via the Internet has a host of problems
patterns may also account for the relative unpopularity including fundamental issues of access and representa-
of online shopping because Singaporeans like to have tiveness of samples since Web demographics are likely to
the full shopping experience of touching and feeling a be skewed. One of the limitations to online research is
product. that the results cannot be projected to the general
Another factor is that Singapore, unlike the USA, population because not everyone has access to a
lacks a history of mail-order shopping. Furthermore, computer, modem and online service (Aaker et al.
Monetary Authority of Singapore regulations make it 1998). We should, therefore, be aware of biases that
harder to get a credit card here than in some other could aVect the validity of the research. However, as
countries, thereby restricting the number of consumers more and more of the world’s population gains Internet
buying online. In addition, consumers also worry about access, this potential problem will diminish gradually
how hard it will be to return or exchange things they (Schmidt 1997)Ðparticularly in the context of Singa-
have bought online but ®nd unsuitable (Andrianie pore, which has one of the highest Internet penetration
1999a). rates in the world due to its excellent infrastructure and
Data about online consumer purchasing behaviour is the government’s active promotion of Singapore as an e-
needed to help companies de®ne their online retail commerce hub.
strategies for website design, online advertising, market The Internet is used as the data collection tool as our
segmentation, product variety and inventory holding topic of interestÐattitudes toward online shopping and
and distribution (Lohse et al. 1999). Hence, this research the InternetÐis of interest to general Internet users. To
focuses on the attitudes of Internet users toward online stimulate response, 100 sets of S$2 Singapore phone
shopping and the Internet. By understanding such cards were given to respondents selected at random.
attitudes, businesses can better understand the factors Recipients of the phone cards were contacted by e-mails
in¯uencing a consumer’s decision to buy online, thereby for their mailing addresses and the phone cards were
enabling them to design more appropriate strategies to posted accordingly.
promote e-commerce. A preliminary survey was created using HyperText
Speci®cally, this research examines: Markup Language (HTML). The various measures used
in the survey were adapted from past research (e.g.
(1) Internet usage patterns; Dodds et al. 1991, Srinivasan and Ratchford 1999). To
(2) external search eVorts for online shopping; ensure that respondents answered all questions, or at
(3) perceived bene®ts of search; least those that were absolutely necessary, JavaScript
(4) interest in e-commerce; programming was added to the electronic survey to
(5) overall deal evaluation for online shopping; verify and perform all necessary checking of a user’s
(6) perceived risk of online shopping; input before the survey was submitted.
(7) willingness to buy online; The survey was initially pre-tested on a working adult
(8) key concerns in Internet usage; (male) and an undergraduate (female). Modi®cations to
(9) information source for online shopping; the survey were made based on feedback. The survey
(10) reasons for or against online shopping; and was then pre-tested on six students and six working
(11) online shopping patterns. adults. There were no adverse comments and the surveyAttitudes toward online shopping 261
was deemed ready for actual collection. The survey site dents from e-mail and those from newsgroups. The
was located at a Homepage within the Faculty of results of the chi-square test on the demographic pro®le
Business Administration server. Messages announcing of respondents indicate that there was no signi®cant
the survey were posted in various discussion news- source bias in terms of gender (chi-square=0.416,
groups. Subsequently repeated postings of the adver- df=1, p=0.519), marital status (chi-square=0.392,
tisement message were made three times a week df=1, p=0.531), ethnic group (chi-square=7.027,
initiallyÐgradually reducing to once a weekÐto en- df=4, p=0.134), age (chi-square=1.409, df=6,
courage greater responses. The newsgroups were respec- p=0.965) and education (chi-square=1.737, df=7,
tively: p=0.973).
The demographic pro®le shown in table 1a indicates
sg.announce that respondents were predominantly males (64.5%)
sg.pacnet.announce and single (90.5%). Ethnic Chinese made up the
sg.singnet.marketplace majority (93.0%) of respondents. The respondents were
sg.general also relatively young, with 89.8% of them in the age
sg.pacnet.help group of 15 ± 29 years and the majority in their early 20s.
sg.singnet.www Most of the respondents were highly educated with
sg.consumers 78.7% of them attaining at least a diploma or other
sg.pacnet.web.announce higher quali®cations. Further, 67.8% of respondents
nus.announce were currently pursuing their education. The demo-
sg.marketplace graphic pro®le of our respondents was in line with
sg.research.general previous research on Internet adoption by Singapore
nus.alumni.talk.announcements Press Holdings (SPH) (Andrianie 1999b) and research
sg.nic
sg.singnet.announce
Table 1a. Demographic pro®le of respondents.
soc.culture.singapore
sg.online-service Our study SPH’s study
sg.singnet.help Demographic pro®le (%) (%)
Gender
These newsgroups were chosen because of their wide Male 64.5 60
reach and tolerance of such advertisement messages. Female 35.5 40
Personalized e-mails were also sent to Internet users who Marital status
had created their own personal Homepage to notify Single 90.5 57
Married 9.5 43
them about the survey. These e-mail addresses were Ethnic group
individually solicited from the Singnet, Paci®c Internet, Chinese 93.0 Data not
Cyberway and NUS homepage. In addition, more than Malay 3.2 available
1000 e-mails were extracted from NUS alumni. In total, Indian 2.3
3606 e-mails were sent to invite Internet users and their Eurasian 1.1
Others 0.4
friends to participate in the online survey. However, 148 Age
e-mails were returned due to expired e-mail addresses or Under 15 0.1 Data not
faults in the mail delivery system, resulting in eVectively 15 ± 19 27.8 available
3458 e-mails sent. 20 ± 24 43.9 Sample
25 ± 29 18.1 comprises
30 ± 34 6.2 age 415
35 ± 39 2.5 years
3. Results 40 ± 44 0.8
Missing (99) 0.7
3.1. Demographic pro®le of respondents Education ¼
Primary 0.9
ITE certi®cate 0.5 33.3
A total of 1133 usable responses were collected. For
the personalized e-mail category, 3458 e-mails were sent
Secondary/GCE `O’ Level
Pre-University/GCE `A’ Level
3.3
16.6
¼
but only 887 of the sendees replied, thus yielding a Polytechnic diploma 32.9
survey response rate of 25.7%. There were 246 responses University degree 35.3 66.7
from newsgroups. Before the analysis, a source bias test Postgraduate diploma 3.7
Masters degree 6.8
using the chi-square (w2) statistic was performed to
determine if there were any diVerences between respon- Note: n=1133 (our study) and n=1500 (SPH’s study).262 T. S. H. Teo
by Teo et al. (1997) who reported that typical Singapore users (41%) had used the Internet for 1 ± 4 years and
Internet users are male, young and highly educated. 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.
3.2. Internet usage patterns The ®ndings are also similar to those of a survey
conducted by Singapore Press Holdings (SPH) research
Table 1b tracks the self-reported usage patterns of and information department, through face-to-face inter-
respondents. The ®ndings show that respondents views between November 1998 and January 1999. It
primarily dialled in from home (69.2%) and secondarily found that a typical user logged on from home about
from their o ce or campus (29.8%). Generally, 49.7% four times a week for about 46 minutes a day e-mailing
of the respondents had used the Internet for 2 ± 4 years, and sur®ng websites for fun or information. The top
thus indicating that respondents were generally experi- three activities were e-mail (87%), browsing (70%) and
enced users of the Web. The table also illustrates that searching through reference materials (55%) (Andrianie
almost half of the respondents (45.5%) accessed the 1999b).
Internet more than twice a day. On the extent of Internet The statistics signal that more Singaporeans are using
usage, 51.8% of the respondents spent between 3 ± the Internet every week and they are getting more savvy
10 hours on average per week in the Web with another in using it for various purposes. They are not only using
20.0% of the respondents spending more than 20 hours the Internet but are also using it regularly to such an
per week online. extent that it has become part of their lifestyles. In fact,
The Internet usage patterns are consistent with the in terms of duration of Internet use, our study shows a
study on the e-commerce behaviour of Singaporeans by higher percentage of active users (as evident from the
Roy and See (1999) which reported that local Internet duration of Internet use) than the SPH study.
Table 1b. Internet usage patterns.
Our study SPH’s study
Frequency (%)
Internet access source
Home 784 69.2 80% login from home and 40% login from o ce
Work 225 19.9
School 112 9.9
Internet cafe 12 1.1
Length of Internet use
Less than 6 months 46 4.1 Typically about 21 months
6 ± 12 months 28 2.5
1 ± 2 years 149 13.2
2 ± 3 years 287 25.3
3 ± 4 years 276 24.4
4 ± 5 years 132 11.7
More than 5 years 215 19.0
Frequency of Internet access
Once a month or less 6 0.5 Typically about 4 times a week for about 46 minutes a day
More than twice a month 6 0.5 About 30% use the Internet every week
Once a week 22 1.9
More than twice a week 159 14.0
Once a day 295 26.0
Twice a day 130 11.5
More than twice a day 515 45.5
Duration of Internet use
30 min to 1 hr per week 42 3.7 9% spend 515 minutes online
1 ± 2 hrs per week 89 7.9 450% spend 15 minutes to an hour a day online
3 ± 4 hrs per week 157 13.9 22% spend an hour or two sur®ng
5 ± 6 hrs per week 196 17.3 13% log on for more than 2 hours
7 ± 10 hrs per week 233 20.6
11 ± 15 hrs per week 104 9.2
16 ± 20 hrs per week 85 7.5
More than 20 hrs per week 227 20.0Attitudes toward online shopping 263
3.3. Attitudes toward online shopping greater perceived usefulness (or bene®ts) is positively
associated with increased usage and impact of the
The following sections examine various attitudes Internet.
towards online shopping. The majority of respondents agreed that it pays to
surf around before purchasing online and that by
3.3.1. External search eVort: On recognizing the need searching for more information, they are more certain
to acquire certain products, consumers will generally of making the best buy (table 2b). Interestingly, more
search for information about the various alternatives than 50% of respondents were neutral in terms of
available to satisfy the need. The consumer’s primary whether sur®ng around enabled them to purchase at the
motive for pre-purchase search is to enhance the quality lowest price. Further, about 60% were neutral in terms
of the purchase outcome (Punj and Staelin 1983). They of whether they got exactly what they wanted by
will look for information either from external sources searching enough prior to online purchase. Nearly
such as the wide variety of media sources, from 10% disagreed that they were able to get exactly what
memory or both to solve the problem (Lohse and they wanted by searching enough. One implication is
Spiller 1998). that customers will purchase online if they are able to
In the context of the Internet, respondents generally ®nd value in their purchases. One aspect of value could
spent a reasonable amount of time or much time sur®ng be low price; other aspects could be products that are
prior to online purchase (table 2a). Impulse buying not available in Singapore or convenience and savings in
(where external search eVort is minimal) seemed to be time. More importantly, such value must be perceived
quite low. Basically, this shows that buyers were by customers to be important in order for them to be
generally cautious and were likely to search for motivated to make an online purchase.
information (perhaps for comparison purposes) prior
to purchase. 3.3.3. Interest in e-commerce: Here, we de®ne interest
in e-commerce as interest in knowing about various
3.3.2. Perceived bene®ts of search: Buyers generally products and brands available for purchase online.
are uncertain which website to purchase from because of Respondents tended to be neutral about their interest in
variations in products oVered online. To reduce this reading advertisements and visiting new websites (table
uncertainty, buyers must seek information. Willingness 2c). However, nearly 50% of respondents liked to
to search for information is contingent on buyers’ browse through websites even when they did not plan
trading oV perceived bene®ts (e.g. money saved) relative to purchase anything. This is consistent with previous
to costs of the search (e.g. time, money, eVort spent in ®ndings that the percentage of Internet users who buy
conducting the search) (Marmorstein et al 1992). In a online is still rather low as most users tend to browse
similar vein, Anandarajan et al. (2000) emphasized that rather than buy online (Wee and Ramesh 1999).
Table 2a. External search eVort.
Total amount of external search eVort A little (%) Reasonable (%) Much (%)
I spend a lot of time sur®ng before I decide upon online purchase 6.2 44.7 49.1
I made a lot of visits to sites before the purchase of products online 9.7 48.9 41.3
I spent a lot of time sur®ng the website for information about online products 11.7 47.1 41.2
Table 2b. Perceived bene®ts of search.
Perceived bene®ts of search Disagree (%) Neutral (%) Agree (%)
By searching for more information, I am certain of making the best buy 1.4 37.0 61.6
It pays to surf around before purchasing online 4.9 37.5 57.6
I learned which products are suitable for me by sur®ng around 4.8 44.9 50.3
There is too much to lose by being ignorant about products when I have to
purchase online 4.9 47.6 47.5
Sur®ng around various sites helped me to ®nd the lowest price when I
purchase online 5.9 52.3 41.8
By rushing into an online purchase, one is bound to miss a good deal 4.1 55.6 40.5
I got exactly what I wanted by searching enough before I purchase online 9.7 58.5 31.9264 T. S. H. Teo
3.3.4. Deal evaluation: Deal evaluation refers to the purchase. In particular, more respondents disagreed
extent to which the users judge products on various (than agreed) that purchasing online is desirable
criteria (Moschis and Moore 1979). For example, (17.9%), and that it would save them money (17.8%).
consumers evaluate the tradeoV between the bene®ts This could indicate that consumers may have perceived
such as product quality and the perceived monetary that there is a lack of value in the online oVers since they
sacri®ce. The cognitive trade-oV between perceptions of may easily get most items from physical stores. This
quality and sacri®ce results in perceptions of value. This result also helps to explain why the percentage of online
trade-oV was observed by Scitovszky (1945) as a shoppers is still rather low despite various eVorts to
paradoxical situation in which a commodity oVered at promote online shopping.
a lower price than competing commodities would be
both more attractive to the consumer because it is 3.3.5. Perceived risk: One factor that research has
cheaper and less attractive because of its suspected identi®ed as a critical determinant of consumers’ will-
inferior quality. To compete successfully in a value- ingness to buy online is the perceived risk associated
conscious environment, sellers must stress the value of with the purchase. Individuals, both experts and non-
their oVerings. One value-based strategy involves experts, diVer in their perceptions of risks depending on
emphasizing the value of acquiring the product (Monroe the nature of the online product (Grobe et al. 1999).
and Chapman 1987). Sellers can increase consumers’ Risk is personal and related to consumers’ perception of
overall evaluation of the deal by enhancing consumers’ what they consider to be risky (Grewal et al. 1994, Rice
perceptions of the product’s quality or bene®ts relative 1997).
to the selling price (Dodds et al. 1991). About 40% of respondents were concerned about
The results showed that about 70 ± 80% of respon- ®nancial losses from online purchase (table 2e). Further,
dents were neutral regarding the advantages of purchas- about 25% were concerned about the quality of product
ing online (table 2d). This indicates that many and that the product might not perform satisfactorily.
consumers are not convinced of the bene®ts of online Businesses need to do more to reassure and encourage
Table 2c. Interest in e-commerce.
Interest in e-commerce Disagree (%) Neutral (%) Agree (%)
I like to browse through the websites even when I don’t plan to buy anything 11.7 40.1 48.2
I surf various websites just to ®nd out more about the latest styles 14.5 39.4 46.0
I rarely read advertisements that just seem to contain a lot of information 14.1 53.3 32.7
I enjoy sampling diVerent websites of commonplace products for the sake of
comparison 18.2 52.9 28.9
I generally read even my junk mail just to know what it is about 27.5 52.1 20.4
I usually delete mail advertisements without reading them 19.7 60.1 20.2
I do not care to ®nd out what types or brand names of online products my
friends have purchased 23.2 57.7 19.1
I often read online advertisements just out of curiosity 22.0 60.4 17.7
A new website is not something I would be eager to ®nd out about 23.5 59.3 17.2
When I hear about a new website, I take advantage of the ®rst opportunity to
®nd out more about it 17.7 69.5 12.8
Table 2d. Deal evaluation.
Overall deal evaluation Disagree (%) Neutral (%) Agree (%)
My attitude about purchasing online is favourable 14.0 68.1 17.9
Considering everything, I think purchasing online is an excellent deal 12.3 73.1 14.5
Purchasing online is desirable 17.9 68.2 14.0
The Web’s product features are very attractive 10.8 77.1 12.2
Purchasing online is de®nitely worth the money 10.4 79.8 9.8
Considering the price, products purchased online are of excellent quality for
the price 12.8 78.8 8.3
The prices of products online are very acceptable 13.9 78.2 7.9
I am con®dent that buying online is a good decision 14.2 78.7 7.2
If I buy online, I will be saving a signi®cant amount of money 17.8 78.2 3.9Attitudes toward online shopping 265
customers to purchase online. Possible measures include by the Australian research ®rm www.consult, where
accurate advertisement about product features, product respondents expressed security concerns regarding online
warranties, avenues for customers’ feedback/complaints, shopping and concerns over the cost of Internet access
and certi®cation of the website by Case. (The Case (Martyn 1998). These concerns need to be addressed
scheme is described in section 5.) before online shopping can become more prevalent.
Information seeking is de®ned as an expressed need to
3.3.6. Willingness to buy: Willingness to buy is de®ned consult various sources of consumer information.
as the likelihood that the buyer intends to purchase the Respondents were asked to indicate the information
product (Dodds et al. 1991). The majority of respon- source they would rely most on for information and
dents were neutral in terms of whether they would advice before purchasing online (table 3b). The results
consider purchasing online (table 2f). However, more showed that websites appear to be the most popular
respondents seemed to consider the probability of source of product information when users consider
purchasing online as being low compared to being high. purchasing online. This indicates the potential of the
It appears that more needs to be done to encourage Internet as an information source. The rest of the
online purchase. information sources are shown in order of importance.
In comparison, the study on cyberbuying by Wee and
Ramesh (1999) reported that local online shoppers
3.4. Key concerns in Internet usage preferred newspaper advertisements. The high ranking
of websites as an information source perhaps indicates
Table 3a depicts the key concerns of respondents in that an increasing number of people are turning to the
using the Internet. Respondents were allowed to select Web for current information, especially since updates of
more than one option. Hence, percentages may sum up local news are now available online even before printed
to more than 100%. Most respondents were concerned newspapers or magazines.
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 3.5. Online shopping patterns
respondents felt they had no major concerns with using
the Internet. Table 4a shows a breakdown of reasons cited for
These ®ndings are quite similar to those of a survey of respondents’ choice in whether or not to purchase
19 000 Australian Internet users conducted in June 1998 online. About 21% of respondents had bought some-
Table 2e. Perceived risk.
Perceived risk Disagree (%) Neutral (%) Agree (%)
As far as I am concerned, ®nancial loss would be important 3.9 55.6 40.5
Considering the amount I would have to pay for online purchase, purchasing
online would be risky 8.8 55.2 36.0
Given the potential ®nancial expenses associated with purchasing online, the
overall ®nancial risk associated with purchasing online is high 10.0 63.0 27.1
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 8.0 65.4 26.5
I am not con®dent that the product purchased online will perform the functions
as described 11.4 63.6 25.1
I have serious doubts that the product purchased online will work satisfactorily 17.2 60.7 22.0
I am not certain whether the product purchased online will perform the functions
that were described in the website 14.6 64.3 21.1
Table 2f. Willingness to buy.
Willingness to buy Low (%) Neutral (%) High (%)
The probability that I would consider buying online is 19.9 63.3 16.8
The likelihood that I would purchase online is 25.4 64.9 9.7
If I were going to buy a product, the probability of buying the product online is 27.3 65.9 6.9266 T. S. H. Teo
Table 3a. Major key concerns in Internet usage. The next major reason was that respondents did not
Key concerns Frequency % possess a credit card. This may be because a large
percentage of them were students with an income of less
Cost of Internet access 733 64.7 than S$1500 per month who did not have the luxury of
Response time 716 63.2
owning a supplementary credit card. Should they need
Security of ®nancial transactions 589 52.0
Privacy of individuals 497 43.9 to purchase something online, they would need to do so
Receiving junk mail 400 35.3 through a third party.
Obtaining value for money 338 29.8 On the other hand, the main reason cited for choosing
Cost of upgrading PC and modem 234 20.7 to purchase online among e-commerce users was to buy
Inappropriate/indecent material 174 15.4
things that were not available in Singapore. Preferring
I have no concerns with using the Internet 108 9.5
Something else 38 3.4 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
Table 3b. Information source. purchasing online, because respondents prefer to exam-
Information source Mean S.D. ine products themselves.
In comparison, the study conducted by Wee and
Website 5.25 1.56 Ramesh (1999) reported that users like to buy online
Magazines 4.94 1.16
Newspapers 4.94 1.28 because of the convenience of delivery and ease of
Manufacturers’ brochures 4.93 1.22 purchase. Other reasons promoting online buying are
Friends and family 4.91 1.41 unique merchandise and impulsive buys. Similarly, in
Television 4.12 1.36 the SPH study (table 4c), users bought online mainly
Sales Persons 4.09 1.56 because of convenience and because they could get
Radio 3.34 1.39
products not available in Singapore.
Scale: (1) Not at all (7) A lot 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
thing online with the majority purchasing products engines (11.6%). This is in line with the SPH study
online between 1 ± 4 times (17.5%). This ®gure is higher (table 4c), which reported that the most popular
than the 14% reported in the SPH Internet survey purchases among Internet shoppers included computer
(Andrianie 1999c) but is fairly consistent with the study hardware/software, books/magazines, airline tickets/
on cyberbuying by Wee and Ramesh (1999) in March hotel reservations and CDs/tapes/videos.
1999, which reported 24.9% of respondents buying The average amount spent per item in our survey
online. ranged between S$21 and S$300 (16.5%) while the total
An interesting point to note is that 31.1% of amount spent ranged between S$51 and S$300 (11.2%).
respondents expressed their willingness to try out e- This is perhaps expected as consumers are still wary
commerce. This indicates that e-commerce activities are about the security of electronic transactions. The most
likely to increase further in future. If businesses can preferred payment option was through credit card/
successfully develop and carry out integrated marketing charge card (17%).
strategies, while capitalizing on consumers’ readiness
and favourable market conditions, further growth in e-
commerce is likely in the coming years. 4. Limitation
The main reason cited for not purchasing online was
the preference to examine products. This ®nding is The main limitation of the study is that the use of an
consistent with the study conducted by Wee and online survey may result in some problems regarding
Ramesh (1999), which reported that the factors deter- the generalizability of the results. It is possible that
ring online purchases are the lack of security, the lack of certain types of respondents may be more likely to
opportunity to examine the merchandise before pur- participate in an online survey. This limitation is
chase, and trustworthiness of businesses in terms of common to many online surveys, for example, Teo et
delivery, refund and merchandise quality. This ®nding is al. (1997) and Tan and Teo (2000). We have tried to
also similar to that of the SPH survey (table 4c), which mitigate this problem by publicizing the survey through
found the uninitiated reluctant to buy online because it various newsgroups that are appropriate for postings
does not allow consumers to gauge the quality of of this nature. In addition, we also sent e-mails to
products or services on oVer (Andrianie 1999a). solicit responses. Since the pro®le of responses fromAttitudes toward online shopping 267
Table 4a. Reasons for and against online shopping.
Frequency %
Purchased products in the past year?
Yes, I’ve tried it once 88 7.8
Yes, I’ve done it 2 ± 4 times 110 9.7
Yes, I’ve done it 5 ± 9 times 28 2.5
Yes, I’ve done it more than 10 times 10 0.9
I’ve tried it but cancelled out before purchasing/it didn’t work 41 3.6
I haven’t tried it yet, but am willing to try it 352 31.1
I haven’t tried it yet and I’m not sure if I will try it 355 31.3
I haven’t tried it yet, and I probably won’t try it 129 11.4
I think online shopping is sheer madness 14 1.2
Missing 6 0.5
Reasons for not purchasing on-line (among non-buyers)
I prefer to be able to examine the product myself 469 52.6
I don’t have a credit card 416 46.7
I prefer to visit real shops 339 38.0
I don’t trust the Internet with my credit card 317 35.6
I prefer to research products online but then shop o‚ine 290 32.5
I’m unsure about how to return faulty products 260 29.2
I don’t want to give away private information 251 28.1
I don’t want to pay for shipping 231 25.9
I already told you, I have purchased something online in the past 12 months 194 21.8
Product delivery takes too long 168 18.9
I can’t buy the stuV I want online 159 17.8
I prefer to talk to a salesperson 135 15.2
The Internet’s already costing me too much 92 10.3
I don’t have the time 72 8.1
Reasons for purchasing online (among non-buyers)
To buy things that aren’t available in Singapore 95 40.3
Just to see if it would work 36 15.3
To get it faster 29 12.3
To save money 29 12.3
To shop at any time 22 9.3
To be on the leading edge of technology 12 5.1
To buy things that aren’t available in my neighbourhood 11 4.7
To get the latest stuV 6 2.5
I prefer not going to the store 4 1.7
To get better selection 4 1.7
newsgroups and e-mails did not diVer signi®cantly, it telephone. There is no subscription charge and the user
perhaps indicates that the sample is generalizable to needs to pay the normal telephone charges based on
some degree since diVerent methods of soliciting time usage when he or she accesses the Internet.
responses yielded a similar pro®le. Future research Alternatively, users may choose to pay a ®xed fee every
can improve generalizability by following the metho- month for a ®xed number of hours of toll-free access to
dology described in Lewis (2001) of recruiting large the Internet.
Internet survey panels meeting strict demographic Companies intending to set up a Web presence should
criteria. 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
5. Implications and conclusions and video. Web pages that are di cult to retrieve may
frustrate surfers to the point where they leave the
To induce sales, Internet access speeds have to be website.
improved to a level fast enough to meet or exceed The main deterrents to purchasing online have been
consumers’ expectations. As shown previously in table customers’ preference to examine products, the need to
3a, the cost of Internet access is the main concern among possess a credit card and security concerns (refer to table
respondents, followed by response time. In Singapore, 4a). Electronic retailers have to work on these areas
Internet access is free for anyone with a ®xed line before more consumers will purchase online. Online268 T. S. H. Teo
Table 4b. Online shopping patterns.
Frequency %
Items purchased (among buyers)
Books 84 35.6
Hobby items 63 26.7
Music 48 20.3
Software 46 19.5
Magazine subscriptions 46 19.5
Computer hardware 43 18.2
Travel and travel information 36 15.3
Stock quotes 28 11.9
Games 24 10.2
Something else e.g. ¯owers, movie tickets, clothes 64 27.1
Getting to sites (among buyers)
Search engines 131 55.5
Retailer’s sites 76 32.2
Online stores 68 28.8
Follow online ads 59 25.0
Manufacturers’ sites 56 23.7
Online malls 24 10.2
Online community shopping guide 14 5.9
Average $ per item (among buyers)
$1 ± $20 20 8.5
$21 ± $50 81 34.3
$51 ± $100 72 30.5
$101 ± $300 34 14.4
$301 ± $600 4 1.7
$601 ± $1000 8 3.4
$1001 or more 17 7.2
Total $$ (among buyers)
$1 ± $20 13 5.5
$21 ± $50 29 12.3
$51 ± $100 42 17.8
$101 ± $300 85 36.0
$301 ± $600 30 12.7
$601 ± $1000 21 8.9
$1001 or more 19 8.1
Preferred payment options (among buyers)
Visa 153 64.8
Cheque 57 24.2
Mastercard 36 15.3
Diners club 3 1.3
retailing calls for a change in customers’ current Asian umbrella of branding or national schemes would
shopping habits. They cannot touch and feel before help to gain trust and acceptance among global
they buy and need time to adjust to this change in shoppers.
buying habits. Also, shoppers are unsure of a website’s For example, the CaseTrust Scheme is a joint eVort of
reputation and the quality of goods oVered (table 2d). the Consumers Association of Singapore (CASE), the
They need to know what they will be getting for the Retail Promotion Centre (RPC) and Commerce Net
money they have paid. Singapore Ltd. (CNSG) to boost consumer con®dence
Hence, businesses should work on improving brand in online shopping. ISO certi®cation can also help in
equity as one way of reassuring their shoppers. Security building con®dence in a company’s operation.
and trust issues are major deterrents to online purchas- The concern over the need to possess a credit card
ing. Online businesses should establish their stores’ might change as the debit card becomes more popular
names so that anything sold by them is perceived as with people in Singapore. It works like a credit card
reliable. When they spell out their policy on the Internet, except that the sums are immediately deducted from the
consumers know what they are dealing with and they card user’s bank account. No base income is set, so
will have the con®dence to buy. Coming under any those who do not qualify for a credit card under theAttitudes 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 72
I don’t feel comfortable shopping online 71
I don’t feel secure giving credit card number through the Internet 71
I don’t trust that personal information will be kept con®dential 66
I ®nd impersonal to shop online 55
It’s tiresome to shop online as browsing through websites is time consuming 47
There are too many websites on the Internet 40
It’s too complicated to place an order for a product 35
I cannot ®nd the product I want on the Internet 32
I don’t know how to shop online 29
What would persuade me to shop online
Quality of products/services 26
Security of personal information 26
Price of products/services 16
Variety of products 9
Ease of placing orders 8
Refund guarantee 7
Payment options are available 4
Getting products/services on time 4
What I buy online
Computer hardware/software 41
Books/magazines 33
Airline tickets/hotel reservations 12
CDs/tapes/videos 10
Flowers/gifts/cards 10
Sporting goods/equipment 7
Clothing 7
Educational services 3
Beauty products 2
Groceries 2
Others 17
Why I shop online
It was convenient 59
I could not ®nd the product elsewhere 55
Price was attractive 29
I wanted to see what online shopping was like 21
I had no time to go shopping 12
Others 3
n=1500. Source: Research & Information Department, SPH, published in Sunday Times, 6 June 1999.
Monetary Authority of Singapore’s (MAS) income Further, if businesses were to provide some clear
regulations can apply. exchange or refund policy to minimize the perceived
To handle security concerns, businesses could oVer risk in purchasing, consumers would be enticed to try
cheque payments, payment on delivery terms, money online shopping. Competent sales support staV that
back guarantees, or buy-®rst-pay-later plans such as a can handle customers’ enquiries and complaints
nominal deposit followed by monthly instalments or promptly will add credibility to online businesses.
follow-up lump sum payments. These suggestions would Credibility is extremely important since people buy
help reduce the need to disclose credit card numbers and from online businesses mainly on the basis of what is
the fear of inferior product quality. In addition, stated on their websites. It is especially important for
encryption can be used to protect credit card numbers businesses to build up a brand name in the initial
and digital signatures for authentication. Secure electro- stage of the innovation period as this would help
nic transaction (SET) is a technology that encrypts protect market share later when more companies have
purchase orders and allows users to check electronically joined the e-commerce business.
with an authorized bank to ensure that the retailer is Website designers can also design a frequently
legitimate. asked questions (FAQ) section to provide rapid270 T. S. H. Teo
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