E-Commerce And Customer Satisfaction (A Study Of jumia.com And olx.com)

Project and Seminar Material for Business Administration and Management BAM

E-Commerce And Customer Satisfaction (A Study Of jumia.com And olx.com)


Abstract


Electronic commerce also known as e-commerce has facilitated the emergence of new marketing strategies and business models in several industries in developing countries, Nigeria inclusive. This study examined E-commerce and Customer satisfaction. Users of and employees of Jumia.com and OLX.com served as the study population. The broad aim of the study was to examine the effect of E-commerce on customer satisfaction while other objectives were; to identify the factors responsible for consumer re-order purchase in Jumia and OLX.com and to determine causes of consumer loyalty to the online products of Jumia.com and OLX.com. Analysis of data is based on 120 copies of questionnaire administered to users of Jumia.com and OLX.com. A total of 50 copies were filled and returned from Jumia.com and 55 was filled and returned from OLX.com, making a total of 105 copies returned while 15 was withheld. The formulated hypotheses were tested using chi-square. Results of the study shows that there are factors responsible for customer re-order purchase in Jumia and OLX.com. The study therefore recommends that an online marketing organization should work at adopting policies that would reflect the factors that encourages customers to use online shops. For example, customers want to be sure of adequate security on their online transactions, they want to be sure that their personal identity and information is intact and that there is need for online shops to do a lot of advertisement based on the fact that many consumers still do not know the advantages of buying their goods online.


Table of Content


Pages

  • Title Page
  • Certification
  • Dedication
  • Acknowledgement
  • Abstract
  • Table of Content

Chapter One:

Introduction

  • 1.1 Background to the Study
  • 1.2 Statement of the Problem
  • 1.3 Aim and Objectives of Study
  • 1.4 Relevant Research Questions
  • 1.5 Relevant Research Hypotheses
  • 1.6 Significance of the Study
  • 1.7 Scope of the study
  • References

Chapter Two:

Literature Review

  • 2.1 Preamble
  • 2.2 Theoretical Framework of the study
  • 2.3 Empirical Review of Previous works in the area of study
  • References

Chapter Three:

Research Methodology

  • 3.1 Preamble
  • 3.2 Research Design
  • 3.3 Population of study
  • 3.4 Sampling Procedure and sample size
  • 3.5 Data Collection Instrument and validation
  • 3.6 Method of Data Analysis
  • 3.7 Limitation of the Methodology
  • References

Chapter Four:

Data Presentation And Analysis

  • 4.1 Preamble
  • 4.2 Analysis of respondents’ Bio-Data
  • 4.3 Analysis of Questionnaire items

Chapter Five:

Summary, Conclusion And Recommendation

  • 5.1 Summary
  • 5.2 Conclusion
  • 5.3 Recommendations
  • Bibliography
  • Appendix

Chapter One


Introduction

1.1 Background to the Study

Electronic commerce also known as e-commerce has facilitated the emergence of new marketing strategies and business models in several industries in developing countries, Nigeria inclusive. Significant changes are happening in product retailing with the introduction of online shopping, especially in terms of channel development and coordination, business scope redefinition, the development of fulfillment centre model and core processes, new ways of customer value creation, online partnerships and general customer satisfaction. In fact the role of online marketing itself has undergone some significant changes in the last few years in Nigeria (Irene 2004). The electronic commerce segment of the retail market has witnessed tremendous growth in terms of participation in the Nigerian economy in the past few years. According to Johnson, (2012) over 100 firms both local and foreign have shown greater interest in the sector alleged to worth over $50 billion annually. The industry has no doubt opened doors for the coming generation of young Nigerian entrepreneurs. Electronic commerce industry has no doubt increased the percentage of local content in products and services as well as increased utilization of local capacity.

Ayo, Adewoye and Oni (2011) asserted that the adoption of e-commerce in Nigerian business organizations has increased since the users of internet in Nigeria has grown from 0.1% in 2000 to 29.5% of its population in 2014 and still has the potential to grow higher. Tunde (2014) also noted that online retail market in Nigeria has significantly impacted the nation’s economy. In the same vein, Mary-Anne (2008) affirmed that e-commerce has offered a level playing ground for large businesses, as well as small and medium-scale enterprises (SMEs) to operate in the global market-place; and for regional businesses and communities to participate in social, economic and

cultural networks seamlessly across international boundaries. E-commerce refers to the use of communications technology particularly the internet to buy, sell and market goods and services to customers. The Internet has brought about a fundamental shift in national economies that are isolated from each other by barriers to cross-border trade and investment; isolated by distance, time zones and language; and isolated by national difference in government regulations, culture and business systems (Mohammad, 2004).

A customer is said to be satisfied when products and/or services meet the expectation of the customer. Trust which is a belief that one can rely upon a promise made by another (Pavlou, 2003), is an important factor in customer satisfaction. Stewart, Ellis, Johnson and Meyer (2009) define trust in electronic commerce as the subjective probability with which consumers believe that an online transaction with a web retailer will occur in a manner consistent with their expectations. Scholars have identified lack of trust as one of the main reasons for consumers’ cynicism towards electronic commerce. In the context of ecommerce, trust beliefs include the online consumers’ beliefs and expectancies about trust-related characteristics of the online seller (McKnight and Chervany,2002). The online consumers desire the online sellers to be willing and able to act in the consumers’ interests, to be honest in transactions (not divulging personal information to other vendors), and to be capable of delivering the ordered goods as agreed. According to Mahmood (2004), the trust factor has significant positive contributions to consumers’ online shopping behaviour. Jiang, Chen and Wang (2008) argued that consumer trust is a critical enabler of successful online retailing and knowledge is one important factor influencing the level of trust. The work of Gefen (2003)and Al-Dwairi, Chappel and Feindt (2009), among others presented an integrated trust model with the technology acceptance model for business-to-consumer (B2C) e-commerce.

It is very important that customers are content with the products and services provided by the particular internet shop as satisfied customers are likely to be loyal and make repeat purchases which will increase profitability of that particular e-commerce company. In this study, the concept of satisfaction will be referred in terms of outcome by comparing the prior expectation and the perceived performance for each antecedent factor in order to measure the attitude of the respondents for each of those factors. Many studies have been carried out to investigate the various degree of influence that e-commerce has on business development in Nigeria using different sectors of the economy but there seems a dearth of research that has specifically studied the relationship between e-commerce adoption and customer satisfaction using online shops. Based on this, this study takes a comparative analysis of E-commerce and customer satisfaction in Jumia and OLX.


1.2 Statement of the Problem

Despite the growth of internet users in Nigeria, much research work has not been done in accessing the Business to Customer (B2C) e-commerce relationship. Presently, many online shopping sites are thriving in Nigeria, servicing thousands of searchers every week. Some of them are:www.234 world., Xtaples.net, www.booksng.com, www.orderbay.com., Jumia.com and OLX.com. Some of these sites make the transaction process so easy that buyers forget about the open market. A site like OLX.com allows buyer to pay to a designated bank account after making online purchases. The items purchased are then shipped to the buyer at the speed of light. Jumia.com allows individual to receive money online and thereafter use it to pay for purchases made. Considering all these, it is expected that the number of people engaging in e-commerce activity will increase. E-commerce has however not been widely tapped into in Nigeria. Many Nigerians still treat its benefits with deep skepticism. They do not believe that e-commerce transactions could be successfully conducted. Customers do not have trust on the delivery system, the payment style and the facelessness of e-commerce activities. Therefore, there is need for online marketing organizations in Nigeria to understand what satisfies individual and organizational customers. Based on this, the study is a comparative analysis of e-commerce and customer satisfaction using Jumia.com and OLX.com, which are some of the leading online shops in Nigeria.


1.3 Aim and Objectives of the Study

The general aim of this study is to analyse e-commerce and customer satisfaction while the objectives are as follows;

  1. To identify the factors responsible for consumer re-order purchase in Jumia and OLX.com;
  2.  To determine causes of consumer loyalty to the online products of Jumia.com and OLX.com.

1.4 Relevant Research Questions

In comparatively analyzing e-commerce and service delivery the following questions are pertinent:

  1. What are the factors responsible for consumer re-order purchase in Jumia and OLX.com?
  2. What are the causes of consumer loyalty to the online products of Jumia and OLX.com?

1.5 Relevant Research Hypotheses

  • H0: There are no factors responsible for customer re-order purchase in Jumia and OLX.com
  • H1: There are factors responsible for customer re-order purchase in Jumia and OLX.com

1.6 Significance of the Study

This study became extremely important because of observed knowledge gap on e-commerce and its impact on customer satisfaction. This has made it apparently necessary to carry out this study. This study is therefore of significance to the following user groups:

Managers of marketing organizations in Nigeria would benefit from the study as recommendations would serve as necessary data for management strategic decision making.

Findings obtained from this study shall be of assistance to the Nigerian consumer public as recommendations would serve as a source of information for purchase decision making.

The online shops in Nigeria would also benefit from this study as findings would assist them in formulating policies to counter competition in the sector. The study would also be of benefit to entrepreneurs who wish to venture into online marketing in Nigeria.

This study would be of importance to academics who are involved in knowledge transfer as findings would serve as research evidence.


1.7 Scope of the Study

This study aims at comparatively analyzing e-commerce and customer satisfaction. The scope of the study is limited to the study of e-commerce strategies in Jumia.com and OLX.com.


Chapter Five


Summary of Findings, Conclusion and Recommendations

5.1 Summary of Findings

The study examined E-commerce and Customer satisfaction. Users and employees of Jumia.com and OLX.com served as the study population. The main objective of the study was to examinethe effect of E-commerce on customer satisfaction. Other objectives also included: to identify the factors responsible for consumer re-order purchase in Jumia and OLX.com and to determine causes of consumer loyalty to the online products of Jumia.com and OLX.com.

Findings of the study shows that the study has shown that 48% of the respondents agreed that they were concerned about security when purchasing products from Jumia.com while 24% disagreed; 60% of the respondents agreed that customers are concerned about online fraud when carrying out transactions with JUMIA.com while 40% disagreed; 80% of the respondents agreed that they were conscious of private information and security when carrying out transactions with JUMIA.com while 8% disagreed; 66% of the respondents agreed that they have trust for JUMIA.com that is why they make their purchases from JUMIA.com online shop while 20% disagreed; 20% of the respondents agreed that they do not switch from JUMIA.com to other online shops when making their online purchase while 60% disagreed; 22% of the respondents agreed that they do not give credit card information to JUMIA.com when making online purchase while 58% disagreed; 38% of the respondents agreed that they were attached to JUMIA.com because it makes their purchase easy at any-time and on any day while 44% disagreed and 68% of the respondents agreed that they were consistent with buying from JUMIA.com because of its convenience while 24% disagreed.

The study therefore has shown factors as security of transactions, customer trust for the online shop, availability of the online shop as factors that have influenced customer loyalty to the products and services of JUMIA.com.
The study shows that 63.6% of the respondents agreed that they were concerned about e-security when purchasing products from OLX.com while 20% disagreed; 30.9% of the respondents agreed that customers are concerned about online fraud when carrying out transactions with OLX.com while 54.5% disagreed; 40% of the respondents agreed that they were concerned of private information and security when carrying out transactions with OLX.com while 50.9% disagreed; 67.2% of the respondents agreed that they have trust for OLX.com that is why they make their purchases from OLX.com online shop while 23.7% disagreed; 27.3% agreed that they were prepared to pay more to purchase products from OLX.com because of the trust they have for the online shop while 63.7% disagreed; 45.4% of the respondents agreed that they were price sensitive and are aware of the price of products of OLX.com and are still willing to make their purchase from the shop while 43.7% disagreed; 29.1% of the respondents agreed that they do not switch from OLX.com to other online shops when making their online purchase while 72.7% disagreed; 54.5% of the respondents agreed that they do not give credit card information to OLX.com when making online purchase while 38.2% disagreed; 61.8% of the respondents agreed that they were attached to OLX.com because it makes their purchase easy at any-time and on any day while 38.2% disagreed and 63.7% of the respondents agreed that they were consistent with buying from OLX.com because of its convenience while 27.2% disagreed. The study therefore has shown factors as security of transactions, customer trust for the online shop, availability of the online shop as factors that have influenced customer loyalty to the products and services of OLX.com.


5.2 Conclusion

Nigeria is one of the fastest growing telecommunication country in Africa. The growth of a number of Internet users from year 2000 to 2010 is sporadic as it recorded 21,891.1% growth rate! According to the Internet World Start, there were 200,000 internet users in Nigeria in year 2000. This number is however less than 1% of the national population (precise 0.1%). In the year 2006 – the number has grown to 5,000,000. This figure doubled in 2008 with 10million people having access to the Internet. In 2009, the figure went above double as 23,982,000million people used Internet in Nigeria.

E-commerce is the use of the Internet for marketing, identification, payment and delivery of goods and services. Through the e-commerce technology, the Internet has revolutionized the mode of business transactions by providing consumers with the ability to bank, invest, purchase, distribute, communicate, explore, and research from virtually anywhere, anytime where there is Internet access. Most importantly, it has created electronic markets and provided opportunities for businesses to reach consumers in a very direct way. Also by virtue of the technology, it has enabled consumers’ immediate access to these electronic markets.


5.3 Recommendations

Based on the findings above the following recommendations are made:

  1. That an online marketing organization should work at adopting policies that would reflect the factors that encourages customers to use online shops. For example, customers want to be sure of adequate security on their online transactions, they want to be sure that their personal identity and information is intact.
  2. Again there is need for online shops to do a lot of advertisement based on the fact that many consumers still do not know the advantages of buying their goods online.

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