Potential of Online Purchase of Book in Hong Kong

Background information of research

At present Hong Kong is now among the countries in Asia with the highest rates of internet penetration and information infrastructure. The country’s local administration has in fact shown active participation in encouraging Hong Kong citizen to be pro-active in becoming a more digitally inclusive society. In November 1998 for example, the government developed a program called Digital 21, in order to build more suitable environments for e-business to prosper in the country (HKSAR, 2004a). With great administrative encourage, the people of Hong Kong had long been open in adopting various forms of modern technology. In making purchases for instance, local consumers have already become adapted to shopping online and paying through credit cards (ACNielsen, 2005). Online purchasing is defined as the process of placing an order of a product or service and completing a purchasing transaction through internet technology. Online shopping attitude on the other hand, pertains to the consumers’ psychological state in terms of making purchases using the internet (Li & Zhang, 2002).

The growing trend of buying goods online among Hong Kong consumers has been made evident by the total sales this was able to generate. Specifically, reports from 2004 indicated that total business receipts gained from online sales totaled to about HK.6 billion – a considerable 30.2% increase in sales was acquired in comparison to the previous year’s total which is estimated to be at .2 billion (HKSAR, 2004b). In Hong Kong, YesAsia.com is considered as the largest and most popular e-retailing site. From June to August of 2004, YesAsia.com and Amazon.com have taken the second and fifth places respectively in the Top 10 Online Shopping Web Sites in the country.

Clearly, the people of Hong Kong display a high degree of interest and comfort in using technology-based products and services. It has been observed that the high affiliation of the people on using the internet technology for making purchases is mainly due to convenience and price factors. Consumers need not visit nearby local stores to buy their needs. Through the internet, needed goods can be viewed, order and paid by online means while sitting down in front of a computer. Foucault and Scheufele (2002) also noted that consumers are interested in making purchases online due to the high availability of the goods offered. In the case of Amazon.com, the online retail company has been able to attract millions of consumers through low-priced goods and efficient advertising. Various internet tools that make product browsing easier are also utilized by the company. In turn, the company was able to establish a great level of loyalty among its patrons (Chen & Chang, 2003).

In addition to these, the changes in the consumers’ lifestyle had perhaps supported the growth of online purchasing in the country. With most citizens working, time to shop has been limited. However, the presence of online retail sites readily addressed this problem (Bellman, Lohse & Johnson, 1999). Rather than walk around from shop to shop, people prefer to rest on their free time; thus, shopping online becomes a very practical and appropriate alternative (Nielsen-net ratings, no date). Research have revealed that the products ordered or purchased by consumers online fall under three main categories, which include convenience goods, shopping goods, and specialty goods. These categories had been defined by Klein (1998). Convenience goods are goods that are frequently and immediately purchased by the consumers with minimum effort. Examples of these are grocery items and newspaper. Shopping goods are those items that consumers buy based on certain characteristics such as style, suitability, price and quality; apparel and furniture are typical examples. Finally, specialty goods are items a certain group of buyers characteristically insist on buying. For these goods, special purchasing effort is exerted. Gourmet foods and computers carrying specific brands are some examples.

1.2 The objectives of research

The purpose of this study is to examine the different factors that influence Hong Kong online shoppers in making book purchases through the internet. In the British and American setting, purchasing books online had long been a common practice among consumers. Moreover, there are several sites based in UK and the US offering such services (Gunter, 2005; Foucault & Scheufele, 2002); hence, studies related to it have been abundant. Hong Kong consumers on the other hand, have only begun embracing this type of purchasing practice. This then limits the availability of online shopping studies or researches based on the country’s local consumers. As stressed by So, Wong and Sculli (2005), there had been little research conducted in analyzing the online purchasing behaviour of consumers within Asia Pacific or Hong Kong, particularly in their intent to but books online. The conduction of this study is then right and timely especially to the consumer and Hong Kong-based e-retailers.

As it is the objective of this research to investigate the different factors that influence the behaviour of online book shoppers in Hong Kong, the research process involved the analysis of different affective factors derived from various literatures. Specifically, this research analyzed how do experience, age, product profile, social influence, promotional offers as well as level of convenience affect the intention of the buyers in purchasing books online.

1.3 Potential of online purchase of book in Hong Kong

Despite the recognized importance of online shopping among consumers, there have been limited studies that analyze their purchasing behaviour, particularly those located in Asia. From being used solely as tool for searching information, the use of internet technology has indeed developed in the Asian sector as online merchant gradually penetrates the market. Currently, online purchasing show great signs of being one of the effective shopping channels for Asian consumers in general. This is mainly because of the convenience this innovation provides not only for the consumers but for e-retail operators as well. Moreover, as more and more consumers have become accustomed to internet browsing, e-retailers will not encounter much difficulty in developing this mode of purchasing.

One of the factors that make Hong Kong consumers interested in making online purchases are the goods’ availability and accessibility. This is particularly true in purchasing books, especially hard-to-find ones. YesAsia.com, Amazon.com and eBay.com are some of the website commonly visited by online shoppers in the country. Aside from ease and availability, purchasing books online typically comes with other promotional offers or benefits that consumers’ find appealing. The research of Talaga and Tucci (2001) noted that online book purchases are usually done due to the books unavailability at local bookstores. Jarvenpaa and Todd (1997) also concluded that consumers looking for limited selection or specialty books typically depend on online sites as it is easier and more convenient.

Multi-national companies (MNCs) or larger merchants name or recognition may have higher impact on online purchase. Degeratu and associates (2000) found that well-known retailer reputation or name influences favourable evaluation of the retailer’s web site and in turn affects the intention to purchase online. Consumers trust MNCs as they invest large human and financial resources in web site design, security and payment transaction to protect their customer’s interest. Whereas the availability of the book in the local bookstore may depend on local demand, the online store may guarantee availability all the time. YesAsia.com is one of the successful local websites and its success can be attributed to the wide variety of products available (ACNielsen, 2005). Consumers can find their favourite writers or young writers online. In Amazon.com, consumers also find different language selection and first hand editions. Moreover, Amazon permits consumers to compare product by making price search and comparison by employing internet tools such as recommendation agents or allowing consumers to screen alternatives online (Chen & Chang, 2003).

In the Asia Pacific region, the average of online consumers in buying a product / service in the online market is five times in each month. In Hong Kong, online purchase is at average of 4.4 times in the past month and is lower than the whole Asia Pacific area. The most popular items purchased in the internet are books as according to a survey which indicates 34% (Appendix 1) (ACNielsen, 2005). Web shopping provides a comfortable virtual environment because there is no distribution done by salesperson and it is open 24 hours and seven days a week. According to research, online consumers prefer browsing and purchasing to well-known e-merchants. They believe that the e-retailers with higher brand name have own server and professional information technology as well as trained personnel to monitor and keep all customer information and transaction making sure to comply with the local regulations.

Most of online purchasers have indicated that they use credit card to settle payment for their online purchases (ACNielsen, 2005). However, they are also concern of the card security during the settlement of transaction provided by the e-retailers. In the Western countries, reputable online marketers such as Amazon.com and Barnesandnoble.com install security and comforting policies to manage their relationships with online shoppers. However, lesser-known online marketers often have less assuring policies, such as requiring customers to pay for return shipping charges for products that are defective on arrival (Chen & Chang, 2003). Online merchants also use and consider other payment methods like bank transfer, money transfer, cash-on-delivery (COD), PayPal and payment in convenient stores where options are given to the consumers selection (ACNielsen, 2005). Obviously, charges upon delivery and return of goods are one of the possible reasons why a majority of consumers abandon the use of the internet for ordering products or service (Huang & Oppewal, 2006).

1.4 Outline of the dissertation

The dissertation is divided into five chapters with sub-title. Chapter One is the introduction of research background, why the topic is chosen, and objectives. Chapters Two is the literature review, identification of the theories, and hypothesis framework set-up. Chapter Three outlines the research methodology to be adapted in the research. Chapter Four is the survey questionnaire results. The contents are analyzed and validated the research hypotheses in relation to the topic of the study. Last chapter is the summary of results, limitations, and recommendations.

1.5 Summary

This study aims to find out the different perceptions/conditions/factors that affect consumers’ decisions on online purchase of books. Majority of previously conducted research studies agree that online users are able to buy the book without leaving the house or office. The ordered products are delivered to their door and this is of great interest to many consumers. In addition, most of online users are young men, with higher educational attainment, stable source of income, experience in the internet, and owns a personal credit card. Most of them have past online experience in the web-shopping. The e-retailer as well as the frequency of service use also positively influences the degree of satisfaction. On the other hand, the security and privacy issues have been of great concern for internet consumers (Grabner, 2002). Consumer’s attitude towards the internet may be an important determinant for internet use for product information search and purchase intention via the online store. Asia area consumers recognize the shopping behaviour is a part of social life with their family or friends (Keng, Tang & Ghose, 2003). Consumers who favour the internet purchase of book are influenced by their relative insight or experience in web-shopping.

An important business managerial question to be addressed is why consumers choose to shop online rather than go to bookstore. Some reasons are: lower prices can expand online purchasing and the effect of other promotional offering attributes on the retention of online customers. Furthermore, the elimination of intermediaries means that e-retailers do not have to add run cost; therefore, the price of the products is exclusive of adding value (Verma & Varma, 2003). It is important for both online and offline merchants to understand the relative importance of these issues especially for their customers if they are to formulate ideal offerings for them.

Chapter Two Literature Review

2.1 General literature review background

The researcher followed the previous researchers’ modelling and read the literature reviews to understand online consumers’ behaviours of different countries. The study is focus on the characteristics of Hong Kong online shoppers based age, education background, income level and year of online experience (Shim, Eastlick, Lotz, & Warrington, 2001). To summarize the various factors which influence consumers’ attitude towards online shopping, So, Wong & Sculli (2005) provided a framework for understanding consumers’ intentions to shop on the internet. Online companies need to understand of online shoppers’ behaviour in order to obtain competitive advantages.

2. 2 Social-demographics variable influencing online purchase

Despite the importance of web-shopping, very few studies have examined the profiles of the online consumers in Asia. Online consumers’ social-demographic characteristics will affect the online merchants’ marketing strategy or general plan. The social-demographic variables such as the gender, age, employment status, past online shopping experience, and internet usage time had significant influence on consumers towards online shopping. A research study related to Hong Kong situation was focused on adopting online shopping in Hong Kong and was conducted by Siu & Cheng (2002). The study found out that most of the online shoppers are internet users. Another research focusing on Hong Kong respondents who are male, with high level of education, using the internet more than two years, and had made online purchase before was conducted by So, Wong & Sculli (2005). Similar studies of the West sound out that the internet consumers’ were young men, with university education level, belongs in a high income group, and owns a credit card (Dholakia & Uusitalo, 2002). The findings had proved the worldwide online users’ characteristics are the same as the Asia online users group. A lot of several research journals have found that many online consumers accepted the practice of online purchase but indicated that it is not only limited to books (Karlsson & Kuttainen, 2005).

Gender difference

The previous researches point out women as the main purchasers of the traditional shopping environment (Peterson, Albaum & Ridway, 1989). Today, with the internet possessing a huge potential as shopping channel, women as well as men are interested in it. The internet allows interaction with online consumers to have a totally difference shopping experience. The internet also creates freedom and innovation to attract and motivate men who usually carry out online purchasing (Citrin, Stern, Spangenberg & Clark, 2003).

Age group

Both the traditional and online consumers are young. They are uncomplicated and willing to try new technological ways. Most of young consumers possess the certain level and online experience in the virtual environments (Dholakia & Uusitalo, 2002; Keng, Tang & Ghose, 2003). Purchasing online requires the consumers to perform their shopping based on their individual capability and problem-solving skills (Peterson, Albaum & Ridway, 1989). Hong Kong is a Chinese community with inherent Chinese culture and factors influencing online buying behaviour. It is acknowledge that the online buying behaviours of Westerners may not have the same effects on Hong Kong consumers. Asian traditional purchase behaviour prefers going to the bricks-and-mortar stores to touch or try products in persons. The purchase pattern was proven by a lot of surveys focusing on consumers’ behaviour and attitude and was concluded that consumer like to touch, feel, try products and discussed with friend (So, Wong & Sculli, 2005). Moreover, consumers recognize that shopping behaviour is a part of social life with their family or friends included. In the study of Sim and Koi (2002), it was stated that the social life with families and friends in Singapore is one the main reasons why internet has not replaced the traditional shopping channels.

The factors that affect the online purchasing decision in the Asian culture are still unknown. As indicated, this study is focused on the identification of consumer groups according to the social-demographic qualities such as age, education, income, and use of online experience. These factors are related to online spending and willingness to buy books online.

2.3 Price, convenience and satisfaction are a motivator

Online retailer allows consumers to access their web site with the purposes of unlimited search of product information as well as price; products comparison to one product and sellers or competitors. The two most commonly cited reasons for shopping on the internet are price and convenience offered the consumers (Karlsson & Kuttainen, 2005). The price is easy to search as it is indicated on the target online merchant web sites. Also, the internet has become a convenient and rich source of information for product comparisons.

Price as a primary motivator

In addition, the use of price as a primary motivator to win over consumers is evident in the success of Amazon.com. Amazon.com heavily advertises lower prices for the same books one can find from local bookstores (Karlsson & Kuttainen, 2005). Also, the internet allows efficient price search and comparison by employing internet tools such as recommendation agents, allowing consumers to screen alternatives online, and comparison matrix, – an online matrix with in-depth comparisons among selected alternatives (Haubl & Trifts, 2000). Price may also be an important motivating factor in the consumers’ decision making on what and where to purchase products or service.

Convenience factors

Online purchase convenience can be defined as a reduction of the opportunity costs of effort and time involved in shopping activities (Huang & Oppewal, 2006). The internet offers greater convenience by making shopping possible anywhere at any time and the door-to-door delivery home service system is also of great advantage (Ruiz & Navarre, 2005).

On the other hand, online purchasing its given inconveniences. For instance, a part of the people’s population who owns computers does not have access to the internet from home or work. New comers are also not familiar with set-up personal account in the system. This hinders them to understand what is directed or indicated in the computer menu. Consequently, some hidden factors are not noticed by the online users such as the poor internet interface, security, privacy, exchange rate, delivery arrangement and cost, guarantee of receiving the products in time, refund policy, after sale service and so on.

Satisfaction

Satisfaction is one the most important consumers’ reactions in the internet shopping. It is also the process of building up of customer relationship or loyalty. Satisfaction influences the online purchase decision and future behaviour intentions of people (Anderson & Srinivasan, 2003). With this, online merchants invest huge financial and human resources in the web site infrastructure. They aim for competitive advantage through cutting down of running cost, enhancing the company online market share, retention of customers and increase profitability. According to the government reports obtained from Census and Statistics Department, the online users can go to the Hong Kong Government web site – www.esdlife.com. This is where they can get the free of charge download version of numerous and various consumer reports. They can also save the hardcopy of reports for the benefits of interested parties. In some cases, the user can select the price of publications in physical media (i.e. print version or CD-ROM version) including the postage fee. Postage fee will be calculated based on the weight of the package and the delivery address. This service enhances the government operations and provides a multi-channel for user selection.

The online customers are satisfied with online purchase experience. They show that the intention to continue with online purchase, frequent purchase or increase in spending (Keng, Tang & Ghose, 2003) is based on the degree of satisfaction. Thus, it is essential to understand of past online experience of consumers in order to develop effective strategies to attract and maintain them.

2.4 The influence of privacy and perceived security on internet consumers

Schoenbachler and Gorden (2002) studied the importance of privacy and security in online transactions. They stated that these are critical factors that online companies should manage effectively in order to build long-term relationships between their company and the customers respectively.

Privacy

Privacy is defined as an individual’s ability to control the terms by which his/her personal information is acquired and used (Galanxhi-Janaqi & Fui-Hoon Nah, 2004). Misuse of privacy affects aspects such as the obtaining, distribution or the non-authorized use of personal information (Wang, Lee & Wang, 1998). Most of online users possessed university education degree and training. They are watchful when online merchants ask them to compulsively fill in over their personal particulars for online processing. With the growing cases and issues on privacy and security concerns, consumer distrust is also increasing particularly on how their personal data is being gathered and processed.

Security

Security, on the other hand, includes the low risk of danger in online transactions, safeguarding personal particulars, and overall safety in completing the online business deal. Security is also linked with the trustfulness of reputation the online company holds (Yang, Minjoon & Peterson, 2004).

Referring to Rowley (2000), more than twenty percent of consumers’ survey in the year 2000 indicates that consumers were uncomfortable with shopping online. Online consumers resisted purchasing a product via the internet because they are concerned about the privacy of their personal information provided to the internet merchants. This also affects their repurchasing and future purchase intention (Bhatnagar & Ghose, 2004). Furthemore, Bhatnager and Ghose (2004) discovered that the barriers to online purchasing, especially the privacy of communication and trust in the online store greatly influence online consumers rather than the convenience and range of products selection available.
The overall research results collected from the studies on security concerns and online decision are consistent. Liao and Cheung (2001) studied online consumers’ concern particularly on the transaction security and privacy in e-transmission. Now, e-retailers are more involved in improving e-transmission security mechanisms and procedures. They also create broader protection policies by providing customized strategies including return policies, interactivity, and personalization on web sites.

Online consumers concern on the impact of security and privacy issues on the online shopping intentions and decisions is apparent. Price would be less important in the purchase decision in comparison to the security and privacy issues (Bhatnagar and Ghose 2004).

2.5 Perception of online service quality

Online consumers’ satisfaction on their transaction has influence the online purchase decision and future behavioural intention (Anderson & Srinivassan, 2003). Online consumers believed that in the whole transaction of online purchase, smooth processing is critically important to ensure online customers satisfaction. If online customers often feel uncomforted, they tend to select other services or terminate the transaction (Yang, Minjoon & Peterson, 2004). A good web site should be clear and has sure and easy interaction of message. This is in order to facilitate a smooth flow of the whole purchasing process (Yingjiao, 2005). Over 88% respondents had show intention to continue with online purchasing because they are satisfied with their previous purchase experience (Yingjiao, 2005). A critical factor in purchasing online is exposure to technology. Cox and Dale (2001) summed up that web site quality should include the following four features: ease of use (website design); consumers’ confidence (web site should elicit consumers’ trust); online resources (website is capable of automatic completion of transactions); and customer loyalty (consumers trust to purchase again).

Web site perceived ease of use and usefulness

Gefen, Karahanna and Straub (2003) found that web site interface namely “Perceived Ease of Use” and “Perceived Usefulness” are important factors that affect customer purchase and re-purchase. The “Perceived Ease of Use” is defined as easy navigation of web site, easy to follow instructions and search of information and product respectively, and ease of completing the online transactions (Yang, Minjoon & Peterson, 2004). Referring to Anderson and Srinivasan (2000), they found that “Perceived Usefulness” is related to time spent on the internet.

The literature review reveals that the internet consumers have a positive attitude towards internet as an efficient way to shopping, effective use of time and flexible and personal time management (Park & Jun, 2003; Sim & Koi, 2002). Tan and Teo (1998) found that the goals of merchants in creating web sites are: convenient access to worldwide information; establishing a global presence; extending global market reach; creating new business opportunities; improving customer service; direct selling the product and lowering of operational costs. Web site design layout can be divided into two functions: information and communication design strategy and online or transactional design strategy (Wen, Chen & Hwang, 2001; Iyer, Gupta & Johri, 2005). They believe that a web site that can provide convenience in finding and obtaining merchandise online creates a more satisfied consumer (Szymanski & Hise, 2000). In order to meet the consumer needs, the internet spending and time cost plays a major role in purchasing product and transaction. It directly influences the consumers to continue and complete all transactions or ignore it immediately (Isakowitz, Bieber & Vitali, 1998).

As results, e-retailers should focus and improve a wide range of products and its availability, good price, convenience, time saving, securing credit card information as well as good quality and easy return policy. In return, these will reinforce consumers’ attitude towards shopping online. Moreover, the demographic variables such as the gender, employment status, internet usage and past online shopping experience have significant influence on consumers’ behaviour towards online shopping. Online shopping may provide more convenience and is attractive to the employed persons. Research results proved that the employed persons are willing spend more money on internet purchase. Over 88% respondents with past online experience were satisfied with their shopping experience. As consequence, online retailers need to pay more attention on web site design to make sure that consumers will come back again for future online shopping experience.

2.6 Promotion offers

The sales and marketing promotions, which include sales coupon, rebate, and promotion package, are also found to have an effect on consumers before they plan shopping (Degeratu, Rangaswamy & Wu, 2000). Online retailers should also consider offering strong economic value by including cumulative discounts or free shipping, delivering competitive value in relatively small package sizes, and lower tax rates over the internet. The reactions of online consumers are affective and cognitive by the product brand names, sensory search attributes, price and application of the online environment (Dahlen & Lange, 2002; Eroglu et al., 2001). In addition, consumers’ online shopping experiences may be enhanced by incentive programs such as saved shopping lists or personalized help, point- and incentive-based premium and gift programs and cumulative discounts or rebates based on purchase amount (Breitenbach & Van Doren, 1998). According to Ray (2001), online companies can convert browsers into buyers online by including incentive experiences such as free postage, “buy one get one free” and points or miles rewards.

2.7 Theoretical framework

“Theory” is an idea or set of ideas that is intented to explain something about the life or the world (www.longman.com). A growing number of studies have examined online consumers’ behaviour in web-shopping. Most of studies had used various theoretical framework including the “Theory of Reasoned Action (TRA)” (Ajzen & Fishbein 1980); the “Theory of Planned Behaviour (TPB)” (Ajzen, 1985, 1991); and the “Technology Acceptance Model (TAM)” (Davis et al., 1989).

Theory of Reasoned Action (TRA)

According to the TRA, an individual’s behavioural intention impacts the performance of his/her behaviour, attitudes towards behaviour, and subjective norms with respect to the behaviour which compose two antecedent factors that determine his/her behavioural intention. An individual’s subjective norms are determined by his/her normative beliefs about the feasibility of a behaviour as evaluated by referent people and his/her willingness to follow these beliefs (Cao & Mokhtarian, 2005).

Theory of Planned Behaviour (TPB)

The TPB is an extension of the TRA (Ajzen, 1991). The major difference of the TPB from the TRA is its inclusion of perceived behavioural control (Cao & Mokhtarian, 2005).

Having identified the relevant theories and theoretical framework regarding the online purchase behaviour, the researcher will use of the TPB to test the hypotheses. TPB posits that behavioural intention to perform an activity is determined by attitude belief; perceived behavioural control (PBC) – defined as the perception of how easy or difficult it is to perform a behaviour; and subjective norm – defined as one’s beliefs about whether significant others think that one should engage in the activity. The TPB is contains three kinds of components: behavioural beliefs, normative beliefs and control beliefs (Ajzen, 2006). TPB model offers a theoretical framework to explore the depth and the range of belief held by online consumers about online purchasing of book and the internet shopping as a whole. It also examines the determinants that influence online consumers’ intention to buy book such as environmental friendliness (user-friendliness) and book categories. Ajzen’s TPB theory provides the conceptual framework of the as well as its appropriateness in the study. Using the TPB as the theoretical base, online consumers are used to find out if beliefs about privacy and internet trustworthiness helped to determine attitudes towards the internet. Online consumers have to be affected by intention to make internet purchases. Taking internet experience into account, general support for the research assumes that in return, consumers think rationally and persuasively in order to affect actual purchasing behaviour.

TPB is strongly related to influence consumers’ behaviour and intentions towards purchasing online. Having identified the relevant theories and theoretical framework regarding the adoption of online purchasing, TPB will be applied in examining the general Hong Kong situation.

Technology Acceptance Model (TAM)

TAM is another adaptation of TRA, which initially and mainly been used in explaining and predicting computer acceptance (Davis, 1993; Davis et al., 1989). TAM states that behavioural intention to use a technology derives from two beliefs: ease of use and usefulness. “Ease of use” is defined as the individual’s perception that using the new technology will be free of effort (Davis, 1989, 1993). “Usefulness”, on the contrary, is defined as the individual’s perception that using the new technology will enhance or improve her/his performance (Davis, 1989, 1993). Applying these two beliefs in research context, “ease of use” is the consumer’s perception that shopping on the internet will involve minimum effort whereas “usefulness” refers to consumers’ perceptions regarding the outcome of the online shopping experience. “Ease of use” also refers to their perceptions regarding the process leading to the final online shopping outcome. The formulation of TAM has been developed as a result of extensive testing and refinement (Venkatesh & Davis, 1996; Venkatesh, 1999).

2.8 Derivation of hypothesis

Consumer’s attitude toward the internet is one of the important determinants for using the internet to make product selection and purchases. Helander and Khalid (2000) stated that a positive attitude toward e-commerce has a significant influence on online shopping. Klein (1998) on the other hand, proposed that the internet may influence information search behaviour because of the greater convenience and accessibility this innovation can provide. The positive attitude toward the internet can increase information gathering behaviour. Blackwell and associates (2001) provided a similar notion on the positive relationship between attitude and information search behaviour. When a consumer has a positive attitude toward the retailer, he or she is likely to exhibit greater willingness to search product information from the retailer. Empirical evidences showed that there is a positive effect of attitude toward the internet purchase on internet search intention (Shim et al., 2001; Watchravesringkan & Shim, 2003). Based on literature, it is reasonable to expect that the more positive attitude the consumers have toward the online store, the intentions to search or browse through the online store are greater as well. Therefore, the following hypotheses were developed.

Hypothesis to be tested

Online purchase intentions indicate the degree of a consumer’s intentions to exercise a specific purchasing behaviour (Salisbury et al., 2001). According to Schlosser (2003), attitudes toward online purchasing pertain to the consumer’s positive or negative feelings about making purchases via internet technology.

This study was conducted for the purpose of identifying the different demographic variables, consumer attitudes and behaviours that influence both online purchasing behaviour and the intent of the consumer in making purchases through online means. This research is timely to present time as online purchasing in Hong Kong and the rest of the world is a growing trend among consumers. Survey report from the Hong Kong Special Administrative Region (HKSAR, 2004b) has indicated that in Hong Kong, about 410,600 people whose age ranges from 15 years and above regularly performs online purchasing of various goods.

Other relevant studies conducted previously have also discovered a number of factors that appear to affect the attitudes of consumers towards making purchases online. In the study of Foucault and Scheufele (2002) for instance, the researchers stated that young men are more frequent users of the internet. With this finding, it is then possible that young and frequent users of the internet encounter greater positive experience out of this activity. The development of positive attitude towards regular internet use on the other hand can support greater possibility of making purchases online. With these observations and possibilities, two hypotheses (H1 and H2) are formulated.

H1: Young online users have a greater positive attitude and experience towards the use of internet and are more experienced in browsing over various websites for information.

H2: Online users with greater positive attitude and experience towards the internet are more likely buy goods, like books, via online means.

Most researchers noted that negative online experience along with the issues of poor security and violation of privacy makes other consumers hesitant in using the internet for shopping (So, Wong & Sculli, 2005). From this finding, it can be stated that previous shopping experience is also an important influence on the consumer online purchasing behaviour. In addition, the price factor also appears to be an essential determinant. The prices of books and CDs offered in Amazon.com for example, were said to be 9-16 percent lower in price as compared to same goods sold in regular stores. From these, two sets of hypotheses are developed.

H3: Positive online purchasing experience increases the willingness of the consumers to shop online as well as make additional purchased from similar online retailers.

H4: The lower price of goods offered online increases the willingness of the consumers to purchase items, such as books, through the internet.

One way of introducing a new product to the market effectively is by means of promotional offers. Bagozzi and colleagues (1998) explained that the use of promotional offers is effective in increasing the intent or interest of the consumers to make a purchase. Promotional offers can come in different forms; coupons, rebates, free sample and bonus pack are some common examples.

Eun and Youn (2004) suggested that online retailers should also adapt the concept of using promotional offers or incentive programs so as to attract more buyers and maintain regular patrons. The availability of the bookmark feature in most online retail sites has in fact supported this concept. With this special internet feature, users can easily save on items that they plan to buy and have the site revisited should they need other goods; this then increases the possibility of the consumers making an online purchase. With this advantage, most e-retailers use various programs like first-time discounts for new comers and reward programs for frequent consumers. The use of these programs not only helps in establishing e-loyalty, but it is also a useful instrument in turning a new consumer into a regular and loyal patron (Reichheld et al., 2000). While this is an advantageous determinant in the consumers’ willingness to make online purchases, e-retailers must also be able to identify which promotional offer will be most appealing to the targeted buyers. With these findings, an additional hypothesis has been made.

H5: The e-retailers’ promotional packages increase the willingness and intent of the consumers to purchase or repurchases books online.

Personal information as well as confidential data like credit card numbers can be tracked easily through a computer feature known as cookie. Computer cookies are actually text files saved in the user’s hard drive (Xu & Paulins, 2005). In order to protect the buyers’ personal information, e-retailers uses online security and privacy protection means, which are displayed on the retailers’ site either in symbols or statements. Online merchants do this for instance, by coordinating with credit card companies in developing consumer protection assurances. Through this, experiences and most especially the inexperienced online consumer would display greater intent in making purchases online. For this, the following hypothesis was created.

H6: The effort of the online retailers to ensure the protection of the online consumers against violation of privacy of personal information theft increases the intent of the customer to purchase books via the internet.

The size of Hong Kong geographically is relatively small. Furthermore, going from one area to another is not a problem with the country’s high-end transportation systems. The location of bookstores can be accessed easily by walking or a short train ride. In Mongkok or Causeway, second-floor bookstores can also be visited at most of the day’s time as owners typically close the stores at a later time of the night. Despite high availability and accessibility, customers often find the books they need in these bookstores unavailable. In most cases, the bookstores only offer best-selling or well-known books. In this case, the problem lies on the inadequate product profile of books offered in local bookstores. Product profile refers to the depth or range of the product or service offered (Xu & Paulins, 2005). In terms of books, product profile characteristics may be outdated editions or limited selection. Compared to local bookstores, these hard-to-find books can easily be found and purchased online. In addition, the availability of these items is greater. It is then assumed that the range and depth of books would attract the online consumers to buy the book via the internet.

H7: Customers are more likely to purchase books through online means as retail websites provide a wider product profile.

Schutte and Ciarlante (1998) suggested that Chinese culture also play a role in influencing consumer behaviour and purchasing. In general, the Chinese people like human interaction when shopping. As online purchasing takes out human interaction while shopping, it is likely that the locals of Hong Kong may not be very open with the idea of buying books through the internet.

From this finding, it can be considered that social influence plays an important role in increasing the intent of a consumer to buy. In the case of online purchasing, despite the lack of interaction with the salesperson or retailer, friends or relatives who do shop online can serve as strong influence to potential online shoppers (Limayem et al., 2000). In the eighth hypothesis to be tested in this study, it is then stated that social influence plays a role in the consumers’ decision to purchase books online. This hypothesis stresses the relevance of social influence theory to online purchasing.

H8: Attitude towards online shopping is directly influence by family members and relatives who are regular online shoppers and have positive experience in buying books online.

It has also been observed that the intention of the consumers to buy products or avail services online is derived from the convenience and after-sales service online retailers can provide. This means that the ease in the process of placing orders and payments to acquire the product increases the willingness of the customers to make online purchases. In addition, the access of consumers to after-sales services such as product inquiries, troubleshooting or filing of complaints also increases their intent to shop online. Moon (2004) noted that the exchange of money for products and time gap between order and delivery are not of greater significance to online shoppers. From this finding, it is assumed that the benefits behind making online transactions also influence the consumers’ interest towards online shopping.

H9: The efficacy of the e-retailers’ logistics system directly influence consumers intent to purchase books online.

2.9 Summary

A number of studies have already been conducted in order to identify the different socio-demographic characteristics influencing online consumers. However, there had been limited studies that use online consumers from Hong Kong or Asia to investigate on this topic. Various theories have been applied in the previous research to explain and predict consumer online purchasing behaviour. Overall, the theories are directly adapted and related to the social psychology area: TRA, TPB and TAM. The studies based on these theories highlight the importance of consumers’ attitude and explain the variations in web-shopping behaviour.

The e-retailers’ wide understanding of the consumers is one of important elements necessary to develop effective strategies that would attract and retain online shoppers. Consumers on the other hand, are generally interested in making online purchases due to the benefits they can acquire from it. These include lower product prices, greater shopping convenience, time-savings as well as flexibility (Kau, Tang & Ghose, 2003).

All hypotheses developed are summarized and presented below: