Adoption Of Online Travel Shopping in Saudi Arabia
The developments in the information technology and communications are beyond what anybody would have imagined five decades ago. The modern day society evolves at an extremely rapid pace and this pace is most often imposed by technologic advancements. The 1990s decade brought about the internet, creating a revolution that would change the face of the world for ever.
The internet is the number one source of information for anybody, from young children to university professors. The internet is not just an application, but it has become a way of life. People meet, socialize and set the basis for life long relationships within the virtual environment. They work online or they shop online.
The internet was initially present in the more economically developed western countries, but it has gradually managed to penetrate all corners of the globe, including Saudi Arabia.
Problem Statement
The question for this study is drawn from a curiosity of identifying the extent of the virtual environment in travel shopping in Saudi Arabia. The number of previous studies focusing on this specific question is extremely limited. At a personal level, the research commences at the basis of previous researches conducted on the specific features of Saudi Arabia.
In terms of the problem at hand, the data suggests a limited usage of online shopping in Saudi Arabia, and an even lower number of internet shoppers for traveling products and services. A question is being posed relative to the reasons behind their reticence to online shopping.
1.3. Research Objective
The objective of the study is that of identifying and understanding the reasons which determine the Saudi Arabian consumers to shop or not to shop online for travel products and services. It strives to identify if there are any elements which determine the shoppers to decide in favor or against travel e-shopping, the mechanisms behind these elements and their role in a decisive outcome. In other words, it strives to explain the tendency, or lack of tendency, of the Saudi Arabian consumers in purchasing their travel services online. This objective would be attained through gradual research of a large number of sources and through the usage of several tools and techniques of data processing.
1.4. Scope of the Study
The study was initially generated by a curiosity related to the development of the virtual community in countries outside of the United States. Saudi Arabia was selected due to its economic strength and its important position within the international market. As preliminary research was conducted, a question was identified in the attitudes of shoppers relative to the online environment. More specifically, do Saudi Arabians shop online for their travel services? Why do they or why do they not? What are the elements which impact their final decision?
Having posed these questions, the scope of the study contours in the identification of the answers. The answers would offer useful input for economic agents conducting business operations in Saudi Arabia as they would allow the marketing teams to better understand the customer and as such better serve his needs.
II. Literature Review
As it has been mentioned throughout the previous section, the specialized literature has placed a decreased emphasis on online shopping in Saudi Arabia, and even less emphasis on the specific aspect of travel shopping within the Saudi Arabian virtual environment. Still, some useful resources exist and they constitute a valuable starting point in the analysis.
(1) The World Factbook — Saudi Arabia (2010) — the set of articles is published on the official website of the Central Intelligence Agency, which updates its country studies each year. The website constitutes a valuable resource in introducing the reader and the researcher to Saudi Arabia, its brief history, its economy or its state of technologic development. One will for instance find that there are 471,217 internet hosts and 7.7 million internet users; the figures place the country on the 49th and 33rd positions in terms of internet hosts, internet users respectively.
(2) The Report: Saudi Arabia 2008 — published under the aegis of the Oxford Business Group, the book offers valuable insights into the modern day characteristics of the largest Arab country. It also contains a chapter on the retail sector, including online retail. It finds that an estimated 14.25 per cent of the entire population shops online.
(3) It would also be interesting to present the stand of the Saudi Arabian government in terms of technologic developments, the internet and electronic commerce. Such information was presented at the World Summit on the Information Technology in Geneva and was integrated in the report entitled Information and Telecommunication Technology in Saudi Arabia.
(4) Julian Taylor’s Selling on the Cyber-Souq (1999) — this source offers information on the introduction of the internet and that of the electronic commerce within the Arab community. It argues that the first developments were made in the United Arab Emirates, but that Saudi Arabia quickly followed. Taylor’s more relevant finding in the context of the current research is that Arab consumers are trusty of online shopping as long as the websites ensure credit card information and payment safety.
(5) Joshua Teitelbaum’s Dueling for Da’wa: State Vs. Society on the Saudi Internet (2002) explains the introduction of the internet in Saudi Arabia, country which is promoted as highly traditional and religious. While developments are still to be made, the author recognizes the advancements in terms of both technology as well as mentality in the acceptance and usage of the internet. Among other useful data, Teitelbaum offers statistical information on internet usage as well as other features of the internet users. For instance, most internet users in Saudi Arabia are women (an estimated two thirds). Saudi Arabia women live strict lives — they cannot drive, they do not work and they cannot leave the house without the permission or company of a man. In this context, the internet creates a new world for them. Unlike the general perception that internet usage in Saudi Arabia is primarily focused on politics, the number one reason for using the internet is in fact entertainment and online dating. In terms of electronic commerce, Teitelbaum argues that the poor technological developments are impeding the growth of the sector.
(6) In Lee’s Electronic Business: Concepts, Methodologies and Applications (2009) — Lee’s work expands over more than 2500 pages and represents a comprehensive look at the international, cross-sector implications of the advances made in electronic business making. In terms of Saudi Arabia, the work incorporates a representative study of the market, addressing primarily the trust of populations in the websites. It concludes that the consumers in the Arabian country are sensitive to marketing efforts incorporating traditional elements; for instance, websites containing photos of Arabs are more trustworthy than websites containing photos of westerners. The general behavior of a consumer can be predicted as follows: a prospective customer will log on to the vendor’s website and will decide whether to browse it any further or leave and go to a competitor’s website. If the user decides to remain, his trust in the vendor would increase as he browses through the web page. In other words, a piece of advice for vendors is to develop adequate interfaces which retain visitors.
(7) Sadiq M. Sait, Khalid M. Al-Tawi and Syed Ali Hussain’s study on E-Commerce in Saudi Arabia: Adoption and Perspectives (2004) also represents a valuable source. It bases its findings on two years of study and it concludes that the highly traditional and religious country is increasingly recognizing the advantages of the internet. As a consequence, it begins to adopt electronic commerce. In terms of the factors playing an important role in the decision to shop online, the three authors argue that these revolve around ease of use, trust, perceived advantages for the online buyer, safety of online operations, the buyers’ personal internet skills or the technical support on the website.
(8) AME Info’s article E-Commerce reaches new heights in Saudi Arabia offers insight into the growing numbers of electronic purchases not only within Saudi Arabia, but at a general Middle East level. The increase is pegged to the recent developments in technology and transaction safety, as well as to the growing numbers of electronic vendors. Nation wide, the editors observe an increased acceptance of electronic purchases.
(9) In Electronic Commerce in the Kingdom of Saudi Arabia, Mutlaq B. Al-Otaibi and Rasheed M. Al-Zahrani recognize the advancements which have been made in the direction of online shopping, but state that the adoption process remains slow. The main reason for the still slow rhythm of electronic commerce adoption is the continued existence of barriers, such as the lack of online complementary products and services, “financial fraud, malicious site misquoting as legitimate site, intellectual property threats, credit card information disclosures, personal information threats, sites hacking (content), applications hacking (software), client machines hacking (systems), and communications hacking” (Al-Otaibi and Al-Zahran). The authors continue by presenting the efforts which have been made for the elimination of these limitations, as well as propose future solutions.
(10) A great resource would be constituted by the Travel and Tourism in Saudi Arabia Euromonitor Report for 2009. Among other things, this report contains information on the most recent internet developments, or the number of tourism related sales made on the internet. The source is however uneasily available; it can be bought from the Euromonitor website at the high cost of 1,190 GBP (approximately $1,800).
(11) The Global Arab Network (2010) promotes an article emphasizing on the desires of the Saudi Arabian government to stimulate the tourism sector. The endeavors are part of a broader strategy to boost the country’s economy through more revenues, as well as by creating more employment opportunities. In the context of incremental acceptance of technology and online purchases, combined with sustained efforts to promote tourism, the future is expected to bring about an increased adoption of online shopping for travel products.
III. Research Model and Hypothesis
The hypothesis at the base of the research process revolves around the belief that few people have engaged in online travel shopping in Saudi Arabia and that this limitation is due to constraints such as lack of trust in electronic commerce, low awareness of the existence of the online travel shopping opportunities, lack of trust in the security and reliability of the vendors and their electronic payment systems, the real or perceived complexity in using the online applications or the real or perceived usefulness of the electronic commerce traveling opportunities.
In terms of the research model to be used, this is called the Technology Acceptance Model. This model is generally accepted as a useful means of approaching issues related to the people’s acceptability of specific technologies. Research models based on the acceptance of technology have evolved alongside with the technologies themselves. They represent pivotal components in the analysis of information systems and they have constituted focal points in the analyses conducted throughout the past two decades (Khosrow-Pour, 2006). In short, “the technology acceptance model proposes that perceived ease of use and perceived usefulness predict the acceptance of information technology. Since its inception, the model has been tested with various applications in tens of studies and has become a most widely applied model of user acceptance and usage” (Mahmood, 2005).
The technology acceptance model has the benefit of being flexible so that it can be adjusted to serve the specific needs of each research project. Within the current scenario, the model will be constructed on four distinct factors:
ease of using the online application awareness of the existence of online applications which allow for the purchase of travel products and services the trust prospective customers have in the online system, the vendors and the security of the payment, and finally the real or perceived usefulness of the online shopping system
IV. Research Method
4.1. Research Procedure
The research procedure commences at the objectives of the research process and with the identification of the questions to be answered. It continues with the presentation of the current findings within the specialized literature, to then move on to the identification of the data necessary in answering the initially posed questions.
The required data is then collected — after the collection process has been selected — and the information retrieved is processed. At the end of this process, the results would be clearly presented (Winstead).
4.2. Sources of Data
The necessary data would be collected through multiple channels, through both direct as well as indirect sources. The indirect sources include books, journal and magazine articles or internet articles. They have the benefit of presenting a complex situation from several standpoints, but the limitation of maybe being biased. These sources would however constitute only of a starting point in the analysis and the information retrieved would be verified.
The direct sources of information include open and direct communications with Saudi Arabian consumers and internet users. The geographic boundaries would be limited through communications in forums, chat houses or other online applications.
4.3. Data Collection Method
In terms of the data to be collected from secondary sources, the method refers to the very study of the books, journals, magazines and so on for the identification of the necessary data. In terms of the primary information to be retrieved, the method refers to the development of a survey integrating several questions referring to the attitudes of consumers towards online shopping, the internet habits of the individual consumers, their experiences with electronic commerce and so on.
4.4. Sample Size and Sampling Method
The sample would consist of 200 individuals. The questionnaire would be posted on several websites and it would invite individual Saudi Arabian consumers to answer it in a few minutes and offer valuable information that would support the development of the domestic e-commerce sector, and as such the entire economy. The technique to be used in the selection of the sample will be that of random sampling, which would not only ensure a relevance of the sample selected, but would also allow the researcher to benefit from the relevance of the results without dealing with the hurdle of mathematic complexities (Babbie, 2008).
4.5. Method of Data Analysis
The final analysis would be constructed on the data retrieved through both primary as well as secondary sources. It would compare the hypothesis and the four identified factors believed to impact the online purchase decision against the results of the survey. Based on the findings, a conclusion would be drawn.
V. Time-Frame for Study
The completion of the research project would require four different stages, as follows:
(1) At the first stage, the focal point would be represented by the identification of the research questions, as well as that of the hypotheses. This stage would be completed in an estimated month.
(2) During the second stage, the necessary data would be collected from secondary sources. In other words, the literature review would be conducted and edited. The stage would require an estimated two months.
(3) The third stage integrates the development and implementation of the questionnaire. At this stage, it is also necessary to collect the information and to process it. It is estimated that this stage spreads throughout the duration of three months.
(4) During the fourth stage, the results would be assessed and a conclusion would be formed. Additional research questions would be formulated. The entire project would be edited, and the estimated duration of this stage is of six weeks.
VI. Preliminary References List
The initially identified references include all those which have been previously mentioned, which play the role of starting points. Yet, relying on the experience of previous researches, it has to be noted that as a research project advances, it raises more questions than the initially identified ones. As a parenthesis, a good research project is in fact expected to raise additional questions for future research studies. Returning to the issues of the references, the progression implies the usage of additional sources. Yet, at this point, the preliminary references list consists of the following:
Al-Otaibi, M.B., Al-Zahrani, R.M., Electronic Commerce in the Kingdon of Saudi Arabia, King Saud University, http://faculty.ksu.edu.sa/DrRasheed/My%20Publications/Ecommerce_in_KSA.pdf last accessed on April 7, 2010
Anderson, D.R., Sweeney, D.J., Williams, T.A., 2009, Statistics for business and economics, Cengage Learning, ISBN 0324658354
Babbie, E.R., 2008, The basics of social research, 4th edition, Cengage Learning, ISBN 0495094684
Kalathil, S., Boas, T.C., 2003, Open networks, closed regimes: the impact of the internet on authoritarian rule, Carnegie Endowment, ISBN 0870031945
Kosrow-Pour, M., 2006, Emerging trends and challenges in information technology management, Vol. 1, Idea Group Inc., ISBN 1599040190
Lee, I., 2009, Electronic Business: Concepts, Methodologies, Tools and Applications, Volume 1, Idea Group Inc., ISBN 1605660566
Mahmood, M.A., 2005, Advanced topics in end user computing, Vol. 4, Edition 4, Idea Group Inc., ISBN 1591404746
Taylor, J., 1999, Selling on the Cyber-Souq, The Middle East, No. 291, Edition of June
Teitelbaum, J., 2002, Dueling for Da’wa: State Vs. Society on the Saudi Internet, The Middle East Journal, Vol. 56, No. 2
Sait, S.M., Al-Tawi, K., Hussain, S.A., 2004, E-Commerce in Saudi Arabia: Adoption and Perspectives, AJIS, Vol. 12, No. 1
Shoult, A., 2006, Doing business with Saudi Arabia, 3rd edition, GMB Publishing Ltd., ISBN 1905050062
Wimmer, M.A., 2005, Electronic government: 4th international conference, Birkhauser, ISBN 3540284664
Winstead, R.L., Outline of Research Procedure, Indiana University of Pennsylvania, http://www.nsm.iup.edu/rwinstea/resproc.shtm last accessed on April 7, 2010
2003, Information and telecommunication technology in Saudi Arabia, Ministry of Communications and Information Technology, http://www.itu.int/dms_pub/itu-s/md/03/wsispc3/c/S03-WSISPC3-C-0025!!MSW-E.doc last accessed on April 7, 2010
2004, Saudi Arabia A Country Study, Federal Research Division, Kessinger Publishing, ISBN 1419146211
2005, E-Commerce reaches new heights in Saudi Arabia, AME Info, http://www.ameinfo.com/61990.html last accessed on April 7, 2010
The Report: Saudi Arabia 2008, Oxford Business Group, ISBN 1902339002
2009, Travel and Tourism in Saudi Arabia, Euromonitor, http://www.euromonitor.com/Travel_And_Tourism_in_Saudi_Arabia last accessed on April 7, 2010
2010, March 31, Saudi Arabia to boost tourism contribution to 11% of the GDP, Global Arab Network, http://www.english.globalarabnetwork.com/201003315347/Travel/saudi-arabia-to-boost-tourism-contribution-to-11-of-the-gdp.html last accessed on April 7, 2010
2010, The World Factbook — Saudi Arabia, Central Intelligence Agency, https://www.cia.gov/library/publications/the-world-factbook/geos/sa.html last accessed on April 7, 2010
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