Customer Satisfaction Towards Online Shopping
Customer Satisfaction Towards Online Shopping
Customer Satisfaction Towards Online Shopping
Supervised by:
Md Miraj Hossen
Associate Professor
Department of Management Studies
Faculty of Business Studies
Jagannath University
Prepared by:
Sadia Hassan ID: B160202099; 12th Batch
Department of Management Studies
Faculty of Business Studies Jagannath University
INTRODUCTION
This chapter begins with introductory remarks and latter discusses the background of the study,
including global and national context.
1.1. Introductory Remarks:
Online shopping has become a promising field around the world. All is now available online,
from bus tickets to grocery stores. Buying and selling watches, gadgets, mobile phones and new
fashion dresses are very popular in e-commerce.
Buying and selling products and services in online is becoming a common activity in the world
today. E-commerce can be used as an invention or an online digital medium for doing business
on the Internet. E-commerce uses digital technologies and its capabilities, such as interactivity,
speed, networked connectivity, and multimedia, and enables many businesses to conduct their
business more efficiently and quickly.
Studies have shown that the Internet is primarily used to search for information instead of as a
means of purchasing products. Less than 2% of online visits result in purchasing a product
(Bellman, 2001).
Similarly, research shows that many customers tend to check for product details online, but
choose to shop in conventional brick and mortar shops (Dobie, Grant, & Ready, 2001;
Wolfinbarger and Gilly, 2001; Straub & Klein, 2001). These findings show that, while there is an
increase in internet users, there is no similar increase in people purchasing products and services
directly online.
In contrast, nowadays, many customers are buying the things they need online every day. It is
now convenient to buy online instead of shopping centers or markets that cross long traffic
queues and highways. E-commerce platform managers can place the products on the doorstep
after customers have given an order. As this sector is evolving in an upward direction, it is
essential to know which factors significantly affect customer satisfaction. Thus, this paper aims
to identify the influencing factors of customer satisfaction towards online shopping in Dhaka
city, Bangladesh.
1.2. Background of the Study:
1.2.1. Global Context:
Online shopping has become more popular than traditional shopping in today’s modern world. It
is an e-commerce form, also known as B2C e-commerce in which people can buy goods or
services directly from the seller over the internet. In research from Clement (2020b) revealed that
the global digital population reached nearly more than 4.57 billion internet users and East Asia
accounted for 1.1 billion internet users worldwide followed by South Asia with 816.9 million in
April 2020.
The rapid growth of internet users is one of the vital reasons for booming online shopping
worldwide. An estimated 1.8 billion people worldwide purchase goods online in 2018. In the
same year, global e-retail sales amounted to US$ 2.8 trillion and projections show an increase of
up to US$ 4.8 trillion by 2021 (Clement, 2019a).
Figure 1.1: People Shop in Online across the World in 2018 (Source: Statista)
More than 2.14 billion consumers worldwide are projected to buy products and services online in
2021, up from 1.66 billion digital customers worldwide in 2016 (Clement, 2019b). Online
shopping has been realizing tremendous growth globally over the past few decades. In 2019,
total global retail e-commerce sales amounted to US$ 3.53 trillion, and e-retail revenues are
projected to grow to US$ 6.54 trillion by 2022 (Clement, 2020a).
The world has been going through a tough situation due to Covid-19. Already one of the major
changes in shopping behavior has undoubtedly appeared from the coronavirus outbreak.
In order to prevent the spread of the virus, countries around the world implementing strict
lockdown measure the number of consumers shopping online has significantly increased,
especially for groceries. According to a recent study, in March 2020, 42 percent of the US
population purchased their groceries online at least once a week (Soper, 2020).
Figure 1.3: Impact of Coronavirus (COVID-19) on Shopping Behavior in U.S. (Source:
Geekwire)
This represents a remarkable change from 22 percent in 2018 and it has nearly doubled for two
years ago. However, it may seem like a temporary improvement; it is also indicating the change
in people's mindset towards online shopping.
More than half of online grocery customers now say they are more likely to keep shopping
online even after the pandemic (Mohsin, 2020). The present situation of online shopping in the
global context shows the magnitude of this highly growing sector.
1.2.2. National Context:
Along with the other developing and developed countries, Bangladesh has witnessed tremendous
growth in the access of the internet with the aim of digital Bangladesh. In Bangladesh, the e-
commerce industry has begun to expand around 2013 with Bangladesh Bank removing its
previously imposed restriction on foreign transactions by customer credit cards (Wing, 2020). As
the Bangladesh government has decided to embrace e-commerce, it has been much easier and
more practical for people to buy online over the last few years.
In 2018, Alibaba, China's multinational e-commerce company purchased Daraz Business, one of
Bangladesh's largest e-commerce firms, initially launched by Rocket Internet. Opening up South
Asian Markets was a strategic move and placed the sector at a significant spotlight (Ovi, 2018).
Although this has been a significant boost to the development of e-commerce, other trends, such
as the continuous increase of internet connectivity and the growing usage of smart phone across
households, have also played a crucial role. (Wing, 2020)
According to Bangladesh Telecommunication Regulatory Commission (BTRC), the total number
of Internet Subscribers has reached 103.476 million at the end of June, 2020 from 31140.804
thousand at the end of February, 2012 (Internet | BTRC, 2012–2020).
Even though there are many obstacles in the expansion of internet access and use in Bangladesh,
it is clear from the statistics of internet users that the development of IT infrastructure and the
tendency of digitalization have been gradually overcoming those obstacles due to the tendency of
digitalization.
A few years before, citizens of Bangladesh were not very familiar with digital technologies.
However, now they have been excited to take advantage of any potential digital opportunity.
This reality is supported by the prevalence of smartphone users in the region. Therefore, it is not
surprising that the sales of e-commerce in Bangladesh have reached the $1 billion mark. (Hasan,
2020).
Many young people, especially university graduates, are earning a good amount of money
through a variety of online activities. Hundreds of websites and directories have been developed
to offer and deliver different services online (Hasan, 2020). Obviously, Bangladesh, as a
developing economy, has massive potential customers for the online market.
Internet shopping is now common in Bangladesh. With the enormous growth of digital
platforms, e-commerce revenues in Bangladesh have recently increased remarkably. The
following figure shows the market size of e-commerce in Bangladesh.
Figure 1.6: Notable Local Players in the E-Commerce Market (Source: DATABD.CO)
Some popular free classified websites and online shopping marketplaces are Daraz.com, Evaly,
Chaldal.com, Rokomari, PriyoShop, Othoba.com, AjkerDeal, Pickaboo, Bagdoom, KHasfood,
MeenaClick, Shawapno, Bikroy.com,Sheba.xyz, Shohoz, Foodpanda, Pathao and so on.
However, some of the people engaged in the e-commerce are a little dubious about the current
situation this industry. But they are still very optimistic that the industry can expand rapidly in
the coming years. Former President of the Bangladesh Association of Software and Information
Services (BASIS) stated, "Maybe, the market has the potential but right now this is an
overestimation,” However, he agrees that online shopping has progressed enormously in recent
years (Hasan, 2020).
Tipu Munshi, Commerce Minister of Bangladesh, said in the virtual discussion organized by the
e-Commerce Association of Bangladesh (e-CAB), "While it was unthinkable just one month ago,
people now visit different sites for groceries and other essentials." He also added that people
have already found it challenging to engage in conventional trading; there is an opening for the
digital sector to flourish (Star Business Report, 2020).
In addition to this impressive development with numerous advantages from online shopping,
online sellers have faced a significant challenge in meeting customers' needs to achieve their
satisfaction level. Any e-commerce organization must identify the key factors that might
influence customer satisfaction to improve business performance as well as increase the level of
customer satisfaction.
LITERATURE REVIEW
This chapter highlights the concepts of customer satisfaction and the related factor influencing
customer satisfaction based on the previous literature. A conceptual framework is also proposed,
and hypotheses would be developed for the research purpose.
2.1. Customer Satisfaction:
In marketing literature, customer satisfaction is recognized as one of the most studied constructs.
This plays a crucial role in the business market as it is capable of maintaining current customers
and attracting new customers (Tandon, Kiran, & Sah, 2017). Kotler and Keller (2012, p.128)
also described satisfaction as “a person’s feeling of pleasure or disappointment which occurs as
a result of the comparison between product or service performance and expectation”. Oliver
(2015, p.8) provided another point of view in which he defined customer satisfaction as the
"consumer's response to fulfillment. It is a judgment related to a product/service feature, or the
product or service has actually delivered (or provides) a pleasurable level of consumer-related
fulfillment."
Giese and Cote (2000) stated that consumer satisfaction includes three aspects: reaction
(emotional or cognitive) relating to a particular target (expectations, commodity, consumption
experience, etc.) decided at a specific period (after purchase, after choosing, based on
cumulative experience, etc.). In addition, Li and Zhang (2002) described consumer satisfaction
as the degree to which consumers confirm their expectations towards the perceptions of the
online shopping experience.
The European Public Administration Network (EUPAN) clarified consumer satisfaction as a
model with the help of disconfirmation theory, which proposes that consumer satisfaction with
the service is related to the level of the disconfirmation experience; where the disconfirmation is
associated with the initial expectations of the individual. When the service experience
substantially satisfies the client's expectations of the service, there should be a strong degree of
satisfaction. When the service experience substantially satisfies the client's expectations of the
service, there should be a strong degree of satisfaction.
Consumers must be comfortable with their knowledge of e-commerce shopping before
purchasing further products and services online. A significant number of experiments have been
carried out to determine the direction of customer satisfaction with online shopping
(Jun, Yang and Kim, 2004; Ballantine, 2005; Cappelli, Guglielmetti, Mattia, Merli and
Renzi, 2011). It is observed that behaviors and views of customers about convenience and
security issues have a substantial influence on their decision to shop digitally (Limayem,
Khalifa, & Frini, 2000). Shankar, Smith, and Rangaswamy (2003) further claimed that the
service provided before and after the order is particularly essential to repeat transactions by e
commerce shoppers.
Besides, Schaupp & Bélanger (2005) had discovered three types of determinants that may
influence customer satisfaction with online shopping. These are technology factors, including
security, usability and site design, and privacy; shopping factors, including convenience, trust
and trustworthiness, and delivery; and product factors, including merchandising, product value
and product customization. Results show that the three most important attributes to consumers
for online satisfaction are privacy, merchandising, and convenience under technology factor,
product factor, shopping factor, respectively. Those are followed by trust, delivery, usability,
product customization, product quality, and security.
Through this study, however, the concept of customer satisfaction is primarily presented as the
consumer's satisfaction with the customer's previous online shopping experience.
Customer satisfaction is dependent on meeting customer expectations, according to Flavián,
Guinalíu & Gurrea (2006). Hence, a detailed analysis of online customer's preferences is
essential.
JUSTIFICATION OF THE RESEARCH:
This research will be valuable for both practitioners and academicians of business background.
Implications of this research would be impactful foe e-commerce industry. This paper also
allows the online traders to guarantee long-term sales, such as re-purchase operations and good
word of mouth. Online sellers can take actions to minimize threats such as complaints and
negative reviews that negatively affect the credibility of the company by optimizing its ability to
please its customers. Therefore, the detailed information on this subject will help future readers
carry out their future studies as this research paper will provide extensive information on this
subject.
STATEMENT OF THE PROBLEM:
The Coronavirus pandemic has stimulated the development of the e-commerce industry in
Bangladesh. Moreover, before the pandemic, the industry was still on an upward acceleration
(Kader, 2020). E-commerce firms expect a positive outcome from the Covid-19 lockdown.
Many consumers are already more likely to shop online than ever before, which may help the
business in the post-pandemic era (Shawki, 2020).
Online ordering has become the standard way to buy food and groceries and maintain social
distancing because lockdowns and social barriers come into effect, and people are forced to stay
indoors. Several online grocery stores have reported a sharp spike in orders from new customers
who have never previously bought on their websites. Internet use has increased, and people are
searching digitally, using internet platforms and resources are indisputable reality.
Consumer satisfaction is the ultimate result of fulfilling the consumer's expectations for product
performance. Most satisfied customers usually intend to re-purchase products if the product
performance meets their expectations (Alam & Yasin, 2010).
People generally have a certain level of expectation in regards to a good or service. When
product performance meets the expectations, customers are satisfied, while customers are
dissatisfied when expectations are below the product (Swan & Combs, 1976). Moreover, a
highly satisfied customer would stay committed to the company for a longer period of time
(Williams & Naumann, 2011).
They prefer to buy more when the company launches new products, spreads a strong word of
mouth about the company and its goods, provides positive thoughts about the product or brands
to the consumer, pays less attention to rival brands, and is less price sensitive (Kotler & Keller,
2012). If the customer is satisfied with a specific online or offline store, there is an apparent
propensity to buy from that store again.
As the internet penetration rate stands at 41% of the total population (Kemp, 2020), new
technologies are evolving, and more businesses are selling their products and services over the
internet. Online sellers should have a clear and in-depth understanding of the factors of consumer
satisfaction in the online environment in order to improve business performance and increase the
level of consumer satisfaction. In this perspective, this research aims to identify factors that
influence consumer satisfaction with online shopping in Dhaka City.
Broad Objective:
❖ The primary objective of this research is to identify the factors influencing customer
satisfaction towards online shopping.
Specific Objectives:
❖ To examine the identified factors influencing customer satisfaction towards online shopping.
❖ This study aims to suggest some implications regarding this research's findings to the
currently operating or future e-commerce businesses in Dhaka city, Bangladesh.
RESEARCH QUESTIONS:
There are few questions arise when conducting this research. Questions are following:
i. What are the factors influences on customer satisfaction towards online shopping in Dhaka
city, Bangladesh?
ii. Do there any relationship among website design, information quality, product quality, product
variety, e-service quality, safety and security purchasing process convenience, lower price and
offers, payment method, trust and customer satisfaction in online shopping?
RESEARCH HYPOTHESES
This research will formulate the following hypotheses for investigating the relationship between
Customer Satisfaction and Online Shopping.
H1: Website design has negative influence on customer satisfaction towards online shopping in
Dhaka, Bangladesh.
H2: Information quality has negative influence on customer satisfaction towards online
shopping in Dhaka, Bangladesh.
H3: Product quality has negative influence on customer satisfaction towards online shopping in
Dhaka, Bangladesh.
H4: Product variety has negative influence on customer satisfaction towards online shopping in
Dhaka, Bangladesh.
H5: E-service quality has negative influence on customer satisfaction towards online shopping
in Dhaka, Bangladesh.
H6: Safety and security have negative influence on customer satisfaction towards online
shopping in Dhaka, Bangladesh.
H7: Payment method has negative influence on customer satisfaction towards online shopping
in Dhaka, Bangladesh.
H8: Purchasing process convenience has negative influence on customer satisfaction towards
online shopping in Dhaka, Bangladesh.
H9: Lower price and offers have negative influence on customer satisfaction towards online
shopping in Dhaka, Bangladesh.
H10: Delivery service has negative influence on customer satisfaction towards online shopping
in Dhaka, Bangladesh.
H11: Trust has negative influence on customer satisfaction towards online shopping in Dhaka,
Bangladesh.
Conceptual Framework:
Website design
Information quality
Product quality
Product variety
Payment method
Purchasing process
convenience
Lower price
Delivery service
Trust
❖ Respondents of the Study: The population of this research is based on all the individuals who
did or currently doing online shopping in Bangladesh. The representative sample of this
population involves customers of online shopping in Dhaka city as the trend of online shopping
is most popular in the capital. The study is limited by the small sample size, which may not be
enough to fully represent the actual population. The sample size is 357.
❖ Primary data: Primary data have been collected from the online shoppers living in Dhaka
city, the capital of Bangladesh, through online survey. Subsequently, these data were analyzed
into four steps involving demographic profile of the respondents, cross-tabulation analysis, and
factor analysis and finally measuring correlation among identified factors that influence online
customer satisfaction.
❖ Secondary data: Secondary data have been collected from various journals articles, books,
websites articles, statistical database and newspapers articles and reports. These data were
mainly used to narrate the literature review chapter and research background of the introduction
chapter and other necessary parts of this report.
3.6. Data Analysis:
Collected information has been processed by using two software; Microsoft Excel, SPSS
(Statistical Package for Social Sciences). Collected data were organized and coded by using
Microsoft Excel. Coded data were transmitted to SPSS software for analysis.
Necessary tables have been made on the basis of processing information and various statistical
techniques have been applied to get the desired result. Frequency table and pie chart for nominal
data; cross-tabulation analysis to identify the frequency of purchasing behavior; factor analysis
and regression analysis for scaling data have been used. Detailed information about analysis has
also been incorporated in this report.
The results of the survey will be analyzed using descriptive statistics. There are many basic
techniques for analyzing quantitative data. In this study, the researchers chose the software of
SPSS for Windows to analyze the exploratory factors. SPSS for Windows is probably the most
widely used computer software for analysis of quantitative data for social scientists.
After collecting the data, it is necessary to analyze them. For analysis, SPSS software will be
used. By using SPSS frequency distribution, cross-tabulation, factor analysis, and regression
analysis were conducted for desired results.
TIME SCHEDULING:
I expect to complete this research project by December 10, 2020. The following is an analysis of
assignment deadlines through the duration of the project.
CONCLUSION:
This research has conducted a conclusive study of eleven factors which previous researchers
have studied. The objective of the research has indicated factor analysis is applicable to find out
the most significant factors that might effect on customer satisfaction towards online shopping
in Dhaka city, Bangladesh.
The literature review chapter has described the critical determinants of customer satisfaction
towards online shopping. Samples are collected with a non-probability convenience sampling
technique by SurveyHeart mobile apps. Demographic analysis and cross-tabulation analysis have
been conducted to measure the respondents' demographic information.
The independent variables are website design, information quality, e-service quality, safety &
security, payment method, lower price and offers, and trust. Moreover, it can be concluded that
the payment method is the most relatively robust independent variable. The change of consumer
satisfaction can be explained by website design, information quality, e-service quality, safety &
security, payment method, lower price & Offers, and trust that have a positive influence on
consumer satisfaction from the context of the online shopping environment in Dhaka.
The result of this research provides implications for online sellers in planning managerial
strategies on how to improve their performance to increase the level of consumer satisfaction and
stand out in the highly competitive online market in Dhaka.
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SURVEY QUESTIONNAIRE
Hello Sir/Madam,
I am conducting a study entitled “Factors Influencing Customer Satisfaction towards Online
Shopping in Dhaka City, Bangladesh”. You are cordially invited to participate in this survey for
drawing conclusion of the study. This survey aims to understand the online shopper’s reaction
towards the factor influencing customer satisfaction on online shopping in Dhaka City,
Bangladesh by asking some questions. It’ll take approximately 10-12 minutes to complete the
questionnaire.
Your participation in this study is completely voluntary and strictly confidential. There is no
foreseeable risk associated with this study. If you feel uncomfortable answering any question,
you can withdraw from the survey at any point. But it is very important for us to learn your
opinion. Your opinion is highly expected and data from this research will be reported only in
aggregate.
Section: A
(a) Daraz (b) Evaly (c) Chaldal (d) Rokomari (e) PriyoShop (f) Othoba
(g) AjkerDeal (h)Pickaboo (i) Bagdoom (j) Khasfood (k) MeenaClick (l) Shawpno
(m) Bikroy.com (n) Sheba.xyz (O) Shohoz (p) Repto (q) Others
7. How often do you use the online e-commerce site for shopping?
8. Which type of products and services would you prefer to buy from online shopping?
Answer:………………………………………………………………………………………
………………………………………………………………………………………………….
Section: B
There are given some attributes which have impact on customer satisfaction towards online
shopping. Please give your opinion/ response only one number for each statement. With those
statement, show your level of agreement & disagreement where: 5 being “Strongly Agree”, 4
being “Agree”, 3 being “Neutral”, 2 being “Disagree” and 1 being “Strongly Disagree”.
1 2 3 4 5
Website Design
# Statement SD D N A S
A
3 Adaptive website design with user’s device does not bore the
customer.
Information Quality
# Statement
Product Quality
# Statement SD D N A S
A
Product Variety
# Statement SD D N A S
A
E-Service Quality
# Statement SD D N A S
A
# Statement SD D N A SA
Payment Method
# Statement SD D AA
N A SA
# Statement SD D AN A SA
# Statement SD D N A SA
33 I got the lowest price without compromising quality during online
shopping.
34 The delivery process does not compromise with the price and the
quality.
Delivery Service
# Statement SD D AN A SA
Trust
# Statement SD D N A SA
# Statement SD D N A SA