A Survey of Online Shopping Behavior in Pakistan
To study the consumer behavior of online shoppers in Pakistan in order to gain insights into their attitudes and preferences, decision-making frame work, attributes for store selection and life styles encouraging online shopping. The target population for this study consists of the urban consumers who are educated and belong to Upper and upper-middle socio-economic classes (SEC A and SEC B) who can be divided into two broad segments, first having ages from 16-25 and second with age 25 years and above. The first stated segment is the major segment and insights about its behavior towards online shopping can provide a sound basis for further research. A substantial size of this segment comprises of students. An effective presence on social media websites is necessary and used as a channel to draw more traffic which is another reason for youth segment for being the majority of consumers.
Since this industry is still in its infancy in Pakistan, the innovators and early adopters who are in bulk at this time are the youth. This consumer segment is experiencing an increase in spending power which is mostly consumed by purchases of clothing and accessories, food and electronic products such as cameras, cell phones, tablets, computer or computer related stuff. Thus we see a resemblance among these products and the product lines of major online shopping sites. The second segment consists of working professionals or business men who have sufficient income to purchase products online. Their purchases are less both in frequency and quantity as compared to the former segment.
Survey
Five In-depth interviews were conducted and the methodology was to select a mix of people who are frequent online buyers, those who have bought once or twice in past 1 year and a prospective online shopper for online websites. Interviewing such a blend of interviewee’s?facilitated us in establishing the attributes leading to purchase (switching behavior) and factors valued the most before making purchase by current online shoppers.
A focus group was also conducted which helped in determining the online shopping behavior in Pakistan and the key attributes that contribute to the switching behavior. 5 participants from the identified segments were invited to be the partakers.
Lastly, a survey question was modeled on the schematic provided by qualitative input, after which the researchers went through numerous iterations to come up with the final questionnaire.
Findings
Findings from in depth interviews
The respondents were frequent online shoppers who had prior experience of online shopping and had a set of preferences that he desired from specific shopping experiences. The respondents generally regarded clothes shopping as a highly involved purchase. In case of online shopping behavior, the respondents bought products to which they?referred to as “standardized’?products. These included cell phones, laptops and TVs. One of the major reasons that numerous respondents mentioned for their online purchases was price economy. A frequent online store that the respondent visited was homeshopping.pk. They found homeshoping.pk to be the most price-effective as compared to other websites and even to wholesale shops at Saddar. According to a respondent, a certain TV was priced at Rs 38,000 at a nearby shop, whereas at Saddar it was Rs 36,000 and at daraz.pk it was 42,000. The respondent purchased the TV from homeshopping.pk at Rs 32,000. When questioned about whether lower prices created any doubt or not, the respondent answered that he had shopped from there before so he was satisfied with the service and quality. As far as the riskiness of online shopping was concerned, the respondent said that the cash on delivery factor was instrumental in mitigating that risk. When asked about other categories, e.g. garments or shoes, the respondent mentioned that he would like to try them before purchasing. However, when questioned about the possibility, whether a software were to be developed which would calculate the exact dimension of the shoe size or the shirt size, then?the respondent suggested that he may switch to purchasing these ‘customized’ items online.
The belief statements of some of the respondents are as follows;
Upon much discussion with the interviewee, it was found that price was a fundamental factor in their decision for selection of a retail channel, and that price and quality did not inversely correlate.
The behavioral statements of some of the respondents are as follows;
As seen from the behavior, the interviewees were interested in a certain category if they decided to make an online purchase. Even after deciding for an online purchase they would do?their research so that they’re?certain about the product requirements. And finally after deciding the price they research on prices and make purchase from wherever they get the best price. Even though homeshopping.pk gives the convenience the respondents need, the respondents majorly inclines towards homeshoipnng.pk is because of the high discounts.
The respondent’s Experience Map can be expressed below:
The nature of the product is very specific which prompted the respondents to search for pricecomparisons. Price economy and discounts prove to be the biggest factor in purchasing online.
Findings from focus group
The number of participant was 5, with their previous online purchases listed below;
Moderator asked questions which were further intrigued according to the responses of participants a few of the questions are given below:
Out of the members who took part in the study, 2 were professionals and 3 were students. Their age was between 24-34 years. 1 out of 5 had never purchased online, 1 was frequent buyer and other 3 had only bought 1-2 things in past year but they ranged between Rs. 15000-100000.
All the participants on average said they spend 2-3 hours on internet excluding the assignments and professional work. When the moderator asked about how many times they had shopped and what did they buy in last one year, 2 respondents were of the view that they usually buy clothes 2 times a year but more often go for grocery shopping while 1 of the respondent mentioned a list of items that he purchased last year which included (cell phone, tablet, clothes, and shoes). 1 said he only buy clothes whenever he goes for shopping and buys it when it only when needed.
Next, moderator asked regarding the online shopping in the past year? 1 participant bought Mobile Sony Xperia; another was heavy online purchaser who had bought in total 5 items in last year from online shopping (shirt, mobile, laptop cover online). 1 said he has done a lot of online shopping in America but only once in Pakistan i.e. of branded shoes (Nike). One of the participants was pro brick & mortar shopper, said his credit card might get misused. Upon asking about cash on delivery, the respondent said that he did know about this facility but still would prefer offline because in that he could feel the product. He further added that he could compare easily among the alternatives, so offline is better regardless of the category of product. One of?the respondent disagreed with him and said if it’s a technology oriented product than it is better?to go for online because?it’s difficult to?trust the Saddar mobile market shop, whereas for clothes offline gives the feel of the product.
When the moderator asked the respondents about the factors that will make them buy?online, one of the respondents said that friend’s recommendation is of?much important. Another respondent mentioned there is no uniformity, even the website’s like eBay and Amazon?sometimes give bad services so some friends might have had the bad experience?on same site. Respondents were of the view that if they?buy it directly from company’s website like Dell or?Apple only then it would be credible. A Participant mentioned that cash on delivery was the key element in Pakistani market without which he would not even consider online shopping.
Price was another important factor and according to the respondent, the price that homeshopping.pk offered was the cheapest. When the moderator further intrigued the respondents on what would their decision be if the same prices were offered online and offline. Respondents said they would prefer online because of convenience. Respondents said that only with discounts and strong return policy, they would consider online shopping.
When the moderator asked what the worst thing about online shopping, all the respondents uniformly agreed that?they can’t?feel and see the product. One of the respondent mentioned that availability issues as sometimes there is a stock out.
When the moderator posed the question, which attributes are most important when you make a purchase either online or offline, 2 said prices and the reliability. 1 responded that he was willing to pay premium for the quality and reliability of the source. Another said he wants value for money. Last one said convenience in the most important factor.
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When the respondents were asked to compare brick and mortar with online, on average according to the participants, brick and mortar was high on experience whereas online was high on convenience and comparison between the products.
When asked about different categories that participants would consider for online shopping- all unanimously agreed that they would go for standardized products specifically electronics like cell phones, laptops, tablets. But one of the respondent said he would go for?clothes because it’s?a cheaper item and he?wouldn’t?want to risk a lot of his money.
Findings from survey questionnaires
The below illustrates the perceptual/brand map of electronic products among online shoppers in Pakistan.
For the online shopping experience, when it comes to electronic products (such as Cell phones, Tablets, Laptops, TV, etc.) shopped through online sites, the typical experience was found coinciding with the following attributes: 1) convenience of shopping, 2) reputation of the store and 3) after sale service. These attributes can serve as the prime motivators for a switching behavior towards online shopping of electronic products. This finding is compatible to our insights drawn through qualitative research, as online shopping was found convenient as it delivered products at home and the product selection process was made highly convenient through digital interface, online stores were comparatively few and reliable as opposed to a plethora of similar stores in brick and mortar markets, and there was a significant amount of doubt about the after sales services through the conventional stores as opposed to online ones.
In terms of the shopping for electronic products through brick and mortar stores, it was found that the following attributes sufficiently described the experience: 1) overall shopping experience and 2) quality. It seems that brick and mortar stores still define the traditional delight of shopping which is often enhanced as the shopper is accompanied by friends/or family and often coupled with food consumption. This type of shopping can easily turn into a fun filled outing experience plus the provision of testing products at hand can be a firm boost.
Online shopping being a relatively new platform still lacks trust in the eyes of shoppers in terms of the quality of products. Another reason for this could be the relatively expensive nature of electronic products which demands higher emphasis on quality and testing before the purchase decision is made.
The below illustrates the perceptual/brand map of clothing products for online shoppers
The online shopping experience for clothing based products was found related to the following attributes: 1) price, 2) convenience and 3) company reputation. Since online shopping is a newer medium, the trust deficit has to be sufficed with a procedure hooked to company reputation/brand and since the knowledge of online market is limited, the shopping is probably confined to searching within certain brand portfolios.
Clothing product selection is often based on the best design available and hence selecting from a physical outlet can be an exhaustive procedure whereas digital interface and search tools can ease the process. Price is found as an additional attribute relevant to online shopping in comparison to electronic products as clothing purchases are relatively greater in number and volume and as opposed to electronic products the portfolio of products within a single brand can have plenty of options and price ranges which renders price as an important attribute.
The offline shopping experience was found compatible to the following attributes: 1) overall shopping experience, 2) warranty/ return and 3) variety. Clothing products often involve a great emphasis on testing prior to purchase which is not seen as a necessity rather fun activity. In addition to testing, clothing shopping experience can gain immense significance when it is coincided with shopping for special occasions which can be enhanced through peer/family opinions. Clothes can sometimes be needed to be returned, which is easier done through brick and mortar stores than online ones and even if online stores declare such return policies, consumers might hesitate in doing so as it not only overburdens the company but also is a lengthy and uncertain process.
As clothing brick and mortar stores are often found in clusters/ markets variety is amply provided as opposed to online sources where the markets are still in their nascent stages of development. An important psychological barrier involved in this could be that even with sites including a variety of products/brands, they are still perceived as a super store rather a whole market of products.
Segments based on perceptual/brand maps
Convenience Seeker: This segment of our consumers were found to have relatively simpler and selective decision criteria designed to optimize their shopping experience in terms of convenience. This type of consumer is making decision based on convenience, company reputation and after sales services. All these attributes seems to be easing the three stages of shopping, first the company reputation makes the store selection simpler, then the convenient execution of purchase (probably getting products delivered to home/office) can direct shopping procedure and then a reliable after sales service ensures that any product issues are dealt promptly and effectively.
Shopping Enthusiast: These types of consumers were found prioritizing shopping experience and quality over all other attributes. This hints towards the high involvement of this type of consumer as he/she is looking for the best source in terms of providing high quality. In addition to this, the experience of shopping is important as the consumer relishes the shopping as a pivotal component of his/her lifestyle. Another key ingredient in shopping attributes could be variety for this segment. As expressed earlier, shopping is a valued experience for them which do get more exciting with more variety available (which probably increases the overall time of shopping as well and with it the fun in it).
Value Maximizer: These kinds of consumers are trying to make an optimal purchase decision based on price, convenience and company reputation. They might prefer online shopping as opposed to brick and mortar since they do look for convenience, yet they are doing for significant reasons (of may be time shortage is one) but they do appear to maximizing on price and company reputation as well which suggests that they belong to less affluent financial?backgrounds as opposed to convenience seekers.
Segments based on Demographics
Using respondents’ demographic data, two main segments were found, one being an?“Affluent Teenager” and another being “Middle Class Graduate”. The Affluent teenagers belong?to SEC-A+ and currently enrolled in a High school degree program. They are image conscious and looking at their behavior patterns, they are more probable to buy products online because of high convenience or because buying from online sources is important for them to project an image of being up-to-date on latest shopping trends. On the other hand, the Middle Class graduate belongs to SEC-A, and is currently enrolled in a graduate degree program. He is more inclined towards looking for best deals/offers. Belonging to a relatively mature age, this segment is still more skeptic towards online shopping and probably still believes in the value optimizing potential of brick & mortar store.
Analysis
The following was analyzed from the perceptual maps drawn using quantitative tools. When it came to electronic products (such as cellular phones, tablets, laptops and televisions) shopped through online sites, the typical experience was found coinciding with the following attributes: 1) convenience of shopping, 2) the reputation of the store, 3) after sales service. In terms of the shopping for electronic products through brick and mortar stores, it was found that the following attributes sufficiently described the experience: 1) overall shopping experience 2) quality of purchase. For clothing based products (such as clothes, shoes, and clothing accessories) the online shopping experience was found related to the following attributes: 1) price 2) convenience 3) company reputation. The offline shopping experience was found compatible to the following attributes: 1) overall shopping experience, 2) warranty/ return, 3) variety.
The segments were divided into two categories, namely affluent teenagers, middle class graduates. The demographics of the affluent teen was that he/she was a student, aged 15 to 20 years, and had 1300cc+ car at his/her home. On the perceptual map, this segment gave weightage to attributes like exclusivity and brand image. This segment preferred shopping for electronics online, but for clothing preferred brick & mortar. The Middle class graduate was mostly working while studying part-time, was aged 21-25 and had car of 1000cc to 1300cc at his/ her home. This segment was primarily a bargain hunter because of its relatively lesser disposable income. This segment also preferred purchasing online as opposed to brick & mortar because online stores were able to give the best possible price. For clothing, this segment preferred brick & mortar for the better price.
After a very in-depth analysis, reliability, cash on delivery and warranty are the most important factors which could motivate a non-buyer to buy from online stores.
"Online Shopping gives you a reason to live for another 3-5 business days."
This article has been written in collaboration with
IBA - Karachi School for Business & Leadership.
Machine Learning Engineer at General Motors
2 年Haider Ali Osama Dar
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2 年nice\
Early Stage Investor | Co-Founder/GP at i2i Ventures | Kauffman Fellow
2 年So 5 in-depth interviews and one focus group with a different 5 people? How many people responded to the survey?