CHAPTER 2

REVIEW OF RELATED LITERATURE AND STUDIES

This chapter discusses about the e-commerce itself, the difference of

actual shops to e-commerce in terms of their convenience, the advantages

and disadvantages of online shopping and its effect to consumers or

customers, and Risk factors that may affect the trust and convenience of

consumers who are purchasing goods through online which can help and

will relate in our study, to make it study more credible and reliable.

RELATED LITERATURE

Local Literature

According to the article “What Makes E-commerce Click?” (2017) ,

eleven years ago RJ David made his bedroom turned into a boardroom while

he was setting up the most successful buying and selling sites in the

Philippines. He did state that he knew that the main hindrance of e-

commerce would be the trust of the consumer because Filipinos would not

be comfortable to the thought of paying someone through online and

waiting for their purchased product to arrive.

According to Manglinong, D. (2018) “Why Online Shopping is

Booming in the Philippines”, the reason why most of the people prefer

shopping online especially during the christmas season and special holidays

as early as December is because convenience, cheaper sales, and special

through the internet. It is also stated that online shopping has been growing

for the past years, as early as the year 2015 were revealed that 9 out 10

Filipinos would prefer online shopping than actual shopping since people

can save a lot due to certain online shops who offer special deals or

discounts for consumers rather than in an actual store.

When using e-commerce as a medium for shopping online people

must still consider factors that would cost them a lot of money and time

due to scam or fraud in an online world. According to the article by

Reformina, I. (2015) “DOJ Warns Public on Online Shopping Fraud”, the

Department of Justice (DOJ) warned the users of online shops regarding

the online fraud among online transactions in e-commerce. It has been

advised by the Department of Justice that in order to avoid unexpected

frauds or scam, people must protect their computers by installing security

software (anti-virus) to their laptops and by updating their anti-spyware. It

is also advised by the public to be aware of the online shops they are going

to purchase a product from, with that consumers must do a background

research regarding the owner of an online shop and suppliers, even the

feedback of the customers regarding the purchased product from their shop

and the owner of the shop.

According to the article by Montealegre, K.A. (2018) “E-commerce

Expected Growth to Drive More Brick-and-Mortar Business to the

Philippines”, states that more global stores would set foot on the Philippines
shores as a brick-and-mortar stores in more advanced due to its fast

growing e-commerce. Because of the fast growing of e-commerce here in

the Philippines a lot of foreign countries has been seeing the Philippines as

a great option in doing brick-and-mortar business since foreign brands are

positive that their stores would also be growing faster than expected.

Foreign Literature

According to the article Asean Up (2018) “Insights and Trends of E-

commerce”, the Philippines is a country of a large and rapidly growing

market for e-commerce. With the continuous growth and development of

digital technologies in our country, especially through internet connectivity

with the use of mobile phones this would be one of the main factors that

will make the Philippines, sooner or later, the major player of e-commerce

in Southeast Asia. E-commerce is not about the use of different kinds of

technologies but it is about how people use technology in doing business.

(Guan, 2008) Internet and e-commerce are closely wrapped towards

developed countries. But they can achieve tremendous benefits to

developing countries if it is applicable as an ideal business purpose. E-

commerce is a revolution in business practices (Ohidujjaman, et al. 2013)

According to the article Tutorials Point (n.d.) “E-commerce-

Advantages”, the advantages of e-commerce or online shops to consumers

who purchase goods through online shops is that consumers get to have

discounts for their products. Moreover, it also provides the consumer more

options to compare and select better and cheaper products to purchase

consumers in such ways. E-commerce also benefits society because it is

less hassle and less time consuming, consumers doesn’t have to travel to

physical stores and get stuck in heavy traffic in our country because e-

commerce will make it so much easier for people to order and get it

delivered right in front of your doorstep. In addition, e-commerce also helps

in reducing the original cost of the products with offered vouchers or

coupons from the online shopping platform.

E-commerce may have a lot of advantages to the consumer or

society. Thus, it also has a disadvantage towards the consumer considering

those as a risk in buying good online. According to Khurana, A. (2019)

“Disadvantages of E-commerce”, one disadvantage of e-commerce that

may affect the students is it delays good due to delay of shipping dates of

the seller. Second is it does not allow the consumer to experience the

product before purchasing it, this might be one of the risk factors that you

might experience because cannot test the quality of the product which

makes it as a waste of time and money. Third, anyone can set-up a store

online. If anyone can easily just set-up a store through online how would a

consumer know if the store they are purchasing from is genuine or

legitimate. Lastly, the security. When purchasing online people must

provide the details of the credit card that they would be using for the

transaction without being a hundred percent sure if their credit card is safe

and won’t be hacked.

Survey: More Filipinos Keen on Online Shopping”, “Three out of 59% of

the online population in the Philippines access the Internet to shop.”

Filipinos turn to the Internet to shop for the following categories: airline

tickets (38.4%), home appliances and electronic products (35.1%),

clothing and accessories (31%), hotels (29.9%) and computer software

(29.4%). However, sites of apps stores (50.1%), music downloads (42.6%)

and home appliances/electronic products (38.2%) draw the most web

traffic. In addition, according to this article it says that “most Filipinos are

satisfied with online shopping, in which they describe it as: easy (73.3%),

convenient (71.9%), or fun (64.4%), and expressing greater likelihood to

purchase in the next 6 months (79.2%). All these figures are improvements

from the results of the 2013 study (61.4%, 63%, 58.2%, and 68.2%),

respectively.”

According to (Fredriksson et. al, 2013) Engaging in E-commerce is

particularly demanding due to several concerns such as shipping and

delivery costs, security, data protection, culture and infrastructure these

concerns are essential to be considered as these may have an impact on

the acceptance of E-commerce. For an online business to be successful in

both local and global markets, it needs to gauge and deal with the said

concerns.

RELATED STUDIES
Local Studies

A work from Salunson and Ramon, (2007) Electronic Commerce consists

primarily of the distributing, buying, selling, marketing and servicing of

products or services over electronic systems such as the internet, electronic

devices and other computer networks.(p. 17)

According to Ong, H. (2013), based on the result of this study it states

there that e-commerce is divided into four major types. And these types

are pertained by the top corporations in Metro Manila, and is offering a lot

of advantages and benefits to the companies and its consumers with

limitations. The new kinds of e-commerce that the companies have been

acknowledged is depending on the needs and usage of the company and

the consumers. The top 100 corporations or online shops has its perceived

advantages and disadvantages to both consumer and owner and based on

the conducted research of the researchers,it is found that there are a lot of

advantages that owner and consumer has been experiencing than the

disadvantages of shopping online.

E-commerce may have affected consumers in ways. According to

Cagaoan, K.A., Buenaobra, M.J.V., Martin, A.T., & Paurillo, J. (2014), it

states there that e-commerce may have a lot of advantages in terms of

time-saving and convenient platform since, people don’t have to go to the

actual store and spend a lot of time in travelling and interacting with a lot

of people. But these ways have impacted on the consumers since it led the

consumers to become lazy and careless about their personal information.

development of its security features and increase the awareness about E-

commerce laws and privacy policies in order to build the trust of the

consumer and to make E-commerce as a risk-free and convenient kind of

medium in terms of purchasing online.

Foreign Studies

In a study by Khan, A.G. (2016), it is stated that the benefit that

consumer can get from e-commerce is its convenience. Due to a consumer

can just place a purchase anytime and anywhere without the hassle of

leaving one place just to go to its physical store. But, while e-commerce is

giving benefit to a lot of people, it also gives a challenge to traditional

businesses. Developing countries face many obstacles that affect the

successful implementation of e-commerce with the help of comparing with

developed country. When the internet cost will be low then the e-commerce

will flourish easily and will make many of the traditional business to run out

of their business.

In a study by Al Karim, R. (2013), it is stated that before a consumer

purchase online they consider various factors. According to consumers’

opinions, the most important motivating factor for online shopping is ‘time

saving’ and the other motivating factors are: ‘information availability’,

‘open 24/7’, ‘huge range of products or brands’, ‘reasonable prices’,

‘various offers for online products’, ‘easy ordering system’, ‘shopping fun’.
In contrast, while the respondents were asked about the inhibition factors

of online shopping, the findings were found that ‘online payment system’,

‘personal privacy or security issues’, ‘delaying of delivery’, ‘products mixing

up at delivery time and product return policies’ and ‘lack of personal

customer service’. It was also discovered that online shopping isn’t a

trustworthy platform and isn’t reliable to some consumers due to online

transactions or payment system and personal privacy. Moreover, the main

concern of consumers when purchasing online is online security due to

fraud, privacy and hacking. The main incommodity of any contraventions

in security or privacy is the loss of trust and reputation of an online shop

that may affect the consumer’s confidence that may cause a bad impact to

web based vendors.

In a study by Sarkar, R. & Dr. Das, S. (2017), it is stated that there

is a difference between an actual shops and e-commerce in terms of

consumer’s shopping style in India. Even though e-commerce is growing

rapidly across the world and the projection of further rise in this medium of

shopping, it is still proven based on research conducted in India that the

majority of the consumers in their country still prefers the actual shopping

of brick and mortar shops. In the different studies, it shows that most of

the online shoppers or users of e-commerce are mostly youngsters who are

fueling the rapid growth of e-commerce in India. The advent of online shops

or e-commerce has impacted so much to the offline stores or actual shops

of certain products since online shops are offering enormous discounts to

consumers that would make the actual shop suffer and it puts a lot of
pressure to the brick and mortar business. Moreover, the Indian real estate

sector is doubting the development of brick and mortar business. On

another note, even though online stores’ are rapidly growing, none of the

brick and mortar businesses have reached rock bottom yet.

According to Aldin, Brehmer & Johansson (2014), The web has

become a chance for the dealer to add value to products and supplies. The

phenomenal improvement and rising of the popularity of the internet and

the World Wide Web have become an essential to attract more consumers

and businesses to engage the benefits of Electronic Commerce.

According to Kartiwi (2006) the use of e-commerce in small medium-

sized enterprises (SMEs) has become an important topic in information

systems research. At present, there is a large number of well-documented

benefits derived from e-commerce for small-medium enterprises (SMEs)

both in theoretical and practical literature with the development of Internet,

e-commerce has become a common practice in foreign trade and

penetrates into every aspect of international trade. Xia (2006) stated that

e-commerce application in foreign trade enterprise are analyzed, the

potential application that e-commerce is superior to traditional trade is

expounded, active reactions are suggested be taken, the promotive

function of e-commerce application should be exerted by government, the

enhancement of e-commerce competence, the perfection of the service role

as intermediary platform, the study of joint effort of all parties for a

promising e-commerce application environment.