Final Dissertation Presentation

1. AGHA
SARMAD
SECTION L
FACTORS AFFECTING THE
ACCEPTANCE & ADOPTION OF
M-COMMERCE IN PAKISTAN

2. 1 Introduction
1.1 BACKGROUND OF RESEARCH
 3G/4G devices, internet users, services
 M-Commerce entering into a developmental phase
globally
 “the buying and selling of goods and services via
mobile/wireless technologies and devices”
 M-Commerce includes purchases on websites or apps,
in-store or from vending machines; paying for travel,
events or bills; or redeeming a coupon *
 Broader definitions include all types of mobile
transaction such as mobile banking (m-banking) and
money transfers (m-money)
 Being one of the world’s fastest growing mobile
markets in terms of subscriber base and
telecommunication sector development, it still lacks
advanced mobile applications

3. 1 Introduction
1.2 SIGNIFICANCE OF STUDY
 Great potential for business startups and growth in m-
commerce persists however ranks at infancy stage
when compared worldwide
 Local firms and marketers can acknowledge diversifying
their range of operations in the particular category of
m-commerce and extending their benefits by adopting
it.
 Theoretical & conceptual framework used in this
research is different from the previous ones and has
been referenced from diverse sources
 Gap spotting: it is studying an infant concept of m-
commerce that is gradually gaining popularity all over
the country & first time being written in the context of
Pakistan-specific studies

4. 1 Introduction
1.3 PURPOSE OF STUDY
 Provides a thorough analysis of the influencing factors
and their interrelationship.
 Provide an initiating analysis of user satisfaction and
the forms of limitations normally faced in the adoption
of m-commerce.
 Develop a research plan allowing itself to be used as a
blueprint for m-commerce to progress in the future
because of the absence of any studies in the precise
field of modern business in Pakistan.

5. 1 Introduction
1.4 RESEARCH OBJECTIVES
 to identify user beliefs concerning
the effects of discovery and usage
of m-commerce services
 to determine the effects of
information privacy and cost
sensitivity on a customer’s
willingness to participate in m-
commerce, and
 to identify a model for use in
determining user’s acceptance and
willingness to use m-commerce.

6. 1 Introduction
1.5 RESEARCH QUESTIONS
1. What is the relationship of the level of perceived
usefulness with the attitudes towards using M-
Commerce technology?
2. What is the relationship of the level of perceived ease of
use with the attitudes towards using M-Commerce
technology?
3. What is the relationship of the level of perceived trust
and privacy in using M-Commerce with the attitudes
towards using M-Commerce?
4. What is the relationship of the perceived cost incurred
in using M-Commerce with the attitudes towards using
M-Commerce?
5. How would development in the M-Commerce sector
influence attitudes towards its adoption in Pakistan?

7. 1 Introduction
1.6 CONCEPTUAL FRAMEWORK

8. 2 Literature Review
2.1 M-COMMERCE & SERVICES
 Mennecke & Strader (2003) "In this new decade, marketing is poised to
witness an unprecedented explosion of mobility, creating a new domain of
mobile commerce".
 M-commerce can be termed as a natural extension or a subset of electronic
commerce (e-commerce) (Jwelassi & Enders, 2005).

9. 2 Literature Review
 B2C: Panis et al., (2001) states “The majority of existing mobile
commerce services deal with an exchange of product, service or
information between B2C”.
 mobile financial services and transactions, personalized and location-
specific mobile advertising and mobile interactive games.
 B2B: Anthony (2006) states “instead of conducting face-to-face
meetings or videoconferences, employees can receive valuable
information from their managers through calls or text messages to
their cell phones.”
 mobile inventory management and wireless business re-engineering
 C2C: Lori (2010) states “Many individuals are conducting C2C m-
commerce activities as a means to acquire products at a more
reasonable price, to acquire products that are considered scarce, or
to sell items as another source of income”
 Kaymu.pk type business models
2.1 M-COMMERCE & SERVICES

10. 2 Literature Review
2.1 M-COMMERCE & SERVICES
 Entertainment: Music, videos, games,
graphics and TV streaming services.
 Communication: Short messaging service
(SMS), unified messaging, electronic mail,
online chat rooms and video conferencing.
 Transaction: Banking, broking, shopping,
auctions, betting, booking and reservations,
mobile wallet, voting, and
competition/contests.
 Information: News, city guide, directory
services, navigation and maps, traffic and
weather, corporate information, market data
and mobile advertising.

11. 2 Literature Review
2.2 ADOPTION OF M-COMMERCE
 The Technology Acceptance Model (TAM) has been the most commonly used
base for studying the adoption of m-commerce, trailed by the Theory of
Reasoned Action (TRA) (Fishbein & Ajzen, 1975) as well as the Theory of Planned
Behavior (TPB) (Ajzen, 1991).
H1: The attitude towards using M-Commerce technology has an influential effect on
the intention to adopt M-Commerce technology.

12. 2 Literature Review
2.2 PERCEIVED USEFULNESS
 Perceived Usefulness can be defined as “the degree to which a person believes
that using a particular system would enhance his or her productivity” (Davis,
1989).
 In recent times, a great number of empirical studies have revealed that
perceived usefulness is the key predictor of M-commerce adoption and it
captures the perceived benefits associated with using mobile commerce (Wei et
al., 2009; Khalifa & Shen, 2008; Kim & Garrison, 2009).
 Prior to the user performing a specific behavior, he/she would prefer to search,
analyze and study some information on the basis of his demand levels, post
series of psychological evaluations or SWOT analysis, user will have behavioral
intention while he considers a particular tool or system is useful and has high
performance price ratio.
H2: Perceived usefulness positively affects the intention of users to adopt mobile
commerce.

13. 2 Literature Review
2.2 PERCEIVED EASE-OF-USE
 Perceived ease of use for a system is defined as the specific degree to which a
person holds beliefs regarding a particular technology that its usage will be free
of any mental effort according to Davis (1989).
 Several prior empirical studies have presented a positive influence of perceived
ease of use on users in the adoption of m-commerce technologies. (Wei et al.,
2008; Khalifa & Shen, 2008; Kim & Garrison, 2009)
 Therefore, it can be said that the perceived ease of use reflects the perceived
efforts in the usage of mobile commerce by a user (Khalifa & Shen, 2008).
H3: Perceived ease of use has a positive effect on the intention to use mobile
commerce.

14. 2 Literature Review
2.2 PERCEIVED TRUST & PRIVACY
 Rousseau et. al. (1998) provides the definition of trust as “a psychological state
comprising the intention to accept vulnerability based upon positive expectations
of the intentions or behavior of another”.
 Trust in M-Commerce: ‘the degree to which an individual perceives that usage of
m-commerce is secure and comprises of no privacy threats’. Wei et al., (2009)
 As m-commerce still currently lies in its infancy stage and numerous payment
systems, regulating policies, technical protocols and transaction standards need a
standardization check (Min, Ji, & Qu, 2008).
 Provided that security and privacy considerations are major hindrances to internet
use/commerce, consumers will certainly prefer not communicate and share any
personal data in the absence of the trust component (Hoffman, Novak, & Peralta,
1999).
H4: The level of perceived trust and privacy in using M-Commerce has a positive
relationship with attitudes towards using M-Commerce.

15. 2 Literature Review
2.2 PERCEIVED COST
 Wei et al., 2009: cost factor is one of the elements that could potentially hold
back the growth of M-commerce. It can comprise of preliminary purchase cost
(for example, hand set fee), ongoing usage cost (for example, subscription fee),
service and communication fees, and maintenance/upgrade cost.
 A study conducted by Kristina (2002) on the acceptance of mobile service shares
revealed that pricing issues appeared as one of the most substantial factors
limiting the usage of mobile services.
 Likewise the qualitative interviews conducted by (Luarn & Lin, 2005)
consequently found that a number of various consumers agree that financial
factors significantly influence their intention in the utilization of mobile banking.
H5: Cost negatively influences m-commerce behaviour usage intention

16. 2 Literature Review
2.2 DEVELOPMENT IN PAKISTAN
 Kanwal, 2014: currently, the size of the e-commerce market is projected at about
Rs3.1bn, whereas m-commerce has hit the Rs15bn mark.
 Internet Service Providers Association of Pakistan (ISPAP): 25m internet and 15m
smartphone users in Pakistan
 There are now almost 30 million internet users and over 15 million mobile phone
users in Pakistan which gives an indication of the massive market potential M-
commerce has in the economy.
 M-commerce has picked up faster than e-commerce because of the fund transfer
facilities provided by telecoms, ordinary citizens have been provided a viable
solution for their needs.
 Kanwal (2014): the potential of growth in e-commerce and m-commerce has also
caught the attention of Rocket Internet, a renowned e-commerce-focused venture
capitalist company. Rocket currently supports six businesses in the country:
Carmundi (online car dealers), Daraz, Easy Taxi, Foodpanda, Kaymu.pk
(marketplace) and Lamundi (realtors).
H6: Development in the m-commerce sector of Pakistan and policies towards its
implementation lead to a positive influence on the adoption of m-commerce

17. 3 Methodology
3.1 SAMPLING UNIT
 The unit of measurement = individuals.
 The target population was picked from the sampling frame of educational
institutions, corporations and households limited within Lahore – one of the
major metropolitan hubs of Pakistan.
3.2 SAMPLING FRAME
 Universities, colleges and households of Lahore which formed an integral part of
the sampling frame. Furthermore, the collection of data also incurred from
business personnel as they are the people directly usually involved in m-
commerce activities.
 The sample size fell around 240 question respondents to attain accurate results
and to maintain neutrality in the information. Age brackets ranging from 16-40
or above, with a mean age of 26.23 whereas a median age of 25. Adding to that,
the sample constituted of 50.4% males and 49.6% females.
 Incomes included to determine relationships such as responses in the perceived
cost variable linked with the income of person.

18. 3 Methodology
3.3 SAMPLING METHOD AND TYPE
 Random sampling evolves out as the best choice for conducting the research as the
populace of customers is high in amount hence, for avoiding bias and maintaining
neutrality this study would apply random sampling to keep an equal opportunity for
everyone to get chosen.
 Furthermore, several sampling techniques have downgraded to becoming either
obsolete or outdated.
3.4 TYPE OF RESPONDENTS
 Comprised of both the genders and respondents constituted of both m-commerce
users in the general public as well as important business personnel
 This aided in acquiring the perspective of both the providers and the users of the m-
commerce services to keep a balance of neutrality in the study.
 Focus was highlighted on individuals who had some kind of prior online shopping
experience through Facebook, shopping websites, apps or any other medium.
 The respondents were initially inquired whether they had ever used any social media
platform for online shopping.

19. 3 Methodology
3.5 SURVEY INSTRUMENTS DETAILS
 A total of 420 questionnaires were circulated to the respondents,
randomly, out of which 240 usable questionnaires were received.
 Online survey development software called Google Forms was employed
to construct the research questionnaire.
 Distributed in around ten Pakistani websites and forums while some were
personally sent to relevant personnel. Some of the websites were relevant
to the telecommunications field whereas the others were general websites
for the common public.
 The major reason behind selecting chosen survey instead of conducting a
practical experiment is due to a limitation of financial resources
 Furthermore, a time constraint is attached to this research as well
therefore questionnaires serve a better purpose in this case of scenario.

20. 3 Methodology
3.5 SURVEY INSTRUMENTS DETAILS
 A survey questionnaire, comprising of a total number of 40 items, was
formulated to measure proposed constructs, based on the existing theories of
reference.
 A “5 points” Likert-type measurement scale was used to measure the items
where “1 = Strongly Agree/Satisfied” and “5 = Strongly Disagree/Dissatisfied”.
Variable Name No. of items in the
scale
Source
Perceived Usefulness 5 Min et al., 2008
Ease of Use 6 Islam et al.,
2010
Trust/Privacy 5 Mamari, 2007
Perceived Cost 6 Yu, 2012
Development in Pakistan 6 Islam et al.,
2010
Attitudes towards using
M-Commerce
5 Mamari, 2007
Adoption of M-Commerce 5 Mamari, 2007
Table 1: Sources of Survey Instrument

21. 4 Results & Findings
 Response rate = 57% which was greater than the desirable response rate that
should be higher than 20% (Yu and Cooper, 1983)
 T-TEST
 P-Value < 0.05
 RELIABILITY ANALYSIS
 Cronbach’s alpha figure > 0.7
Usefulness Ease of Use Development

22. 4 Results & Findings
 Beta Values (Standardized Regression Weights)
 Estimates resulting from a regression
analysis that have been standardized so that
the variances of dependent and independent
variables are 1
CFA PATH

23. 4 Results & Findings
4.1 CONFIRMATORY FACTOR ANALYSIS
 AVG VARIANCE EXTRACTED (AVE) > 0.5
 CONSTRUCT RELIABILITY (CR)
> 0.7
(Fornell et al., 1982)
 All the latent variables (except Adoption)
 DISCRIMINANT VALIDITY (DV)
Squared correlation coefficients of each
construct with other constructs should be
less than the AVE of each construct
(D.U. Kim, 2008; K.S. Kim, 2008)
 0.95< STANDARDIZED COEFFICIENT > 0.5
Bagozzi and Yi (1988)
Table4.1:ConfirmatoryFactorAnalysisResults
Variable AVE CR DV Variable Item Standardized
Loadings
Adoption - - 0.016
AD1 0.587
AD2 -
AD3 -
Attitudes 0.511 0.712 0.042
ATT1 -
ATT2 -
ATT3 0.507
Usefulness 0.633 0.911 -
USE1 0.736
USE2 0.876
USE3 0.856
USE4 0.612
USE5 0.824
USE6 0.736
Ease-of-use 0.758 0.939 0.144
EAS1 0.749
EAS2 0.959
EAS3 0.924
EAS4 0.775
EAS5 0.925
Trust 0.510 0.770 0.116
TRU1 -
TRU2 0.950
TRU3 0.636
TRU4 0.642
TRU5 0.658
Cost 0.500 0.824 -
COS1 0.555
COS2 0.629
COS3 0.874
COS4 0.691
COS5 0.798

24. 4 Results & Findings
4.1 CONFIRMATORY FACTOR ANALYSIS // assessing model fit
 P-value extracted from the results is 0.00.
 Kim (2008) proposed the CMIN p-value near to 0 because the p-value is
responsive to the sample size.
 CMIN/DF = 3.62 which is an acceptable fit to the data.
 CFI = 0.734 > than the conventional benchmark of 0.5 (Holtz, 2012)
 RMSEA = 0.042 which should be lesser than 0.05

25. 4 Results & Findings
4.2 PATH ANALYSIS
 The beta coefficient of H6 can be used to evaluate that Attitudes have a
positive significant relationship with Adoption and hence a one unit
increase in Attitudes will result in a degree of 0.752 increase in units in the
variable Adoption.
 The beta coefficients extracted also demonstrate that the Attitudes
towards m-commerce have a strong impact on the Adoption of m-
commerce with a positive sign and therefore the hypothesis is accepted.
 Development and Cost also prove to have a significant impact on Attitudes
Hypothesis Relationships Estimate (β) P Accepted/Rejected
H1 Attitudes ← Usefulness .287 .010 Accepted
H2 Attitudes ← Ease-of-use .230 .107 Rejected
H3 Attitudes ← Trust -.326 .108 Rejected
H4 Attitudes ← Cost .515 .018 Accepted
H5 Attitudes ← Development .633 *** Accepted
H6 Adoption ← Attitudes .752 *** Accepted
*** indicates p < 0.05 Table 4.2: Path Analysis Results

26. 4 Results & Findings
4.2 PATH ANALYSIS // assessing model fit
 P-value = 0.000 which proves significance (Dreze et al., 2009).
 CMIN/df= 3.78 which is slightly greater than 3 however overall a good
model fit can be indicated according to the scale proposed by Barret,
2007.
 RMSEA = .118 which is closer to 0 than 1 and thus is an indicator of good
fit (MacCallum et al, 1996).
 Segars and Grovers (1998): a good model fit is characterized by the values
of NFI, IFI, CFI being greater than 0.7.
 Hence, the closer the value is to 1 and further from 0, the better the
model. The value of CFI = .713, NFI = .65 and IFI = .716.
 All three values therefore demonstrate closeness to a good model fit.

27. 5 Discussion
5.1 INTERPRETATION OF FINDINGS
 Attitudes ← Usefulness H1: As in today’s world the modern consumer desires
faster, smaller, and greater reliable devices to complement his or her fast
paced life style with the addition of more efficiency and some form of value to
it.
 Attitudes ← Ease-of-Use H2:
1. Any difficulty level faced in the usage of mobile services simply carries no influence
on the attitudes of consumers.
2. The questionnaire had a sample mean age of 26.23 and median age of 25 possibly
leading to the results getting skewed
3. Several consumers in their age of 20’s have a greater chance of already being
equipped with an acceptable level of general knowledge on the usage
 Attitudes ← Trust H3:
 Possibly signal a growing trust in m-commerce technology with the
introduction of new and improved online brands such as Daraz.pk that are also
trust-worthy.
 In Pakistan usually the procedure for making payments is through “cash on
delivery” (COD) that eliminates the involvement of credit card transactions
through a mobile phone

28. 5 Discussion
5.1 INTERPRETATION OF FINDINGS
 Attitudes ← Cost H4:
 Should signal mobile companies to keep the costs of these services low and continue
the introduction of several packages and bundles for 3G/4G internet and other services
 More economical and convenient than visiting a retail outlet
 Attitudes ← Development H5:
 Major factor
 ‘eGovernment’ can also help bridge communication gaps between the Government and
its citizens.
 Educating and creating awareness on these services
 Adoption ← Attitudes H6:
 re-enforces an insight to Pakistani m-commerce marketers and companies

29. Thank you!