Online Business Sustainability and Challenges to Meet the Demands of Online Consumers

Abstract

Digital entrepreneurship the trend of entrepreneurship, where entrepreneurs are able to sell their items, as the online space seems to be this unique entrepreneurial space for entrepreneurs. Common perceptions seem to be that very little goes into selling items online, where barriers are expected to be low, with low cost equipment and not much time needed. Even brick and mortar shops are selling items online to sustain their business in this ever growing business space. This research delves into what goes on behind the scene for these online entrepreneurs. It also strives to understand consumer behaviours, where it looks at the different platforms that consumers use most and why these platforms are more trusted. This ethnographic case study looks at the digital business from multiple different angles where consumers, entrepreneurs, instructors, along with an online paying platform staff were given open ended surveys, interviewed online and face to face. The purpose of this research is to evaluate the effort entrepreneurs put in, and how much they are getting back, evaluating consumer’s perspectives, and assessing whether entrepreneur practice in the online platform is relevant to what is needed by the consumers. The research implements a micro and macro analysis approach. The micro analysis evaluates different components from the two sets of participants, which are the online shoppers and the online entrepreneurs, with their own separate themes whereas the instructor’s answers and the third party customer service answers were used as a macro analysis.

Keywords: Onlinebusinesssustainabilityentrepreneurscase study

Introduction

The internet is seen to be an enabler for entrepreneurs to set up their business platforms. There is also a widespread adaptation to the online digital business where there are endless entrepreneurial opportunities (Martinez, Marlow, & Martin, 2017). This platform seems to be the best for entrepreneurs as there are very little barriers for entrepreneurs to start an online business, does not need any equipment’s, and does not require any formal premises (Martinez Dy et al., 2017). It is also seen as a great platform as there are no pre-commitment required, relatively low affordable loss which could be attributed to loss of reputation, and an entrepreneur does not need experience to start an online business (Daniel, Di Domenico, & Sharma, 2015).

Research by Daniel et al. (2015) mentioned that due to the nature of online business and that it is easy to gain access from outside, the entrepreneur should use this opportunity and learn how to exploit it. It is the entrepreneurs job to understand the market needs and learn how to take advantage of this opportunity. Business entrepreneurs should possess certain characteristics in order for their business to sustain online. One characteristic is functional, where the entrepreneur engages their audience and interacts online. This is where the entrepreneur and the computer works together to achieve a goal (Mabrito, 2001).

Online business has brought on a huge impact to the business world, and through this entrepreneurs and shoppers has gone through a paradigm shift. Business owners no longer focus on service and relationship, but rather on customer experience (Bhattacharya & Srivastava, 2018). Bhattacharya & Srivastava (2018)’s research mentioned that superior customer experience has become an important factor to sustainable competitive advantage in the online business platform. Melo, Hernandez-Maestro and Munoz-Gallego (2017)’s research found that there is a correlation between word of mouth and business performance. It is important to understand customer’s intention and willingness to purchase an item. Here, some of the major theories highlighted for consumer behaviours are social exchange theory, theory of reasoned action, theory of planned behaviour, retail patronage models and the technology acceptance model where Hwang and Jeong (2016) highlighted causal relationships between beliefs, attitudes and actual intention of the consumer. East, Romaniuk, Chawdhary and Uncles (2016) also highlighted the significance of word of mouth to shopper’s intention to purchase products in their research. The word of mouth could also potentially distinguish between a brand that would be successful to those that will not. Pricing items accordingly and fairly is another ethical issue that entrepreneurs should weigh heavily, as this could impact their reputation, which could indirectly affect the sustainability of their business as there are customers seems to have more buying power with the advancement of technology and multiple platforms (Ayadi, Paraschiv, & Rousset, 2017). Utilizing social media such as Facebook to establish a business would be a good step for entrepreneurs as Facebook currently has an estimated of 1.79 billion users world-wide. Social media is a game changer in the customer relationship management platform where a person could reach thousands through different functions within the applications (Wali & Andy-Wali, 2018).

Problem Statement

The online space is viewed as an easy platform for entrepreneurs to sell things and make money, without understanding the constraints or components that goes into an online business (Martinez et al., 2017). Although there are a lot of online business mushrooming, there are not many data on the entrepreneurs themselves. It is important to analyse what goes on when an entrepreneur sets up a business online, and which factors to the business do they weigh more compared to others. It is also important to understand what customers need and want, and how this could contribute to the sustainability of an entrepreneur’s online business sustainability. This is due to the global and technological trend where customers or shoppers could protest something if they are unsatisfied with a service or product, which could result in the post going viral. This could directly affect the entrepreneur’s business and could propel in the downfall of an online business (Martin & Kracher, 2008). Although there is a rise in the online business platform, particularly independent home business owners, there is relatively little research attention compared to other forms of business (Daniel et al., 2015). It is also important to understand entrepreneur’s readiness before delving into the online platform (Pollack, Rutherford, & Nagy, 2017). This research would be beneficial for entrepreneurs as they could see what customer’s needs and perception of online shopping in order for entrepreneurs to better sustain their online business.

Research Questions

RQ1. What are the themes that could be derived from online shopper’s perspectives on their online shopping experience?

RQ2. What do entrepreneurs practice to sustain their business online?

RQ3. How relevant are online entrepreneur’s business practice to the market needs?

Purpose of the Study

The purpose of this research is to delve and understand customer needs and to assess what online entrepreneur practice, and what they deem to be the most important criteria to their practice. It is also to evaluate the relevance between what is practiced to what is needed, and how this could impact the sustainability of online businesses.

Research Methods

This is an ethnographic case study research where it looks at the digital business within Malaysia in depth (Kamarudin, Hussain, Applegate, & Mohd Yasin, 2018) from multiple different angles where consumers, entrepreneurs, instructors, along with workers from online paying platforms would be given open ended surveys, interviewed online and face to face. The purpose of this research is to understand the effort entrepreneurs put in, and how much they are getting back, understand consumer’s perspectives, and look at it from another angle, of what happens when something is disputed.

There are 4 different types of participants for this research as it would like to look at this research from multiple angles. Participants consists of online shoppers, online seller, a subject matter expert on online business, and a worker from a third party payment centre. A purposeful and snowball sampling method was applied for this research. Purposeful research was utilized because the researcher wanted participants with prior knowledge on the topic, and for this, purposeful sampling was utilized (Gall, Gall, & Borg, 2014; Creswell, 2013). It is also because the subjects sampled had the information that was needed from their previous experience (Kamarudin, 2017). Sometimes, it is hard to access to certain populations. In these instances, snowball sampling method is extremely useful, as participants who have volunteered could recommend other people that they know who fits the needs of the research (Creswell, 2014). For this research, Participants were recruited through purposeful sampling, as the researcher has targeted those participants with prior knowledge on the topic or has had experience in online shopping. The researcher also utilized snowball sampling method as this will help the research recruit more participants of the same characteristics, since participants could recruit and recommend other participants into the research. 13 online shoppers, 9 online business owners, 1 subject matter expert and 1 third party payment centre were recruited into this research.

Both online shoppers and online entrepreneurs were given an open ended questionnaire to be filled out, along with some follow up interviews to prompt for more in depth explanations concerning their answers. The subject matter expert, is an instructor, specializing in digital business and the sample was interviewed using semi structured interview method. A customer service staff from a third party payment centre was also recruited and interviewed using semi structured interview. The reason why both the instructor and the customer service staff was sampled is to address the trustworthiness aspect which is authenticity, so that there is a balanced view and that the research is not bias in any way.

Findings

There would be a micro and macro analysis. The micro analysis would look at the different components from the two sets of participants, which are the online shoppers and the online entrepreneurs and put them into separate set of themes. The instructor’s answers and the third party customer service answers would be used as a macro analysis to both of the two sets of themes found in this research.

Conclusion

As a conclusion, it is important that entrepreneurs understand and study the market needs first before proceeding with the products. They then should try to create trust between entrepreneurs and shoppers, as shoppers still have trust issues when it comes to purchasing items from online independent entrepreneurs, as there are too many stories out about being cheated, and that it would be hard or a hassle for them to get their money back, the opposite of what they are looking for when purchasing online items, which is convenience. Customer reference is a valuable tool in the marketing arena (Morgado, 2018) where given the right circumstances, entrepreneurs could win over potential clients. Although advertising is important, it might be more worthwhile for entrepreneurs to spot trends and try to find their niche, that distinct difference between them and other entrepreneurs to propel them forward in the online business world. This also ensures their online business sustainability. While entrepreneurs are striving to provide good services to receive good testimony to ad on to their credibility, entrepreneurs should also know how to aggregate the comment to maximize their usage. According to Melo et al. (2017), they should aggregate information according to positive comments to enhance customer attraction and obtain useful comments to guide improvement. This is to avoid abundance of information. Entrepreneurs should also learn how to write and be courteous online. Online comments should be given extra attention as these are what customers need and want.

Acknowledgments

Thank you to the Faculty of Industrial Management, University Malaysia Pahang for making this publication possible.

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