Table of Contents
Introduction
The main objective of this study is to examine factors that influence consumer’s online purchase intention in Kazakhstan in comparison with China.
The survey, that was conducted by a way of comparing factors approaching a case with Sino-Kazakh e-commerce patterns. Survey has held a research predominantly on online purchase motives and has served as a hence contribution to studies done in this field.
The focus of this dissertation is to analyse current situation of the using ChocoFamily as a platform for the research between two really different countries as are China and Kazakhstan.
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Kazakhstan is developing country and one of the biggest and the most successful e-market in Central Asia. However, there is a lack of extensive studies about related topic in English. The majority of studies are shallow and do not contain sufficient empirical data to support research findings. Therefore, this dissertation aims to address the gap in the literature by investigating Kazakh’s consumer behaviours patterns in the two different markets.
The dissertation will start with a brief overview of the Internet influence, which lead to online shopping and e-commerce developing till it internalization. This will provide a reader with valuable information about the context and will give an insight into the main characteristics of the e-markets in the world, generally.
Next, the problem formulation, development of research questions and hypothesis will be followed.
Afterwards, different theories and previous documents about e-commerce and the buyer purchase intention will be reviewed. Based on findings from relevant theories, a conceptual framework for the dissertation will be developed.
The theoretical part will be continued with a description of methodological standpoints and selection of appropriate methodological approach. After that, appropriate methods for conducting the research will be selected.
The analysis chapter will start with a presentation of the background characteristics; follow by the variation of the consumer buyer process according to the background characteristics to discover the motives and factors that might have an influence on consumer’s behaviours clients. The chapter will be continued with a comparison of the buyer online purchase intention for online shopping in two countries of the study, here we will analyse the most widespread theories, discover the main limitations of the research, and a deep analysis of the create data that will allow to answer the research question and the hypothesis.
At the end of thesis work the key findings will be summed up in the conclusion part giving some recommendations for the future to the interested parties.
Background Study
At present, computer technologies are actively developing and the borders of countries and markets are blurring, so special attention is focused on the concept of e-commerce. E-commerce is often identified with e-business, if more narrowly with virtual trade, so these concepts almost merge in meaning, but they are all different. The electronic business has several interpretations, depending on which side to look at:
- From the point of view of obtaining profit through the provision of electronic services, the sale of goods
- From the point of view of transactions with partners and consumers via electronic networks and information environment
If we take the second point of view into account, we can designate e-business as a system of economic activity based on modern information technologies. E-commerce is an e-business method. It is an extensive system of electronic business management, divided into several directions with different functions.
There are two main directions:
- Business – consumer (business-to-customer, В2С) – consumer sector
- Business-to-business (B2B) – inter-corporate sector. The e-commerce system is a special Internet technology that provides participants with new opportunities to expand their field of activity, namely online shopping.
To manufacturers, suppliers: to provide services and goods through the Internet, to organize communication with clients without personal meeting, to minimize ‘paper’ work, to carry out calculations by means of payment systems.
Clients: to receive the most complete information about the product and the manufacturer, to make orders remotely, personalize the terms of purchases and the method of calculation.
Internet commerce is a promising area, whose development is going very fast. Relevant in this area are online auctions and trading platforms. The organization of such a site is attractive in that it helps reduce costs and expand sales markets. By virtue of their transparency and accessibility, electronic trading platforms allow uniting many suppliers together, thereby increasing supply in the market. The future of e-commerce stands for ETP. (Statistical Agency in Almaty, 2017).
E-Commerce Market in Kazakhstan
Today, electronic commerce is one of the most rapidly developing trade formats, and this trend is observed even in countries where it has a long and fairly successful history. Some progress in intensifying this type of Internet operations is also demonstrated by Kazakhstan, although against the background of indicators of such countries those are advanced in terms of e-commerce, such as the United States and China, and even compared to Russia, our results so far are modest. Nevertheless, if three or four years ago, the majority of Kazakhstan’s people viewed the possibility of acquiring goods via the Internet as an outlandish and risky venture, today many people make purchases in online stores, and not only those who are “computer friendly” to you.
Kazakhstanis are increasingly mastering the Internet and digital technologies. For now, the population is 17 million, where over 14.03 million Kazakhstanis have access to the World Wide Web. At the same time, the country is actively developing e-commerce and all related market segments: logistics, marketing and IT companies, payment systems, etc. Now in Kazakhstan there are more than 3 thousand online stores. The volume of the Kazakhstan e-commerce market in 2017 amounted to 260 billion tenge. The share of e-commerce in the retail business of Kazakhstan was 2.6% in 2017. But in these promising figures there is one drawback: only 10% of active users of Kaznet make purchases online.
As you can see from the infographics below presented by electronic payment system PayOnline, online citizens of Kazakhstan usually buy electronic subscriptions / services and goods with a relatively low cost. The main share of Internet purchases falls on clothes, footwear and accessories (56.8%), food products (20.8%) are on the second place, and medicines (12%) are on the third place.
Judging by the picture, you can say that it is the price that is the reason for buying the goods online. In addition, Kazakhstanis tend to buy goods from abroad, even despite the long delivery, that is, buyers are willing to wait for savings.
Also, based on the data provided, it can be noted that Kazakhstanis are used to buying in domestic online stores – the share of sellers from Kazakhstan is already 63.8%. At the same time, the most common amount of the average check is kept within 5000-25000 tenge.
As for the main problems of users when buying goods and services online, here in the first place technical problems. One of the main problems of users in buying goods and services online is technical problems, or even the lack of convenient sites, platforms and applications.
This is because not all sites are adapted for mobile devices or have a mobile application with the ability to pay for goods. In fact, this problem exists in the CIS countries, but every year the number of unadapted small screens of sites is getting smaller. As result, we can assume that in the e-commerce of the .kz zone such a trend is also present.
On infographics it is shown that online buyers more and more make purchases through mobile devices. The growth is very fast – in just two years the share of mobile customers increased from 17 to 41%.
The big potential of the local market is distribution by types of payment methods, such as payment through smartphones, tablets, PCs and others. However, until now most of Kazakhstani people pay for purchases in cash for delivery. Although at the moment, in the country there are significant changes with the development of technology and increasing customer loyalty. Buyers increasingly began to make online purchases and pay for them through bank cards and electronic purses.
For 2016, the size of the e-commerce market in Kazakhstan amounted to 226.4 billion tenge (about 660 million US dollars). The increase year-on-year was 45.4%. The share of the e-commerce market from retail turnover is 10%. Separately, it is worth noting the fact that the main share of online sales falls on the southern capital, which accounts for almost 72% of the total e-commerce market in Kazakhstan. In Karaganda region – almost 12%, Astana – 7,5%. This indicates the level of e-commerce in different regions of the country, which proves its importance of studying, implementing and developing in the current time.
Baker Tilly Kazakhstan Advisory made a list of ranking participants in terms of turnover – only those companies with more than 2.5 million US dollars got into it. These turned out to be 25. As the initial data, the experts used open data, and cross-checking was carried out using Qazkom data (bank processing controls almost 60% of payment card transactions). The top ten players are expected to get (represented in descending order, the turnover in millions of US dollars is indicated in brackets) Airastana.com (75), Lamoda.kz (67.7), Avon.kz (43.5), Aviata.kz (40 ), Kaspi.kz (35), Wildberries.kz (34.2), Chocotravel.com (19.5), Otto Group Kazakhstan (Otto-trade.kz, Quelle-kz.ru, Bonprix.kz – 15 , 5), Sulpak.kz (15,2), Technodom.kz (13,7).
In general, the top ten generated 359.3 million US dollars (with an average weighted rate of 342.16 tenge per US dollar – 123 billion tenge), accounting for 76.5% of all revenues received by participants in the top 25 ranking (467.7 million US dollars) and 54.3% of the total e-commerce market in Kazakhstan. The last figure shows the strongest fragmentation of the market. Full list of participants and their indicators can be seen in the screenshot.
