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54A STUDY ON PROFIT-MAKING STRATEGIES ADOPTED BY E-COMMERCE COMPANIES Dr. Manoj Kumar, Assistant Professor,
Guru Dronacharya Girls College, Mandi Adampur
Abstract:- The issue of internet shopping conduct is acquiring significance with the proceeded with advancement of online business. Online business organizations that mean to be effective in the online market over the long haul should consider the components of internet shopping conduct while making and executing their web based business system.
This paper is centered around the essential conduct of internet business from a viewpoint of the online client. The point of the paper is to assess the essential situation of web based business organizations that emphasis on online deals of hardware, in view of their essential conduct from the client's viewpoint. The principal objective is to recognize the current variables of internet shopping conduct in the business of online gadgets. The subsequent goal is to recognize the current monetary exhibition and monetary procedure of internet business organizations and their significance to key conduct in internet business. The third goal is to distinguish the potential contrasts in essential conduct of web based business SMEs and internet business huge organizations. The examination strategies utilized were:
circumstance investigation, benchmarking, quantitative exploration, chosen techniques for monetary examination. The chose techniques for factual enlistment were picked to confirm the exploration speculations. An exploration test of 89 internet business organizations selling on the web hardware was chosen for this examination. It was tracked down that most online business organizations apply a reasonable e-methodology dependent on the evaluated elements of web based shopping conduct that doesn't compare to the reformist development of web based business. Fifteen components were recognized that impact clients when picking and purchasing gadgets on the web. It was additionally tracked down that the essential conduct of web based business organizations is affected by elements of internet shopping conduct. At long last, it was tracked down that the current adjusted e- system of internet business organizations doesn't relate with moderate monetary procedure.
Keywords:- E-commerce; e-strategy; customer perspective; strategic behavior; online shopping behavior; electronics.
1. INTRODUCTION
The issue of web based shopping conduct in the online climate is acquiring significance dependent on numerous examinations. With the improvement of web based business, the shopping propensities for online clients on the Internet are additionally changing and advancing. Organizations in web based business that need to be fruitful over the long haul should adjust their internet business methodology to the web based shopping propensities for their clients.
The reason for fruitful internet business technique creation and execution is the thought of current elements of web based shopping conduct recognized by past investigations.
One of the vital components of a fruitful internet business technique is the execution of the requirements and current online propensities for potential and existing clients. Point out the significance of giving the business data and keeping up business connections as a piece of web
based business. The B2C model, where
correspondence happens
straightforwardly between the organization and the end client, is inescapable because of a quick reaction and a wide scope of items. Retail deals in online business represent 11.5% of the all out retail deals (APEK 2019).
This offer is rising each year. This presents openings for little homegrown organizations just as for global organizations. Numerous little organizations began working an e-shop with the vision of saving promoting costs, on account of which they could make items less expensive and accordingly have the option to rival others. As per the examination individuals shop online for the most part at low costs, just as for solace and accommodation. It very well may be said that the Czech Republic has found different nations with respect to the utilization of the Internet, and specifically web based shopping.
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55 E-commerce brings the traderscertain positive and negative points.
According to there are many obvious benefits that e-commerce brings, such as fast transactions with suppliers, cheaper advertising, lower communication costs, and new customer service options. These benefits lead to improved economic efficiency. Market forces are reflected in marketing and promotion. The negative relationship between e-shops and customers is then caused mainly by mistrust.
Lack of trust is also a common reason why people hesitate to make an online purchase or not. Shoppers often question the security, return policies, or quality of information provided on the Internet. According to the reluctance to shop online may also be associated with an individual’s personality, as buyers show different levels of trust in e- commerce. Some previous theoretical research has suggested that the level of trust was culture-related. Modern research partially confirms this theory.
Evaluation helps to companies analyze customer preferences. Recommendations are influenced by past shopping behavior and customer demographics.
Based on this information, future online shopping behavior can be predicted. Today, when social networks are a huge phenomenon, e-commerce has the potential to change into a customer- oriented environment instead of a product-oriented one. The next step, closely related to the previous communication, is to attract attention, which should lead to brand loyalty. The last step is collaboration took a closer look at online shopping security. They said customers felt limited in protecting their privacy due to a lack of control, influence, and choice about how businesses use the information.
According to them, companies should design systems that guarantee privacy, with an adequate control and consumer choice. The paper focuses on the identification of current factors of online shopping behavior in the industry of online white electronics sales in the Czech e-commerce environment. The term
‘white electronics’ refers to home electrical appliances for the kitchen and bathroom (e.g., large appliances, such as washing
machines, refrigerators, refrigerators, freezers, dishwashers, stoves, clothes dryers, hoods, ovens, microwave oven, hobs; and small appliances such as coffee makers, kitchen robots, whisks, mixers, juicers, kettles, slicers, frying pans, irons, grills, etc.).
This technique is also often referred to as white goods. The reason for limiting research to the electronics industry is its high share in total turnover in retail sales in e-commerce (more than 7%, APEK 2019; CSO 2019). In terms of turnover, however, the first place is occupied by the sale of electronics and white goods, including computers, laptops, mobile phones, and accessories (APEK 2019).
Regular clients of white gadgets are individuals matured 30–59; people are similarly addressed. The most trait of this gathering is the way that the individuals have extremely expansive interests. Retail deals in internet business in the Czech Republic is one of the quickest developing enterprises in retail deals as the entirety.
Right now, online retail represents 13% of complete retail deals in the Czech Republic. With the improvement of online retail since 2000, we can see a consistent expansion in the fame of internet shopping in the Czech Republic. As indicated by APEK (2019), in 2001 the yearly turnover in online retail was CZK 1 billion and in 2019 this yearly turnover was CZK 155 billion.
The zone of online retail is developing yearly by a normal of 15%
every year. The primary justification this consistent development is the earnestness, trust, and security of Czech internet business and changing propensities for clients. These days (APEK 2019; CSO 2019), more than 95% of clients have an involvement in web based purchasing and 56% of them purchase online routinely. In web based shopping in the Czech Republic, garments and frill industry (17%) overwhelms along with house and nursery (11%) and hardware (7%) businesses.
The quickest developing on the web business in the CR is food (by 10%
each year) the business of online gadgets deals addresses a homogeneous market that offers arrangement of chances for online clients and retailers, the proposal
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56 of deals and after-deals benefits that someconventional physical stores don't offer. In view of the ID of variables of web based shopping conduct in the business of online electronic deals, the essential conduct of internet business organizations is assessed.
It is also evaluated whether the identified e-commerce strategy corresponds to the economic performance and financial strategy of e-commerce businesses. However, no previous research has focused on identifying a strategy and strategic behavior based on considerations of factors of online shopping behavior from the customer’s perspective. Research deals in isolation with the issue of e-strategy or factors of online shopping behavior, no research considers the synergy of these monitored areas.
This paper therefore aims to fill this research gap based on the consideration of factors of online shopping behavior from the perspective of e-commerce businesses. Therefore, the main purpose of the paper is to provide a comprehensive view of the issues of online shopping behavior. The main research question of the paper is: do e-commerce businesses consider all factors of online shopping behavior when creating and implementing e-commerce strategy and what is their strategic behavior and e- commerce strategy based on these identified factors?
2. LITERATURE REVIEW
2.1. Factors of Online Shopping Behavior
Online shopping behavior is directly influenced by the payment methods offered. When considering payment trends, the Czech Republic faces a major obstacle in modernizing the payment environment. The Czech market is characterized by a high level of cash use.
Cash on delivery is the most popular method of payment in the Czech Republic;
it is used for 45% of transactions.
However, this causes problems for sellers who face late payment, which is only accepted upon delivery and creates additional costs.
Online clients are progressively intrigued by different elements, like security, trust, protection and the sky is
the limit from there. Later on, internet shopping conduct will be influenced by new factors: cost will at this point don't be the main factor, the significance of extra administrations, quality data about the reach, stockpiling of products, and the technique for moving merchandise to the client will increment. Numerous creators concurred that trust is significantly more significant than the cost of an item.
Expressed that trust is the assumption that others will act in a solid, moral, proper way and maintain their responsibilities.
The assertion is likewise affirmed by who found in their exploration the most concerning issues that clients face when shopping on the web are an absence of trust, an assurance, the need to pay via card, delays in conveyance, and the danger of outsiders hacking into individual or monetary information. A business can build client trust from various perspectives. For instance, the validity and dependability of sites and the nature of the data gave are significant uncovered four essential zones that straightforwardly impact achievement in online business: consumer loyalty, which incorporates the client trust, individual information security, buy security, and simple admittance to data.
Businesses have already begun to realize that changing online shopping behavior is an inevitable trend and must respond to it by changing marketing strategies (Kumar and Dange 2012). If marketers can identify the factors that affect online customers, as well as the relationships between these factors, they can create new effective marketing strategies and gain new customers (Singh and Sailo 2013). State that online shopping behavior is also related to the customer’s experience with online shopping.
2.2. Strategy and Strategic Behavior in E-Commerce
E-commerce strategy can be defined as the direction and framework of a company adopting e-commerce for long-term business management to increase competitive advantage in a modern environment. The creation and implementation of strategy is essential for operational planning, increases efficiency,
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57 and brings long-term benefits. Eachcompany should determine its e- commerce strategy based on consideration of its portfolio and business environment, specifically concepts, principles, and detailed plans for its development.
It is likewise imperative to characterize techniques for assessing system execution. The determination or making of a system ought to think about online client conduct, client maintenance and developing client esteem further highlight the contrast among methodology and plan of action. The procedure incorporates a dream, setting itself in a serious climate and communicating a thought of the course the organization should take later on. The plan of action would thus be able to be perceived as a connection between arranging (system) and operational execution (measure the executives).
Reviewed that conventional organizations that have as of late entered the online market and become internet business organizations should likewise carry out internet business procedures.
This is a key to effective web based exchanging. The online business procedure likewise incorporates a bringing together arrangement that improves hierarchical proficiency.
Numerous customary organizations neglect to execute this new system and fruitlessly change their standard undertakings. Most examinations center around arising internet business organizations and its essential conduct and overlook customary online business organizations and their requirements with regards to their financial presentation.
The importance of the relevance of the financial strategy with the e- commerce strategy is also emphasized.
Managers should be able to identify different types of their customers and choose a strategy of behavior towards the individual groups to strengthen their loyalty. This is especially important in more competitive sectors state it is important to identify key factors for a successful e-commerce influencing the customer when purchasing. Afterwards, it is possible to predict future demand with greater accuracy.
Safa and Ismail (2013) stated that the advantages of switching to e- commerce are time savings, lower prices, and fewer mistakes for buyers and sellers.
3. MATERIALS AND METHODS
3.1. Main and Secondary Objectives of the Research
As mentioned in Introduction, the main objective of the paper is to evaluate the strategic position of e-commerce businesses that focus on the online sale of electronics, based on their strategic behavior from the customer’s perspective.
The secondary objectives are following:- 1. The first secondary objective is to
identify and evaluate the factors that affect customers when online shopping for white electronics in
the Czech e-commerce
environment.
2. The second secondary objective is to identify the current economic performance and financial strategy of e-commerce businesses and the relevance to their strategic behavior.
3. The third secondary objective is to identify the possible differences in strategic behavior of e-commerce SMEs and e-commerce large businesses.
3.2. Research Methods
The following research methods are used to fulfill main and secondary objectives of the research (inspired by the following Svatošová 2018, 2019b; Pilík 2011, 2015;
Kumar and Dange 2012; Kim et al.
2018):-
1. Situational analysis—an important element of strategic planning and identifying the current situation of businesses. It will be used to identify, analyze and evaluate relevant factors of online shopping behavior related to individual e- commerce businesses and current situation of businesses. Situation analysis supports the qualitative research based on identification and qualitative data analysis and supports the fulfilling the first secondary objective.
2. Benchmarking—a tool of strategic management. It will be used to compare a selected group of e-
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58 commerce businesses. Thismethod will determine the position of e-commerce businesses and their characteristics. Finally, it will define the possibilities of development of individual e- commerce businesses. This is a supportive method for complementing the research results and for fulfilling the third secondary objective based on the situational analysis, financial analysis, and qualitative research to find out the possible differences between e-commerce SMEs and e- commerce large businesses.
3. Quantitative research—a method by which the researched phenomenon is converted to numerical characters. This facilitates further data processing, comparison, evaluation, and subsequent verification of hypotheses. Within the quantitative research, the method of qualitative data analysis is used, based on which the strategic behavior of e-commerce businesses is evaluated, on the selected scoring scale 0–5. It is a main research method for fulfilling all the main and secondary objectives and is described in more detail in Results and Discussion.
4. Financial analysis—to evaluate the strategic position of e-commerce businesses, it is necessary to evaluate their financial stability and financial strategy, which should correspond to the main e- commerce strategy. Methods of profitability, activity, indebtedness, and liquidity are used to evaluate the financial position and financial strategy.
Financial analysis supports the comprehensive current situation of e-commerce businesses based on situational analysis and qualitative research. Financial analysis supports the fulfilling the second secondary objective.
3.3. Main and Secondary Hypotheses of the Research
To fulfill the main and secondary goals of the research, the following main research
hypotheses are established, based on the results of a literature review:-
1. Main research Hypothesis 1 (MH1): Most of the selected e- commerce businesses use a progressive strategy related to the progressive growth of e-commerce market, based on their strategic behavior from a customer perspective.
2. Main research Hypothesis 2 (MH2): The strategic behavior of e- commerce businesses is influenced by factors of online shopping behavior.
• Hypothesis 1 (H1). There is no relationship between the quality of factors of online shopping behavior and the economic performance of businesses primarily oriented on e-commerce (using multiple regression analysis).
• Hypothesis 2 (H2). Strategic position of e-commerce businesses is not influenced by the quality of factors of online shopping behavior (using the Kruskal–Wallis test).
• Hypothesis 3 (H3). All factors of online shopping behavior are evaluated as equally important (using the Friedman test).
• Hypothesis 4 (H4). Type of financial strategy in e-commerce does not correspond to the strategic position of e-commerce businesses, respectively type of strategy in e-commerce (using the Kruskal–Wallis test).
• Hypothesis 5 (H5). Factors of online shopping behavior are not influenced by the size of e- commerce businesses (using the Kruskal–Wallis test).
3.4. Subject of the Research and Research Sample
The subject of the research is based on e- commerce businesses focused on the online sale of electronics, so-called ‘white goods’. Electronics is one of the best- selling categories on the Internet. The reason for choosing this sales industry is the fact that this range is linked to more accompanying services, which are not used so much in other categories. This includes, for example, extended warranty, delivery of goods, and connection of
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59 goods, installation, or the possibility ofpurchase in installments.
For certain kinds of items, the benefit is additionally the capacity to see the merchandise in the store or give it a shot. The pre-shopping stage—i.e., the exchange determination stage—is longer here for a few reasons. We are searching for a store that is dependable, offers a decent cost, and shopping through it is protected. In the shopping stage, clients value a very much organized site, the chance of looking at more items, ideal data about a particular item and its photographs, or even surveys of different customers.
For large appliances, emphasis is also placed on the issue of transport and delivery of goods. After-sales service is also important for the given category, specifically warranty and complaint procedure, post-warranty service. We use some appliances from the category of white goods daily (refrigerator, oven, microwave oven) and in the event of their failure, we require a fast and professional approach to trade.
4. RESULTS AND DISCUSSION
4.1. Summary and Findings of the Research
Based on the literature review the identified factors of online shopping behavior in the industry of online sales of electronics, which are then the subject of the research, are the following:-
1. Reviews of e-shops;
2. Complaints;
3. Certificates and security;
4. Advertising and communication;
5. Product price;
6. Website;
7. Organizational factors.
These components are assessed on the scale 0–5 utilizing the subjective information investigation for the chose gathering of internet business organizations. The chose gathering of 89 internet business organizations were partitioned by their size, which got from the European Commission Regulation no.
800/2008, which is as per the following:
miniature (up to 10 workers, yearly turnover up to EUR 2 mil., little (up to 50 representatives, yearly turnover up to EUR 10 mil.), medium (up to 250
workers, yearly turnover up to EUR 50 mil.).
In outline, in the exploration, there are 5 miniature organizations, 36 private ventures, 43 medium organizations, and 5 huge organizations. In the Appendix A, the normal mean of assessed elements of internet shopping conduct isolated by the size of internet business organizations is introduced, see outcomes show the bigger internet business is, the higher the nature of distinguished elements is assessed.
This assertion is upheld by the optional Hypothesis H5 confirmation (subtleties see underneath), it is affirmed that there is a connection between the quality variables distinguishing proof and the size of internet business organizations.
On average, based on qualitative data analysis, large businesses are scored higher than the other groups of e- commerce businesses. Micro businesses are scored as the worst group. Based on these results, it can be concluded that the larger the business is, the better scoring of factors of online shopping behavior is reached. Similar results are reached in previous studies focused on SMEs in other industries.
4.2. Hypothesis Verification
Hypothesis testing is performed at the significance level of α = 0.05. The rejection or non-rejection of the verified hypothesis is decided by comparing the p-value, which is the minimum significance level for which the null hypothesis can be rejected and the significance level α. The Shapiro–Wilk test confirmed that the selection did not come from a normal probability distribution at the significance level of α = 0.05, since p ≤ α (based on software Statistica results).
Along these lines, the accompanying non-parametric tests are chosen for speculation testing: various relapse investigation, the Kruskal–Wallis test, and the Friedman test. The accompanying data sums up the method for the primary and optional theories confirmation. The confirmation, all things considered (H1–H5) is performed at the importance level α = 0.05, i.e., the base importance level for which the invalid theory can be dismissed, in light of the fact that p ≤ α.
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60 5. CONCLUSIONSElements of web based shopping conduct have a place with the critical components of fruitful carrying out web based business procedure. This examination affirmed the essential conduct of web based business organizations is impacted by components of web based shopping conduct. This implies internet business organizations in the business of online deals of gadgets consider the components of web based shopping conduct while carrying out web based business system.
Elements of web based shopping conduct are considered as significant;
notwithstanding, these components are not considered as similarly significant.
Different outcomes affirmed the connection between the size of internet business organizations and nature of variables of web based shopping conduct, i.e., the bigger the business is, the higher the nature of applied components of web based shopping conduct are given. A connection between the monetary presentation of web based business organizations and nature of components of web based shopping conduct was not affirmed, i.e., nature of elements of web based shopping conduct are not by any means the only component of positive financial outcomes. It was not affirmed that online business organizations utilize a reformist procedure that ought to compare to the consistently reformist development of internet business.
The progressive strategy is used only among 8.98% of e-commerce businesses. In the industry of online sales of electronics, the balanced strategy (51.69%) dominates. However, this e- commerce strategy does not correspond to the conservative strategy (42.69%) that dominates among the selected e- commerce businesses. There is a discrepancy between the stable growth of e-commerce and the applied e-commerce strategy or financial strategy and strategic behavior of e-commerce businesses.
The possible explanation lies in no coherent strategic approach of e- commerce business when implementing e-commerce strategy. Even though the main and secondary goals of this paper are met with the help of hypothesis verification, several limitations have to be pointed out. The research sample is
limited to e-commerce businesses in the industry of online sales of electronics.
Therefore, other research should be focused on the other fields of e-commerce to confirm or contest this statement. The paper employed its own methodology in qualitative data analysis when evaluating the quality of factors of online shopping behavior.
Other research activities should be focused on the other methods of evaluation and compare them with the methodology used in this paper. Finally, this paper focuses on strategic behavior of e-commerce businesses from the customers’ perspective. Other research will focus on this issue from the businesses’ perspective. The main theoretical and empirical benefits of this paper are: identification of the current factors of online shopping behavior in the industry of online sales of electronics, the implemented methodology of their implementation, and identification of relationship between strategic behavior of e-commerce businesses and quality of factors of online shopping behavior.
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