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The Limitations Of E Commerce In Developing Countries Information Technology Essay

in partial fulfillment of the requirements for the Degree of

Master of Technology

Information Technology

Eastern Mediterranean University

January 2013

Gazimağusa, Northern Cyprus

Approval of the graduate committee of School of Computing and Technology.

Assoc. Prof. Dr. Mustafa İlkan Director, School of Computing and Technology

We certify that we have read this term project and that in our opinion it is fully adequate in scope and quality as a project for the degree of Master of Technology in Information Technology.

Assoc. Prof. Dr. Mustafa İlkan

Supervisor

Examining Committee

1. Assoc. Prof. Dr. Mustafa İlkan

2. Asst. Prof. Dr. Alper Doğanalp

3. Asst. Prof. Dr. Ersun İşçioğlu

ABSTRACT

The adoption of e-commerce has proven to be a significant player in the economy of most developed and some developing countries today. This ranges from business to business and the commonly implemented business to customer e-commerce, such as the popularly known e-commerce shopping sites like eBay, Gittigidiyor, Amazon, O-basket and many more. However, some issues have been coming up regarding the significance of e-commerce in developing countries. This study aims to be informative, choosing Northern Cyprus as a case study of a developing country and briefly going through the adoption level, benefits and limitations of e-commerce. Furthermore, some countries are already benefitting from this information communication technology (ICT) product. This study will also look into problems encountered during the adoption process of e-commerce. Prior research carried out by researchers in this field shows that there are six main limitations of e-commerce in developing countries: security and trust, internet experience, enjoyment, language, legal issues and technology acceptance (Abbad, Abbad & Saleh, 2011). The technical and non-technical limitations will also be analyzed to discover the main barrier to adoption of e-commerce in Northern Cyprus. For data, a questionnaire approach will be adopted in this research study to get the most appropriate information for identifying the main limitations of e-commerce. The questionnaire will be administered across both e-commerce users and non-users to obtain a valid data. This is because this research aims to find out the barriers non-users of e-commerce are facing (i.e. why they are not using this awesome benefit of Information Communication Technology), while considering the challenges e-commerce clients already using its services are facing.

DEDICATION

I dedicate this paper to my friends and most especially my family who offered me unconditional love and support throughout the course of this project and this program in general.

ACKNOWLEDGMENT

I would like to thank all faculty members and especially my project supervisor Assoc. Prof. Dr. Mustafa İlkan for his support and supervision throughout my studies in the department and specifically in the preparation of this project report.

TABLE OF CONTENTS

LIST OF TABLES

Chapter 1

INTRODUCTION

Electronic Commerce commonly known as e-commerce is such an awesome, innovative and highly beneficial derivative of both the internet, information and communication technology (ICT).

Internet world statistics reviews how the number of internet users increases exponentially in both developed and developing countries, from Africa to America to Asia to Europe to the Middle East and to Oceania which has some percentage increase of subscribers on a yearly basis. This includes the introduction of the research in motion (Blackberry) services which has taken over a percentage of mobile communication globally. E-commerce is one of the virtually limitless applications of ICT in business. Mind you, ICT can be applied in various fields including public administration, business, education, health, agriculture, science and employment. This technology comes in different forms which includes e-learning, e-government, e-business, e-health, e-agriculture, e-science, and much more.

However, this study mostly covers e-commerce and the general limitations in the adoption of these technologies. Further, e-commerce improves the trade efficiency of the global world and is also capable of incorporating developing countries to have an effect in the global economy through information and communication technologies (ICT) (UNCTAD 1999). Consequently, developing countries have started adopting e-commerce which has proven to be significant in the economic growth in developed countries (Chowdhury 2003).

Most of the information and communication technologies which includes e-commerce, online banking and many more were all adopted and developed first in the western countries which has a different environment and background in comparison with the developing countries. In addition, it is left to the adopters of this technology on how successful it will be; this depends on the way the use it. Therefore, the level of benefits obtained from most information and communication technologies depends on the technology itself and the adopters (Unhelkar 2003). Although the benefits and significance of e-commerce and most information and communication technologies has been recognized by organizations and businesses in developed countries. However, there is still a level of doubt in the importance of e-commerce and application for some developing countries (Odedra-Straub 2003; Raman and Yap 1996). In this technology dependent era, understanding the importance of ICT and advantages in adopting these technologies is becoming significant to improve success rates. E-commerce provides a medium for developing countries to trade and do business with developed countries more effectively and vice versa.

This study covers the limitations and barriers of e-commerce by considering the adoption of e-commerce in developing countries using Northern Cyprus as a case study. Furthermore, the aim of this study is to dig into the status of e-commerce acceptance in Northern Cyprus, the reasons for adoption, some benefits experienced, negative issues and the problems encountered. For this purpose, a compound research of multiple case studies and a survey of various organizations in Northern Cyprus are carried out.

Chapter 2

Literature Review

2.1 The Internet Usage and Communication in Northern Cyprus (NC)

According to the survey carried out by the United Nations in the Turkish Cypriot community, the conclusion was that 51 % of the surveyed individuals living in the Turkish Cypriot community have computers while 39% have internet access. Further, the major reasons for not having internet access was that they didn't feel need to do so (UNDP, 2007, p. 5). The survey also shows that the Turkish Cypriot’s citizen’s internet usage is much more than that of the companies in the Turkish Cypriot community; this also applies to the rate of computer ownership and usage. Therefore, the internet penetration by the citizens is close to the EU average; despite relatively high prices and slow connection speeds.

By 2009, Northern Cyprus has made drastic movements in telecommunications development with the introduction of Asymmetric Digital Subscriber Line (ADSL) by the Telecommunications Department of the Northern Cyprus and broadband internet. Further, mobile phone internet penetration was about 68% as of 2005 (UNDP, 2007, p. 37). Also, the third generation (3G) mobile technology was made available through the two major mobile phone service providers, KKTCell (Turkcell) and Vodafone (Telsim). Nowadays, there are several relatively high quality, high speed internet service providers in Northern Cyprus which provides fast uninterrupted services with wireless, adsl and hotspot connection possibilities. Some of these companies are Nethouse Networks, Multimax Communications, Sunny Cyprus Broadband Internet, Extend Broadband, Northern Cyprus Broadband, Rflex, do provide wireless connections and Superonline, LedraNet, Comtech, Mahir and Analiz Computer are internet service providers that use dial up as their means for connection. Internet commerce is still springing up and gaining popularity in Northern Cyprus. Various enterprises in Northern Cyprus already use some form of e-commerce; to make and accept orders via the internet. Also, research carried out by e-commerce specialist’s points out that individuals do order products over the internet; although these products are mainly textbooks, journal publications, magazines and some other e-learning material in Northern Cyprus.

Chapter 3

Taxonomy of E-commerce

There are various definitions of electronic commerce or internet commerce; there are different understanding and opinions about the topic. Electronic commerce can be defined as the buying and selling of products or services via electronic systems, not just the internet but also other computer networks. Electronic commerce can also be defined as the paperless exchange of business information using electronic means such as electronic funds transfer, e-mail, fax transmissions, and electronic data interchange (EDI). In comparison with the traditional commerce which promotes buying and selling of goods and services done physically (face to face), electronic commerce promotes the buying and selling of goods and services over the internet or some other network, and uses the World Wide Web as a means for shopping.

Some classifications of e-commerce models are: business-to-business (B2B), business-to-consumer (B2C), business-to-government (B2G), consumer-to-business (C2B), consumer-to-consumer (C2C), and mobile commerce (m-commerce) (Ayaz , 2010) , (DigitSmith, 2011).

3.1. Business to Business (B2B)

B2B is widely known as Business to Business. It is a term used to describe transactions between businesses; these transactions could be between a wholesaler and a retailer or manufacturer and wholesaler. Very good examples of companies that utilize this sort of transaction are HP, IBM and Cisco.

3.2 Business to Consumer (B2C)

Business to Consumer is simply referred to as B2C. It is a term used to describe transactions between companies and consumers; this involves customers gathering information; purchasing physical goods, or information goods. The most common instance of this model of e-commerce is for a business to sell its products through a website. The website consists of a catalogue, an electronic shopping cart, and a payment system.B2C reduces search costs by increasing consumers search range to information and allows consumers to find the most suitable price for a product or service. Very good examples of companies that utilize this sort of transaction are Amazon.com, Ebay.com, and basketim.com.

3.3 Business to Government (B2G)

Business to Government e-commerce or B2G is a term used to describe transactions between businesses and the public sector. Here, the internet is used for public procurement, licensing processes, and other government-related operations.

3.4 Consumer to Business (C2B)

Consumer to Business is simply referred to as C2B. It is a term used to describe transactions between a customer and a business. It occurs when a consumer is selling a product or service to a business. A good example will be between a freelancer and a business.

3.5 Consumer to Consumer (C2C)

Consumer to Consumer e-commerce or C2C is a term used to describe transactions between private individuals or consumers and other consumers. Very good examples are Ebay and Craglist; this eliminates the need for a middleman in the business process. It promotes auctioning, real time bidding of products online.

3.6 Mobile commerce (m-commerce)

M-commerce or mobile commerce can be simply defined as the buying and selling of goods and services through the help of mobile technology such as cellular telephones and personal digital assistants (PDAs). Here, consumers can interact with each other and can lead to business.

Chapter 4

ADVANTAGES AND DISADVANTAGES OF E-COMMERCE

4.1 Benefits of E-commerce

4.1.1 Complete Shopping Freedom

E-commerce eliminates the limitations of distance and time. A consumer can easily buy or sell any product or service anytime. This is one of the main benefits of e-commerce.

4.1.2 Lower Cost

Through automatization, an individual or consumer can cut down costs such as costs for preparation for documents such as invoices, phone calls, order catalog, hard copy mailing reminder systems and especially labor cost. Orders made through an e-commerce website costs lesser than the order made through the traditional system.

4.1.3 A Much Better Customer Service

The customer service is more effective and quicker. Some e-commerce site provides 24/7 customer service systems. Since a customer can reply a mail online very easy and fast too, it is without doubt that providing such services in a business can make its customers the happiest. Instead of the traditional communication procedure through phone calls, information can be conveyed to the customer through their online account with the web site. Obviously, this saves both time and cost (money). This can be a competitive advantage for businesses with so many rivals in the same business. A good example will be creating an online tracking system.

4.1.4 Eliminate Geographical Limitations

E-commerce eliminates setbacks due to geographical area or location in starting, maintaining or running a business; since entrepreneur has an online store and not a physical store. Also, the addition for the mobile commerce as described earlier in this study has eliminated any other doubts related with the limitations of the geographical area.

4.1.5 Expand Customer Range with Search Engine Visibility

Through the social media and the various search engines online, a business can easily reach a wide range of new customers. Using the right keywords, these search engines can index their sites and pops it out when related keywords are searched for through search engines.

4.1.6 Advertising and Marketing

Businesses use search engines, social media tools and the pay per click systems online for advertising and marketing their products and services more effectively and at a relatively low or no cost.

4.1.7 Fewer Personnel

Due to the automated system provided by an e-commerce site, the need for so much employees are minimized or unconsidered too much in running or starting a business.

4.1.8 Real Estate

An Entrepreneur does not need a physical field or location to start doing business. This is beneficial for both the buyer and the seller. The buyer can easily view photos, compare prices and specifications of houses online via e-commerce websites. Nowadays, the buyer can also view the location of the house in detail using maps provided. Also, the seller can use e-commerce websites to showcase and advertise houses available for sale and manage transaction on few clicks.

4.1.9 Pinpoint Products Quicker

An e-commerce site provides an online catalog of products carefully organized and a search box to narrow down search rapidly. Some e-commerce websites also provides suggestions through the product the customer views.

4.1.10 Provide Comparison Shopping

E-commerce promotes comparison in shopping or business transactions. Since there are so many similar e-commerce websites or businesses offering the same product or service, the customer is allowed to make the best decision in terms of price or other factors.

4.1.11 Eliminate Travel Time and Cost

In comparison to the traditional process of doing business, customers had to travel physical to the store’s location to make purchase. Nowadays, the same store is made available virtually through e-commerce tools.

4.2 Disadvantages of E-commerce

4.2.1 Shipping takes time

Although, e-commerce eliminates location and geographical barriers, shipping physical products can take some time. For instance, if you are shipping perishable goods outside your continent, it might take a couple of days, weeks or even more.

4.2.2 Shipping Costs more

Typically, the heavier a product gets the higher the shipping cost. This basically means that shipping certain goods will be ridiculous. For example, it will be absurd to ship a complete set of furniture from one continent to another because the shipping cost will be outrageous.

4.2.3 Doubts and fears

People are usually afraid and skeptical about things they can’t see physically. Generally, people share concerns about how authentic and reliable an online store is; if the seller is trustworthy and if the products sold on the e-commerce site is as good as it appears online, lest their money is stolen.

4.2.4 Inability to feel the physical

Shopping via an e-commerce site or online store doesn’t offer the possibility to touch, wear, sit or test out the product before purchasing it. Hence, shopping for clothes or furniture sets might not be ideal. Nowadays, some e-commerce sites support demos of their products to handle this disadvantage.

4.2.5 Too many competitors

This awesome application of information technology is so great that an online store can be easily created in less than 5 minutes. There are so many types of these content management web applications available online, so everyone can easily start a store. The issue now is this, since there are thousands of e-commerce sites or online stores selling different or similar products online, how can a seller or store owner attract visitors to their site and not others.

4.2.6 Security

Security is one of the main problems for online business today. Customers and businesses are always skeptical about the payment process and system at the starting point until they get the hang of it and use this application for business. People are afraid of credit card fraud, identify theft or much worse.

Some customers and businesses are really concerned about privacy issues and how online e-commerce stores handle them. Since, they have to expose their personal data such as full name, full address, mobile phone number and banking or credit card details. Though people’s perception about the internet privacy and the use of e-commerce sites are changing as internet penetration increases and seminars that addresses such issues are held, some people still choose to make purchases physically and not take chances.

Finally, the benefits of e-commerce are typically endless. Although, there are disadvantages of e-commerce, its advantages out ways them all. Furthermore, the convenience in shopping online is the best. Think about it consumers or customers don’t need to go to the store physically, waste precious time and energy, can compare products and prices easily, can even shop in Pajamas (PJs) while lying on the bed, assurance that goods be delivered in one piece, all time 24/7 shopping is possible, online shopping cart system can keep track of many goods added and the consumers or customers don’t have to push a heavy trolley around and much more.

Chapter 5

E-commerce in Northern Cyprus

Cyprus is one of the many islands countries in the Mediterranean Sea. Formally, Northern Cyprus is located in the Northern territory of the Republic of Cyprus which is an island country in the Eastern Mediterranean Sea. Typically, the analysis of e-commerce and various information & communication technologies in the island of Cyprus are so far more popular in the southern part, that is, the Republic of Cyprus. The lack of international recognition heavily affects the adoption and application of most of these technologies in Northern Cyprus. Northern Cyprus deeply depends on Turkey for support economically, politically and for military forces (Thomas 2006, Cockburn 2004 p.96). In addition, Northern Cyprus is a blooming model of a developing country with it economy dominated by the services sector (78.7% of GDP in 2010) which covers tourism, the construction sector, education, public sector and much more (Unistar, n.d).

According to Muhtaroglu (n.d.)’s import data, Northern Cyprus’ import in 2010 has increased by %30 from 2009 to 2010. In addition, export to Turkey and Middle East countries are high, on the other hand, export from Northern Cyprus to EU countries is quite low due to the embargoes and disability to direct trade. Admonishing the drawbacks imposed by the lack of international recognition, the economy of Northern Cyprus has turned in a striking performance over the past few years. This development is as a result of the relative stability of the Turkish Lira and a huge growth in the education and construction sectors. In regards to Gross Domestic Product (GDP), studies from the World Bank show that the per capita GDP in Northern Cyprus was about 76 percent in the Republic of Cyprus in purchasing power parity-adjusted terms in 2004 (USD 22,300 for the Republic of Cyprus and USD 16,900 for the Northern Cyprus ) (Unistar, n.d). Northern Cyprus’ economy greatly depends on tourism, offshore banking services and also higher education.

Northern Cyprus is at the intersection of about three continents; this makes it a great destination for tourists which in turn increase its economy. Also, Northern Cyprus has a high per capita growth rate of about 10 percent and it is proposed to rise by 2012. Thus, there is a need to look into certain areas for economic growth such as the liberal equity policies, the tourism sector, chambers of commerce, the telecommunications sector, financial services, education and much more (Andrin Raj, n.d).

The growth in the use of the internet and the WWW has offered great opportunities for economic growth and development in developing countries. Bajaj et al. (2001, p.363) suggests that there is a need for developing countries to embrace these information and communication technology opportunities for economic growth and development, if the wish to match growth in the developed world by improving their information infrastructure. Vividly, the development of information technology industries and greater social applications of information technology (IT) for instance e-commerce, e-learning, e-government amongst others is the best promise for growth in developing countries.

The need for the development of information and communication sector is indeed of great importance in developing countries. Northern Cyprus employs these technologies to various sectors such as the telephone services, e-commerce applications, internet service providers, website development, content management, e-banking, e-learning and e-government among others. This has enhanced the profile of Northern Cyprus companies in the global world. Especially, with its advancement in the adoption of e-government and e-learning in the educational sector which contributes substantially in the growth of the economy of Northern Cyprus. In general, not so much studies/research has gone into e-commerce in Northern Cyprus. However, some workshops and seminars can be used as great tools for creating awareness and helping people understand the value of e-commerce in general. Moreover, this study advocates the benefits of e-commerce in developing countries using Northern Cyprus as a case study, while observing some limitations/barriers that hinders Northern Cyprus from fully benefitting from this awesome application of information technology.

Typically, the barriers that hinder the adoption of most of the Information Communication Technologies basically don’t vary much from each other and in similar countries. Some limitations of e-commerce in Northern Cyprus are mostly in terms of language barriers, Lack of ICT knowledge and skills, Lack of awareness and understanding of the value of e-commerce, financial costs, the perceived lack of relevance or what value ICTs adds to their business, security and trust, taxation, customs clearance, underdeveloped legal protection, high financial cost, unresolved payment solutions, limiting government legislation among others.

Altogether, Northern Cyprus has also adopted e-laws and e-transactions as well as addressing matters like privacy issues, cybercrimes, e-payment & the use of e-documents. In addition, some training programs such as Microsoft, Oracle, and Cisco among others have been launched to ensure that the required skills are in place for the transformation process.

5.1 Main Limitations of E-commerce

5.1.1 Trust

Trust is one of the main barriers of e-commerce. Customers and even businesses are usually skeptical about things they cannot see or touch directly (i.e. Virtual technologies). It is a normal phenomenon to have fears and doubt about people you cannot see, and how authentic and trustworthy they might be. Although, this is dropping down nowadays, the lack of trust in the third party electronic means of payment remains a global limitation to e-commerce. However, there have been movements in this area through seminars, recommendations from trusted sources and as the knowledge of the internet increases.

5.1.2 Language

Also, language is also one of the main barriers of e-commerce adoption in developing countries. In the event of shopping online with international businesses language becomes a barrier when no provision of the customer’s local languages is available in the e-commerce local website (Singh, n.d). Christian Arno said: “Many EU consumers don’t buy British goods simply because they aren’t marketed in their own language” (The Telegraph, 2011). This limitation is also applicable in various countries like in Northern Cyprus’ case.

5.1.3 Security and Privacy

The issue of lack of security and privacy is one of the main limitations of both the internet and e-commerce in general. As mentioned earlier, customers and businesses are always doubtful at first about the third party payment systems; how secure and genuine they are and how secure their personal information including credit card details are. Also, there is actually no real control of information gathered throughout the World Wide Web or internet. Although, there are data protection laws available nowadays, there is no guarantee that a website hosted in another country practices or even have such laws to protect the privacy and personal information or data of its users. In addition to that, websites are prone to hacking, and when this occurs, vital user information can be stolen. Therefore, this is a really vital problem to tackle and many developments and research has gone into this to make e-commerce more secure.

5.1.4 Enjoyment

Another major limitation of e-commerce is enjoyment. Davis et al. (1992) describes enjoyment here as “the extent to which the activity of using a computer is perceived to be enjoyable in its own right”. Also, enjoyment can be defined as the act of receiving some kind of pleasure from doing something. Some people find shopping online unwise and unenjoyable; this is because to them shopping is a social event where they can meet people or at least have some sort of conversation with the seller. Also, some individuals find shopping or rather window shopping a thing of joy and recreation at times.

5.1.5 Internet Experience

As the internet user experience increases, the tendency of adoption of e-commerce increases in developing countries. Further, the use of the internet for shopping depends on the information technology education (knowledge) level and internet experience of consumers. The more people use the internet, the more they conform and discover great information technologies like e-commerce, e-invoices that could help their businesses and make it easier to do certain things.

5.1.6 Legal Issues

There are a number of legal and consumer challenges that arises as a result of the growth of e-commerce. These issues include intellectual property violations, privacy concerns, deceptive trade practices and product disparagement (Ashford, n.d). Connoly (1998) suggests that “many legal issues are as yet unresolved, and in many circumstances government regulations and standards are not yet refined enough to deal with the intricacies of e-commerce” (p.10). Moreover, there is still a possibility of a criminal offense across the internet when both the buyer and the seller do not have any physical connection with each other and only a virtual connection. Since the introduction of the internet the evolution of e-commerce, there have been fraud cases, impersonation and identity theft and more.

5.1.7 Technology Acceptance

Here, Davis (1986) describes technology acceptance using a technology acceptance model. This model is divided into two: perceived usefulness (PU) and perceived ease of use (PEOU). Perceived usefulness is "the prospective probability that using a specific application system will increase a person’s job performance within an organizational context" (Davis, 1986, p. 26). Perceived ease of use is “the degree to which the prospective user expects the target system to be free of effort” (Davis, 1986, p. 26). It’s obvious that the first step to the adoption of e-commerce will be to create awareness for this technology, so that both businesses and customers can fully know how such technology can help them do business more efficiently.

Chapter 6

Research Work

6.1 Methodology and data analysis

The principal aim of this study is to examine the status of e-commerce in Northern Cyprus, limitations and barriers affecting its adoption and benefits of e-commerce adoption. For data, a questionnaire approach was adopted in this research study to get the most appropriate information for identifying the main limitations of e-commerce. Further, the questionnaire was administered across both e-commerce users and non-users to obtain a valid data. This is because this research aims to find out the barriers non-users of e-commerce are facing (i.e. why they are not using this awesome product of information and communication technology), while considering the challenges e-commerce clients already using its services are facing.

The questionnaire used in this study comprised of two main sections. The first section gathers basic information about this research and the participant’s demographics. The second section gathers the participant’s view on the benefits and the main limitation of e-commerce. Furthermore, the Statistical Package for Social Science (SPSS) software package was used for statistical data analysis of questionnaires collected.

6.2 Sample descriptions

As discussed earlier in this paper, the questionnaire was passed across both e-commerce users and non-users. In Table 1 shown below, the summary of the basic information about this study and the participant’s demographics is shown. The majority of participants were female (54.5 percent). Also, Table 1 shows the variable of age in years. The category of less than 20 years was 0 percent; for 20-30 years was 45.5 percent; for 30-40 years was 27.3 percent; and finally 27.3 percent for 40 years and above.

Table : Summary of the basic information and the participant’s demographics and SPSS analysis

Variable

%

Gender

Male

45.5

Female

54.5

Age

Under 20 years

0

20 – 30 years

45.5

30 – 40 years

27.3

Above 40 years

27.3

Nationality

Turkish

27.3

Cypriot

59.1

Other

13.6

Occupation

Professional

22.7

Other

77.3

Academic level

Undergraduate

22.7

Graduate

59.1

Post-Graduate

18.2

Level of IT skills

No computer skill

0

Low computer skill

4.5

Normal computer skill

36.4

High computer skill

40.9

Expert computer skill

18.2

Hours spent on the internet per day

1hr

13.6

2hrs

4.5

3hrs

9.1

4hrs

9.1

5hrs

63.6

Internet services fee per month

Under 200tl

72.7

200tl - 400tl

13.6

400tl - 600tl

4.5

600tl -800tl

9.1

Use of internet

E-Banking

50.0

E-mail

18.2

Finding information about things to buy

4.5

Entertainment

13.6

Educational courses

13.6

Money spent on shopping per month

Under 200tl

72.7

200tl - 400tl

13.6

400tl - 600tl

4.5

1000tl & above

4.5

Frequency of shopping online per month

Yes

59.1

No

36.4

Other

4.5

Product purchased online

Home appliances

18.2

Books

18.2

Clothes

45.5

Services

4.5

Online store use the most

Amazon

13.6

Ebay

40.9

Yemeksepeti

4.5

Other (like Vitrinada, kijiji, sahibinden)

31.8

Experience of safety issues from shopping online

Yes

59.1

No

31.8

Other

9.1

6.3 E-commerce benefits

In the second section of the questionnaire, data collected from participants about their view on the benefits of e-commerce is shown. In Table 2 shown below, the mean and standard deviations of the participants view about the benefits of e-commerce is shown. For evaluation a rating scale of 1 (low) to 5 (high) which also represents (1) strongly disagree and (5) strongly disagree was used. According to the data collected, the mean of e-commerce benefits scaled from 3.59 to 4.41. Clearly, this result showed that the participants of this survey have a high awareness of the benefits of e-commerce but might not be using it. The next section shows the summary of the main limitations of e-commerce from the participants’ view.

Table : Shows the benefits of e-commerce and SPSS analysis

E-commerce benefits

Mean

SD

Using e-commerce reduce time and cost

3.95

0.899

Buy everywhere in the world

4.18

0.958

Find new products

4.23

0.813

Open 24/7

4.41

0.734

No need for foreign agents

3.76

0.889

Use auction and Better price

3.95

0.950

Comfort shopping

3.77

1.193

Recognition among peers

3.73

0.985

Improved customer service

3.86

0.774

Enhance company brand and corporate image

3.80

0.834

Ease of payment

3.91

0.868

Security and Privacy

3.59

1.141

User friendliness

3.77

0.973

6.4 E-commerce limitations

Furthermore, in Table 3 shown below the mean and standard deviations of the participants view about the main limitations of e-commerce is shown. For further analysis, the standard deviation, and the mean value three (3) which is the median value of the 1-5 (strongly disagree – strongly agree) rating scale is used for identifying the participants level of agreement about the limitation of e-commerce. Therefore, the mean marks above three (3) indicates a high level of agreement between participants’ about the limitation.

Table : The main limitations of e-commerce and SPSS analysis

Factor

Statement

Mean

SD

Security and trust

E-commerce site are not secure

2.68

1.323

I cannot trust the ecommerce sites

2.50

1.185

Insufficient security for online credit payment transactions

2.90

1.300

Insufficient security to prevent hacking and viruses

3.23

1.378

Internet experience

I think that anyone who has internet experience will use e-commerce sites

3.82

1.006

I do not have good experience of the internet to use e-commerce sites

2.77

1.152

Enjoyment

I think that anyone who enjoy using the internet will use e-commerce sites

3.59

1.141

I will not enjoy shopping if I use e-commerce sites

2.76

1.375

Language

I cannot understand the language of e-commerce sites

2.32

1.041

My problem in ecommerce sites is the language

2.00

0.894

Legal issues

I do not use e-commerce sites because of the legal issues

2.41

1.221

I think that if I use ecommerce site I will not find law to protect me

2.40

1.188

Technology acceptance

E-commerce sites are difficult to use

2.24

1.091

E-commerce sites are not effective

2.48

1.250

Other

Insufficient qualified vendors for developing applications

3.30

0.865

Lack of skilled workers to handle or maintain electronic commerce system

3.38

0.805

Cost of setting up electronic commerce is relatively high

3.14

0.793

Taxation

Value added tax on goods bought online via ecommerce sites is too high

2.95

1.024

I do not use e-commerce sites because the value added tax is too high

2.48

1.123

I think if I use ecommerce sites, the price of the product becomes higher than using the traditional commerce

2.62

0.973

Chapter 7

CONCLUSION

In conclusion, the need for the adoption of e-commerce is highly significant in developing countries like Northern Cyprus. The status of e-commerce in Northern Cyprus is still at an infant stage, business owners are highly aware of the benefits of using e-commerce in their business. Although, there are limitations and barriers affecting the adoption of e-commerce; the e-commerce adoption process is rapidly growing in Northern Cyprus. Furthermore, the applications of e-commerce in Northern Cyprus ranges from the use of e-commerce sites by businesses to showcase products and services online to the adoption of the smart card system by Eastern Mediterranean University and other universities in Northern Cyprus which includes a web portal for managing transactions and a payment system.

In this research it is proven that most managers and employees in Northern Cyprus are quiet aware of e-commerce and its benefits but only a few of them use it. Although this is the case there are other factors hindering the adoption of e-commerce such as the security fears and setup costs. Also, some managers where against the use of e-commerce because it means people wouldn’t use the traditional way of commerce and come down to the store to buy a product. The saw this as a treat to their business and complained on how they will make profit if people can get products and services from limitless stores and even from other countries.

My recommendation is that there should be more seminars and workshops to create awareness about the benefits of the adoption of e-commerce. This workshops needs to be both theoretical and practical to show business owners and entrepreneurs how e-commerce could improve and increase their profit relatively. This is to remove any skepticism about how difficult it is to setup and manage. The seminars need to be detail and users given basic training on how to use system.

To address security issues, buyers and sellers should ensure that e-commerce websites use trust marks. A well know trust mark is ‘TRUSTe’ for data privacy management and for credit cards there is the ‘Verified by Visa’ for managing credit card fraud. These measures can be used to decrease security issues that could be encountered. It is advised to look for ‘TRUSTe’ or ‘Verified by Visa’ symbols before using e-commerce websites for extra security.

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